Hilde Merete Nafstad - Senior Vice President of Investor Relations Torgrim Reitan - Chief Financial Officer, Executive Vice President and Chairman of Corporate Risk Committee Svein Skeie - Senior Vice President for Performance Management and Analysis Ørjan Kvelvane Svein Rennemo - Chairman and Member of Compensation & Leadership Development Committee

Trond Frode Omdal - Arctic Securities ASA, Research Division Morten Evjenth Lindbäck - Fondsfinans ASA, Research Division Alejandro Demichelis - Exane BNP Paribas, Research Division Theepan Jothilingam - Nomura Securities Co. Ltd., Research Division Haythem Rashed - Morgan Stanley, Research Division Jon Rigby - UBS Investment Bank, Research Division John A. Schj. Olaisen - ABG Sundal Collier Holding ASA, Research Division Peter Hutton - RBC Capital Markets, LLC, Research Division Michael J. Alsford - Citigroup Inc, Research Division Rahim Karim - Barclays Capital, Research Division Oddvar Bjørgan Robert A. Kessler - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division Iain Pyle Blake Fernandez - Howard Weil Incorporated, Research Division

Ladies and gentlemen, welcome to Statoil's Third Quarter Earnings Presentation. My name is Hilde Nafstad, and I'm the Head of Investor Relations in Statoil. This morning at 7 a.m. CET, Statoil announced the results for the third quarter of 2013. The press release and presentations for today's event were distributed through the wires and through also stock exchange. The quarterly report and the presentations can, as usual, be downloaded from our website, statoil.com. Please make special note of the information regarding forward-looking statements, which can be found on the last page of the presentation. Today, Statoil's CFO, Torgrim Reitan, will go through the earnings and outlook for the company. The presentations will be followed by a Q&A session. We will aim to end the conference, at the latest, at 2:30 p.m. CET. Please note that questions can be posted by means of telephone but not directly from the Web. The dial-in numbers for posing questions can be found on our websites. It is now my privilege to introduce Statoil's Chief Financial Officer, Torgrim Reitan. Please go ahead, Torgrim.

So thank you, Hilde, and good afternoon and good morning to all of you in the U.S. In the third quarter, Statoil delivered adjusted earnings of NOK 40.4 billion. This is in line with the same period last year. Our net operating income was positively impacted by gains from the Wintershall transaction. However, impairments on the refineries and commercial provisions impact the financial results negatively. We delivered good operational performance in the third quarter, producing as expected. In fact, underlying growth was around 6% if we adjust for the divestments we have made and the redetermination at the Ormen Lange. The transactions created significant value, and I have, of course, no regrets in seeing the production being impacted as a consequence. We're ramping up new production on the NCS, as planned, and carrying out high maintenance activity, and we maintain good cost control and capital discipline. And then we produced record volumes from our portfolio outside Norway. We continue to deliver on our exploration strategy. We announced a new high-impact discovery offshore Canada. This is the world's largest oil discovery this year, and it is our 10th high-impact discovery in 30 months and it's our third oil discovery in the Flemish Pass Basin. Our chief explorer, Tim Dodson, and his people are doing very well. We continued to shape our portfolio, announcing divestment of assets in Norway and in the U.K. to OMV. $2.65 billion in proceeds and an expected gain of $1.4 billion. This transaction will also reduce our future CapEx exposure by $7 billion, and most of this is before 2020. This demonstrates the value of our portfolio. Recent asset divestments in the North Sea price our assets at around 50% premium to Wood Mackenzie estimates. And we expect to close the OMV transaction shortly. And finally, we…

Thank you, Torgrim. And for the Q&A session, Torgrim will be joined by our Senior Vice President for Performance Management and Risk, Svein Skeie; and our Senior Vice President for Accounting and Financial Compliance, Ørjan Kvelvane. We'll start out by taking questions from the audience here in Oslo, and then we'll turn to the audio audience. So I'll first ask the operator to explain the procedure for posing questions over the telephone. Please, operator?

[Operator Instructions]

Okay, we'll start out here in Oslo then. Please remember to push the button and hold it on your microphone as you speak in order to broadcast your question. We have Trond.

Trond Omdal, Arctic Securities.

Please hold the button while you speak.

Trond Omdal, Arctic Securities. On the Troll field, you're going to install a new compressor, and I think you're guiding was second half of 2014. Is that still the case? And how will that impact your plateau or peak production in Q4 and Q1? And the second question, you've now taken over ownership on Eagle Ford, and you've been drilling for 3 years. Has the -- your -- the company's view of the liquids component versus the dry gas component changed since you did the acquisition?

Okay. Thank you, Trond. So first, on the Troll field. You're right. One compressor is for repair, or a new compressor will be installed. The plans are as they have been. While we are -- while we have reduced capacity at Troll, the maximum capacity is to -- between 95 million standard cubic meter per day while the full capacity is 120 million. So this means, first of all, a reduced flexibility around the Troll production. On Eagle Ford, drilling is progressing well since we have taken over the operatorship. We see that there is a significant potential to improve efficiency and reduce costs. And so far, that asset delivers pretty well and in accordance with our expectations.

Any -- yes, Morten. Morten Evjenth Lindbäck - Fondsfinans ASA, Research Division: Morten Lindbäck, Fondsfinans. Could you please elaborate on Snøhvit, on the processes that you have been through? And also, on all the -- last tax changes has affected the economics on the project.

Okay. Thank you, Morten. So Snøhvit, 2014 is an IOR, potential IOR investments. We have not made any decisions. What we have agreed is to work on a concept and plan for an investment decision in 2016, which is actually later than was planned for earlier. We will work very hard to improve that project as much as possible, but no decisions have been made. In 2016, this project has to compete with other investment opportunities as such. When it comes to specifically on the tax changes made in the spring, that deteriorated the profitability of that asset, and adjustments to that will improve the economics and make it easier to make a positive investment decisions when that is relevant.

Do we have any further questions here in Oslo? I can't see any. So then, we will turn to the audio audience. And our first question comes from Alejandro Demichelis from Exane.

Torgrim, just one question here. You have been talking about your cost being under control here. Maybe you can give us some kind of indication, at least directionally, in terms of how we should be thinking about CapEx going into next year?

Okay. Thank you, Alejandro. So the guiding that we gave is $21 billion, in average, in investments 2013 to 2016. This is consistent with our production in 2020 of 2.5 million barrels per day. So that is still valid. But we also are saying that this production ambition in 2020 is what it is, and we -- our target is to create value and not necessarily steer on a 1 single number at 1 point in time. So we are doing portfolio adjustments, as you know. We will revert at the Capital Markets Day in February with a fuller update on the totality.

Okay. But just in terms of you're doing the divestments here, can we see some kind of reduction in CapEx because you have less assets to spend your money on?

So I won't go into details. We will have to revert to that in February. But generally speaking, yes, these transactions reduce our investments or free up investment capacity going forward.

And then our next question comes from Theepan Jothilingam from Nomura.

A couple of questions actually. I was just coming back to the disposal strategy particularly after the OMV transaction. Is management thinking that there could be a greater emphasis to sell some of the growth assets particularly in Norway? Then in that context as well, I was wondering whether there had been any progress in terms of development plans on Johan Castberg. I think the Energy Minister made some comments recently there. And I'd just follow up, I understand that you'd like to give more details on the CapEx for the longer-term and the 2020 target but just, I think pulling up on the first question directionally, do you see investment, organic investment up year-on-year or not, given that you've given us a production profile?

Okay, thank you, Theepan. When it comes to disposal strategy, portfolio management is a key part of our strategy. And I think that is very well demonstrated by the transactions over the last 3 years. We will continue to high-grade the portfolio to sharpen our growth further, seeing to that we reinvest into the most profitable projects. So going forward, you should expect this to be a part of the strategy and what you should expect to happen. When it comes to Johan Castberg, we have a drilling campaign in that area. We will await that and then, it has been said that physical framework will be looked upon in this area. So we also await physical clarification for that assets. When it comes to investments, I do can understand your question and your curiosity but I must ask you to show up at the Capital Markets Day in February instead.

Okay, can I just follow-up back on disposals. Just in terms of thinking though. Is there more emphasis in terms of being more active on early cycle assets trading some of the exploration success that you've clearly had over the last 18 months, 2 years. Is that now more in your thinking or you're still thinking more around the mature producing assets in the portfolio?

If you look back on the transaction that has been done over the last year. You will see actually quite a broad spectrum of assets from mature assets to more exploration and early phase assets. So we take a rather broad perspective on this and I think that must be part of forming your expectation. I will not give more clear guidance on specific type of assets but we have regularly review of the portfolio to decide on what do we want to continue with and what do we want to do something else with.

The next in line is Haythem Rashed from Morgan Stanley.

I may be sort of repeating answered earlier questions, but if I could ask you slightly different way, I'd like to come back to sort of portfolio management again. But I just wanted to understand because I know in the past you chose not to sort of give any explicit guidance on disposals and you clearly have a very strong track record in actively managing your portfolio. But is there any sort of scope to provide any sort of guidance or color on sort of the amounts of, should we say spending saved through an active portfolio strategy so...

Excuse me.

Would you, would it be fair to say that your focus or you're priority when you're looking at sort of assets in the sort of disposal phase, you would be looking at those with sort of perhaps disproportionately high levels of spend associated with them. And is that something that is an increasing focus for management? And second question is on U.S. onshore gas production, it was quite a bit stronger Q-on-Q. I know you sort of made some comments about 2014 sort of level, activity levels in the U.S. continue to remain relatively subdued. I just wanted to, so if you could give a better color as to how we should think about the trajectory for that going forward over the next 12 months, is sort of 3Q more of anomaly, should we be seeing sort of those productions normalizing back down again?

Okay. It was a bit on and off with the sound, so the first question, I think I got it. So looking at further portfolio adjustments, I think I just have to repeat my answer. It's all of a pretty broad approach to how we look at our portfolio. We keep on making big discoveries that are very profitable and that will be prioritized. So we currently run a very hard prioritization what to invest in and what not to invest in. So certainly there will be assets and that are in the investment phase that are part of that discussion. And then there are other assets that are less strategic than others. That we want to capitalize on. On the U.S. onshore production, to give some more color on that. Currently, we run with 5 in Bakken. We run with 5 rigs in Eagle Ford, and a total of 14 wells in Marcellus. So this is down since the start of the year and significantly down from what it was before that. So when it comes to Marcellus, in the start of the year, we had 400 wells drilled, waiting for completion and hook up to gathering systems. A lot of them have not been hooked up and are in production. The current in entry is down to 100. And 100 wells is a normal in entry when you're in a steady state. So have been in sort of what should we call it, a backlog of wells waiting for transportation. So that is a part of the explanation why the growth in this segment has been so high so far this year. So as you understand, a stable situation with fewer rigs means lighter growth from the Marcellus area. When it comes to Bakken, we at 1 point in time, we had 16 rigs. We are currently at 5. Now to give some color on why that is. For us, it's very important to take a long-term perspective on that assets. So what we do see is that when we run with such a number of rigs, we're able to take learnings across the rig portfolio and apply it. And that is makes very much sense. So that is, explains while this will be slower ramp up than it has been this year.

The next question comes from Jon Rigby with UBS.

Two questions, first just going back to your Bakken comments, and you talked about value not volume, but surely everybody is driven by value. And if you look at your competition which is mainly independents, they're clearly growing production significantly faster than you in the basin. So I just wondered what it is more specifically that you are concerned with about not growing production but that they clearly are not and maybe what it is we're missing in the comparison between the two. And then the second question is, I'm fully behind your strategy of realizing value, I think it's a good one and particularly with your exploration success it make sense to continue to high-grade. But has any thought been -- has there been any thought at broad level of allowing shareholders to participate in that, in that the final link between realizing capital value within the portfolio and delivery to shareholders could be something exceptional in terms of payback shareholders. I'm thinking primarily of share buybacks?

It will be the easiest thing to boost short-term production in Bakken. It is just to frac very hard and then you'll see the initial production go very, very high and then decline very rapidly. The key here is to track as subtle as you can, reduce the distances between the fracs and get the maximum out of your reservoir. Then you get the higher recovery rate but a much flatter production profile and much less initial production. Without naming anyone, companies that want to dress up for being acquired really have the incentives to boost initial productions. We have not that driver. So I think that is a short and brittle comment. When it comes to your second question on share buybacks, yes, we have a mandate from the annual general meeting like we have every year. It is part of the toolbox that we have and if that is judged as being prudent, we will use it.

The next question comes from John Olaisen with ABG.

Two questions. First, do you intend to give a lot of warnings about production for 2014. And how strong this is to take this in the case. Do you expect another year with production down year-on-year or do you expect production growth in 2014?

My main purpose is to get across very clearly the impact of the changes that has happened over the year. So you all have that with you when you make your forecast into the future. I will not give any directions in to it next year, but we have our guiding from 2% to 3% of growth towards 2016. That is still valid but you should remember that impact from the OMV transaction is 60,000 barrels in 2016.

Oh yes, but also organic investments are going from $16 billion to $19 billion to $21 billion, should we really not expect any production growth from all this increased CapEx?

So I think it is -- we're currently investing $19 billion and yes, it is investing into growth and there will be growth. But I think it's relevant to also take into account what is the net investments in this perspective all of the proceeds that has been brought in, and then of course, reduces the production.

Okay. My final question here is regarding the NOK 4.3 billion in provision for a change in ownership interest in an international field. Can you specify which field that is and what's the dispute?

This is related to an offshore field internationally. And due to commercial reasons unfortunately, I can't be more specific than that.

Could you tell us a little bit how much it would impact your production if you lose on that dispute?

That is too early to say. But the expectation is that it is not too large impact on production.

Your next question comes from Peter Hutton with RBC.

And just 2 questions, again coming back to the guidance or marginal guidance that we've got for 2014 production. You said that the impacts of the Ormen Lange and the disposals, that would be 110, 120 in 2014. Can I just check because looking through this, which is the logic that you gave in getting to those numbers, that would imply that 2014 compared to 2012 is that correct, because you also said that's bigger than the 80,000 barrels a day that we saw in -- so that's 80 bigger than the impact we saw in 2013. So that the base is actually 2012. Can I confirm that one? And the second area is, thank you for the update on Castberg. When do you think we might be able to get to a stage whether there's more information on that one given that you're awaiting the campaign and also the fiscal framework, and also on dates, are we still on track to get an update on share drop by the end of this year?

Okay, thank you Peter. So Svein, if you can give the more granularity into the 110 to 120, that would be appreciated. On Johan Castberg, Skarv is being drilled. When that is done, the next one is going to be drilled and as far as I recall, it's called Kwanza [ph], yes. And then, we have done with the campaign around Johan Castberg. Then we know more whether there is additional volumes. When it comes to fiscal framework and clarification, we are awaiting that and that will of course, be an important factor in deciding on the way forward. It is a great reservoir. It is large and we'll see. When it comes to Johan Sverdrup, the plan is to make a concept selection by end of this year where an updated resource estimate, total resource estimate from us will be given. So that is the plan and we will see to that information is presented in a prudent way.

Regarding the 110,000 to 120,000 barrels impact next year. That comes from the Ormen Lange, which is then estimated to be around 40,000 barrels per day, out for the year. The OMV transaction, which is done also and estimated to be around 40,000 and as we have said also for the Wintershall transaction, that the impact then, after closing, is around 40,000. So those are the 3 elements, adding up to the full impact of 110,000 to 140,000 -- 110,000 to 120,000.

But that's not against sort of full year average '13 because some of those elements have been included already, Wintershall from the end of July, Ormen Lange date is 20,000 on an annual basis.

Yes, this is the impact in 2014, and also as Torgrim mentioned in the speech, is that the increase will be around 80,000 from this year.

Peter, the Ormen Lange the annual effect is 20 but the second half effect is 40.

We'll turn to the next question then. It's Mike Alsford from Citi.

I've got 2 questions actually, please. Firstly, just on cash taxes. So despite, obviously, lower possibility in '13 versus '12, cash taxes are running high year-to-date. Can you just tell us what's driving this, does this I guess, unwind in fourth quarter and how should we think about I guess, cash taxes relative to P&L taxes into 2014. That was my first question. And then secondly, maybe more go on CapEx, you've obviously given us the guidance on production impact for the asset transactions that you've made. You mentioned, I think when you did the OMV deal, that you were sort of freeing up around $7 billion of CapEx of which I think $5.5 billion was before 2020. So could you maybe provide us with what the I guess, saving is from that asset divestment for the period 2013 to 2016 so we can reconcile with your current group guidance on CapEx, please?

Okay, the first question on cash taxes this year and I'll make a comment to the Norwegian taxes because that is paid with a 6 months delay. So the first, the Norwegian taxes paid in the first half of the year was based on the 2012 earnings. And they were high. So the tax payments in the second half of the year is lower than in the first half of the year. When it comes to the OMV transaction, you were absolutely right. It takes them, the investment levels, from these assets from some $7 billion, $5.5 billion within the period up to 2020. And if you look at the profiling, it is more in the early years than in the later years, related to those.

Okay, so just to confirm that $5.5 billion is going to be in the 2013 to 2016.

No, no, not all of it. But $5.5 billion will be in the period of 2020 and if you profile it, it is more in the earlier years than in the later years of that period.

Next question comes from Rahim Karim from Barclays.

I have 2 questions, if I may, the first was just around Tanzania. We've seen a few comments on the headlines in the last week or so around the fact that those concerns about there not being enough resources to develop LNG facilities there. A bit surprised by those and also by others suggesting that Statoil and Exxon might be looking to sell down stakes there. So I was just wondering if you could perhaps provide an update and your current thinking around Tanzania. And then the second question, was just about the impairment seen in the upstream. You talked a bit about the provision but I was wondering if you could provide any color on the impairments especially in the International business. What those relate to, whether any of it relates to the U.S. onshore and what whether they were there any associated reserve impacts?

Okay, all right so on the impairments Ørjan, if you can take that afterwards. On Tanzania, there is enough resources for a development, 15 to 17 Tcf. We are working closely with BG in the neighboring block as you know. We have one well being drilled correctly, Marungga [ph], which is the first in that campaign. And so of course, more volumes are better when you talk about LNG developments. To us, the priority is to do this right. This will be -- this will have no impact on 2020 production. So this is for the next decade. So on the impairment, Orjan. Ørjan Kvelvane: Yes, on the impairment, we, of course, test the triggers every quarter and this quarter it's mainly impacted by the refineries, over 4.3 billion and then in addition, we have parts in DPI 0.9 billion and also in DPN Norway 0.4 billion. But I don't think we should go into details further.

And the question was, did this have reserve impacts, these impairments? Ørjan Kvelvane: No, they will not.

Okay, but can you confirm that they're not associated with the U.S. onshore? Ørjan Kvelvane: They're not associated with the U.S. onshore. You are right. They are not associated with that.

Next question comes from Oddvar Bjorgan from SpareBank Markets. Oddvar Bjørgan: I'm afraid it's the CapEx question again, but as you know, this is the main investor worry in the stock. But I'm just trying to rephrase the question a bit. You're last CapEx guidance for 2014 to 2016 was given in February this year. Today, what has changed? Do you see more CapEx or do you see less CapEx in that period now? Can you answer that?

Okay, thank you, Oddvar. 2.5 million barrels per day is consistent with the 21 billion in the period 2013 to 2016. If we elected to grow harder, which all the assets and discoveries and everything gives the potential to, then investments can be significantly higher than that. On the other hand, if we decide to do something else than producing 2.5 million in 2020, lower, then the investments will be lower. So it's a pretty consistent picture and we see that still is the case. What has changed since February? I think first of all, it's a series of great discoveries and explorations, results that has brought into prioritization work that we are currently doing.

Then our next question comes from Robert Kessler with Tudor, Pickering, Holt. Robert A. Kessler - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: I wanted to come back to refining if I could, I recognize it's not the largest portion of your portfolio but I wanted to see if I could get some color nonetheless. You said no plans to close the refineries but any thoughts about temporary reduction in runs and also any possibility of divestment for those assets?

Okay. So the related production out of those assets are optimized and the runs are reduced to optimize it. When it comes to any plans for divestments, I won't comment on that but on general notice, that selling refineries in Europe is not an easy task these days. Robert A. Kessler - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Understood. Have you been below cash costs on the margin in recent histories in the last couple of months at those refineries?

At both refineries, so far this year, is balancing neutral, both in the quarter and so far this year.

Our next question comes from Iain Pyle from Bernstein.

I have just 2 questions on the Flemish Pass. Firstly, when might you expect to have more information on Harpoon. And then secondly, given a fast-track development of what looks to be pretty attractive assets there, is there any potential for these to contribute to the 2020 production targets?

Okay. thank you, Iain. So the Harpoon, the finishing of that evaluation, that is ongoing. Am not sure if you have the dates, Svein.

We are in the phase of them doing the final evaluation so and then taking the totality and then when we have the full flow [ph] we -- you need to come back for our plans.

Yes, exactly, there are, there's such a huge acreage that we hold around this and we do see other very interesting drilling targets in this area. So we will work on bringing a rig back and do more work. You should not expect this to be part of the production in 2020.

We have time for just 1 more question. And that will come from Blake Fernandez with Howard Weil.

I had a couple of questions on back to North America. I'm just curious, it sounds like you're activity levels as you say will be modest as you kind of develop your drilling and completion techniques. Is it fair to say at this point you really focused on optimizing costs and not so focused on testing other formations and down spacing in some of the places like the Eagle Ford?

I think you are absolutely right. We see a big potential in improving the operations and making it optimal. We are satisfied with acreage that we have and the positions that we have. And optimizing on that is a natural part of running that business of course, but quite comfortable with what we have.

If I could just follow-up, do you have a first right of refusal on your Eagle Ford acreage with Talisman?

I think those commercial considerations, I'm not prepared to share.

Thank you. And that will have to conclude our Q&A session for today. And our presentation and the Q&A session can be replayed from our website, as usual, in a few days and there will also be transcripts available. If you have any further questions, please don't hesitate to contact us with Investor Relations department. And thank you, all, very much for participating today. Have a good day.