STO » Topics » Manufacturing and Marketing

This excerpt taken from the STO 6-K filed May 11, 2009.

MANUFACTURING & MARKETING

IFRS income statement

First quarter

Full year

(in NOK billion)

2009

2008

Change

2008

 

 

 

 

 

Total revenues and other income

77.7

126.3

(38 %)

531.3

 

 

 

 

 

Purchase, net of inventory variation

69.7

120.2

(42 %)

501.4

Operating expenses

1.9

2.9

(35 %)

14.7

Selling, general and administrative expenses

2.1

1.9

13 %

8.6

Depreciation, amortisation and impairment

0.6

0.5

31 %

2.1

 

Total expenses

74.2

125.4

(41 %)

526.8

 

Net operating income

3.5

0.9

293 %

4.5

 

Adjusted earnings [12]

First quarter

Full year

(in NOK billion)

2009

2008

Change

2008

 

 

 

 

 

Total revenues and other income adjusted

77.5

125.9

(38 %)

530.5

 

 

 

 

 

Purchase, net of inventory variation adjusted

70.2

120.5

(42 %)

498.6

Operating expenses adjusted

3.2

2.9

10 %

13.4

Selling, general and administrative expenses adjusted

2.0

1.9

8 %

8.1

Depreciation, amortisation and impairment adjusted

0.6

0.5

31 %

2.1

 

 

 

 

 

Adjusted earnings [12]

1.6

0.2

741 %

8.3

 

Operational data

First Quarter

Full year

 

2009

2008

Change

2008

 

 

 

 

 

FCC margin (USD/bbl)

5.4

6.2

(13 %)

8.2

Contract price methanol (EUR/tonne)

159

490

(68 %)

344

 

In the first quarter of 2009 the net operating income for Manufacturing & Marketing was NOK 3.5 billion compared with a net operating income of NOK 0.9 billion in the first quarter of 2008. The net operating income increased partly due to a NOK 1.3 billion reversal of a take-or-pay contract accrued for in the third quarter of 2008, reduced operating expenses, gains from higher prices on our operational storage amounting to NOK 0.5 billion and NOK 0.2 billion in gains on inventory hedge positions which do not qualify for hedge accounting. A write-down of shares in Energy and Retail negatively impacted out net operating income by NOK 0.1 billion. See the section "reconciliation of net income to adjusted earnings" for details.

Adjusted earnings were NOK 1.6 billion in the first quarter of 2009, compared to NOK 0.2 billion in the first quarter of 2008. The increase was due to strong trading results and lower negative effect of exchange rates on the value of inventories in our commercial storage, partly offset by lower methanol price and reduced sales volumes.

Adjusted earnings in Oil sales, trading and supply were NOK 1.2 billion in the first quarter of 2009, compared to an adjusted operating loss of NOK 0.5 billion in the first quarter of 2008. The increase was mainly due to the positive effect of exchange rates on the value of inventories in our commercial storage and positive crude trading results.

Adjusted earnings in Manufacturing were NOK 0.2 billion in the first quarter of 2009, compared to NOK 0.5 billion in the first quarter of 2008. The decrease was due to lower methanol price and sales volumes.

Adjusted earnings in Energy and Retail were NOK 0.2 billion in the first quarter of 2009, compared to adjusted earnings of NOK 0.3 billion in the first quarter of 2008. The decrease was due to lower non fuel volumes and convenience sales in falling markets.

Important events:
  • On 11 February StatoilHydro submitted its master plan for carbon capture at Mongstad to the Ministry of Petroleum and Energy and the Ministry of the Environment.
 
This excerpt taken from the STO 6-K filed Feb 27, 2008.

MANUFACTURING & MARKETING

Fourth quarter
Twelve months ended 31 December
 
2007
2006
 
2007
2007
2006
 
2007
(in millions)
NOK
NOK
Change
USD*
NOK
NOK
Change
USD*
                 
IFRS income statement                
                 
Total revenues and
other income
117,212
96,341
22 %
21,582
428,043
411,990
4 %
78,815
               
Cost of goods sold
110,490
89,556
23 %
20,344
401,804
383,362
5 %
73,983
Operating, selling and
administrative expenses
5,897
5,500
7 %
1,086
19,630
19,068
3 %
3,614
Depreciation, amortisation
and impairment
1,459
888
64 %
269
2,833
2,280
24 %
522
               
Total expenses
117,846
95,944
23 %
21,699
424,267
404,710
5 %
78,119
               
Net operating income
(634)
397
(260 %)
(117)
3,776
7,280
(48 %)
695
               
Operational data                
FCC margin (USD/bbl)
7.7
4.7
64 %
 
8.4
7.1
18 %
 
Contract price methanol
(EUR/tonne)
380
395
(4 %)
 
317
300
6 %
 

Net operating income for Manufacturing & Marketing in the fourth quarter of 2007 was a loss of NOK 0.6 billion, compared to an income of NOK 0.4 billion in the fourth quarter of 2006. The difference was mainly due to increased pension costs of NOK 0.7 billion, mainly due to early retirement, a NOK 0.6 billion gain recognised in 2006 from sale of our retail business in Ireland, and impairment loss and provisions due to weak market conditions and restructuring of the retail business in Sweden representing an increase of NOK 0.5 billion compared to fourth quarter 2006.

In 2007, net operating income was NOK 3.8 billion, compared to NOK 7.3 billion in 2006. The difference was mainly due to increased pension costs of NOK 0.7 billion, negative currency effects of NOK 0.7 billion, lower trading results contributing NOK 0.6 billion, a gain of NOK 0.6 billion in 2006 from the sale of our retail business in Ireland, and impairment loss and provisions due to weak market conditions and restructuring of the retail business in Sweden contributing NOK 0.5 billion.

Oil sales, trading and supply
net operating income in the fourth quarter of 2007 was NOK 0.4 billion, compared to a loss of NOK 0.1 billion in the fourth quarter of 2006. The increase was mainly due to positive changes in value of our inventory. In 2007, net operating income was NOK 1.3 billion, compared to NOK 2.2 billion in 2006. The decrease in 2007 was mainly due to NOK 0.7 billion in currency losses, lower trading results contributing NOK 0.6 billion compared to 2006 and deferred gain on inventories, which was partly offset by gains on operational storage.

Net operating income for Manufacturing was NOK 0.7 billion in the fourth quarter of 2007, compared to NOK 0.7 billion in the fourth quarter of 2006. In 2007 net operating income was NOK 3.3 billion, compared to NOK 4.4 billion in 2006. The decrease in 2007 was mainly due to lower regularity and higher operational costs due to turnaround activities. Lower USD exchange rate and lower capacity utilisation also contributed negatively.

Net operating income for Energy and Retail was a loss of NOK 1.0 billion in the fourth quarter of 2007, compared to a loss of NOK 0.2 billion in the fourth quarter of 2006. Net operating income in 2007 was NOK 0 billion, compared to NOK 0.6 billion in 2006. The decrease in both periods was mainly due to increased impairment loss and provisions due to weak market conditions and restructuring of our retail business in Sweden of NOK 0.6 billion in 2006 and NOK 1.1 billion in 2007 and a net gain of NOK 0.6 billion in 2006 related to the sale of our retail business in Ireland.

Table of Contents
This excerpt taken from the STO 6-K filed Oct 29, 2007.

MANUFACTURING & MARKETING

 
  Third quarter  
Nine months ended 30 September
Full year
2007
2006
2007
2007
2006
2007
2006
(in millions)
NOK
NOK
Change
USD*
NOK
NOK
Change
USD*
NOK
 
IFRS income statement
Total revenues and 
other income
93,266
92,337
1%
17,241
272,718
275,402
(1%)
50,415
361,027
 
Cost of goods sold
88,977
85,802
4%
16,448
255,353
255,686
0%
47,205
335,020
Operating, selling and 
administrative expenses
3,921
4,012
(2%)
725
12,443
12,327
1%
2,300
17,368
Depreciation, amortisation 
and impairment
418
430
(3%)
77
1,250
1,277
(2%)
231
2,070
 
Total expenses
93,316
90,244
3%
17,250
269,046
269,290
0%
49,736
354,458
 
Net operating income
(50)
2,093
(102%)
(9)
3,672
6,112
(40%)
679
6,569
 
Operational data
FCC margin (USD/bbl)
7.6
8.0
(5%)
8.7
7.9
10%
7.1
Contract price methanol 
(EUR/tonne)
218
250
(13%)
296
268
10%
300
 


Net operating income for Manufacturing & Marketing in the third quarter of 2007 was negative NOK 0.1 billion compared to NOK 2.1 billion in the third quarter of 2006. The decrease was mainly due to currency losses on inventories within Oil sales, trading and supply combined with lower regularity and lower refining margins measured in NOK within Manufacturing.

In the first nine months of 2007 net operating income was NOK 3.7 billion compared to NOK 6.1 billion in the first nine months of 2006. The decrease was mainly due to currency losses on inventories and deferred gains on inventories within Oil sales, trading and supply, lower refining margins measured in NOK and lower regularity within Manufacturing.

Oil sales, trading and supply net operating income in the third quarter of 2007 was negative NOK 0.6 billion compared to NOK 0.5 billion in the third quarter of 2006. The decrease was mainly due to currency losses on inventories and lower results from trading. In the first nine months of 2007 net operating income was NOK 0.7 billion compared to NOK 2.1 billion in the first nine months of 2006. The decrease was mainly due to currency losses on inventories, lower results from trading and deferred gains on inventories.

Net operating income for Manufacturing was NOK 0.4 billion in the third quarter of 2007, compared to NOK 1.2 billion in the third quarter of 2006. In the first nine months of 2007 net operating income was NOK 2.2 billion, compared to NOK 3.2 billion in the first nine months of 2006. The decrease in both periods was mainly due to lower refining margins in NOK, and lower regularity due to turnaround activities.

Net operating income for Energy and Retail was NOK 0.2 billion in the third quarter of 2007, compared to NOK 0.4 billion in the third quarter of 2006. Net operating income in the first nine months of 2007 was NOK 0.9 billion, compared to NOK 0.8 billion in the first nine months of 2006. The increase in the first nine months of 2007 compared to the same period in 2006 was mainly due to improved volumes, margins and convenience sales.

On 19 September 2007 StatoilHydro entered into an agreement to acquire ConocoPhillips’ JET automated gas station network in Norway, Sweden and Denmark. The transaction will increase the number of StatoilHydro’s automated gas stations by 274; 39 in Norway, 72 in Denmark and 163 in Sweden. The acquisition is subject to approval from European competition authorities.

 

Table of Contents
This excerpt taken from the STO 6-K filed Jul 30, 2007.

MANUFACTURING & MARKETING


Second quarter
First half
Full year
2007
2006
2007
2007
2006
2007
2006
(in millions)
NOK
NOK
Change
USD*
NOK
NOK
Change
USD*
NOK
 
IFRS income statement
 
Total revenues and other income
94,344
92,092
2%
16,006
179,452
183,065
(2%)
30,446
361,027
 
Cost of goods sold
86,969
85,278
2%
14,755
166,376
169,884
(2%)
28,227
335,020
Operating, selling and administrative expenses
4,376
4,044
8%
742
8,522
8,315
2%
1,446
17,368
Depreciation, amortisation and impairment
416
309
35%
71
832
847
(2%)
141
2,070
 
Total expenses
91,761
89,631
2%
15,568
175,730
179,046
(2%)
29,814
354,458
 
Net operating income
2,583
2,461
5%
438
3,722
4,019
(7%)
631
6,569
 
Operational data
FCC margin (USD/bbl)
11.7
9.7
21%
9.3
7.8
19%
7.1
Contract price methanol (EUR/tonne)
250
285
(12%)
306
250
22%
300


Net operating income for Manufacturing & Marketing in the second quarter of 2007 was NOK 2.6 billion compared to NOK 2.5 billion in the second quarter of 2006. The increase was mainly due to realisations of previously deferred gains on inventories within Oil trading and improved results from the Energy & Retail business, partly offset by lower regularity due to planned turnarounds within Manufacturing.

In the first half of 2007 net operating income was NOK 3.7 billion compared to NOK 4.0 billion in the first half of 2006. The decrease was mainly due to deferred gains on inventories within Oil trading.

Oil trading net operating income in the second quarter of 2007 was NOK 1.3 billion compared to NOK 0.9 billion in the second quarter of 2006. The increase was mainly due to realisations of previously deferred gains on inventories and positive changes in inventory values, but was partly offset by lower income from trading. In the first half of 2007 net operating income was NOK 1.3 billion compared to NOK 1.6 billion in the first half of 2006. The decrease was mainly due to deferred gains on inventories.

Net operating income for Manufacturing was NOK 1.0 billion in the second quarter of 2007, compared to NOK 1.3 billion in the second quarter of 2006. In the first half of 2007, net operating income was NOK 1.8 billion, compared to NOK 2.0 billion in the first half of 2006. The decrease in both periods was mainly due to lower regularity due to planned turnarounds, but was partly offset by higher refining margins. In the second quarter of 2007, the average refining margin (FCC) was USD 11.7 per barrel compared to USD 9.7 per barrel in the second quarter of 2006, an increase of 21%. The average contract price of methanol was EUR 250 per tonne in the second quarter of 2007 compared to EUR 285 per tonne in the second quarter of 2006, a decrease of 12%.

Net operating income for Energy & Retail was NOK 0.3 billion in the second quarter of 2007, compared to NOK 0.2 billion in the second quarter of 2006. Net operating income in the first half of 2007 was NOK 0.7 billion, compared to NOK 0.4 billion in the first half of 2006. The increase in both periods was mainly due to higher fuel volumes and margins, and sales growth in the convenience market segment.


 

Table of Contents
This excerpt taken from the STO 6-K filed May 30, 2007.

MANUFACTURING & MARKETING


First quarter
Full year
(in millions)
2007
NOK
2006
NOK
Change
2007
USD*
2006
NOK
 
IFRS income statement
 
Total revenues and other income
85,108
90,973
(6%)
14,004
361,027
 
Cost of goods sold
79,407
84,606
(6%)
13,066
335,020
Operating, selling and administrative expenses
4,146
4,271
(3%)
682
17,368
Depreciation, amortisation and impairment
416
538
(23%)
68
2,070
 
Total expenses
83,969
89,415
(6%)
13,817
354,458
 
Net operating income
1,139
1,558
(27%)
187
6,569
 
Operational data
FCC margin (USD/bbl)
6.8
5.8
17%
7.1
Contract price methanol (EUR/tonne)
420
268
57%
300


Net operating income for Manufacturing & Marketing in the first quarter of 2007 was NOK 1.1 billion compared to NOK 1.6 billion in the first quarter of 2006. The decrease was mainly due to unrealised losses on hedging derivative contracts not qualifying for hedge accounting within Oil trading.

Oil trading net operating income in the first quarter of 2007 was NOK 0.0 billion, compared to NOK 0.7 billion in the first quarter of 2006. The reduction was mainly due to unrealised losses on hedging derivative contracts not qualifying for hedge accounting.

Net operating income from Manufacturing was NOK 0.9 billion in the first quarter of 2007, compared to 0.7 billion in the first quarter of 2006. The improvement is mainly due to higher refining margins, high regularity on all processing plants and high methanol price. The average FCC refining margin was USD 6.8 per barrel in the first quarter of 2007, compared to USD 5.8 per barrel in the first quarter of 2006, an increase of 17%. The average contract price of methanol was EUR 420 per tonne in the first quarter of 2007 compared to EUR 268 per tonne in the first quarter of 2006, an increase of 57%.

Net operating income from Energy & Retail was NOK 0.3 billion in the first quarter of 2007, compared to NOK 0.2 billion in the first quarter of 2006. Improved results from strengthened fuel margins in both Sweden and Norway, and additional income from the sale of Statoil Ireland, as a result of a purchase price adjustment, are the main reasons for the increase.


 

Table of Contents
This excerpt taken from the STO 20-F filed Mar 20, 2007.

Manufacturing and Marketing

The following table sets forth certain financial and operating data for our Manufacturing and Marketing business segment and percentage change for each of the years in the three–year period ending December 31, 2006.

 

Year ended December 31

Income statement data (in NOK million)

2006

2005

Change

2004

Change

Total revenues

354,024

333,493

6 %

262,402

27 %

Cost of goods sold

329,072

308,124

7 %

243,026

27 %

Operating, selling and administrative expenses

16,035

15,704

2 %

13,896

13 %

Depreciation, depletion and amortization

1,919

2,072

(7 %)

1,581

31 %

Income before financial items, income taxes and minority interest

6,998

7,593

(8 %)

3,899

95 %


Operational data:

 

 

 

 

 

FCC-margin (USD/bbl)

7.1

7.9

(10 %)

6.4

23 %

Contract price methanol (EUR/tonne)

300

225

33 %

213

6 %

Petrochemical margin (EUR/tonne)

-

161

-

153

5 %

Years ended December 31, 2006, 2005 and 2004
Manufacturing and Marketing sells Statoil equity oil volumes, SDFI oil volumes and third party oil volumes.

Manufacturing and Marketing generated total revenues of NOK 354.0 billion in 2006 compared to NOK 333.5 billion in 2005 and NOK 262.4 billion in 2004. The 6 per cent increase from 2005 to 2006 resulted mainly from increased Oil Sales, Trading and Supply (O&S) revenues due to higher prices in USD for crude oil, but was partly offset by a reduction of 11 per cent in total volumes of crude oil sold.

The 27 per cent increase from 2004 to 2005 resulted mainly from higher prices in USD for crude oil, but was partly offset by the strengthening of the NOK versus the USD and a decrease in total volumes of crude oil sold by 3 per cent.

Cost of goods sold increased from NOK 243.0 billion in 2004 to NOK 308.1 billion in 2005, and to NOK 329.1 billion in 2006. The increase from 2005 to 2006 resulted primarily from higher prices paid in USD for crude oil.

The increase from 2004 to 2005 resulted primarily from higher prices paid in USD for crude oil and SDS being consolidated in the group’s accounts for 12 months in 2005, compared to only six months in 2004.

Operating, selling and administrative expenses increased by 2 per cent in 2006 compared to 2005. In 2005, operating, selling and administrative expenses increased by 13 per cent compared to 2004, mainly due to the full-year effect from the SDS consolidation and restructuring costs in Marketing.

Depreciation, depletion and amortization totaled NOK 1.9 billion in 2006, compared to NOK 2.1 billion in 2005 and NOK 1.6 billion in 2004. The decrease from 2005 to 2006 was mainly due to lower depreciation within Manufacturing as a result of extended life expectancy for the plants, following a review of the useful life of the facilities that took place during 2006.

Income before financial items, income taxes and minority interest for Manufacturing and Marketing was NOK 7.0 billion in 2006, compared to NOK 7.6 billion in 2005 and NOK 3.9 billion in 2004. The decrease from 2005 to 2006 was mainly due to the gain from the sale of Borealis in 2005, partly offset by the gain from the sale of Statoil Ireland and higher trading income in 2006. The gain from the sale of Statoil’s shares in Borealis and higher margins, combined with higher regularity within Manufacturing, were the main reasons for the increase in income before financial items, income taxes and minority interest of NOK 3.7 billion from 2004 to 2005.

In Manufacturing, Income before financial items, income taxes and minority interest increased by NOK 0.3 billion from 2005 to 2006 mainly due to reduced depreciation and the absence of losses on margin hedging compared to 2005. These were partly offset by lower refining margins. The increase by NOK 1.7 billion from 2004 to 2005 was mainly due to high refining margins and high regularity levels. In 2006, the average refining margin (FCC margin) was 10 per cent lower than in 2005, equivalent to a reduction of USD 0.8 per barrel. The average contract price on methanol was 33 per cent higher measured in NOK in 2006 than in 2005.

In Oil Sales, Trading and Supply (O&S), Income before financial items, income taxes and minority interest increased by NOK 0.6 billion in 2006 compared to 2005, mainly due to higher trading income. Income before financial items, income taxes and minority interest increased by NOK 0.7 billion in 2005 compared to 2004, mainly due to good results from trading operations and currency gains on commercial storage, which were partly offset by a lower contribution from the then contingent compensation arrangements relating to the sale of the Melaka refinery.

In Energy & Retail (formerly Marketing), Income before financial items, income taxes and minority interest increased in 2006 by NOK 0.7 billion compared with 2005. This was mainly due to the gains from the sale of Statoil Ireland in 2006 of NOK 0.6 billion before tax. Income before financial items, other items, income taxes and minority interest decreased slightly from 2004 to 2005, due to lower margins, particularly in Sweden, and restructuring costs.

The contribution from Borealis to Manufacturing and Marketing’s Income before financial items, other items, income taxes and minority interest was an income of NOK 2.2 billion in 2005 and NOK 0.8 billion in 2004. The contribution from Borealis increased from 2004 to 2005 due to the gain from the sale in 2005 of Statoil’s 50 per cent holding in Borealis to International Petroleum Investment Company (IPIC) and OMV Aktiengesellschaft. Statoil received EUR 1 billion (NOK 7.8 billion) for the transaction, which resulted in a tax-free capital gain of NOK 1.5 billion that was recorded as profit in the fourth quarter of 2005.

 

This excerpt taken from the STO 20-F filed Mar 20, 2007.

Manufacturing and Marketing

The following table sets forth certain financial and operating data for our Manufacturing and Marketing business segment and percentage change for each of the years in the three–year period ending December 31, 2006.

 

Year ended December 31

Income statement data (in NOK million)

2006

2005

Change

2004

Change

Total revenues

354,024

333,493

6 %

262,402

27 %

Cost of goods sold

329,072

308,124

7 %

243,026

27 %

Operating, selling and administrative expenses

16,035

15,704

2 %

13,896

13 %

Depreciation, depletion and amortization

1,919

2,072

(7 %)

1,581

31 %

Income before financial items, income taxes and minority interest

6,998

7,593

(8 %)

3,899

95 %


Operational data:

 

 

 

 

 

FCC-margin (USD/bbl)

7.1

7.9

(10 %)

6.4

23 %

Contract price methanol (EUR/tonne)

300

225

33 %

213

6 %

Petrochemical margin (EUR/tonne)

-

161

-

153

5 %

Years ended December 31, 2006, 2005 and 2004
Manufacturing and Marketing sells Statoil equity oil volumes, SDFI oil volumes and third party oil volumes.

Manufacturing and Marketing generated total revenues of NOK 354.0 billion in 2006 compared to NOK 333.5 billion in 2005 and NOK 262.4 billion in 2004. The 6 per cent increase from 2005 to 2006 resulted mainly from increased Oil Sales, Trading and Supply (O&S) revenues due to higher prices in USD for crude oil, but was partly offset by a reduction of 11 per cent in total volumes of crude oil sold.

The 27 per cent increase from 2004 to 2005 resulted mainly from higher prices in USD for crude oil, but was partly offset by the strengthening of the NOK versus the USD and a decrease in total volumes of crude oil sold by 3 per cent.

Cost of goods sold increased from NOK 243.0 billion in 2004 to NOK 308.1 billion in 2005, and to NOK 329.1 billion in 2006. The increase from 2005 to 2006 resulted primarily from higher prices paid in USD for crude oil.

The increase from 2004 to 2005 resulted primarily from higher prices paid in USD for crude oil and SDS being consolidated in the group’s accounts for 12 months in 2005, compared to only six months in 2004.

Operating, selling and administrative expenses increased by 2 per cent in 2006 compared to 2005. In 2005, operating, selling and administrative expenses increased by 13 per cent compared to 2004, mainly due to the full-year effect from the SDS consolidation and restructuring costs in Marketing.

Depreciation, depletion and amortization totaled NOK 1.9 billion in 2006, compared to NOK 2.1 billion in 2005 and NOK 1.6 billion in 2004. The decrease from 2005 to 2006 was mainly due to lower depreciation within Manufacturing as a result of extended life expectancy for the plants, following a review of the useful life of the facilities that took place during 2006.

Income before financial items, income taxes and minority interest for Manufacturing and Marketing was NOK 7.0 billion in 2006, compared to NOK 7.6 billion in 2005 and NOK 3.9 billion in 2004. The decrease from 2005 to 2006 was mainly due to the gain from the sale of Borealis in 2005, partly offset by the gain from the sale of Statoil Ireland and higher trading income in 2006. The gain from the sale of Statoil’s shares in Borealis and higher margins, combined with higher regularity within Manufacturing, were the main reasons for the increase in income before financial items, income taxes and minority interest of NOK 3.7 billion from 2004 to 2005.

In Manufacturing, Income before financial items, income taxes and minority interest increased by NOK 0.3 billion from 2005 to 2006 mainly due to reduced depreciation and the absence of losses on margin hedging compared to 2005. These were partly offset by lower refining margins. The increase by NOK 1.7 billion from 2004 to 2005 was mainly due to high refining margins and high regularity levels. In 2006, the average refining margin (FCC margin) was 10 per cent lower than in 2005, equivalent to a reduction of USD 0.8 per barrel. The average contract price on methanol was 33 per cent higher measured in NOK in 2006 than in 2005.

In Oil Sales, Trading and Supply (O&S), Income before financial items, income taxes and minority interest increased by NOK 0.6 billion in 2006 compared to 2005, mainly due to higher trading income. Income before financial items, income taxes and minority interest increased by NOK 0.7 billion in 2005 compared to 2004, mainly due to good results from trading operations and currency gains on commercial storage, which were partly offset by a lower contribution from the then contingent compensation arrangements relating to the sale of the Melaka refinery.

In Energy & Retail (formerly Marketing), Income before financial items, income taxes and minority interest increased in 2006 by NOK 0.7 billion compared with 2005. This was mainly due to the gains from the sale of Statoil Ireland in 2006 of NOK 0.6 billion before tax. Income before financial items, other items, income taxes and minority interest decreased slightly from 2004 to 2005, due to lower margins, particularly in Sweden, and restructuring costs.

The contribution from Borealis to Manufacturing and Marketing’s Income before financial items, other items, income taxes and minority interest was an income of NOK 2.2 billion in 2005 and NOK 0.8 billion in 2004. The contribution from Borealis increased from 2004 to 2005 due to the gain from the sale in 2005 of Statoil’s 50 per cent holding in Borealis to International Petroleum Investment Company (IPIC) and OMV Aktiengesellschaft. Statoil received EUR 1 billion (NOK 7.8 billion) for the transaction, which resulted in a tax-free capital gain of NOK 1.5 billion that was recorded as profit in the fourth quarter of 2005.

 

This excerpt taken from the STO 6-K filed Feb 12, 2007.

MANUFACTURING & MARKETING


Fourth quarter
Year ended 31 December
2006
2005
2006
2006
2005
2006
(in millions)
NOK
NOK
Change
USD*
NOK
NOK
Change
USD*
 
USGAAP income statement
 
Total revenues
84,581
90,960
(7%)
13,579
354,024
333,493
6%
56,838
Cost of goods sold
78,468
83,482
(6%)
12,598
329,072
308,124
7%
52,832
Operating, selling and administrative expenses
4,224
4,240
0%
678
16,035
15,704
2%
2,574
Depreciation, depletion and amortisation
748
546
37%
120
1,919
2,072
(7%)
308
 
Total expenses
83,440
88,268
(5%)
13,396
347,026
325,900
6%
55,714
 
Income before financial items, income taxes and minority interest
1,141
2,692
(58%)
183
6,998
7,593
(8%)
1,124
 
Operational data
FCC margin (USD/bbl)
4.7
8.3
(43%)
7.1
7.9
(10%)
Contract price methanol (EUR/tonne)
395
220
80%
300
225
33%


Income before financial items, income taxes and minority interest for Manufacturing & Marketing in 2006 was NOK 7.0 billion compared to NOK 7.6 billion of 2005. The decrease of NOK 0.6 billion was mainly due to contribution from the operation and the sale of Borealis in 2005 of NOK 2.2 billion, partly offset by the pre-tax gain from the sale of Statoil Ireland of NOK 0.6 billion and increased trading income in Oil trading.

In the fourth quarter of 2006 income before financial items, income taxes and minority interest was NOK 1.1 billion compared to NOK 2.7 billion in the same period in 2005. The decrease from the fourth quarter of 2005 to the fourth quarter of 2006 was mainly due to the sale of Borealis, which contributed to NOK 1.5 billion in the fourth quarter of 2005, combined with reduced refining margins and an infrequent expense of NOK 0.3 billion due to implementation of the new business model in Energy & Retail.

Oil trading income before financial items, income taxes and minority interest in 2006 was NOK 2.4 billion, compared to NOK 1.7 billion in 2005. The increase from 2005 to 2006 was mainly due to improved results from trading. In the fourth quarter of 2006, income before financial items, income taxes and minority interest was NOK 0.4 billion compared to NOK 0.5 billion in the same period of 2005.

Income before financial items, income taxes and minority interest from Manufacturing was NOK 3.7 billion in 2006, compared to NOK 3.4 billion in 2005. In the fourth quarter of 2006, income before financial items, income taxes and minority interest was NOK 0.5 billion, compared to NOK 0.8 billion in the same period in 2005. The increase from 2005 to 2006 was mainly due to reduced depreciation, partly offset by lower refining margins. The decrease from the fourth quarter of 2005 to the fourth quarter of 2006 was mainly due to lower refining margins. In 2006, the average FCC refining margin was USD 7.1 per barrel compared to USD 7.9 per barrel in 2005. The average contract price of methanol was EUR 300 per tonne in 2006 compared to EUR 225 per tonne in 2005, an increase of 33%.

Income before financial items, income taxes and minority interest from Energy & Retail was NOK 1.2 billion in 2006, compared to NOK 0.4 billion in 2005. Income before financial items, income taxes and minority interest in the fourth quarter of 2006 was NOK 0.4 billion, compared to a loss of NOK 0.1 billion in the same period in 2005. These increases are mainly due to the pre-tax gain from the sale of Statoil Ireland of NOK 0.6 billion and increased fuel margins, partly offset by an infrequent expense of NOK 0.3 billion as a result of the implementation of the new business model in Sweden.

On 13 October 2006 Statoil received the approval from Irish competition authorities to finalise the sale of Statoil Ireland to Topaz Energy Group. A pre-tax gain of NOK 0.6 billion was booked in the fourth quarter of 2006.

In December 2006 it was decided that Energy & Retail will implement a new business model in Sweden. This means that Statoil will take full, end-to-end, ownership of the fuel business, while the franchisees in the retail network will increase their share of the non-fuel business. This will enable better control of micro market pricing that is expected to give higher margins and increased logistics efficiency.

 

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