Equinor ASA (EQNR) Q4 2012 Earnings Report, Transcript and Summary

Hilde Merete Nafstad - Senior Vice President of Investor Relations Torgrim Reitan - Chief Financial Officer, Executive Vice President, Chairman of Corporate Risk Committee and Member of Corporate Executive Committee Svein Skeie - Senior Vice President for Performance Management and Analysis Oystein Michelsen - Executive Vice President of Exploration & Production Norway Business Area Eldar Sætre - Executive Vice President of Marketing, Processing & Renewable Energy and Member of Corporate Executive Committee

Brendan Warn - Jefferies & Company, Inc., Research Division Alejandro Demichelis - Exane BNP Paribas, Research Division Paul G. Spedding - HSBC, Research Division Haythem Rashed - Morgan Stanley, Research Division Rahim Karim - Barclays Capital, Research Division Michael J. Alsford - Citigroup Inc, Research Division Irene Himona - Societe Generale Cross Asset Research Marc B. Kofler - Macquarie Research Peter Hutton - RBC Capital Markets, LLC, Research Division Neill Morton - Investec Securities (UK), Research Division Oswald Clint - Sanford C. Bernstein & Co., LLC., Research Division Teodor Sveen Nilsen - First Securities AS, Research Division Brandon Mei - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division Jason Kenney - Grupo Santander, Research Division Anne Gjøen - Handelsbanken Capital Markets, Research Division John A. Schj. Olaisen - ABG Sundal Collier Holding ASA, Research Division Lars-Henrik Roren - SEB Enskilda, Research Division Jon Rigby - UBS Investment Bank, Research Division Theepan Jothilingam - Nomura Securities Co. Ltd., Research Division Christine Tiscareno - S&P Equity Research

Ladies and gentlemen, welcome to Statoil's Fourth Quarter Earnings Presentation and Capital Markets Update, most to the audience here in London and to audio and webcast audiences. My name is Hilde Nafstad, and I'm the Head of Investor Relations in Statoil. Before we start, let me say that there are no scheduled fire alarm tests today, so if the fire alarms do go off, please listen to the announcements and follow the instructions. The fire assembly point is over by St. Paul's Cathedral opposite the Blacks camping store. The venue management team will be on hand to assist. The nearest fire exits to this location are out of the entrance doors behind me, and turn to your left or right. The fire exits are indicated by the green running man sign. In the event of a medical emergency, please inform the event management team who are trained first aiders or, where required, can contact the relevant services. This morning at 7:30 Central European Time, Statoil announced the results for the fourth quarter and full year of 2012. The press release and presentations for today's event were distributed through the wires and through Oslo Stock Exchange. The quarterly reports and the presentations can, as usual, be downloaded from our website, statoil.com. I would ask you to kindly make special note of the information regarding forward-looking statements, which can be found on the last page. Our CEO, Helge Lund, will not be present today. He is attending a reception in Bergen to receive the casket of our esteemed colleague and country manager for Statoil in Algeria, Mr. Victor Sneberg, who was killed in the terror attack in Algeria. Today's program will start out with Statoil's CFO, Torgrim Reitan, who will go through the earnings, the strategy update and the outlook for the company. Then after the break at 2:00, EVP Oystein Michelsen will give an update on the Norwegian continental shelf, followed by EVP Eldar Sætre, who will give a presentation about natural gas. After the presentations, Q&A sessions will follow. Please note that questions can be posted by means of the telephone, but not directly from the web. Dial-in numbers for posting questions can be found on the website. The operator of the conference call will explain the procedure for posing questions over the phone immediately before the Q&A session starts. The event will close around 3:30 U.K. time. It is now my privilege to introduce our CFO, Torgrim Reitan. Please, Torgrim.

Thank you, Hilde. At In Amenas in Algeria, we are part of 2 international corporation, 3 companies from 3 countries and 2 continents and suppliers from across the globe. Colleagues from Algeria, the U.K., Japan, U.S., Canada, Ireland, Norway and others, and this is what the terrorists who cold-heartedly attacked. More than 40 people from 10 countries were killed, innocent people with rich lives, and in Statoil, we lost 5 of our best. We share the pain and we share the sorrow of all the families who have lost their loved ones. It is difficult to understand and it is impossible to accept that our colleagues are the victims of deliberate and gruesome violence. Our response to this evil has been to respond with determination and to reach out with care and support to the victims and the families. In these dark hours, we have also experienced the character of a people. On behalf of Helge and the rest of the company, I would like to thank you for the support and the sympathy we have received from partners, from authorities and from the financial community from all over, and that means a lot to us. Terrorism is a global challenge, and it needs an international response. Statoil cannot respond alone, but we will work together with authorities and our partners, and we will do our part. And we have the responsibility to learn and to improve and to protect our people and our assets. And we will not be deterred from doing business around the world. We are going to share our experience. We are going to share our know-how in bringing energy to those who need it. Today, I will show you the states -- or we will show you the state, that the state of Statoil is strong. I will start by going through the results and give you an update on our strategy and our outlook, then Oystein and Eldar will cover our activities on the Norwegian continental shelf and in the gas markets. And then we look forward to taking your questions and discuss these issues with you. We have started our fifth decade of growth. Last year, we marked the 40 years anniversary, and in the last few years, we have accelerated that development. From a Norwegian national oil company to a globally competitive oil and gas company, we have achieved necessary scale, and now, we have operatorships in several of the most attractive basins around world. From an integrated oil and gas company to a focused [indiscernible] company with a clear strategy, selling non-core assets and putting our money where our strategy is. From resource constraints to opportunity-rich, we are delivering industry leading exploration results and production growth. And we have moved from financially restrained to having significant financial flexibility. We have brought down our net debt to 12% currently. So we enter 2013 from a robust position, and then we do look forward to the next 40 years as well. 2012 was a year of records for Statoil. We delivered strong results across the business. When we broke new barriers, we produced more than 2 billion barrels per day in 2012. And 2 years back, I'm sure you will recall that we said we will grow with 3% on average from 2010 to 2012, and I am very glad to be here today and tell you that we have delivered on what we have said, that meant a production growth of 8% from 2011 to 2012. We delivered strong earnings, and the earnings are growing. Our cash flow from underlying operations is the best ever, more than NOK 250 billion last year. Then reserves. Reserve replacement rates is 110% in 2012. Then you take into account the divestments that we did, it is 100%. Exploration was another -- had another great year, adding 1.5 billion barrels from the drillbit. That is the best exploration year since 1997. And then our dividend policy remains firm, and we proposed to continue the growth in the dividend, NOK 6.75 per share this year, and that translates into a direct yield of around 4.5 percentage points. For 2012, we delivered strong adjusted earnings; it increased 7%. And we reported an earnings per share of NOK 22. And in the fourth quarter, earnings increased by 5% when we make the adjustments to reflect the underlying operations. And this growth of 5% comes even without the results from Statoil Fuel & Retail and Gassled that have been part of earlier years' results. Then I know that tax on adjusted earnings is a bit lower than what you expected. Simple reason behind that, the lower tax rate is mainly due to deferred tax assets in the international business. And you will find that the tax rate for the year, 71.5% is within the guided range of 70% to 72%. We can report strong performance across the business -- across the segment. Our Norwegian business continued to deliver strong earnings and earnings growth for the year. And there's particularly one thing I would like you to see, that even if we have more fields into production now, costs are stable. We have kept operating costs stable for 5 quarters in a row. So our cost focus is paying off. And Oystein, he will come back to the NCS later today. From our operations outside Norway, we see increased earnings. Earnings grew by 20%, and production grew by 25%. And we are ramping up production from Peregrino in Brazil, from Pazflor in Angola and the Pazflor in -- Bakken in the U.S. and Pazflor in Angola. And currently, around 1/3 of our production comes from outside of Norway, and this is profitable production. The cash flow per barrel is on par between the Norwegian production now and the international production. So we are growing internationally, and it is a profitable growth. Marketing, processing and renewables contribute with close to NOK 18 billion last year, and that is a 60% growth. We have record gas sales, and we have record gas prices in Europe. And in addition, our traders are doing well, and they achieved better margins from our refineries. And Eldar, he will tell you more about this later today. In 2012, we produced the barrels we promised you at the Capital Markets Day in New York 2 years ago. Average annual growth from 2010 to 2012 was 3%. And then last year, it increased by 8%. In the quarter, it was up 3%. We responded to strong gas markets and increased gas production on the NCS, and we are ramping up production as I have told you. And we have also reduced the maintenance compared to the same period in 2011. We are on course to profitable growth, our production to above 2.5 million barrels per day in 2020. And this means that 3% growth on average throughout this decade, and our current resource base has a potential well beyond that. And I will come back to the details of that later in my presentation. I'm following the cash flows very carefully, and cash flow from underlying operations was record strong, more than NOK 250 billion last year. It was up NOK 20 billion from 2011. We sold oil and gas -- more oil and gas to higher prices, and, of course,, we had to pay more taxes as well. Our organic CapEx was $18 billion, and that was in line with what we told you in advance. And after dividend, we are left with around NOK 26 billion for the year. Net debt has been reduced from 21% at the start of the year to 12% at the end of the year. So let me now move over to give you an update on our strategy. 2012 was a year of strong strategic progress. In Norway, we are growing, and we are growing on back of a rich and highly profitable portfolio. And we are on track to grow our production to more than 1.4 million barrels per day in 2020. We are positioning ourselves for the future gas markets in Europe. In 2012, we realized highest gas prices ever in Europe. Negotiations have been concluded for the majority of the volumes, and we have agreed on the sustainable solutions for all parties. We are actively shaping this market, and we are seizing new opportunities. We are deepening our positions in the offshore basins, and we had another strong year within exploration, with 5 high-impact discoveries. It was Havis in the Barents, it was King Lear in the North Sea, Zafarani and Lavani in Tanzania and Pão de Açúcar in Brazil. Within unconventionals, we will now operate production from all the 3 U.S. plays that we are part of. And we have doubled the production from Bakken as we acquired it one year ago. And we are making money on our unconventionals in today's prices and with the current differentials. And finally, we will continue with portfolio management as a key part of our strategy. You have seen the successful divestments we have done from -- of our retail business, and we have also realized substantial value from non-core assets in the transactions with Wintershall. In total, we have delivered gains of more than $6 billion over a short period of time. So we will continue to add and subtract to our portfolio, and you will recognize the pattern. We are sharpening the growth, putting our money where our strategy is, securing influence and control to Statoil and giving us added financial flexibility. We are in a robust position to finance our growth, but first of all, in the past 4 years, Statoil has generated strong cash flows. This has provided strength and flexibility to invest in our projects, reducing our net debt from 27% to 12%, and at the same time, maintaining a firm dividend policy. And then we have maintained our solid credit rating, of AA-. Over the next 4 years, we aim to follow a similar pattern. We are going to generate significant free cash flow from operations, and we will actively manage our portfolio going forward, and then we will continue with our dividend policy, which is to grow the dividend in line with underlying earnings. Let me then turn to how we are investing the capital. In 2012, our producing assets generated around $10 billion in free cash flow, that is after investment. And the producing assets will continue to deliver a solid free cash flow over the next years. That means that if we had selected not to invest on new assets, we would have paid back the entire company value by 2020. But we are reinvesting, and we are reinvesting to deliver even greater value to our shareholders. With our return on capital employed above 15% last year, we are in the top quartile compared to our peers. And we will invest in a controlled way. This year, we expect to invest from $19 billion on organic investments. And over the coming 4 years, we see an average yearly CapEx of around $21 billion. And this is consistent with delivering on the 2.5 million barrel per day ambition in 2020. We have more than 100 projects that have a potential production capacity of 1.9 million barrels per day ahead of us, highly attractive and profitable projects that are competing well within the industry. The average breakeven price for our sanctioned projects is $50 per barrel, and the average payback time from production start is actually 3 years for the new project. But this money will come back quickly. And as a last point, let me remind you that we operate most of our investments ourselves, and 40% of our total new project has not yet been sanctioned. So we have the flexibility to adjust and optimize as we choose. Then over to Norwegian tax system. 40% of our projects are located in Norway, with a tax system that gives a very efficient cash recovery of CapEx. I get questions about the Norwegian fiscal regime, and yes, 78% is a high tax rate. But what makes this work is that the system is balanced. And due to depreciations and uplift, we get back 93% of our investments as reduced taxes, and that is just over the first 6 years. So this means that of the tax CapEx, cost is only 7% of the pretax CapEx. And it's, of course, the after-tax investment that will impact our cash flow. Projects are put into production as planned. Since the strategic reset in 2011, we have delivered the first growth wave, 400,000 barrels per day in new production capacity for Statoil. And to put that in context, that is 4x the contribution from Gullfaks to Statoil. And the projects that are operated by Statoil have been delivered on schedule and at cost. Towards 2020, we will add an additional 1.9 million barrels per day of new capacity, and 900,000 of those will come over the next 3 years. Our fast-track portfolio, they will produce 100,000 barrels per day for us in 2014, that is stronger and it is faster than expected. So this is substantial value creation and projects with low breakeven prices. As you understand, we are on track to deliver on 2.5 million barrels per day in 2020. And as you know, we will grow with 2 to 3 percentage points from 2012 to 2016. Then, our investments result in many big projects coming on stream, and growth will accelerate. 3 to 4 percentage points growth per year from 2016 to 2020. And as we have told you, growth will not be linear. And in 2013, production will be lower than in 2012. This comes from decisions we have made ourselves and decisions we have made to create value. The Wintershall transaction will reduce oil production by 40,000 barrels per day from closing. We have reduced the rig count in Marcellus to adjust to the price environment there and so we can produce the gas at a later point in time at higher prices. That will reduce the growth in Marcellus with some 25,000 barrels per day. And then, we have sold more gas in Europe in 2012, meaning that there will be a lower gas production in 2013, around 15,000 barrels per day. And lastly, the situation at In Amenas will also impact output in 2013. In Amenas produced 23,000 barrels per day for Statoil in 2012, and work needs to be done on the plant and work needs to be done before it can be started safely. It is too early to say when that can happen, so it puts uncertainty into the production for 2013. So we are on track and we are moving ahead as we have discussed earlier. We have a portfolio with a capacity to produce more than 2.5 million barrels per day in 2020. Our current portfolio of producing assets is performing well. Decline is 5%, as it has been over the last years and it is as expected. And new projects will add significant growth on top of that. We are also increasing the oil share in our production towards 2020, and we expect the NCS gas volumes to stay around the same level throughout the decade. Then we are growing both internationally and in Norway. All clusters are growing and we are growing on all our continents. Based on the resources, we could continue our production for more than 30 years, but our ambition doesn't end there. Our ambition is to consistently deliver an organic RRR above 1. In 2012, it was 110%. We have increased the oil ratio as well, and the 3-year average RRR is 1. This result comes from a strong effort by the organization. We have sanctioned 4 new developments giving more than 200 million barrels of new reserves, Dagny and the Ivar Aasen on the Norwegian continental shelf, Hebron in Canada and Mariner off the coast here in the U.K. And then increased recovery also provide important reserve additions. So our large project portfolio will ensure an average RRR above 1 throughout this decade. Then over to exploration. Our new exploration strategy is showing results. 2012 was the best exploration year since 1997. 46 wells completed, 23 discovery, adding more than 1.5 billion barrels from the drillbit, with the high-impact discoveries in Norway, in Brazil, in Tanzania, and the result is even better than in 2011 when we discovered Johan Sverdrup, the world's largest oil discovery that year. And you have seen the Tanzania announcement today, 7 to 9 Tcf are in recoverable resources from our Block 2, a great reservoir, probably 60% to 80% recovery rate, and that forms a good basis for an LNG project. And we are moving our Discoverer Americas to East Africa, and we will work together with Exxon to mature other prospects there. And there is more to come. 20 high-impact wells is going to be drilled from 2013 to 2015. And this year, we have 4 exciting campaigns with a number of wells to watch. First, the Barents Sea, we will drill 4 wells in the Skrugard/Havis. The first one is Nunatak, that is we should pay attention to. Then we have the Hoop area. Further north, there we have the first well called Apollo. That is a potential play also. Moving to East Africa. In Tanzania and Mozambique, Zafarani-2 was announced today. And then we have Tangawizi, that's a new prospect, looking promising. That should be watched. Moving over to Canada. There, we will have 3 wells. The one to look out for there is called the Harpoon West[ph]. And then in Gulf of Mexico, a program of 5 wells, and a prospect called [indiscernible] is worth mentioning. And finally, in Indonesia, we have a potential play out there called [indiscernible]. And back home in the North Sea, the Lupin prospect should be watched. So it's a long list, and that is the whole point. Then next year, we will also start drilling in the Kwanza basin in Angola. As you have seen today, we are in an investment cycle. We are building 2 legacy assets for the future, and the growth will be strictly governed. The projects will give a strong cash flow and a cash flow growth, and we have the luxury to pick our best projects. Balancing all of these will ensure that we deliver a competitive growth on top of a robust balance sheet and while we are providing a competitive dividend yield. So in conclusion, we are delivering strong results across the business, we are executing our strategy and we are on track to meet our targets. Thank you very much for your attention.

We will then turn to the Q&A session. And for this session, Torgrim will be joined by the Senior Vice President for Performance Management and Analysis, Svein Skeie. We will take questions from the audience here in -- at London Stock Exchange and also over the telephone. I will first ask the operator to explain the procedure for asking questions over the telephone.

[Operator Instructions]

Thank you, operator. We will start with questions from the audience here at the London Stock Exchange. [Operator Instructions] The Q&A will end at 1:35. We will pass microphones here in the audience in London. So we'll start off -- out with Brendan here, please. Brendan Warn - Jefferies & Company, Inc., Research Division: It's Brendan Warn from Jefferies. Just my one question. In terms of value over volume, you've given us the impact of 2013 by producing the gap in 2012. What was the EBIT -- or can you give us an idea of the value you got from the reduction of volume in 2013, please?

It's a good question. And I think you should save it for Mr. Gas, which is here, Eldar Sætre. But record sales, record prices, yes, large earnings impact.

All right. Yes, next please.

Alejandro Demichelis from Exane BNP Paribas. Yes, my one question is, you talked about stabilizing costs across the portfolio. Maybe you can give us some indication of how you see that evolving both in international basis, but also in Norway.

Excuse me, could you repeat a part of the question?

You talked about stabilizing cost in your option business, maybe you can give us some indication of how you see that going forward.

I'm very glad to see the development on the cost side in 2012, stable operational costs. I do expect cost controls to be strict going forward as well. And the way we work with these elements is, first of all, on the simplification, and I think the fast-track concept is a very good example of addressing costs. Standardizing the way that we build these projects, the one project team can take care of more than one project, and the project have to use this type of equipment. It has reduced the time from discovery to production by 50% and reduced cost by 30%. That is getting more out of scarce resources. Then it's about working with suppliers, long-term frame agreement. It is a scale effect working with costs, take advantage of them. And then it's -- the last point is about future [ph] and the people and the attention that our leadership is on course. So it is under control, but it is a tight market in many places. We need to have full focus on this going forward effort.

We have another question.

Paul Spedding from HSBC. Your production profile that you show on Slide 15 shows a relatively flat gas profile. I'm curious as to whether you include anything in there for gas from East Africa, or whether that could be providing some upside to that profile.

Yes, thank you. You are right. The gas profile is rather flat on that profile. When you come to East Africa, still large uncertainty when that will be put into production. We are very encouraged with what we see and the potential. The block is large, and there are further things that we want to mature and drill. So that is what we focus on now. And then we have to come back to any potential start-up and decision in the East Africa. So you're right. It's not part of the gas profile in that chart.

Yes, Haythem.

Haythem Rashed from Morgan Stanley. I have one question with 2 parts, if possible, just around your financial framework. I just wanted to ask, firstly, on the sort of CapEx guidance that you have over the coming years, sort of, how comfortable you feel with that and whether you think it's enough given some of these projects that you are considering sanctioning, like Tanzania for example, some, coming over the next couple of years. I'm sort of particularly interested given the -- when you look at the operating cash flow that you're guiding for and the CapEx, sort of how much flexibility you have there, obviously assuming you actively -- continue to actively manage your portfolio in that regard. And the second part of it is just on your reference oil price. I just wanted to get your thoughts around that. The $110 looks relatively high compared to some of your peers in terms of reference conditions. I just wanted, given some of the agencies we've seen around the world talk about spare capacity increasing quite substantially over the coming years, what your thoughts are around sort of the oil price going forward.

Okay, thank you, Haythem, for a long and complex question, and I counted 3 or 4 questions, so thank you. On the CapEx, I'm more comfortable. I mean, the key point on the CapEx pricing is that it is consistent with the 2.5 million barrels per day production in 2020. And the project portfolio can produce more than that. If we bring on all the projects that we are working on as soon as we can, we can produce more than that, and that would also lead to a higher CapEx than we have guided on. So it takes a strict prioritization, picking the best project, picking the most profitable project. And that is what we are doing, and that is what we have done over the last years as well. So it is a consistency in that respect. You touched upon Tanzania and sanctioning and upsize, so if there are sort of an increase into the growth outlook, it will need more CapEx in a way, so it sort of hangs together. But this is a consistent data set that's sort of built into 2.5 million. Then about the operating cash flow and flexibility and divestments and so on. Over the last few years, we have brought in proceeds of around $13 billion, creating capital gains of $6 billion on those transactions. We haven't stated anything going forward on what will happen with the portfolio, and that is deliberate. I see that some of the peers are more explicit on numbers and what, but we are not doing that. But what I can say is that there will be changes in the portfolio going forward as well. We will sharpen the growth. There are assets that will be sold. There are assets that will be acquired. That will, of course, distort the picture and then the guiding in a way, but we'll to have to come back to it to any adjustments in that respect. And then your last point, and that was on the oil price. I think $110 per barrel, the reason why we use that is that, that is the current prices. We said, okay, just on the same prices today, this is the development. This is not what we do for planning purposes for we use different prices as such. You sort of turn that into development of the oil price outlook, hard to tell, I think the world is off to a good start this year. Macroeconomics showing strength. I do think it's very vulnerable. But let's hope that Europe can come back in growth modest, then that will sort of strengthen the picture. Then political risk, there is a political risk premium into the current price environment, maybe $10 to $15 per barrel. An escalation or an extension of the Syrian issue, all these trade issues and so on could add to the price. And then we have the general macro issues. I think it's important to remind ourselves that if you see more than $100 per barrel, [indiscernible] the world has stated it, then you know it's a strong oil price. But there are some strong fundamentals here that sort of supports a strong oil price in the long term. But we need to be prepared for significant volatilities in the short term. So it's sort of to me more of a short-term concern than a long term concern. Okay. Long question, long answer. Sorry.

[indiscernible]

Rahim Karim from Barclays Capital. I just wanted to touch back on this issue around financial framework and perhaps around the growth of the international business. You seem to be suggesting that you're putting a constraint in terms of capital that you want to deploy as a group as a whole, and that's why you're not going to perhaps deliver more than 2.5 million barrels per day by 2020. If I've understood that correctly, we should be getting towards a point in the middle of the decade where the international business becomes free cash flow positive. Am I thinking about that correctly? If not, what am I missing? At what point should we start to see the international upstream business start to generate free cash flow rather than being an absorber of CapEx?

Okay. First of all, international business is contributing strongly to fund the investment. The cash flow per barrel, on par with our Norwegian production and 1/3 of the total production, so it is contributing well. Then sort of the way we look at the investments going forward, it is not allocating x billion to international and y billion to Norway when these projects have to compete side by side with equal measures and then we prioritize the best one. So it's a strong competition for investments then in Statoil today, and all the projects knows that, and they know that they have to deliver. That is the way it works. So I can't give you a specific guiding on the totality of the international built of -- that's one unit.

I think it was Michael first, over here.

It's Michael Alsford from Citigroup. Just a quick question on the financials while we wait for the next presentations. But just on tax, obviously, a few one-offs in the fourth quarter. But can you give us some guidance on 2013 tax rate for the group and perhaps by division would be helpful. Okay.

So I'll leave that to you, Svein, so please.

Yes, as you said, the fourth quarter tax rate might be a bit lower than expected. If you look at the international segment, it's especially related to that one. And we announced earlier on that there's a new law in Norway saying something about the availability than for we get the tax reductions for international activities. So that is an effect that we will have in fourth quarter, which we have accounted for. In addition to that, we have also done some restructuring in the group, which we have done -- have the opposite effect from the costs that we have there related to the future international depreciation. So we have an offsetting in the group related and mainly to restructuring to the U.S. business. If you look at deep in Norway, and you see with high prices and the effect of the uplift related to the investment is a bit lower, but we are in a similar segment, a similar level as we have guided earlier on also for that one. And in NPR [ph], we have said that there will be volatility in that, especially when we don't have the uplift anymore. So looking forward, it's both on -- DPN similar level as we have said earlier on; DPI, also at a similar level as we had said early on. But then when we get more and more then from the U.S. and lower tax regime, then it will be a bit lower as we have guided early on as well.

Yes, next question [indiscernible] can you please pass the mic.

It's Irene Himona, Societe Generale. You renegotiated about half your portfolio of gas contracts last year. Can you please update us on the current balance of oil versus spot [ph] Gas link? And what do you expect to happen to your margin as you lose the benefit of the oil link but gain volume flexibility?

Okay, thank you. Eldar is coming on the stage later today, addressing especially this issue. I'm not ready to take that question. I think it's better that Eldar answers it. Thank you.

It's Marc Kofler from Macquarie. I just had a quick question on the reserve additions for 2012. I noticed you talked about, I think, it was 4 distinct geographies within that 110% replacement ratio. I was just wondering, how much of that was U.S.?

Reserves addition in the U.S., Svein.

We'll not give a specific number, there. But what we see is that the -- we have the onshore part in the U.S. is having a high contribution than for -- and being important than for the booking of the reserves, which adds significantly then to our reserve replacement ratio. So it's still a large contribution as it also happened in 2011.

Question, please.

Peter Hutton from RBC. I'm just wondering if you can give any kind of guidance of what you see as the optimal gearing level for a company like Statoil. You've gone to 12. Your guidance is for 15 at the end of '13. If we look at the slides in terms of op cash, dividends, CapEx, you're free cash flow negative of about 1.5 billion, so creeping up -- so you're between 15 and 20 over the medium term. Is that the right level, or is that a bit conservative, or what do you think?

Okay. A very good question. From a purely financial perspective, probably low. I mean, we are on the low side. I mean debt is very low priced currently. So I guess there are good arguments to increasing the year [ph] from that perspective. When that is said, to us, it is extremely important and strategically important to run with a strong balance sheet and a lot of liquidity because we must be able to take long term decisions even if there is short-term volatility and trouble in the short term. We need to be able to lead safely through strong volatility in oil and gas prices. And that is -- it is in those periods you can actually create much additional value. Running with a solid balance sheet is very important to us, strong rating and a lot of liquidity. And you will see that going forward as well, so I'm not prepared to give a specific range and so on, but the current rating is -- the current net debt level is, of course, very comfortable, but a very solid balance sheet going forward will be the key. Thank you.

Next question, please. Neill Morton - Investec Securities (UK), Research Division: It's Neill Morton at Investec. Could I just follow on from that comment and just go back to portfolio management with regards to gearing? As you sharpen the portfolio further in the future, can we assume that in dollar amounts, acquisitions are offset by disposals? And also just in terms of acquisition, perhaps just give us a clue as to what the criteria are. Are you looking at conventional, unconventional, existing areas with synergies or new areas, et cetera?

We will -- I mean, some years, there will be more divestments than acquisitions and then some years, the other way around. It's based on opportunities that arise and the market conditions and so on. I think if you -- to better understand the future, I think we need to look back on what has happened. Over the last 10 years, divesting of shipping, petrochemical, fossil fuel and retail, a lot of other assets as well. And then acquiring into things that can be something big going forward. So that will be sort of the things for the future as well. So I'm not prepared to give any specifics on what will happen with the portfolio. You just have to be prepared that there will be changes to the portfolio going forward as well. So thank you. Oswald Clint - Sanford C. Bernstein & Co., LLC., Research Division: Oswald Clint from Sanford Bernstein. Just maybe a question on the Gulf of Mexico. Some of your projects there, Jacks, St. Malo, Julia in FID or close to it, but you haven't quite given the volumes yet, the capacity of those projects. Could you say what's happening there in terms of what you expect volumes to be, and maybe also just an update on what's happening in terms of your Gulf of Mexico portfolio?

Okay, thank you. On St. Malo, we -- we have said that we assume production start in 2014. And from Jacks, St. Malo and Julia, the capacity combined, we expect to be around 170,000 barrels per day to as such. We haven't [indiscernible] it. So there are quite a few interesting developments in Gulf of Mexico coming on stream now. We are going to continue our exploration efforts. There are several wells this year. And then we took quite a bit of acreage in the licensing rounds the last time, and we have quite a few interesting prospects that we really would like to try out. So we are positive with outlook on it and looking forward to get going with more production.

Do we have any further questions here in London? I can't see any hands. Then I think we'll turn to the audio audience. Operator, would you please be so kind as to introduce the first question over the telephone?

We'll take our first from Teodor Nilsen from Swedbank First Securities.

Just a question on CapEx in related to the recent attacks in In Amenas and the Arab Spring. In general, has the recent terror attacks changed the way you think of which areas you will allocate CapEx to, like in the long term from, from let's say, 2015 and onwards, will you allocate more CapEx to less -- or areas with low political risk?

Okay, thank you Teodor. First of all, safety for our people is the absolute most important one. So we will not bring back our people into Algeria until we know it is safe, and that is the way going forward as well. First, it's important to remind ourselves that risk management and security assessment is the key judgment with any investment decision and is constantly evaluated because we need to be very comfortable with where we send our people. We are committed to our assets in Algeria. They are important to us. They contribute well to production, and then there is work that needs to be done on the asset before it can be started safely. And then we have started an investigation -- or agreed with the board that we will start an investigation that will establish the fact and chain of events. We will see to it that we take out learning from what has happened and that we -- and then we improve our business. We need to wait for that investigation report to evaluate the consequences of what we are going to do.

Okay. Is it likely that you will change the way you think around the gas discoveries in Eastern Africa following the recent events?

It's too early to conclude, Teodor.

We will take our next question from Brandon Mei from Tudor, Pickering and Holt. Brandon Mei - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: I just noticed in the Marcellus, it looks like you've had a pretty significant ramp up there despite a lower rig count. It looks like it's about plus 12,000 barrels a day in the quarter versus plus 5 in 3Q, so I'm just wondering if you could talk about what's going on there as far as rig count, wells drilled in the quarter and then wells drilled but not turned on.

Okay, thank you. So you're right, production from Marcellus has increased, and that comes from a large inventory of drilled wells that has not yet been produced -- put into production. So that in theory [ph] Is being capitalized on currently, stepping up production in Marcellus. So you're right, it is increasing even if we have reduced the rig count. Interestingly, this Marcellus gas will not be sold in the Marcellus area. It will go through Toronto. We have taken on capacity, as you know, there. All capacity in that pipeline and our gas is now realizing a much higher prices in that area than the alternative was. So we are earning money in Marcellus currently. Brandon Mei - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Can you put some numbers around how many wells are drilled but not turned on now?

Svein, do you have it?

That, I think, I need to come back to because it's developing day by day.

I suggest you take that to the Investor Relation Officer.

We'll take our next question from Jason Kenney from Santander.

Just a point of clarification, please. I know you answered Paul earlier on the volumes from East Africa and whether they were in the volume profile or not. And I think one other question revolved around will you need more CapEx if you decide to FID Tanzania. So I was just really wanting you to clarify, is CapEx in the 2013, 2016 plan for East Africa or not?

It is the same answer back earlier. We have more wells to be drilled. There are more interesting prospects that will be matured in that block. And there are no firm plans for an investment decision related to this.

We have a question from Anne Gjøen from Handelsbanken. Anne Gjøen - Handelsbanken Capital Markets, Research Division: I wonder when it comes to the 2020 production guiding of 2.5 million barrels a day, how much of that is related to projects yet to start. And when it comes to projects yet to start, how much of that remains to be sanctioned?

Okay. I think there is one slide in my package which elaborates the various fields and then when they are starting. There it is, on Page 13. Today, you can see where we -- when we -- which ones are sanctioned, when we expect them to start up and the capacity they provide. So hope that can be useful to answer your question on that.

We have a question from John Olaisen from ABG.

I wonder if you can give the split of the E&P spending, the CapEx spending and the exploration spending versus -- and if we can split it into Norway and international, please.

Okay. Thank you, John. Svein?

I will refer to the supplementary information that we have provided in the details that we have provided. If you look at the investment going forward, we have said that around 40% will come -- will be at the Norwegian continental shelf, and then the split of what has been going into the North American and the rest of the international portfolio is splitted out. Also, we have said that 10% of the CapEx in the future is expected to be in the NPR segment. And there we have also then on Slide 16, by the way, on supplementary information. And we have also then giving the split into how much is going into the liquids and then how much is not sanctioned. Also, in the supplementary information at Slide 13, we have then also then provided the exploration activity in 2012, the splits between the Norwegian part of it and the international part of it.

That's very useful. And a follow-up on that, given that your guidance is based on a dollar amount. Can you tell us a little bit about the cost inflation in this? With flat exploration spending, does that mean lower volume? I guess rig rates are going up and seismic day rates are going up and everything. Can you give us indication what's the volume -- how much is volume going down in exploration and in CapEx?

First of all, I think it's what we have done and experienced now in 2012 is a very good exploration result. We have spent 3.6 billion in exploration, drilling down 46 wells in 2012 and then adding on 1.5 billion. What we have said then for 2013 is that we expect around 50 wells and then being at a similar level. What we will then also see in 2013 is that we will drill quite a lot of appraisal wells to secure that we are maturing our resources into reserves so that we are then -- have the ability to develop them into profitable projects. So the appraisal will be more important in 2013.

But given the exploration success you had lately and all the interesting exploration acreage you have available, why don't you boost exploration more?

Thank you, John. It is a tempting question. And there's a lot of opportunities -- exploration opportunities out there. This is an optimization exercise based on all the rigs that we have available and all the prospects and all the discoveries that we have made. The more discoveries you have, the more appraisal you need to do. So that's why there is quite a bit of appraisal this year, but I'll bring back home your advice, John. So thank you.

Final [ph] question, will we see a well in Angola for you guys in '13?

I think we need to move onto the next question now, John. We'll take one more before the break, and that is Lars Roren from SEB. Please go ahead.

Just a clarification on your operating cash flow guidance from 2.13 to 2.16. As far as I understand, this is based on $110. But you also said that you have an other budget price or internal planning price. Can you confirm that, and can you also tell us what kind of price that is?

Thank you. Yes, we have another planning price. If I can tell it? No, so I'm sorry about that. But we use different prices. We use a very low price where we sort of test all the projects and the profitability and the sustainability of the company. Then we have a bit higher prices. And then we use one price that is even higher than what we see today because there is an upside as well. It's very important for us to see to that we can sail safely through any scenario.

Yes, but if you have an internal planning price that is -- can I ask the question?

Well, I think actually we have to round off for the break now, Lars.

But this was just beginning of the question, okay.

Okay, go ahead. One question.

Okay. But just to understand because if you use your sensitivities and say that the dollar oil price will be $10 lower, and with the current NOK-U.S. dollar price, then you will add on for the next 4 years approximately $6 million to $8 million in finance deficit. That will increase your net debt ratio by 10 to 12 percentage points. Is that what you also include in your internal planning, that you plan for a higher debt ratio than your sensitivities or that you show us?

Yes, on this issue, we expect net debt to grow slightly during 2013. Then we are investing. And if prices drop significantly, we have, of course, to borrow money. I have no problems with borrowing money. It's actually a very tempting market out there, but everything needs to be balanced. To add some debt when you are growing, I think that is perfectly fine. But the point is that we will run this company based on a very solid balance sheet. And I think you need to take a bit of comfort into -- from the history here. For the last 10 years, we have seen oil prices between 17 and 147. We have paid a dividend, 50% in that period. We've run with a AA- rating. And we have had a production growth of more than 100%. So things are changing, and that is the art of running an oil and gas company. You need to take into all of these uncertainty and just see to that you sail safely and you are able to grow and you are able to create value. So we are in an investment cycle. We intend to do it, and then we have a lot of tools, and we have also a lot of flexibility in the investment program to address the situation.

Thank you very much. That will have to conclude this Q&A session. We will have a short break. There will be refreshments outside at the gallery, and we will reconvene again at 2 p.m. So I'll ask everybody to please be on time in respect of the audio and webcast audiences. Thank you. [Break]

Welcome back, everybody. We will now have the Executive Vice President for Development and Production, Norway, Oystein Michelsen, present the development of the Norwegian continental shelf for us. So please welcome Oystein.

In June 2011, I shared my perspective on the NCS with the investment community in New York. My main message then was the NCS is not the sunset region. In 2011, I said that we plan to develop more than 500,000 barrels per day on new, high-value production towards 2020, and we plan to produce more than 1.4 million barrels per day in total in 2020. And we even see exploration potential in addition to this. But now, today, my key messages are the following. Our operational performance has improved. Our portfolio has been high-graded through asset transactions. New projects are maturing on schedule and at cost. And the exploration success to date provides additional volumes and optionality. So in short, Statoil on the NCS delivers according to plan, and most importantly, we are on track to meet the 2020 ambition. Our company has worked systematically on safety and efficiency over a number of years. The serious incident frequency has been consistently reduced. Production efficiency has improved due to more efficient maintenance, and we have reduced unplanned losses, regained shut-in wells and increased our drilling and completion capacity. And according to the North Sea benchmark study, our unit lifting cost has improved relative to the industry average. And I'm convinced that safety, efficient operations and a minimized CO2 footprint are all prerequisites to maximized value creation, so this is why we have a continuous focus on improvement in these areas. As you may know, we have undertaken several portfolio transactions since June 2011. The 2 largest were the U.K. company, Centrica, and secondly, with the German company of Wintershall. I am pleased to see that we have managed to reach an agreement on transfer of operatorship to Wintershall, a highly competent, I would say, newcomer on the NCS. We see this as a win-win outcome for the 2 parties. The rationale behind these transactions was to enhance value creation and growth, so we want to high-grade our portfolio by exiting non-core assets to strengthen our position in defined growth areas and to recycle capital into new growth opportunities. As shown on this graph, these transactions represent a net divestment of approximately 60,000 barrels to 70,000 barrels per day of production over the coming years. But let me underline that these transactions are not driven by lack of belief in the NCS. It must be seen within the context of an increasing number of business opportunities there and our strategy to concentrate our efforts on the NCS. So we are reallocating our resources from the opportunities of the past to business opportunities of the future. So our policy of active portfolio high-grading will continue. And in addition to exploration and production, the core task of an oil and gas company, as I see it, is project maturization. And this graph shows the progress since June 2011. The top left graph is the new project portfolio that I presented then. Since 2011, we have made progress in 3 respects. And that is, one, we have completed 5 projects. This represents approximately 90,000 barrels per day of new production in 2014. During the coming 3 months, we will add another 60,000 barrels per day from projects now close to production start. And two, we have sanctioned 11 new projects. In total, this will add 240,000 barrels per day in 2017. And three, we have added 6 new projects to the new project portfolio, among them Skrugard and Johan Sverdrup. According to our current plan, these will produce 200,000 barrels per day in 2020. I would like to underline that this is the result of a consistent field development strategy over a number of years. In 2011, I said that we plan to develop more than 500,000 barrels per day of high-value new production towards 2020. Today, I believe we will develop more than 650,000 barrels per day on new production. Due to this positive development in our new project portfolio, we are on track to fulfill our 2020 ambition. We are fully aware that the challenge going forward is project planning and execution, and we have already taken steps to prepare ourselves. On the external side, we have modified our supplier strategy. We have gradually increased our use of global supply market and thus, expanded the supply capacity and the competition for our projects. On the internal side, we have taken active steps to improve the planning and monitoring process. We have increased the focus upfront planning. We have strengthened the monitoring of project cost and project progress, and we have simplified and thus, increased efficiency in the monitoring of our contractors. The project execution on Gudrun and Valemon has been excellent. That is on schedule and within cost. We are well positioned to tackle the project execution challenge going forward. In addition to our portfolio of large projects, we have a number of smaller projects ongoing, typically subsea tie-in projects. As you may remember, we introduced the fast-track initiative in 2010. The objective is to expedite project execution and reduce investment cost through simplification and standardization. At present, we have 12 fast-track projects ongoing. Each project may be small, however, in total, they contribute significantly to our portfolio of new production, more than 100,000 barrels per day towards 2014. And even more importantly, the value creation is high. As shown on this graph, the average breakeven price for our fast-track portfolio is below USD 50 per barrel, and the net present value of the current fast-track portfolio is slightly larger than the Skrugard project, a highly profitable project in the South. And as I see it, this clearly demonstrates that our fast-track initiative is a success. A systematic exploration program in the vicinity of existing platforms will create additional business opportunities going forward. The fast-track initiative is an important part of our strategy, and it will be continued. Now to value creation. So let me highlight 3 different value creation aspects of our portfolio. First, the cash flow characteristics of 2012. We are currently, as I've shown earlier, investing in new production capacity. Our present cash flow from operations, despite substantial tax payments, allows us to self-finance all investments in new NCS business opportunities, and in addition, we provide NOK 40 billion in net cash to Statoil corporate. Secondly, let us look at the value of our new project portfolio. The average breakeven price of our total new project portfolio is USD 50 per barrel. In other words, our project profitability criteria are met even at the USD 50 price level. To me, this illustrates that our new projects are profitable and robust. Third, the external market assessment of NCS assets. And the 2 major deals we made recently imply an average transaction multiple of $15 per barrel, and I'm certainly aware of the fact that for a number of reasons that you all know very well, this multiple cannot be used as a kind of yardstick to assess the value of the total NCS reserves. But if I were to apply this multiple to the Wood Mac estimate of our NCS commercial reserves, it would imply a value of approximately $130 billion. So my observations from these 3 variables are: one, the strength of our value machine, our currently producing assets is impressive; and two, our new project portfolio is robust; and three, the transaction market recognizes the underlying value of the NCS. In 2012, we launched an increased oil recovery, IOR, initiative. Our ambition is to increase the average oil recovery of our NCS-operated fields from the present level of 50% to 60%. In order to avoid any misunderstanding, I would like to be clear on 3 basic issues connected to this ambition. First, the ambition is value-driven, not volume-driven. We will not engage in IOR projects that do not add value, and our IOR projects are highly profitable. Second, this is a long-term goal. We expect gradual increases via incremental steps. Please note our 2020 ambition of 1.4 million barrels per day is not dependent on reaching a 60% average recovery rate. And third, the major part of this ambition will be realized after 2020, and 60% recovery will require continued technology development. As part of this ambition, we are currently building an IOR research and test center in Trondheim. The center is due for completion towards the end of this year. Statoil is a technology-based upstream company. We do believe that technological progress creates value, and this is why we see value in increased oil recovery. So let me now turn to the larger picture, the main industrial steps going forward that is the further industrialization of the NCS. Due to our history on the NCS, the industrial architect capability is one of our core competencies. This is a continuous process in which we pursue a number of different industrial tasks in parallel. We actively explore for new reserves close to existing installations. We tie in smaller discoveries to existing platforms, typically fast-track projects. We identify the best area development solution for larger, new discoveries, and we find the optimal joint export solution from new area, and we secure best practice project execution. I'm convinced that this is a process in which we can create high value both for shareholders and the larger public. Now we'll start in the North Sea, the most mature part of the NCS. The recent discoveries in the Utsira area, Edvard Grieg, Ivar Aasen and Johan Sverdrup, and the ongoing development of Gudrun and Dagny have definitely revitalized this part of the North Sea. You now see the emergence of Sleipner-Utsira area in which our production will increase from the current level of 160,000 barrels per day to more than 200,000 barrels per day in 2020. And beyond this, we see interesting exploration potential in Sleipner-Utsira. Due to this positive development in the Sleipner-Utsira area and the significant remaining reserves identified further north, we believe that the present production from the North Sea of 880,000 barrels per day will be maintained at a similar level in 2020. Therefore, as I underlined in 2011, we do not see a sunset future even in the most mature part of the NCS, the North Sea, towards 2020. Turning now to the Norwegian Sea. As you may know, in January, we submitted the plan for development and operation of the Aasta Hansteen project. Aasta Hansteen is a 47 billion cubic meter gas field located in the deep sea part of the Norwegian Sea. The planned production start date is 2017. It will add 100,000 barrels per day to our production. Polarled, the 480-kilometer gas pipeline through the Ormen Lange facilities at Nyhamna will link this new gas discovery to the European gas markets and add gas export capacity from the Norwegian Sea. Our Norwegian Sea production will consequently be maintained at the present level, around 400,000 barrels per day, also in 2020. I would like to underline that these 2 projects represent the opening of a new gas province in the Norwegian Sea. I will not speculate on the result of future explorations in the Norwegian Sea, but it is a fact that the Aasta Hansteen development and the construction of a new gas pipeline opens new industrial opportunities. Further discoveries in the vicinity of Aasta Hansteen field and along the new pipeline will become more attractive. The Barents Sea has, for a number of years, been part of our exploration frontier, and I would say it still is, even though there remains uncertainty as to the resource potential in the Barents Sea. The oil discoveries, Skrugard and Havis, in 2011 and 2012 are promising. These are located 240 kilometers northwest of Hammerfest, and the water depth is in the range of 360 to 400 meters. We are studying 2 main development alternatives. That is one with offshore loading of oil and one with oil transportation to an onshore terminal, and we will make a decision on the development concept this month. According to our current plan, we foresee a production start in late 2018, and it will add up to 90,000 barrels per day to our production plateau. I would like to underline that the area has further prospectivity. We are in the middle of the planning process with regards to industrializing a new oil province in the Barents Sea, and so far, we have drilled 3 exploration and appraisal wells on Skrugard/Havis. We plan to drill 8 new prospects this year in the Barents Sea, 4 of them on Skrugard. Based on our present reserves, our production in the Barents Sea is expected to increase from 40,000 barrels per day up to 140,000 barrels per day in 2020. Beyond 2020, the ongoing exploration and future license awards may add to this. In the future, we expect the Arctic will be of increasing importance for our industry, and the Norwegian Barents Sea is the most ice-free part of the Arctic. It is closer to existing markets than other parts of the Arctic, and there's no other area in the Arctic that offers more attractive framework conditions for exploration. Further large oil and gas discoveries in the Barents Sea would provide a new energy region for Europe, and Statoil has more experience in the Barents Sea than any other company. This means that we are strongly positioned to move further north into the Arctic. To conclude, the NCS, the backbone of Statoil, is on track to meet the 2020 ambition, and our efforts to improve safety and efficiency do work, and we have made 2 major steps in high-grading our portfolio. This will continue. We are maturing new projects according to schedule and cost, and we have taken action to continue this success going forward. We have a robust portfolio that create high value. We consider IOR to be an important value creation competence, especially in the longer term, and we see the emergence of 3 new oil and gas industrial regions on the NCS. And the NCS is a strong base for Statoil and will continue to be for decades to come. Thank you for your attention. Then I have the pleasure of introducing my good colleague, Eldar Sætre, responsible for marketing, processing and renewable energy in Statoil. Eldar Sætre: Thank you, Oystein. Good afternoon, ladies and gentlemen. It is really good to see you all and also good to see quite a lot of familiar faces still, actually. As some of you might know, I was the CFO of this company for quite a few years before handing over the position to Torgrim 2 years ago, more or less exactly now. And I know and I could see today, Torgrim, that you are enjoying yourself in this new role. That's very good. And I think you have had really good reasons to do so. It has been actually a tremendous achievement and tremendous resource that has been delivered from the company since then. Then I have a confession to make, and that is that I have also enjoyed myself a lot, actually, being responsible for the quite sizable but also extremely dynamic mid and downstream part of this business. It has been, as I said, truly exciting, and the gas part of the business, which is my subject today, represents, actually, a big part of this excitement. So on this background, again, my key messages today are the following: first of all, that Statoil has, and it has been said before today, delivered record gas sales and earnings in 2012; secondly, that we actually believe in a strong, robust outlook for the European gas market; and thirdly, going forward, that Statoil is well positioned, well equipped to capture value from the ongoing changes that is taking place in our -- in some of our gas markets. So my main focus today will be on Europe, but I will also touch upon our U.S. gas business towards the end. 2012 was a very good year for Statoil's gas business, record gas sales, very strong gas prices and actually, the highest earnings ever in relation to the gas marketing and trading activities as such. Our total gas sales increased by approximately 10% compared to the volumes that we sold in 2011, and this was achieved in a market that was actually declining compared to the year before, implying, as you can understand, an increased market share for Statoil. In addition, the average global realized -- the global realized gas price we achieved last year was the second highest ever. And in Europe, if you look at Europe alone, we saw actually the highest gas price that we have ever seen in Norwegian kroner, that is. So I believe this demonstrates the sustainability of our business model, while, at the same time, we are also adapting to the changes and the structural changes that has actually happened in our markets. Most of the value is passed on from my business to the upstream business areas through the transfer pricing mechanism, and I know Oystein is very happy about that. But as Torgrim mentioned earlier, our adjusted earnings for gas marketing and trading, the money that is left in my P&L, was the highest ever at NOK 14.7 billion compared to NOK 13.2 billion the year before. And then you should note that this happens despite the fact that we have divested a significant part of the gas-led infrastructure from 29% to 5%, which typically represents NOK 4 billion to NOK 5 billion in income -- loss from that divestment annually. And then you might ask, I'll ask the question so you don't have to ask it later, if this is a sustainable level of earnings. And my response to that would be that we do have -- I think we have proven and I know we have a solid competence base, skilled and a professional team and also a very solid and flexible asset base, and that combination is very strong. Then you should obviously be prepared to see variations in the results as the volatility and opportunities varies. And last year was, in many ways, a reasonably good year for my P&L in that respect. Then I should say to this question that I'm also confident that we will be able to deliver solid contributions from our gas marketing and trading over time, and the justification for such a statement is actually the backbone of what I'm going to talk about in this presentation. But first, I will say a few words about the European gas markets and our perspectives on the gas market. We believe in a robust, we use that word, outlook for the European gas market as Europe needs new gas supplies, actually, in competition with other regional markets. The outlook for the overall European gas demand is somewhat uncertain, at least in the short term, but growth is expected to resume as we move towards 2020. That's our views. Energy policies currently provides limited support for gas demand growth, and also, economic growth in general is stagnant. However, we expect demand to rebound and increase by almost 100 BCM from now until 2030. The key feature on the supply side is that indigenous gas production in Europe, excluding Norway, is in decline and that this trend is actually set to continue, as you can see here. Between 2008 and 2012 , indigenous gas production came down by some 50 BCM. So this leaves Europe with a large supply gap that needs to be filled from new and more costly supply sources, and this gap can be as high as 250, big number, BCM by 2030 according to our estimates. This supply gap can be filled with new pipeline gas from Russia and from Norway, as mentioned by Oystein, and also from the Caspian region, which I will refer to. And in addition, Europe will need continued and increasing supplies of LNG. And generally speaking, new LNG projects will not be dedicated for Europe. This implies that gas buyers in Europe will have to compete with buyers in other import regions. The cost of developing new gas value chains into Europe, in particular, LNG value chains, underpins a strong price outlook. This also goes for potential future LNG exports from the United States as the delivered cost from U.S. LNG to European hubs would not be particularly low. So in conclusion, the price level for gas in Europe will, over time, have to, over time, have to allow for new and profitable development of the required supply, both pipeline gas and LNG. Potential downsides to -- or risks to the demand level are driven by, as you can see here, unfavorable energy and climate policies and, obviously, also lower economic activity. But on the other hand, the price risk for natural gas is balanced due to the potential tightness in supply that I just talked about. Within this framework of a robust market outlook, let me reflect a little bit on the structural changes that is taking place in our markets. We do see that the regulatory efforts to stimulate the development of gas commodity markets on the continent have worked in some markets, ensuring access to traded hubs for all players has increased the level of trading activity. For instance, the volumes being traded at the NCG and the gas pool hubs in Germany have both increased by over 300% during the last 3 to 4 years. However, today, we see what we call here and illustrate to you a 3-speed Europe. In Northern Europe, as I touched upon, we see some real changes taking place, while Southern Europe has adopted liberalization legislation as such but are, in reality, lagging behind in this development. And Eastern Europe countries are the least liberalized markets. So for us, this means that also, our adaption to these more market-based terms and conditions will materialize at different speeds, implying that the old market structures are still most relevant for markets that is in an early phase of this process of maturation. So these different regional and market dynamics will also create trading opportunities all along the value chain for a company like Statoil. Market players that have a diversity of assets, including a lot of flexibility, will be able to capitalize on this. And the liberalization process provides Statoil with new opportunities to enter into new growth markets to diversify the composition of our sales channels and also getting direct access to new customers. I'll come back to this. And finally, these changes also have some quite obvious implications for gas price formation and product bundling in the most mature markets, and that is actually my next subject. So we all know that restructuring and adoption to more market-based gas pricing requires both the existence of transparent price quotations at sufficiently liquid hubs and open access to infrastructure to attract market participants sufficiently to create the liquidity that is needed and sufficient competition. When these conditions are fulfilled and we are facing a fully liberalized market, the historical oil indexation is likely to be less used. The graph shown here compares the input prices to Germany, the so-called BAFA price, which typically was a proxy for oil indexation, represent the contracts to Germany versus a gas market price contract which is illustrated here by the NBP in the U.K. These 2 price formation mechanisms for exactly the same, exactly the same product is not likely to coexist in the long run in a fully liberalized market environment. When it comes to new sales in such a market environment, I'm talking about new sales, both oil indexation and other non-gas indices may still be an option for certain customers for various risk management purposes. This kind of pricing could, however, entail hedging as such, and there would typically be a cost associated to that kind of risk management services for the customer. And then, bear in mind that the pricing in a traditional oil index contract and a market-based sales contract is not comparable as these 2 actually represents very different products. Hub-based sales equals flat volume sales, whereas the traditional oil index contract were a bundled product with an all-inclusive price for the commodity as such and also for the -- including a significant offtake flexibility. With a flat and hub-based sales, the seller, Statoil in this case, regains control of this flexibility and can sell it as a separate product or use it as a trading tool in our trading activities, and we're doing both. So now let me elaborate on Statoil's approach to these market developments. We seek to address these changes in an opportunity-driven manner. The liberalization process, which breaks up old and often inefficient monopolistic value chains, creates a new dynamic where both old and new players have access to the same markets on equal terms. Germany represents a very good example, actually, of a market that is going through this process. Suppliers get access to new customers such as trading companies, regional and local distribution companies, industrial end users, big and small, and also power companies. And Statoil is very much an active participant in these market developments, and we have expanded our commercial relationship over the last few years quite considerably. From 2009 until last year, the volumes sold through the traded markets and through direct sales activities to end users almost tripled from around 10 BCM to more than 25 BCM last year. And going forward, this part of our business is going to grow even further, as indicated also on this graph. This means that we are developing new commercial relationships with large end users, utilities and local distribution companies like, in this case, the German Stadtwerke. In addition, we expect to continue to grow our short-term gas trading activities via liquid hubs, which today, as you can see, represents around 25% of our total equity volumes. Long-term contracts will continue to be an important part of our business, but they will most likely take different shapes and forms, reflecting the various underlying market characteristics. In this context, we will continue, obviously, to develop our relationships with our legacy customers, strong and important relationships. At the same time, we will develop new relationships, and our recent sale to Wintershall in Germany is a good example of our ability to do that, a new type of relationship and a strong long-term partnership. Our strategy is to mature the total capacity of our sales channels, which will be more diverse than they have been before, but to expand the total capacity to beyond the physical production capacity that we have. And that enables us to shape the portfolio structure and the sales channels mix in a way that maximize value creation over time. Let me then say a few words about our price risk profile. We have actively managed our gas business and modernized our contract portfolio over the last few years. Through commercial negotiations with our existing long-term customers, we have gradually adapted to these new market realities to the extent this has been justified. The upper chart on this slide illustrates the development of our price exposure in the global gas sales portfolio, showing approximately 55% at hub price, hub-related price last year, 45% oil index. And the increasing share of hub -- gas hub pricing is a result of several factors. It includes increasing sales and production in the U.S. and also growing sales to the U.K. market, both markets which have been fully liberalized for many years, and gradual adoption to gas hub pricing in continental markets whenever this has been considered relevant. In the contract negotiations, we have also been seeking what we call structural solutions, which typically is -- could be outside of the former price review process. Examples of such structural solutions is access to markets and access to hubs, access to flexibility that I just talked about and in some cases also, volume reductions that we have agreed upon. In addition, we have reduced the level of price review exposure in our long-term contract portfolio, as shown on the lower chart here. Negotiations have now been concluded for the majority of the volumes, which have been up for renegotiations in gas year 2011 and 2012, and we agreed on sustainable solutions with all parties. Let me then remind you briefly our unique NCS position. Our competitive features includes the following elements: huge gas reserves; flexible production assets, quite unique; and access to an integrated and very cost-efficient transportation system, which is directly tied into attractive markets, short distance. To monetize these positions, we capitalize on commercial competence and operational skills that have been developed for over 30 years. An important part of this strategy is to build on our huge upstream flexibility, the beneficial cost position. The Troll and the Oseberg fields give us access to physical upstream production flexibility based on both day-to-day and seasonal demand variations. We will also continue to use the integrated transportation system to access different markets to optimize and maximize value creation, and our LNG business will continue to create arbitrage value by diverting LNG cargoes to premium markets around the world, I'm talking really around the world, whenever we see opportunities to do that. So before leaving Europe, you can see on this slide on the right-hand corner of the map, there is an arrow coming in there. I would like to give you the latest status on our growing gas position in Azerbaijan. The Shah Deniz 2 project is one of the biggest of its kind, and we have a 25.5% stake in that, material stake, and it's really key to opening up the southern gas corridor from the Caspian to Europe. The project is now progressing towards final investment decision late this year and first gas in mid-2018. In addition to the upstream investments in relation to this project, the project also requires significant investments in midstream infrastructure. We are talking about more than 4,000 kilometers of new pipelines that needs to be sort of put in place. This includes the expansion of existing pipeline capacity in Azerbaijan and Georgia. It includes a new pipeline through Turkey, and Turkey is a long country, and also on-board capacity from the border of Turkey into Europe, which would be either the Trans Adriatic pipeline or the Nabokov West [ph]. Statoil has an option to become shareholder in actually the entire value chain from source to market. The gas sales negotiations are very important, with the EU buyers were assumed last month and the Shah Deniz consortium targets final selections of buyers, and that would also have to be combined with the selection of pipeline route into Europe ahead of the final investment decision to be made this year. Then let me spend some time on our growing position in the gas position in the U.S. The United States is the largest growth market for Statoil outside of Europe. We currently market 4 BCM to 5 BCM of equity volumes in the U.S., which is mainly production from the Marcellus region. As we are all aware of the gas prices in the U.S. remain at the low level. We were hoping for a development, but it didn't materialize. In the short term, prices will continue to be driven by weather, obviously temperatures, coal prices and short-term drilling economics as such. However, we believe that as demand growth continues mainly from structural shifts to more of use of natural gas in the power generation sector, that prices should slowly trend upward. For our Marcellus volumes, we have the secured access to growth and premium markets in both the Greater Toronto area and in New York City, and this has enabled us to achieve materially higher prices for our gas compared to the local markets in the production area. The price graph that you can see here illustrates the price difference between Dominion South Point, which is the best proxy for the local markets, Toronto and New York, and it's all relative to Henry Hub. And as you can see there is a significant value uplift for sales to greater Toronto and also to New York markets. One additional point. We also add value to our Marcellus production by means of ethane extraction and sales, realizing the significant premium compared to the alternative of actually blending this ethane into the sales gas. So we do all we can to extract and maximize value. Going forward, we will use our competence and resources to develop similar type of thinking, value chain thinking. Premium markets is important to cater for growing production also in the liquid-rich southern Marcellus, and I think our latest acquisition in this region will give us even more leverage in that respect. Finally, Hilde, to conclude my presentation. I always like to repeat and I will leave you with these 3 main messages of today. During 2012, we have seen record gas sales, record gas prices into Europe and also record earnings, and I think this demonstrates a sustainable business model. We do see a continued strong outlook for the European gas market, and we are convinced that Statoil is fundamentally well positioned, well-equipped to continue to capture value also in a more liberalized market environment as it emerges. So thank you very much for the attention, and I'll leave the floor to you.

Thank you, Eldar, and we will now have another Q&A session and this time we will have both Eldar and Oystein available for answering questions regarding their presentations. Once more, we will start out with you taking questions from the audience here in London. And again, please state your name and the name of your company before your question and also, again ask you to please limit yourself to one question at a time. And we can start off with Jon. Please, Jon.

So, one question per principal on the stage. So I could have -- maybe I'll come back with my second one. So if I can ask my first question for Oystein. On -- I'm trying to relate the production targets that you have to the CapEx targets you've also announced in Norway, and I'm conscious that over the next 2 to 3 years, you're probably building up developed reserves in advance of actual [ph] Tick up in production from things like Johan Sverdrup, et cetera. And so are you able to give some guidance on capital intensity, so a development cost, either blended or by region, sort of a Norwegian Sea, North Sea, Barents Sea, that we can use to guide a sort of development cost, unit development cost for Norwegian oil and gas over the next decade or half a decade?

We don't give all those detail for all of our separate projects, but we have -- we are guiding on sort of the CapEx numbers over the next years in total. So I'm not so sure if I can give you all the details, but as I said, we have an average breakeven price of USD 50 per barrel, that is some indication of what it costs to develop the NCS.

Sorry, I don't need it per project. I'm just trying to get an idea of the buildup of capital intensity and then almost the release of capital intensity as you come off the back of what looks like quite an active development process over the next few years, and so I'm just trying to get an understanding of that -- the unit CapEx intensity so that we can kind of plot that out over the decade.

Maybe we could come back to some -- just to make sure we can give you what you're actually asking for.

Yes, Theepan?

Theepan from Nomura. Sort of a derivative of that question, I guess, but I guess the backbone of your growth in Norway has grown over the last couple of years. The question I have is, do you think there's enough capacity in the local contractor market in Norway to meet your aspirations? Or are you increasingly going to use Asian contractors to deliver on your projects?

Well, as I said, we are increasingly using the international supply market and that we have been working on that for some time, actually, to qualify more contractors and to qualify more suppliers in the market, and to also, how to team them up with the right competencies that we need on the NCS. So we have been preparing for that. We have seen that this activity level is more than can be absorbed by sort of the local markets. But still, the -- for example, the Norwegian suppliers, are very, sort of heavily involved in our projects, and they're contributing a lot, but did we have a -- prepared for that, and we see that there is an international supply industry that can provide us with the capacity we need.

Is there a very deliberate strategy and effort to keep the market in Norway, let's say, is due to this [indiscernible].

They keep the market at --

Is there a strategy, therefore, to keep that market in Norway, let's say not to over-inflate that market? [indiscernible]

Yes, it's important to keep -- kind of -- competition in the market. That is important for us. So we would like to see the supply market being able to compete with this, so that we are not stuck with, sort of a limited capacity because then the prices and the cost level will rise to, yes, more than we can live with.

Can we have -- yes, Haythem, please?

It's Haythem Rashed from Morgan Stanley. My question is for Eldar, actually, on your presentation on gas. Just to really, if you could perhaps give us more color and sort of substance around the comments you made about the -- expanding the commercial relationships, and sort of increasing that share to sales directly to end-users in trade markets. I just wondered if you could sort of talk a little bit about what Statoil is doing to sort of prepare for that in terms of resourcing staffing? Are you -- do you feel you're ready, sort of, as an organization to sort of grow that, or is that something to come? Eldar Sætre: I appreciate that question because that gives an opportunity to just repeat that this is -- now, we are looking for opportunities in this new reality. That means that we are not sort of reactive. We are proactive, so we seek to prepare ourselves before the event, to put it that way, and build the organization, build the capabilities on top of the competence base that we already have, to be able to sort of deal with a much bigger number of customers, which is one of the futures of the future. By selling directly through the hubs, increasing volumes and also by selling directly, increasing volumes. We will have delivered a lot of -- many more customers and smaller customers, so we need to build the competence to deal with us with that, and we are doing that quite aggressively, we have a direct sales organization in Brussels that has been doing a tremendous job, and has developed very good relations and is expanding their market presence and has grown, as I indicated there, that part of the business quite significantly. And we have high ambitions for further growth in that area, and our trading activities, which is carried out from London, first of all, is making good money, so I think we demonstrate on the way that, we are up to the task, but we're also preparing ourselves to do more volumes and utilize sort of the whole set of opportunities that Europe gives us and the flexibility that we have. So we are expanding that, both geographically and also in terms of building our capacity to run that business.

Yes, Rahim, first.

It's Rahim Karim from Barclays. Eldar, you talked about the fact that your long-term contracts were taking different shapes and different forms and you're also looking to sell more of your gas to end-users, directly. I was just wondering if you could perhaps talk a little bit about the different commodity prices or different price risks you might be willing to take on, or that you are having to take on as a result of these shifts. I guess we all assume or mainly assume that those contracts are going to be spot gas price latent or some derivative of that, but perhaps you could give us a sense of your linking contracts to other commodities or other pricing references? Eldar Sætre: The legacy contracts have a huge component of oil in it. The gas or fuel oil, so obviously we are willing and we'll be continue willing to take on that kind of risk, it's a core it's for Statoil, as such, so no problem. We'll increasingly take on gas market risk into this, and we like that. It's also part of our core risk. So and then we see that there is developing diversity of desires and needs from various customers, in particular when we go down to the more shorter term and more, sort of smaller customers with more specific needs. We see a variety of things that we need to relate to. And one of the basic principle is the product unbundling here, that when we have, you start, with the hub price on these new sales, and if there is something which has a price tag attached to it, that is basically has to be priced into this. And that could also have a hedging type of nature, so we are into some kind of commodity that we might not want to prefer as a course for us, and then we might sort of look at what is the cost of taking that back to crude oil or gas or something. so as I think we have very conscious strategy as to sort of what is, what is the kind of risk that we like and so on. What I should say is that, when it comes to the Power segment, it is -- that is an issue, because you -- they are facing basically power -- electricity risk at the end, and gas risk, on the other end. And there is a risk component, that to the extent that there is [indiscernible] positive at all, which is a problem, currently. But we have discussions, and have developed sort of concepts, involving ourselves in discussions, which is about sort of how to look upon that risk, and we had a couple of contracts where we shall decide which have the sort of more complex risk, and which also has component of power risk and electricity into our risk profile. That's not a big chunk, but there are those kinds of components as well.

And I think there's Neill for the next question, please. Neill Morton - Investec Securities (UK), Research Division: It's Neill Morton at Investec. Back to the NCS. Oystein, you mentioned that back in New York 2 years ago, you gave a 1.4 million-barrel a day target for 2020. Your projections today now include new volumes from you would see at a high, or from the balance, and yet the target's still the same. I was wondering what the offsetting factor was.

We can see we have had a development. We are also divesting from the NCS, that is affecting our production and also the target or the ambition that we stated in the New York 1.5 years ago, also included exploration success. That was a part of it. So this is what we actually have, we have confirmed that the potential in the exploration prospects that we were looking at, that's actually, it's true, and that is adding on to our production in 2020. So yes, and of course, we are much firmer on our, guiding now than we...2 years ago.

Michael, please.

This is Michael Alsford again, from Citi. Could I maybe just refer back to sort of the European Supply and Demand chart that you talked about on the gas market. Clearly, we can all model maybe the supply declines in the existing production base, but could you maybe talk a little bit more about your thoughts around the demand, I guess, targets that you lay out? I think you talked about 20% increase in European gas demand until 2030, but maybe you could you talk a little bit about where you think gas is, as a percentage of share into the utilities market, for example, are you saying that's going to increase, or is it simply just a recovery in GDP that's driving that kind of assumption, that would be great. Eldar Sætre: Yes. There are several factors that goes into that, that belief as such, when it comes to the overall demand, and then I'll discuss the price as a separate thing, because that's strongly related to the supply side as well. When it comes to demand, what we do see is that and honestly we believed, a few years back, that the Power sector would be the main engine and the driver for growth as such. That has not materialized, and that's also why we have seen a contraction in the European gas demand, in combination with the economic situation in Europe, which hasn't sort of rebound. We are still optimistic about the Power sector as such, but let me remind you that there are other sectors also where gas plays an important role. When it comes to power sector we think it is, it would be rather astonishing if Europe, at some point, doesn't recognize the fundamental nature of gas in terms of climate policies and the effectiveness of gas in terms of coexisting with renewables and so on. So we think that, it might take some time, but eventually there will be policies established, like we see in the U.K. actually, which is favoring gas slightly more than we typically see in Germany, for instance. We think also that the EU, in terms of the ETS system, will have to come together at one point. They're struggling, but they will have to come together to establish a system that makes this come into the money in a way, and have an impact on what was a starting point for the whole ETS system. So these more sort of fundamental, there are sort of variances from year-to-year here, but we have to take a fundamental view, and we think that is going to drive also this sector longer term. And then it is -- it's going to be -- enough differences, depending on what part of Europe you are looking at. We're talking about 100 BCM of additional demand, which would be part of the 250 glut that I was talking about. We don't think that the material part of that is going to come in Northern Europe. It is probably going to come in southern and eastern Europe. So that is also an aspect of this which is important in our analysis. Another component is that, obviously renewables is -- has played an important role, in particular in countries like Germany so far, in displacing gas and the price of coal has sort of made it superior to gas in this environment. We also think that fundamentally, the cost of renewable subsidy is increasingly, and also looking at the economic situation in Europe, coming up on the -- among politicians as an issue and we see those debates emerging also in Germany now, so we think that, that sort of the politicians' view on how much financial willingness there is to invest in, massively in further development of our new business also going into this equation. So all in all, renewables, subsidies, finances, climate policies, fundamental attractiveness of gas, it all points together into a longer-term development that we are quite convinced about, but the main driver of what I said about the price, is actually, in any case, there will be a significant supply glut from the indigenous production side from the supply side.

I can't see any...yes, I can see one more, from Jon.

Jon Rigby from UBS again. If I can ask my gas question now -- If I look at the chart that you showed of projections on prices, which you don't show a European contract price in, but you show Japanese LNG prices dipping down, which I guess is a reflection of your oil price view, and you also show MBP [ph] spot European prices climbing. It strikes me that if you were to put a European contract price on there, you'd end up showing the spot prices in Europe and contract prices in Europe pretty much converge in your scenario, and therefore we get back to the answer we first thought of. Is that a correct interpretation? Eldar Sætre: No. I consciously didn't show, sort of a, typical -- I would have to pick a contract to do that. We don't do that, so but what you see, what you have seen is actually quite strong evidence that we are able to sort of deliver a strong result, despite the fact last year that we have 55% on a hub basis. Going forward, obviously, what kind of assumptions are you putting into, in place there is also important, that's sort of how the forward curve for gas and oil is developing, and we see that oil is backwarded, and gas is the opposite. So even today, this is strong evidence that we are dealing with this situation in a good way. And going forward, they are looking at the market and how it prices those commodities, it's -- and I think we might be back to the situation that we had earlier that before the economic crisis, we took a more -- a lot of that gas demand, that it's a pricing that is pretty much equal, it could up or down, but as you know, over time it is, is [indiscernible]. I honestly think that longer-term hub based pricing and the liquid market for gas is a good thing, longer term, and we are preparing ourselves to do that and we are making good money on that already now.

Yes, I see another hand.

Peter Hutton from RBC. You've got a strong position on -- in European gas pipeline deliveries. Is there a question of not having the sustainability that -- or are there any handicaps to the long-term position of that, given that, as a company, you're relatively underway in global LNG, and are there any issues to address there? Eldar Sætre: It's the fundamental nature of a pipeline, you cannot -- there's not much you can do about it. So there is an infrastructure. I think the main point is that it's a flexible infrastructure. It gives us access to various markets, and that gives us a very strong starting point. If you look at Europe, I think it is, I mentioned, there is demand uncertainty. We have a view on that. We think the pricing in Europe is quite robust, and that we will have a situation where Europe will need LNG to balance the whole thing. I pointed at some risk factors, obviously things could happen, if you don't give a lot probability to, that sort of takes away the whole European gas market. But I think we would have to see a quite serious situation before, so that we were really concerned with the pipelines of gas to Europe, and the cost efficiency of utilizing that system is so huge, that my starting point gives me a very strong hand and is a benefit to us. But ideally, if we're looking at sort of how to expand our growth business, our gas business, we have said that LNG is a nice thing. The flexibility of LNG in a global context is something that we would like to see. We have tried for many years, and in that context, the Tanzanian position is a very good asset for us, that would make a difference in that respect.

I think we'll turn to the audio audience now. And our first question comes from Teodor Nilsen with Swedbank First Securities.

A question related to the NCS. You have said that you want to concentrate your portfolio in Norway, so then I guess, you want to divest some assets in some areas and maybe you want to increase exposure in some other areas. Is it possible to give some colors, color on which areas you will pay attention to, and to which areas you will seek to make some divestments in?

Well, as you know, we have already done 2 major transactions, that is telling us something about what thinking about this is. Now we are building up in, for example, Utsira, and selling down in the Euro Vega area. That's a reflection on where we are intending to be, and where do not intend to be. And the same was with the Centrica deal, where we also divested many, say very early phase projects because we couldn't, we were not or we didn't want to prioritize these, and therefore we also divested them. So we have a plan. We have a strategy to where we want to be, and then it is the opportunities and the price and to find the right partner to do these transactions with. But this will be a continuous effort on the NCS. And we would very much like to see more of this happen. But, of course, this depends on many parties, but we do work systematically on this issue.

Do you have an influence around owner's shares -- there's some fields from Utsira High [ph] where you have a pretty substantial owner's share in -- could you own 100% of a field or do you have any thoughts around that in terms of risk management?

We do not want to own 100% of the fields. It's also a matter of sharing the risk with other partners, and that is -- will also be part of our strategy going forward.

And a final question, just on the recovery rate, if I may. You were aiming for a 60% recovery rate on NCS, which is nice. Could you say something about the CapEx requirements per barrel, and also something about the internal rate of return you expect on the CapEx, related to increased recovery?

Well, as I said, this is a very long-term ambition, and this is only natural going forward from the 35% we started out with. We had 49% last year. We are 50% this year, and we have said that this is the right ambition for us, to give direction to our IOR efforts. What we say also is that this will require technological development, so we are not there today to say that it's -- we do not know exactly what it takes to make a 60% recovery from our NCS portfolio. But we will -- the most important thing we will have a strong effort on doing research, in technological improvements or developments to get there in the future. And as I said also, this will happen in the long term, and most of it after 2020. So I can't give you any figures or directly sort of the price for the 60%, we don't know.

And our next question comes from Brandon Mei with Tudor, Pickering, Holt. Brandon Mei - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: I may have missed it, but I was wondering if you can give some color on what you're seeing on the coal competition, and maybe if you could put some numbers around it, and what you expect, going forward?

Obviously, no, it's -- there are some paradoxes here, but what we see is that the United States is basically growing their gas consumption and -- at the expense of coal, and improving their climate accounts as such, without the climate policy, to put it that way. While Europe, which has a climate policy, goes the other way, so it's a paradox. And I think the solution to that equation is the coal, that increasingly comes in at a low cost from the United States into Europe, into Germany at quite low costs, and it's hard to compete when that happens. And Europe is willing to accept that stuff into their power generations and for other purposes with CO2 emissions, which is 3x at least as much with the old power plants, as you would see on gas, but that's what happens, at least in the, at least to have you have seen that the Germany. I don't think that paradox or that situation can prevail for a long time. I think the U.K. is seeing it, and their electricity markets are foremost [ph] is pointing at, sort of, acceptable levels of carbon emissions for power generation, and that greatly creates a problem, at least for new coal investments. And I think it also incentivize gas to at least, to a large extent. So I think, the other x factor in this is Europe, and I think if the fundamental thing is that -- if they want to reduce CO2, they have to put a cost on it. And if they want to achieve something, not only put a cost on it, but a cost that has an impact. And so far, there is a cost, but it doesn't have an impact, and it's as far away from that, so European policies have to sort of address that in a way which displaces coal. Otherwise, they will not see impacts in their climate ambitions. So that's my general view on this. As I said, longer term, we think this will -- this leads -- elements will emerge, and that goal will, coal will really struggle in the European energy mix, and it should. Brandon Mei - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: And then, I guess my second question is on the Marcellus, again. Can you give some color on what new opportunities you're exploring in the midstream, in the southern Marcellus? And then also your thoughts on LNG export from the U.S. and also petrochemical projects? Eldar Sætre: Yes, petrochemical's, to take the easy one. That is something we have been into, a few years ago and we're not going back there. But obviously, petrochemicals is a potential customer. And I talked about ethane extraction as such, and that is part of the thinking, to supply into petrochemical industry. When it comes to southern Marcellus, we are looking into that. The key thing here is to attract key markets, premium markets that has sort of a demand, and would like to develop a demand and whether our infrastructure projects, that is addressing these markets. So I think, basically we are heading slightly south in -- from, and not North, as they, as we have seen into Toronto and New York, and into southern markets, like the Atlanta region and so on. So we are exploring those kind of opportunities and pipeline opportunities in that respect, but it's based on the same competence that we have from the Norwegian side, and the same principles that you have seen us develop in the Marcellus so far. And to take out the wet components and maximize values from that, is also a key part of the strategy in the South.

All right... Eldar Sætre: Hilde, there was a question from -- that I might try to answer, and on Torgrim's -- on the volumes that we have moved forward, to put it that way. And how much money we have made on that, and I have to disappoint, not surprisingly a little bit on that question, because, I think you have, you are indicated the volumes, Torgrim [ph], that we have moved forward around 15,000 barrels per day. And if I were to give a number on that, you would -- I would pretty much expose every sort of -- strategy for decision-making and how we are thinking about this and I don't think that is a wise thing for me to do. But all I can say is, that it's we even obviously we make good money on that, and then that's part of, sort of what you see, also in other accounts.

Okay, then next on the list, we have Jason Kenney from Santander.

Just going back to the earlier questions on capital intensity. Been also thinking of unit costs, and I wonder if you could share your thoughts on the unit cost profile, going forward, versus today at least, and thinking over the period to 2016. And then, maybe if you could just expand a bit on the $50 per barrel cash breakeven of new projects, and relay that to or relate it to the current cash breakeven of your business, and maybe the whole portfolio and the profile, going forward.

That was a lot of details to sort of -- well, when it comes to unit costs, we see the cost is developing. We try to keep it in a kind of constant, but that does have a slow -- we'll have a slow increase in the years to come, but we have full control of that. It's not, kind of getting out of control. As we said, because we are working on -- we have, our ambition is to keep the field cost level at a constant level. When it comes to the capital or the cash or the breakeven on the project, there is a variety. We have a $50 per barrel as an average, about that. Some of our projects are much better than that, and some of them are not as good and when it comes to Aasta Hansteen, for example, whether I mentioned, there we have a somewhat higher break even, and that is also because this is an area solution, it's opening up for new infrastructure and so on. But on average, we have a very robust portfolio, and our best projects within, sort of fast-track is better than $30 per barrel, breakeven.

And we'll take the last question today from Christine Tiscareno from S&P Capital IQ. Christine Tiscareno - S&P Equity Research: I don't know if you are the right person to ask this but, I wonder if you could give us an update on the Troll field, which is one of your most flexible ones, if you have any comments on that, and maybe also the Alve field?

What the -- the Troll?

The Troll field, and what was the second field? Christine Tiscareno - S&P Equity Research: Yes, the Troll field and Alve?

What do you mean, about the Troll field, the update of that, the projects or ...? Christine Tiscareno - S&P Equity Research: Well, yes, there was a significant decline in production in the fourth quarter versus the third quarter. And I don't know if most of your so-called held back volumes are coming from there?

Yes, so that is more kind of Eldar question there. I mean the Troll is at Springfield, and we can produce, we have a very large flexibility of production capacity, so the gas sales is very much controlled by a gas -- Eldar Sætre: The portfolio [ph] Is full speed, that is a -- so will gas prices that we have seen and so we mentioned we also moved forward volumes, so basically, on the Troll field, it has been full speed. So any kind of decline in the fourth quarter that means some minor operational interruptions, but those are minor, so they shouldn't have any impact on the production volumes, as such in the fourth quarter. So I can't relate to sort of a material reduction on the -- from the Troll field, that should basically be, as much as possible, at least in November and December.

When it come to the Alve, I'm not quite sure what you mean about that? Christine Tiscareno - S&P Equity Research: Well, there's also a very significant reduction in volumes.

We have had some problems with the [indiscernible] and that has affected the production, from Alve, that is correct, but that is a very minor, very minor effect on our total production. Christine Tiscareno - S&P Equity Research: Okay. So going forward in the first half of the year, the Troll production could increase again, or it could stay where it is, which is basically half of what it did in the third quarter?

I'm not familiar with the numbers that you're referring to so [indiscernible] my sort of market intelligence. We'll check it, I think.

Okay, then we'll have to conclude the Q&A session, and should there be any further questions, please feel free to contact us in Investor Relations. The presentation and the Q&A session will be available for a replay from the website in a few days, and transcripts will also be available. Now, before we end, I would once again like to introduce our CFO, Torgrim Reitan, who will close today's event. Please, Torgrim.

Okay. Thank you, Hilde. So it has been very good to be together today, and I hope it has been a useful few hours for you. We have given you a comprehensive, comprehensive level of details and information, and I'll let you digest the information, and I'm not going to repeat it now. What I want you to remember is 2 things: Firstly, we have delivered a very strong set of numbers for 2012, and we have enhanced the value for all shareholders. And then, secondly, we are on track to deliver on our longer-term ambitions, and our strategy remains firm, and it's quite a big momentum in the strategy work. It has to be said that a strong set of results, it raises expectations for future deliveries. That is a challenge that we live well with. We have been clear on the development in 2013, and I do think it has come across that, as a CFO, I'm looking forward to 2013. And I'm proud to be part of an organization that is able to deliver strong growth, the transactions we have done, the exploration results that we have seen in 2012. So let 2012 be a teaser for what we will like to achieve in the years ahead. So thank you very much for your attention here today, and then I'm looking forward to enter into discussions with you over the next few days. So thank you very much.