Press Release

Date: 15. 07. 1998

Statoil valuation

The Ministry of Petroleum and Energy has received the two annual valuations of Statoil. The valuations show an increase over last year. SBC (Swiss Bank Corporation) Warburg Dillon Read has estimated the value of Statoil to 136 billion Norwegian kroner (NOK) and DnB Market's estimate is NOK 130 billion.

The valuations are important for the State in the owner's follow up of Statoil. In addition to estimating the market value of the company (as if quoted on the Stock Exchange), analyses and evaluation of the profitability, solidity, choice of strategy, market development and comparisons between Statoil and its competitors have also been carried out. The owner can via the valuations get a better insight in the dispositions and results of the company, strengths and weaknesses, historical and possible future development etc. The benchmarking between Statoil and its competitors are very important to measure whether the company meets the owner's aim on return of equity in line with the best of the comparable companies.

The valuation of Statoil by SBC Warburg Dillon Read is NOK 136 billion. This represents a value increase of 15 % from last year's estimate of NOK 118 billion. Including the dividend, the owner's economic return increased by 18 % compared to last year. According to Warburg Dillon Read, cost cutting initiatives, active portfolio management programmes, focus on competitive advantages, use of alliances etc. demonstrate a clearer understanding of the key drivers of shareholder value within the sector. The resource supply and the results from the international portfolio look promising. Warburg further mentions lower net income than in 1996, an aggressive investment program, lower return on average capital employed (ROACE) (8,6 % and lower than the industry average of 11,6 %) and high net debt.

The Statoil valuation by DnB Markets is NOK 121 - 134 billion (average value NOK 130 billion) showing an increase of 10 % from last year. Including dividend the owner's economic return increased by 12,8 %. DnB points at the fact that activities on the Norwegian continental shelf, refining, marketing and petrochemicals have shown low value change from 1996/97 (weak negative change), while the relative importance of the international engagement increased (112 % increase in oil and gas reserves and an increased share of total value creation - 6 % in 1996/97 and 22 % in 1997/98). In the valuation report DnB has emphasized possible strategic development of Statoil in the future. DnB stresses the need for stronger focus within the company and redesigned corporate governance system.

- The increased value of the company is very positive, says the Minister of Petroleum and Energy, Marit Arnstad. - Statoil is still facing great challenges in the years ahead. The development of the international engagement is very interesting. The company is in a strong competitive situation. Activities to improve profitability is necessary. At the same time the concentration on the core business must be strengthened, says Minister Arnstad.