Good afternoon, ladies and gentlemen. And welcome to the Statoil’s First Quarter Earnings Presentations and Conference Call. My name is Hilde Nafstad, I’m the Head of Investor Relations in Statoil. Before we start, let me say that that there no fire drills planned for today. So, in case the fire alarm goes off, you will need to exit through the two doors in the back of each side of the room. And continue on towards the same sides. This morning at 7:30 Central European Time, we announced the results for the first quarter of 2011. The press release regarding the results was distributed through the wires and through OSLO stock exchange. The quarterly report and today’s presentation can as usual download it from our website, statoil.com. There a link directly to the presentation on the front page of statoil.com. I will ask you to kindly take special note of the information regarding forward-looking statements, which can be found on the last page of the presentation set. Please note, that questions can be post by means of telephone. Questions cannot be posted directly from the web. The dial-in numbers for posting questions can be found on the website. The operator of the conference call will explain the procedure for posting questions over the phone immediately before the Q&A session starts. It is now my privilege, to introduce our Chief Financial Officer, Torgrim Reitan.

Thank you, Hilde and good afternoon everyone. It is a pleasure for me to present our results for the first quarter 2011, a quarter with very good progress within key areas. The production has developed as we planned and it is satisfactory in the first quarter. It is in line with my expectations so far. We have had significant progress when it comes to putting new production capacity on stream or demonstration plant, at Leismer in Canada and the field developments, Peregrino in Brazil are both on stream currently. Both of these are examples of large developments that are now put into production. And these fields, they are in ramp up phase and are both long lived assets. And they will contribute with more than 70,000 barrels per day in new capacity through Statoil. Furthermore, we have now closed the sales process of selling 40% of both of these assets which we used to own 100%. And those transactions, those are generating proceeds of more than NOK 30 billion and accounting gains of more than NOK 14 billion. You should please note that it is only the oil sand transaction that is part of the first quarter results, the Peregrino transaction, that was closed in April, and that belongs to the next quarter. So, through these transactions, we have demonstrated how we create value. We have applied our North Sea experience and competence through large and complex developments and we have demonstrated value creation through the portfolio optimization. Furthermore, we have sanctioned new projects in Norway, in Canada and in Algeria. Vigdis North and Kathla (ph) in Norway, those are both part of the fast track portfolio of projects, Hibernia in Canada and the In Salah Southern Field in Algeria. In February, I told you that we sanctioned 20 projects…

Thank you very much, Torgrim. We will now turn to the Q&A session and for this session Torgrim will be joined by the Senior Vice President for Accounting and Financial Compliance, (inaudible) Thomson (ph). This session will last for approximately 15 minutes. I will ask you to please limit yourselves to one question at the time. For the audience in the room please raise your hand if you have a question, microphones will be passed and please keep the microphones close to your mouth. Please state your name and your company. Operator, can you please explain the procedure for asking question over the telephone.

(Operator Instructions), thank you.

We will first take questions from the audience here in Oslo and do we have any questions from the room? I cannot see any hands, so I suggest we then turn over to the audio conference. Audience are there any questions, operator.

Yes, ma’am we have three in the queue at this time and we’ll take the first question now. (Operator Instructions). Oswald Clint – Sanford Bernstein: Hi Oswald Clint, here from Sanford Bernstein I’ll just try two quick ones please Torgrim. Firstly, just on upstream OpEx on a unit basis does seem to up quiet substantially even though you said, there was a slight increase in operating cost. Look’s to be up 9%, 10%, I wonder if you could just take about that what could be the major drivers of that, and that’s on a year-over-year basis. And second question just carries on our reversal, on the co-point re-gasification terminal, almost 12 months after you actually that done. In terms of why you riding back half of that provision from last year, thank you.

All right, thank you. When it comes to unit production cost, there is an increase year-over-year on that one. It is mainly related to cost related to start up production, and we’re in that the period now, where we are preparing for lot of startups, and the startups are coming later. And one example of that is the Peregrino field that started in April, where we had significant costs in the quarter, related to that field to get on stream. So that is the major part of that explanation. Going forward, we don’t give a specific target on the unit production cost, we see that it is slightly increasing, it is slightly increasing as we go, not much more than by inflation actually, so it is in that range. What we aim at is to maintain our competitive position when it comes unit production cost, we’re among the better companies on benchmarks, and we aim to maintain that competitive positions. Specifically, I would like to mention the Norwegian Continental Shelf, where we’ve heels in lot of different faces, we’ve some feels that are in the climb, and have very high unit production cost, we have fields with close to NOK 100 per barrel, and we’ve new fields with significantly lower, and we see that a new field actually compensates well for the more old fields, when it comes to unit production cost, and then the Norwegian Continental Shelf level. But you should expect this permit to increase slightly as years goes by. When it comes to Cove point, and Cove point expansion, we did quite some payments latter that last years. What has happened over the last year, is that we renegotiated the capacity related to Cove point expansion so that was on the explanation of the reversal that we did in, that was in the fourth quarter. The Cove point, and Cove point expansion is looked upon as one common asset from an accounting point of you, and related to this now with volumes. We see increased value of (inaudible) away from the US, so these Norwich Cargos are not going to that terminal they are going all the places at significantly higher prices. So, the value of that value chain is higher, when the spread is high. So that is the main explanation for the reversal of that one, so the value of our energy value chain is higher now, than we expected it need to be last quarter.

Operator. Next question please operator.

Thank you let’s go to next question now.

Hi, (inaudible) from Bank of America Merrill Lynch. A couple of questions, your gearing is obviously falling quite dramatically post the booking of the Canadian asset sale, and your looking to book Peregrino in the second quarter, so again you should see another substantial drop off in gearing. Can you just give us some color around how management is now considering the gearing level, are you looking towards acquisitions or shareholder distributions to address what is a very lowly geared balance sheet, and also just coming back on to the cost side, are you now in a period, where you feel that all the cost reductions, that you were aiming for in your previous targets have been achieved or do you believe that cost can remain under control, and you continue to cut cost, and implement initiative, are should we continue expect cost of the growing line with inflation, thank you.

All right, thanks. First giving it is a comfortable situation, when it comes to the balance sheets, and as a CFO it is all of a good place to be, whoever of course, this the situation that we monitor closely. The bet proposition I can give it you as investors is quite easy, it is actually through realized a great project portfolio that we hand we have more than 100 projects in the pipelines, we’re going to sanction 40 more over the next two years. And we’ve a lot of things to do in the portfolio, and those projects actually compete very well in the industry, when it comes to breakeven price, and average breakeven price is around $50 per barrel. So that is to me the best value proposition I can give, and the best way that I can use, that we can use the moment. Well that said, we’ve an investment program which is at $16 billion this year, and with the current price environment, and that is all gearing is expected to decrease if that persist. On your specific comments on M&A, of course, I appreciate the question. But, we’ll of course not answer that question, what I can say is that our radar screen is large it has always been, we’ve been quite actively in the acquisition and the divestment market of the last four to five years, so you should expect there to be activity on that going forward as well. When it comes to capital distribution we had suggested to the annual general meeting dividend of NOK 6 and 25 and that will be paid in June, early June. And we are also asking the annual general meeting for a mandate for share buyback, but please remember that is one thing that we have done for many years so that is just to have the tool box available as we always wanted to be fully loaded. So that is the guidance I would like to give along that well. When it comes to costs and cost reduction, we took all significant synergies after the merger that is more or less delivered. We of course had benchmarked ourselves heavily towards other companies and other peers when it comes to cost competitiveness, also beyond the unit production costs. We see that we compete well across most perspectives, but when that is said we can always be better at costs and that has still significant focus in the company. So, the initiatives that was implemented after the merger that has been delivered on, we are working constantly on the further reductions. And for instance, during the financial crisis, we said okay, we will have to do a quite a bit and we did and few examples, we reduced travel cost by, ticket was 27% in the company over a year, just one small examples that goes along a lot of categories. But, we are working seriously on further cost improvements going forward. I think that is important.

All right.

Yeah, thank you.

Operator, do we have more questions for the audience.

Yes ma’am, we do ma’am, we’ll take the next one now.

(Inaudible) Securities, I have two questions, first one is related to the NPR results reported for a week for sales compared consensus and you say that is due to difficult trading market and low natural gas margins. So, my question is how is the outlook for this division. Second question is related to the Peregrino how is conductor announcing for 10 April, is this is potential time counter that to the current estimation what is the role of potential of this discover. Thank you.

All right, thanks. NPR results and the question what we expect going forward, there are some stable elements of that results is the results from the Gassled and the transport and processing that will typically be a stable part of the results, the refining business, will fluctuate with the refining margins from quarter-to-quarter and then it comes to the more commercial units and they will typically also fluctuate, they depended on the market opportunities as they arise. So, with this hard to give a guidance on the level, you should expect it through the fluctuates, I would say that last quarter is sort of not very good results from the trading activities but it is expected to fluctuate. Just to give some flavors on the main drivers of the natural gas trading results that prices on the national balancing point was increasing quite rapidly through the quarter, we have always a lot of gas at hands that we need to sell and we cannot sell it on the day ahead basis. So, we need to be in front of the market, so we sell gas on before we actually get to the day when we have to deliver it. So that is, so there is a lagging effect in the results on the gas, while internal price between the upstream business is an average of the prices noted in the market in the period, so that explains part of it. On the oil side it was especially a link to almost the products, a strategy which was very profitable last year and this quarter it has impacted negatively on that strategy. But that strategy in whole is providing value, so that’s just exemplifies that the results will fluctuate dependent on the market circumstances. When it comes Peregrino results, I’m enthusiastic about it, we reached a 130 meter column of hydrocarbons, we have not stated the volumes related to it and so I’m not prepared to that currently but it proves that area where we have Peregrino is an exciting one it has potential beyond the Peregrino field and it serves as you know firming up volumes we expect someday it will be produced.

Thank you. Next question operator.

Yes ma’am, here we go. Brian Mckenzie – Royal Bank of Scotland: Good afternoon, it’s Brian Mckenzie from Royal Bank of Scotland here. Thank you for the presentation. I have question on slide 7 on the cash flow, you show the cash flow of underlying operation is 57 billion taxes paid like 16 of that, can you help me reconcile please with the stated cash flow was provided by operating activities on 32 of the release which are NOK 30 billion for the quarter and some large moving (inaudible) capital section and the largest – the largest the increase in the current financial investments, if you could help me understand, that would be great. Thank you.

All right, thanks. I leave that to (inaudible) Thompson, attempt to that question.

Yeah, you referred to page 32 of the financial review which starts with a 50.3 cash flow from operating activities and what we have done is adjusted for the next part which is called adjustments to reconcile to net income to cash flows provided by operating activities and the depreciation and expiration and the FX and the sale of assets and that’s altogether net 6.4 billion, that takes the 6.4 and the 40.23 up to 56.7. When you ask about the cash flow from operation, I also want to emphasize that for accounting purposes, the changes to financial investments and derivatives is an operational part of the cash flow, but it’s really for us part of the liquidity, what’s placed in the market between over and above three months is not cash and cash equivalent anymore, it’s on the operation. So, they build up the change of 13.2 billion is not really from commercial point operation it’s the financial deposits which we make in the market 3 to 12 months. Brian Mckenzie – Royal Bank of Scotland: Thank you.

Do we have any more questions operator?

Yes ma’am, we do. One moment please. Michael Rollins – Citi: Hi there, it’s Mike Rollins from Citi and I have got two questions please. Just firstly on the natural gas market in Europe, could you maybe give a better color as to what you are seeing currently from the outsource gas buyers and whether you are saying so the increase off take from your long term contracts currently given with (inaudible) spot prices at the moment and the fact that maybe they used in the incentives just take volumes under the long term contracts currently, because you seem to be talking down a little bit production for second quarter and third quarter. And then secondly, just on the gas slide, you highlight, you’ve might essentially sell your equity state in gas slide, could you maybe give a bit more color as to are you looking to complete the best of your state in gas slide or are you looking to take a partial sale or maybe you looked on the timing as to when we might see you looking to the divest of stake. Thanks.

Okay, thanks. First on the outlook and Europe gas markets, it has been a market you know, quite a bit of turbulence over the last few years, and you know in previous job, I had looked trading activities within natural gas. So, from 2009 and onwards we were actually surprised by two things, one was the strength of the recovery, and the demand recovery especially in Germany, and the second one was the increased demand for gas towards Asia. So that surprised us on the up side so the markets, so the markets firmed up quite rapidly. And I would say actually both of those two points are still valid going forward. So, the prices currently they are quite healthy, if you look at the spot prices. In the historic context, it’s around 2006, 2007 levels, ‘07 levels I think which is sort of good. And natural gas competes currently very well with alternative sources of energy. We see that in both the case, the German nuclear capacity is down and also the tragic situation in Japan after the Tsunami and earthquake has actually firmed this further. So, we see a European gas market where gas is attractively priced compared to alternatives. And where this, it is robust prices as we see it. I won’t speculate into the further development but it’s an okay market to operate in. And if you consider our position in this, you should remember that Norwegian gas has to travel one fifth of Algeria gas, one tenths of Russian gas and also, one eights of Russian Gas and one tenths of Qatari Gas Research. And we have low unit cost for our gas and we have access to all the landing points. So, we consider ourselves to be a very well positioned for what to come in that market. When it comes to Gassled and sales process, you are right. We are evaluating the assets and evaluating whether that has more value for others than for us. So, we are thinking about it. I will not go into any specifics on the timing of it. But you are right. We are thinking about that asset. Michael Rollins – Citi: Okay, thank you.

Next question, please.

Yes ma’am. Brendan Warn – Jefferies: Thanks, this is Brendan Warn from Jefferies, just one quick question, Torgrim. Just as I, (inaudible) horizon indicator of cost and a reflection of your cost reduction. Just can you make a comment on the trend of the total recordable and loss time injury frequency looks to be heading more trending back up to where you were in 2006, 2007?

Yeah, that was the loss time frequency. And so, they have, I mean, if you look at safety KPIs in general, it is a positive trend over the years. The serious incident frequency which is the one that we consider the most important one, we have reduced that significantly over the years. I think it was around 6 in 2006, and in 2010, it was 1.4 as far as I recall. And this quarter, it is 1.2. So, that is progressing well. When it comes to the other ones, I’m not prepared to answer in detail the explanations of those developments. But I can make a general reflection on the importance of safety, which is to our company extremely important. And we consider ourselves to be good in that respect. But we need to be better and better and better. And that we’ll encourage you to, there is a letter to the PSA authorities, after the Gullfaks incident, which was an important learning exercise for the company, that was an incident where we were the barriers functioned. But it had a potential, we agree to that. But as for us, it’s important that we never, never get complacent when it comes to safety, we need to be better every day on this one. We are progressing and have full attention to it. Brendan Warn – Jefferies: Thanks.

Do we have any further questions from the audience.

Yes, we do ma’am. Just one moment, please. Lucy Haskins – Barclays Capital: Good afternoon, Lucy Haskins from Barclays Capital. Torgrim, you talked about more downside risks to the production going through this year and talked about gas off take. Are you also starting to see a higher instance of unplanned maintenance on the NCS? And sort of, how much kind of contingency are you still building into your forecast for this year and indeed the treatment, (inaudible) growth rate out to 2012. By nature, the impact is slightly ageing, sort of productive capacity in that part of the world?

Okay, very good question, thank you. I deliberately said that is more downside risk than upside risk in production in 2011 compared to 2010. And I said that in February, at the Capital Market Update and it is still valid. So, the main risk elements were related to this year is ramp-up of production from new fields. It is maintenance that we are able to, to deliver on the maintenance program and step up the production after the maintenance program, which is as important. It is related to gas off take situation over the year. And it is also related to opportunities in the gas market to differ gas production to a later point in time. So, that is the main uncertainties, main uncertainties. Furthermore, we have not catered for large incidents beyond what you sort of should expect from a company like ours. You should expect that we will have unplanned losses as we operate a significant portfolio, that we’re catering for instance incident like the (inaudible) pipeline a few years back when somewhat tried an anchor over a pipeline and destroyed it. So, we’re not catering for that. Furthermore, we’ll remind you that we said 2010 level or slightly lower. So that is the wording that we use on it. So, we are, we have produced so far this year as I should expect but it is not more than what it should be. When it comes to unplanned losses so far this year, we have had some. If you look at the rate compared to earlier year, it’s approximately where it has been over the last period or such. So, there are no big changes in that respect. Lucy Haskins – Barclays Capital: Many thanks.

Next question please.

Yes ma’am. Jon Rigby – UBS: Hi, it’s Jon Rigby from UBS. Two questions on tax, just to follow up on Peregrino. On tax, can you just confirm whether the guidance you’re providing on the international tax rate is a permanent feature or just one this related to current producing conditions and oil price? Then the second, I almost hesitate to ask this, when you clean up your financial items, and still get a charge for the year. Your also show a charge on tax, a tax charge on a charge. I just wondered what was going on there and what we could expect on a cleaned up basis, what you’re tax rate would be on financial items? On Peregrino, can you just confirm, you receive some cash already. Is there a net cash to balance to receive while you’re getting the full amount in the second quarter? Thanks.

Okay, thank you. (Cody), you can start preparing for the question on financial items and tax. When it comes to international tax, I understood your question, whether this was a permanent change in the tax, expected tax internationally. I mean, the tax rate in this quarter was very high in the international segment. You should also expect it to be 50% to 55% over the next year or so. We have earlier guided on 40% to 45%, so yes, in the short term you should increasing in the tax rate internationally. However, Peregrino is steeping up. And our production in the U.S. and Canada is stepping up, with a much lower tax rates, so that will drag it down over a couple of year as such. So that is what you should expect, and then just a reflections on all these things to lookout for in the international segments, when we’re drilling wells, if we’re drilling wells in countries, where we don’t have tax protection, or tax position it will typically impact more on the tax rate, than else for instance the key reveal this quarter. And we in the late quarters, we have had dry wells in the Gulf of Mexico and in the US we don’t have tax protection either for accounting proposes. So, dry wells in those areas will typically drag up the tax rate, and within the international segments, when it comes to Peregrino, yes, we’ve received the money related to Peregrino that was received in late April, so that it’s in our accounts. Jon Rigby – UBS: That was all, the full amount this Peregrino had you received?

Yes, that was the full amount, and fully paid and sits in our accounts, so that is fully received. The tax rate on financial items is hard run to predict because it all depends you have in the group we could have terms in or losses in one jurisdiction in another jurisdiction and also the tax rates very, very much from approximately 20% up to 60% to 65% for the net financial items, and especially when the net financial items come down to zero, it could up, it could be any percentage the tax rate as it is now, it’s minus 114% (ph), but what we say if have to say a figure which should be an average figure, we’ve set 40% to 45% on the net financial items. But that is the tax item which can vary the most in the whole composition of the tax. Jon Rigby – UBS: Okay, thank you.

What I think we’ll ran off with one last question if there are any more questions in queue.

Very good, Ma’am we actually do have one question, I’ll put up in right now, please hold. Stephan – Morgan Stanley: Hi, it’s Stephan here at Morgan Stanley, just a couple of follow questions. Firstly, could you just on volumes could you gives us an estimate what you think year end production would be for a Peregrino so the exact right. And then secondly just if could give us an update in terms of, where we are on sort of final investment decisions, there are some of the key projects for this year. And then, lastly I think on the (inaudible) announcement you suggested the potential for an appraisal well, I know you’re going to be drilling another well on the license, for the next year, I was just wondering, when do you that appraisal well maybe drilled.

Okay, the year-end production on Peregrino, we’ll not give an estimate on that one, what I can say is that it’s going to be fully seven wells in that license, and they will have each of them have a significant contribution as well, I mean we’re progressing on preparing the wells and these wells tied up already, so the step up is progressing as expected when it comes to Peregrino. When it comes to key projects for this year, step up we have on Peregrino, we have Scarb (ph) as key projects for production in 2011 that is a BP operated and that is expected to start up in the second half of the year. We have (inaudible) which is put all operated license in Angola that is going to have a large impact in 2012, but we expect it to start up in the very end of 2011 and then I would like to mention, Shelf Eagle Ford and Marcellus which are stepping up. We have re-cruise and frac cruise available that we need to build up and it is building up as expected as such. But that is as you know invest and drill as you go so that might vary going forward on the step up related to that. Yeah, so that is the main contributors to 2011 step up production. Then you last question screw garden appraisal well, I mean we are sort of enthusiastic about the year and so on and we have more work to do up there. I am not prepared to discuss on when that is going to happen, but it is important to firm up the volumes in that area and so on, so we can mature it even further.

All right, thank you. Unless either any further questions in the room here in Oslo. One last question.

On the announcement again, when it comes to natural you previously indicated that based on contracts renegotiated, it’s basically 70% that you sell oil linked and 30% that you see in these markets, if that’s also good indication going forward if you assume relatively high uptake?

I think just a second. I think there are couple of points I want to make in that respect. First of all, we have in 2009 when we faced a significant drop in annual prices, we renegotiated the contracts we were early out in that respect and then we had a grace period for three years as such. So what we did was to pitch some more spotting decisions into the gas formulas as such together with that we had excess capacity to pipelines and liquid markets as such so we could operate that. When that said, when it comes to the mix of spots going forward, you should expect actually this year to be less, I don’t have specific numbers in front of me here but you should actually expect the exposure to spot to be less this year than last year. So that is but we can say is that if you look at the long term contracts around 70% of that volume is linked to oil and gas products as such that is still valid and there is a certain amount of gas with outside the long term contracts as well.

Thank you, I think that will have to conclude our Q&A session and also our program for today. Today’s presentation on the Q&A session can be replayed from our website and in a few day transcripts will be available. Any further questions can be addressed to the Investor Relations Department. Thank you all very much for participating and have a good day.