Equinor ASA (EQNR) Q4 2015 Earnings Report, Transcript and Summary

Ladies and gentlemen, welcome to our Fourth Quarter and Capital Markets Day for 2016. It's a pleasure to see you and to have an opportunity to talk through our results and our outlook. I think we give some good detail in the presentations today, and I'm glad that we're -- in this year, we're also being joined by 5 Executive Vice Presidents, who are going to talk through the impact on their business and what they're doing in the present situation and their outlook for the next 4 years. Safety is a number one priority for Statoil. And as always, I just like to start with a brief safety announcement for everybody. So just to run through this, if an emergency situation should occur while we're here, the evacuation signal is a voice system announcement. Please note that we only evacuate the building should the voice announcement tell us to do so. Please use the fire exits within the venue and follow the signs and exiting at ground level. The assembly point is situated on Bartholomew Close. Okay. The format for today, we have a lot to get through. We will start with a presentation of about 20 minutes each from the CEO and CFO. And then we'll have an opportunity for questions -- Round 1, predominantly from the floor. I'm afraid I'm going to impose the same rigid discipline as we had last year. For this round, there's a lot to get through: half an hour, one question in one part only, but there will be plenty of opportunities in the second round and also at the end of the session. After that -- after these presentations and the Q&A, short break for a sandwich. At 10 past 1, we will gather again, and we'll have a series of presentations from the executive vice presidents. After that we'll have another round opportunity for questions and answers of around 30 to 40 minutes and then, again, opportunity to meet people more informally on the tables outside the room. So once again, thank you very much for attending. I know this is very busy period as well. We're not the only ones reporting, but I think we're the ones who've got most detail in our presentations today. So with that, let me introduce Eldar Saetre, our Chief Executive Officer. Thank you very much. Eldar Sætre: Thank you, Peter. Good morning, everyone. And thanks for coming to this annual event here in London. It's really good to see you all once again. Ladies and gentlemen, our industry is definitely experiencing tough challenging times. In fact, you have lived with the turbulence and tumbling prices for over a year now, a powerful reminder, indeed, of the fundamental cyclical nature of oil. But everyone -- every downturn has its -- is different and has its own characteristics. This one has truly exposed how the industry over many years has allowed costs and complexity to escalate, I would say, beyond sustainable levels. Yes, we face a challenging market but, equally important, we now also have a unique opportunity to fundamentally reset our business. Today, you will see how we are taking down costs faster and with much bigger impact than we planned for earlier. You will also see how we are radically reshaping our project portfolio, positioning Statoil to capture significant value as the cycle turns towards the upside. This is the core of our strategy: resetting costs, capturing opportunities. Hans Jakob will show you the financial details of this plan in addition to our fourth quarter and full year results. And you will also have the opportunity to hear how we are implementing this value-driven strategy throughout our business. Since you will hear a lot about changes today, let me start with one thing that is not changing: our commitment to safe and secure operations. In the last quarter, Statoil regrettably had 3 fatalities related to our operations. These incidents are clear reminders that the safety and security of our people and the integrity of our operations remains our top priority. For the year as a whole, our serious incident frequency came at 0.6, which is a solid result as a statistic, and it gives us clear indications that we are consistently on the right track and have been so over many years now. As you know, timing matters a lot in our industry. And on this day, exactly one year ago, I was appointed the CEO of Statoil. What a timing. And indeed, the perfect timing to make a difference. One of the first things that I did was to make promises to the market. And I hope you will agree with me that we have delivered on those promises. Our efficiency program is already well ahead of the USD 1.7 billion target for 2016. Organic CapEx came in at USD 14.7 billion, a reduction of around $5 billion compared to 2014. Production, adjusted for divestments, increased by 6% year-on-year. And reflecting our commitment to competitive shareholder capital distribution, we also maintained our dividend throughout the year in line with our dividend policy. I am truly encouraged by these results. But let me assure you we are not here today to celebrate, but to accelerate. In 2015, Brent averaged USD 55 per barrel. And so far, this year, we have experienced prices below USD 30. Fortunately, the fundamentals of supply and demand still works, which means that the best cure against low oil prices is actually low oil prices. The middle graph shows the EIA numbers for stock changes, indicating clearly that markets are heading towards a rebalancing. But exactly how long it will take to get there is highly uncertain. Another and more long-term implication of the current market environment is that the oil companies, almost everywhere, are cutting back on their investment programs. And for the first time in history, we are likely -- very likely to see at least 2 consecutive years of cuts. And as a consequence, significant new capacity will not be brought on stream when needed. Adding to this what we know about the decline from existing fields, the time horizons of new project developments and increasing demand further underscores the point that the oil prices are cyclical by nature. When it comes to natural gas, we know that prices are under pressure short term. Medium to longer term, however, we do see a stronger gas market emerging. Declining European indigenous production, markets gradually absorbing new LNG capacity and clearer policy signals of the need for natural gas to replace coal in power generation. This all supports the view that I mentioned we do see an emerging -- emergence of a stronger gas market, and Jens Økland will give you more detail outlook for the gas markets at our gas seminar in London in 2 weeks' time. We are now resetting Statoil to become much more fit for the future. Our strategy will ensure that we are well prepared for a low-price environment, and it will position us to capture opportunities for value growth when the cycle turns and markets rebound, and they will. I think of this in terms of 3 priorities. First, faster and deeper cost reductions. Rather than depending on what we believe to be an expected oil price in the future, we want to shape a company that is competitive at all times. We were early movers, starting back in 2013, and have now reinforced those metrics by taking a transformational approach to our cost base. And at the same time, we will continue to demonstrate strict financial discipline. In this way, we enable ourselves to act on my second priority: preparing to invest in what I call the next and our next-generation portfolio. Since last year's CMU, we have challenged every single project at hand to get below a USD 50 per barrel breakeven. I can assure you, it seemed like a very tough challenge at the time. But now, we see real success, radical change. So far, we have reduced breakeven oil prices at our operated opportunity set to USD 41 per barrel. In some cases, both CapEx and breakevens has been reduced by up to 50%, and we are not done yet. As an additional tool to strengthen our financial capacity, the board has decided to propose the introduction of s scrip dividend program through the AGM in May. I will return to this later in my presentation. Finally to my third priority, capturing the upturn in the oil and gas prices. Our plan positions Statoil for delivering value creation and staying competitive in a low-price environment. But even more so, it offers attractive value-creating opportunities when the commodity market rebounds. And to achieve this, 2 conditions needs to be in place. First of all, that our efficiency gains are -- must be sustainable, even when the heat one day is turned back on in our industry. And secondly, we must actually invest in attractive projects in order to deliver volumes to benefit from this price recovery. So let me add some numbers to this story. By targeting unplanned losses, we have been able to improve regularity in our operations. Compared to 2013, unplanned losses are down 50%, and we have sustained this level for 2 years in a row now. This represents around 50,000 barrels per day, adding almost USD 700 million to our pretax cash flow last year. On cost efficiencies, our target for 2016 was USD 1.7 billion, measured against the cost base of 2013. Having already realized $1.9 billion, we are now increasing the 2016 target by another 50% from $1.7 billion to $2.5 billion annually. And finally, flexibility matters a lot. In fact, it is truly golden in times of uncertainty. With a large share of operated assets, we are in the driver seat on this flexibility, and we will continue to use the flexibility to the extent necessary. Included in this flexibility is also a further tightening of our priorities within exploration, which Tim will discuss in more detail later today. The combined effect of the measures that I've just shown you adds up to more than USD 10 billion in improved pretax cash flow for 2016. Ladies and gentlemen, we have now arrived at my favorite slide of the day. I said at the outset that we are taking actions to reshape our company, and here you can see how. In 2013, the average break-even price for our operated projects, pre-FID with plant start-up by 2022, was USD 70 per barrel. Today, we have reduced to this to USD 41, precise number, an improvement of more than 40% or almost USD 30 per barrel. We are reworking concepts. We are challenging solutions all the way from the reservoir to the market, and we are renegotiating contracts to capture falling rates in the supplier markets. 82% of the CapEx in this portfolio now has a breakeven price below USD 50 per barrel. And we will hunt for even more. In fact, I am now challenging every new project with an ambition to pursue profitability below USD 40 per barrel. One example is Johan Castberg, where we so far have been able to reduce the break-even price from above USD 80 per barrel to below USD 45 per barrel and almost half the required CapEx so far. For Johan Sverdrup Phase I, the break-even price is further improved and is now below USD 30, truly a world-class project. And Margaret has the pleasure of elaborating further on both of these projects, and she will also show you more examples in her presentation. As you have seen, we have a clear plan to create value for our shareholders. And as a part of the plan, we are also firmly committed to maintaining a competitive capital distribution, in line with our dividend policy. The board has decided to recommend to the AGM to maintain the dividend of USD 0.2201 per share for the fourth quarter of 2015. And the board's intention is to keep the dividend flat for the first 3 quarters of this year. In addition, the board will propose the introduction of a 2-year scrip dividend program, starting from fourth quarter 2015. We maintain our dividend policy, while adding the options for shareholders to reinvest their dividend into newly issued shares at a discount of 5% for the fourth quarter 2015. In addition, the scrip program will strengthen the company's financially -- financial flexibility and capacity to invest in high-quality projects in a timely manner. The Norwegian government supports the proposal and will match the take out from other investors, thereby maintaining its ownership at 67%. Towards the end, let me offer some comments on how Statoil plans to be part of the low-carbon future. First of all, Statoil welcomes the Paris Agreement. We firmly believe that the oil and gas industry has to be part of the solution. Our ambition is to be a leading company in terms of carbon-efficient oil and gas production, and we believe this increasingly will be a competitive advantage as tighter carbon regulations comes into effect. Since we met last year, we have also established new energy solutions as a business area, with a mandate to gradually build a business within renewable energy. I see this as a long-term growth opportunity for Statoil and the starting point is our current business within offshore wind. So allow me to summarize what you have heard this morning. Resetting costs, capturing opportunities: that is the core of our strategy. We will deliver faster and deeper cost reductions, increasing our annual efficiency target by 50% to $2.5 billion by 2016. We will cautiously manage our financial flexibility, in light of the current uncertainty in our core markets and in light of our commitments to shareholder capital distribution. As early movers on cost efficiency, we are also now shaping our next-generation portfolio. More than 80% of the CapEx in our operated opportunity set has a break-even price below USD 50 per barrel. Finally, Statoil is positioned for value creation even in a low price environment, and we are well placed to capture the full gains when the oil prices recovers. Thank you very much for the attention. I leave the word to Hans Jakob Hegge.

Thank you, Eldar. Ladies and gentlemen, good morning. It's a pleasure seeing you all. Let me start by sharing 3 things that are important to me in order to deliver on our strategy of capturing -- resetting cost and capturing the opportunities. First, driving performance every day. Second, capital discipline, saying yes only to the excellent projects. And third, securing financial flexibility to invest in the right opportunities, while remaining committed to capital distribution. These will be the main themes in my presentation today. But let me start with the performance from 2015. In a year with high-market volatility, we delivered adjusted earnings of NOK 77 billion, down from around NOK 136 billion in 2014. New fields on steam, ramp-ups, accelerated wells and higher regularity delivered a production growth of 6%, adjusted for divestments. We saw material impact from our efficiency program and strict prioritization in all our investment decisions. We reduced organic CapEx in 2015 by around $5 billion compared to 2014 to $14.7 billion, $3 billion below our original guiding. Cash flow from operation was NOK 166 billion for the full year. And through the year, we maintained our firm commitment to our dividend policy. Achieved liquid prices were down 29% in kroner compared to last year. But our results also reflect strong operational performance, continued high production and significant cost improvement. We've reported an adjusted earnings of NOK 15.2 billion, down by 44% from the same quarter in 2014. Net adjustments in the quarter of NOK 13.5 billion, mainly due to impairments as a result of short-term price assumption that has been taken down. An effective tax rate of 89.5%, up from 84.1% the same quarter last year, mainly as a result of losses in countries with limited tax shield. Mainly due to the lower realized prices, development and production Norway delivered adjusted earnings of NOK 17.1 billion, down 29% quarter-on-quarter. But we continue to deliver strong operational performance and reducing OpEx SG&A by 17% per barrel in the quarter. Development and production international reports a negative result of NOK 5.7 billion in this last quarter of last year, impacted by lower prices and the dollar to NOK exchange rate. We reduced operating cost by 22% per barrel in the quarter measured in dollar. Our mid and downstream business continues to deliver good results, although somewhat lower than last year. Earnings -- adjusted earnings were NOK 3.6 billion, mainly as a result of high regularity, continued attractive refinery margins as well as strong trading results for liquids and our U.S. gas business. During the quarter, we've produced more than 2 million barrels per day. And adjusted for divestments, the equity production was at the same level as fourth quarter last year. For the year, adjusted for divestments, production increased by 6%. In 2015, we delivered a cash flow from operations of NOK 166 billion, with tax payments of NOK 66 billion, NOK 23 billion distributed to shareholders, NOK 33 billion in proceeds from sale of assets, and investments by NOK 129 billion. It all ends up to a cash flow of minus NOK 18 billion for the full year. One-half of the tax payments in 2015, in Norway, relates to the second half of 2014, a period with significantly higher prices. With taxes based on the 2015 results, net cash flow for the year would be significantly improved. Our adjusted net debt ratio of the capital -- our adjusted net debt ratio to capital employed was 26.8% at year-end, up from 20% at the start of the year. We continued to move barrels in 2015 from resources to reserves. Divestments and strong production reduced our reserve base, giving an organic RRR of 88% and 140% on liquids. Johan Sverdrup was the main contributor to the added reserves. The 3-year average organic RRR was 110%. Let me now leave the quarter and take you further into our Capital Markets Update. You've heard Eldar present our firm strategy of resetting cost and capturing opportunities. And as CFO of Statoil, I will keep special focus on driving performance every day, securing strict capital discipline and safeguarding our financial flexibility. All this to remain in the position to prioritize capital distribution while investing in strong projects. Last year, we presented an ambitious plan to improve competitiveness, targeting $1.7 billion in annual savings from 2016. And I'm pleased to present how we have taken down costs even faster and deeper than we expected. We have reached an annual savings of $1.9 billion for 2015. We are spending 30% less time drilling offshore wells. We have reduced U.S. onshore costs by 38%, well underway to reach our revised target of 45%. We are reducing facility CapEx by 11%, stepping up to 15% this year. Modification CapEx is down by 35% through strict prioritization and efficient planning. Doing more work ourselves, we are stepping it up to 40%. And we have almost reached our target for reduced field cost on the Norwegian continental shelf, but see clear progress to our -- towards our stretch target of 25%. We challenged the teams, and they returned with substantial savings. And they have proposed new and even tougher targets. This is what happens when the snowball starts rolling. It's cultural. With 15 fields that deliver production efficiency above 92% and maintaining unplanned losses at 5% 2 years in a row, we see strength in culture at our fields, driving performance every day. This step up of $800 million to our new target of $2.5 billion in 2016 will be divided by 2/3 CapEx and 1/3 OpEx. In addition, we benefit from a softening supplier market, with drilling and completion on U.S. onshore and the new contracts related to Johan Sverdrup. We expect to see costs coming further down and have included a market effect of $300 million for 2016. Our job is to turn efficiency into money. Our competitive cost position is -- compared to our peers is good, and we started our efforts coming from a first quartile unit production cost. The efficiency improvements reduced our upstream OpEx SG&A per barrel by 11% on the NCS and by 18% in DPI. Compared to 2014, the improvement equals savings of $1 billion in 2015. Our workforce will be reduced by 19% towards the end of 2016 compared to 2013, leaving us in an organization more fit for the current activity level. As you can see, we reduced cost using a range of measures to secure the long-term efficiency of Statoil. Growth in production comes from projects under execution, such as Johan Sverdrup and Aasta Hansteen. They are coming on stream with an operating cost of around NOK 30 per barrel. The 6% production growth in 2015 primarily came from new production capacity, increased drilling efficiency and using our flexibility in the gas machine to move volumes to periods with higher prices. In 2015, we produced the guided level for 2016. Going forward, we will continue to prioritize our production profile prioritizing value. This strategy includes reducing activity level in the U.S. onshore and on Peregrino in Brazil as well as postponing and stopping projects. In 2018 and '19, we have several major start-ups in a time frame where we and the market expect better prices. The list includes Gina Krog, Aasta Hansteen, Marinette and Johan Sverdrup. Last year, straight after the CMU, we went back to the organization raising the bar, challenging the breakeven of every single project. Eldar told you how successful this initiative had been, reducing the breakeven by close to $30. Let me highlight the financial impact. First, since 2013, we have sanctioned projects which today have an average breakeven level of around $30 per barrel. Second, we have reduced average breakeven on a range of non-sanctioned projects to $41. This provides attractive options for investment in the next couple of years. Third, we have postponed some projects beyond 2022, with the expectation of further improvement. And finally, we have stopped and divested projects that have an average breakeven above $80. As Eldar said, more than 80% of our CapEx in the non-sanctioned projects will have a breakeven below $50. And we strongly believe we can improve even further. So let there be no doubt that maintaining our financial flexibility remains a key priority. Last year, we presented our financial outlook reflecting 3 price scenarios. Today, we give an update on the scenarios of $50 and $70. We also provide an outlook for $40 for the next couple of years. From the illustration on the slide you can see how our cash flow from operations will look like in the various scenarios, and how this compares to our CapEx. You can see how the flexibility offers an opportunity to balance cash flows at the lower scenarios. And the flexibility in the annual CapEx level is in the range of USD 4 billion to USD 6 billion in 2018 and '19. Even without exercising that full level of flexibility, we can be cash flow neutral at $60 in '17 and $50 per barrel in 2018, excluding any impact of the scrip dividend. This enables us to invest in strong projects which are profitable at levels below $50 per barrel. So what does this mean to our balance sheet? We've previously expressed our ambition to have a net debt ratio between 15% and 30%, but 30% has never been a hard line triggering automatic actions. As shown today, we have the capacity to pursue our investment program being cash flow neutral at $60 in '17 and $50 in '18. Our debt ratio will be in the mid-$30s, and we are very comfortable with this. As you can see, at prices below $50, the gearing would increase. In such a case, we are still comfortable, but this confidence will increasingly have to be backed by our toolbox. We further increased cost efficiency. We maintained significant flexibility in our CapEx on exploration spending, and we have demonstrated the willingness to use this flexibility. The scrip dividend is an additional measure strengthening our financial capacity. Let me take you back to our key priorities. First, faster and deeper cost reductions. We have increased our annual ambition of (sic) [to] $2.5 billion by the end of 2016. We continue to reduce breakevens in our portfolio of non-sanctioned projects. And we take forceful measures to improve profitability in our international portfolio. Later, you will hear Torgrim and Lars Christian go more into detail on this. Second, securing capital discipline to build a next-generation portfolio. We will only invest in excellent projects that are fit for the future. We will optimize and reduce the CapEx level to $13 billion in 2016, and we will spend around $2 billion on exploration, down from $2.9 billion in '15. Third, securing financial flexibility to capture the upturn. As I mentioned, we can be cash flow neutral at $60 in '17 and $50 in '18. This is not including the scrip. Our strong commitment to the dividend policy is backed by our strong priority of positioning ourselves for the long-term growth in earnings. This is what backs and supports the dividend capacity long term and create value for our shareholders. Let me sum up. It is challenging times, and we still have a job to do, but we have demonstrated that we can deliver. We are increasing our targets. We continue to offer attractive investment. Our dividend policy remains firm, and we are well positioned to benefit from the upturn in oil and gas prices. Thank you for the attention.

What I'd like to do now is, if I can ask, Eldar to come back to the stage, and then we'll have an opportunity of about 30 minutes for questions and answers from the floor. We'll try to get some in from the phones as well. So if I could ask the operator to start polling now, and we'll come on to those questions in a short while. It's a lot to get through, 30 minutes. So if we can keep it to one question each. We have some roving mics around. I can see those.

So if I start with these, and I'm going to start at the front with Mike Alsford.

It's Mike Alsford from Citi. You mentioned very good progress around your current operated portfolio in terms of breakeven reductions. But what I wanted to try and get an understanding of is the moving parts. So what is the actual volume sacrifice? So you talked about projects starting up in 2022. What is the impact to those on volumes as a result of our basically pushing out high-cost projects from that suite of projects? And what is really the reduction you've been able to generate from recycling projects and -- on capturing cost savings? Eldar Sætre: So some projects have been pushed out, like the Tanzania gas project. We don't see that being realized in this time horizon. When it comes to the project that is in the portfolio, like the Johan Castberg, we are talking about the same volume. So we haven't scaled down the projects. That would be very marginally. So this is an optimization all the way from the reservoir to the market, and we need to take very good care of the barrels. So that is a firm part of our strategy that we capture the resources and focus mainly on how we can simplify, how we can challenge the solutions and come up with lower, more efficient solutions in total to get the same volumes out of the reservoirs. Is there anything you would like to add to that Hans Jakob?

No, I think it's important to just underline that we guide on the production of 1% growth from 2014 to '17 and from '18 to '19 it's 2% to 3%. We still have the gas flexibility. We have demonstrated we can use that, based on our price assumptions.

Okay. Jon?

Yes, Jon Rigby from UBS. One of the things that comes up a lot when discussing Statoil is the position of your larger shareholder, the government. And clearly, there are some radical changes taking place at Statoil and sort of a change of the nature of the company since it IPO-ed, basically, and I think that's picked up over the last 2 or 3 years. And it seems to me there's 2 big moving parts that you're highlighting today. One is a reduction in spending on the NCS, that's driving your efficiency gains. And the second is a change in your dividend policy or a change of the way that you implement your dividend policy. So from the outside, the relationship is somewhat opaque. So I wonder whether you're able to make some comments sort of characterizing what the discussions with the government have been, how supportive they are of what you're doing? And where you've got to in sort of implementing strategy and how you discuss that with the Norwegian government? Eldar Sætre: The Norwegian government and the ministry behaves as a very professional owner. I can assure you. And we have the same type of regular discussions with this owner as we have with other major shareholders. So basically, they support all the measures that we are taking. I think that can be well documented in the Norwegian environment in terms of strengthening the -- increasing the efficiency, taking down cost. And they, fundamentally, see that this is to the benefit of the whole Norwegian society because this is about creating optionality and increasing efficiency and by that creating options for projects and activity that in the long run will be good for the Norwegian society and also the whole Norwegian oil and gas cluster. So I feel a very strong support, not only through the meetings that I have, which are formal meetings addressing these kind of -- this relationship, but also through the way the government is addressing this current situation in the Norwegian environment. When it comes to the scrip, we've found it natural to have a dialogue with the majority shareholder because they need to support this, and they would also need to consider how to approach the parliament on this. So to have a discussion on that and make sure that we have support in general for that, we found that prudent. And they have given that support, and we're very happy with that, also demonstrating that the government is an arm's-length and very professional owner to the company.

And do a couple more in the middle, and then we'll move over to the right-hand side. So Lydia?

Thanks. Just within the presentation, you talked about what seemed clearer policy signals for gas versus coal within Europe. What is it that you're actually wanting? And within that framework, how do you actually make the decisions in terms of where the investment comes -- goes to, when you don't have that policy framework? Eldar Sætre: I think, on Europe, it's basically a question on Norwegian gas and new opportunities and new investment decisions to be made. And it is very important for us to have confidence that there is a policy supporting long-term use of natural gas in Europe. And that has been a question mark, I have to say, previously, for some time. We still moved on with the Aasta Hansteen project, but we need that. And I think it will be particularly important, if we discover new resources, big resources, and the question mark becomes how do we develop these resources. What we see now are positive signals, and I'm convinced that there is no way for Europe to take part in the global effort to reduce climate without actually addressing the coal issue in Europe. Whether that is through the ETS or through direct regulations, that remains to be seen. Hopefully, both, but they will have to do something, which will support further gas developments from the Norwegian continent shelf. By the way, you will have a gas seminar in a couple of weeks, and Jens Økland will also be able to answer more questions later today.

Okay. Can we more over to Hamish and then Brandon, and then we'll move back.

Some very commendable CapEx cuts, cost-saving initiatives and more so than many of us thought you could achieve. So it's very good. Focusing on the sort of resource side of your business, you mentioned the reserve replacement ratio, organically, around 88%. Could you tell us through how -- could you tell us how you intend to address the reserve life and sustainability of the portfolio going forwards? You mentioned a few other projects and the good cost cuts you put through on those and the lower breakevens. You did mention, I think, Hans Jakob mentioned on the Q3 call, potentially going above the 30% gearing threshold in order to do M&A. Is that something you'd still guide us towards? Eldar Sætre: So I'll comment on M&A, and you do the reserve based on a more general -- from a more general approach. So M&A is -- obviously has been for a long time a key component of our dynamic strategy. It is an obligation to look at opportunities, both to divest assets that others can do -- enhance better than we can do and also to look for opportunities to do acquisitions. And the more you can do this in a countercyclical manner, the better it probably is. So we are looking -- and Jon here and his team is looking at opportunities all the time, persistently, assets in various parts of the world. But it has to be right. It has to be the right price, fit into the strategy, stepping stones that we can build on. So if we get that right then we have done some -- actually, also during the last year, which leads nicely into that strategy, that's good. But it also has to fit into the overall corporate financial framework. So it's part of that. But at hand, we have a huge, very attractive portfolio, organic assets with names that we are working on -- that you heard about. That is also a top -- definitely top priority. On the reserve replacement...

I'll do a more technical comment that in general, we, relative to peers, also prioritize exploration quite highly. Last year, we booked Johan Sverdrup Phase 1, and there is a SEC rule accounting wise that make us use the average price for the year. So in the disclosure at the back of the financial disclosure, you will find a reduction of 330 million due to these price assumptions. But as you know, we have a 3-year rolling average on the RRR, and we have reported 110%.

Brendan?

It's Brendan Warn from BMO Capital Markets. Just since announcing delay at Aasta Hansteen and Mariner, just what you have changed internally to make sure we don’t see delays on some of the big projects coming up and further reduction of production growth towards the end of the decade? And then just secondly, I appreciate you're not reliant on disposals, and you're giving organic numbers. But obviously it was successful for you in the past. Are there any sort of targets you look at internally in parts of the world where you’d look to exit or dispose, please? Eldar Sætre: Well, I'm sure Margareth would love to answer the question about all the efforts that she's doing to make sure that we are not getting into a situation of cost overruns. Actually if you look at our overall portfolio, it's not a story about cost overruns. It's the opposite. We have been struggling with the -- with some of our projects in -- at Korean yard [ph]. Very high -- and we have been -- we were seeing delays on these projects as well. We are putting a lot of effort and Margareth is there frequently to visit the management of the yards to make sure that we get sufficient priority, that we have the progress that we are -- that we need, and I feel confident that the plans that we are -- is now public and that we are working on that we will be able to stick to those plans. But you can never issue guarantees. But it's a high focus on that. When it comes to divestments, I will -- would never be specific. There is always components in our portfolio that might be a little bit stranded or where we don't see a lot of building blocks on top of it and so on. So you will always find that, and that's something continuously to be considered. So I won't give a list of those names, what that could be. But obviously, again, if you do that kind of stuff, it would have to be at the right price at the right time, and so timing is, as I said in my speech, essential in our industry.

Rob?

It's Bob West here from Redburn. You might not like my question entirely. It's about the deflation in cost that you've mentioned today. So going from your $70 to $40, which I'm guessing is on a barrel of oil equivalent basis, which I think means something like $90 to $50 if we take pure oil. If you can do that and everybody can do that, you might take that to mean the marginal cost in the oil industry is closer to $50, and that's where prices might go to. So it -- my question to you is, what is it about your portfolio and how you are deflating cost that make you think that's a Statoil effect that can't be generalized by the broader industry? Eldar Sætre: So I'm confident that the whole industry is addressing the same issues. It's 2 type of improvements there, of cost issues that we are looking at. It's the structural and then it's the market. Our improvement program is focusing mainly on the structural issues. So then what we have achieved and Margareth will show you a slide later today on Johan Castberg, the components, what is taking us from the 80 [ph] to where we are today. The market is part of it, but it's not by far the biggest component. This is really structural, how you -- what you solve for, what kind of solution, not starting the sort of big scopes, but really what do you really need, and then challenge every single bit that you need on top of that and make sure that everything hangs together. It's using our competence and our capacity and the engineers to solve that equation. I'd have to say, it could also be why we haven't done that before. And if the industry is doing the same, I don't know. I think still we are a company that is quite forceful on this, and hopefully, the industry is doing the same. So yes, market impacts is part of it, but the program and the impacts that you see and being presented today is much more about the structural efforts. Margareth will also show you how the market impact comes out, looks like in relation to different types of services and how that could look in a time horizon.

Haythem?

Haythem Rashed from Morgan Stanley. Just if I could come back to the comments you made about the balance sheet and sort of the way you see net debt to capital employed potentially, sort of evolving to. Within that, it seems like you're assuming an uptake of the scrip, something like 40%, and if we assume that, that might be lower and we assume an oil price closer to where the oil price is today, for example, it's not impossible to see that reaching 40% potentially in the near term. Just wanted to get a sense, I know you talked about 35% being something you were comfortable with, but when we get into sort of those sorts of levels, does that trigger different thinking from yourselves in terms how you react to it? And perhaps just a broader comment, if you could, about what metrics matter to you. I mean, isn't net debt to capital employed the most important one? Would you look at other metrics, you look at net debt to cash flow on the balance sheet? Eldar Sætre: So currently a debt ratio of 27%. 30% has never been a hard line in the sand, triggering any specific actions of such. It's been a reference point for us. It's clear to us that with the current opportunity set and the quality of work we're pursuing, it is important to do that. I think that is value-enhancing for our shareholders and strengthening our dividend capacity in the long term to actually pursue good projects. That's how we create value. So we have shown that we are able to pursue the current opportunity set in line with the existing plan -- time horizons and be cash flow neutral at $60 in 2017, at $50 in 2018. That will take us -- that will cross the line and how far it will cross the line is depending a little bit on the take out, on the scrip. But it could take us into the mid-30s. Well, if oil prices comes -- turns out to be lower and well below the $50s, we -- we'll see an increase in the debt ratio. We’re still not uncomfortable. There is no such thing as line anywhere, but it's a situation that then emerges where it becomes increasingly important to feel good about: how do we control this and what kind of measures would we like to take? And we have significant measures. And we have shown that we are willing to do that. The flexibility in our CapEx program, flexibility on our exploration side, divestments we just talked about, if we have to, there are liquid assets in our portfolio. So we are in control, we have a significant flexibility, we have strong starting point. There's flexibility on the balance sheet, and there's flexibility on top of the balance sheet, and we have added another tool. So we are not depending on any take-out. There's no mechanics between take-out and dividend. This goes into the whole toolbox that we have at hand, and we are comfortable.

I'm very conscious that we've got a lot still on the floor. I'm going to take one more on the floor, then we'll go into the phones, and then we'll come back and collect some of the ones remaining in this room.

It's Marc Kofler from Jefferies. Two questions, please, broadly relating to the total capital allocation process. I think it's fair to say that the dividend policy has been tweaked a few times now in recent months. So really I was looking for clarity, I suppose, around what the policy actually is and how we should be thinking about that for the next 3 quarters. And then, just within sort of the comments you made around M&A, how should we interpret the transaction with the Lundin equity? Eldar Sætre: So I do the dividend policy and you do the Lundin, right?

Sounds good. Eldar Sætre: So the dividend policy states clearly that it's our intention to grow the dividend over time in line with the expected underlying earnings. There are also statements in terms of what if conditions turns out to be very difficult. We haven't pushed -- pulled that brake because we could like to rely on the first part of the dividend policy, which is consistency, capacity to pay cash dividend through the cycle, and we have a fantastic set of opportunities that actually justifies that also towards our shareholders. That's the interpretation. I don't see any tweaks. It is the way it is, and it's consistent. And we have just added another tool that was just not inconsistent with the policy in terms of the scrip dividend. So the board has stated clearly that the intention -- that's what they can say. The intention is to maintain the current level of $0.2201 for the first 3 quarters of this year. And then, it would be a formal process on dividends beyond that.

On Lundin, as you're aware of, we are the operator of Johan Sverdrup, and this expresses our strong belief in the Norwegian continental shelf, and it increases our indirect exposure to high quality assets on the NCS that we know very well. And it also underlines our long-term view on the industry and the potential value of capturing on the upturn.

Be patient in the center of the floor. We'll come back to you. I'm just going to open up to the operator now, so that we can run through a couple of calls for people who weren't able to make it to the room today.

We'll now take our first question from John Olaisen from ABG.

Yes, it's John Olaisen from ABG here. A question, if you have projects now that are profitable below $40 oil price, do you then continue them regardless? Or do you have any project that you're currently holding back here with -- to have -- and to be breakeven below $40? In other words, could you have invested even more with -- in projects at the moment that are profitable with the oil price below $40? Eldar Sætre: So flexibility is gold. And in fact, the case is, we still have a lot of flexibility. If we look at the next 18 months or so, there is no major FIDs. There's no major project that is mature enough to be up for decision-making in -- within that time horizon. That means, we have -- we are retaining flexibility. We cannot -- and we are -- we'll use that time very efficiently to continue to work on the project and the new challenge of getting below USD 40. So we are -- we lost one project on the Norwegian continental shelf in December. We decided to move forward with Trestakk on the Norwegian continent shelf. Johan Castberg we have firmed up the concept and the solution for the concept. So we are maturing these projects, but they are not ready to be concluded. So I think the next one to be up for decision-making is the Trestakk project by this summer. So that is the characteristic we are not -- we are working on all projects. Some of them we have sort of a little bit on the back burner because they are not urgent, we need more time. We need to firm up like resources. For instance, Bay du Nord in East Coast of Canada. We're now into drilling program. So we need to know like we did for Johan Castberg more -- what is the resource base that we would like to base a development on, not build all types of [ph] optionality into solutions, but we have time to wait to see what are we solving for.

And my follow-up question would be there were some slides that Torgrim will present later so I might be too early with this question, but it seems like the U.S. onshore needs some $50 in oil price to be breakeven on average. Is that correctly understood? And if so, why invest in the U.S. onshore at all? Eldar Sætre: If I may, I could go into this, but I think -- that's by Torgrim this year. So if I might offer to allow him to answer that question later, I would appreciate that.

We will now take our next question from Anne Gjøen from Handelsbanken. Anne Gjøen: In third quarter '15, second quarter '15 and third quarter '15 in your report, you're saying that you've used $80 as the assumption behind the impairment testing. This time you have excluded the price assumption. It's not longer in there. So could you confirm that $80 is still used because if it's not significant right at this time, and if it is, because previously it's -- and particularly hit devaluation on the U.S. assets. If you think it's right to keep kind devaluation of the U.S. assets of $80? Eldar Sætre: So I leave that to Hans Jakob.

Yes. Thank you for that question, Anne. You're absolutely right. We were disclosing the $80 in '18 in our financial statement. That is still within our uncertainty range in current times. But for impairment testing, we are using the forward prices for '16, '17 and '18, with an average of USD 44 per barrel. As you said, there are NOK 10 billion net impairments in this quarter, and we still have a firm belief in the upturn of the prices, but we do not know when and we haven't updated our long-term price assumptions since first quarter last year, but we do -- have adjusted the impairments with a 3-year forward for '16 to '18.

One more from the phones and then I'll come back to the auditorium, please.

We will now take our next question from Teodor Nilsen from Swedbank.

I have a couple of questions on exploration. You clearly reduced exploration spending pretty much from 2015 to 2016. So I just wonder, what's the main driver behind the reduction? Was it price driven? And was it activity driven? And where should we look for areas that you will focus on in 2016 when it comes to exploration? Eldar Sætre: So in line with the efforts to address cost efficiency, we have also done significant achievements within exploration, drilling wells, on the administrative side. You will hear more about that, the efficiency gains, in the presentation later today. We are in a situation now where it's natural for Tim to replenish a little bit his portfolio. He has been having a high drilling activity, and we need new acreage and new opportunities. So that is the kind of process we are into, which is also a good thing because it fits nicely into the financial thinking currently and the uncertainties that we are facing. But it is also time of opportunity for Tim, and he's done a tremendous job accessing new acreage in many exciting places, and he will love to talk about that later. And also, do counter-cyclical things, for instance, on seismic activities and so on. So it's a lot of things that comes together into the number that we are presenting today for this year and through that he creates optionality for the future. Now I probably answered questions that he would love to do later today, but he will get the chance to elaborate in his presentation.

Okay, all right. Okay. As I was saying, we're now back in the room. Apologies for those on the phone. There'll be opportunities in the second round of questions as well. So we were over here, I think was a remaining question from the center here. No. In that case, can we go through to the gentleman over there.

Ilkin Karimli From Crédit Suisse. So you say you have around 20 billion BOE of reserves and resources of which 1 piece is around NOK 5 billion. So of the remaining NOK 15 billion, can you give was an idea firstly, how much of it is gas? And secondly, how much of it is commercially, you say, breakeven below $50 oil? Eldar Sætre: I don't think -- for some of these projects that we talked about, that is the project that is coming up for decision over the next couple of years. Some of these projects are -- there have been discoveries. They are laying there. So to comment and give you some indication as to breakevens, that wouldn't be prudent because we haven't even started to really work these projects. So we have a capacity to address project like the Tanzania gas project, for instance. There are so many issues that needs to be resolved, and when we are done then we really start addressing sort of what is -- what are we heading for. I talked about the Bay du Nord and so on, and we are doing exploration in that area. We know we have resources, we know it's going to work. But really to optimize, get into a concept selection and so on, what is -- which is what it really needs to have a firm view on profitability, it’s too early. So to give you profile reflecting the difference between the 5 out of 20, that is -- that wouldn't be very meaningful. It might actually be misleading. On the gas share...

Yes. Well, just a teaser for the U.S. story that Torgrim is going to tell. On the reserves, it's been a change on the U.S. onshore due to the price assumptions that I mentioned. And there is also potential step-up on the offshore side. So the relative composition of the portfolio in the U.S. would be changed, but you'll hear more about that when Torgrim is on the stage.

We've got time only for a couple more in this session. I am sorry. Theepan?

I've got a question just coming back to Norwegian continental shelf, I mean, you've had improved performance there. But I was wondering could you just talk about direct spend on the base in the NCS, where that is in '16, how that may have changed and the implied decline rate? And just coming back to Slide 13, just a point of clarity. What's your assumption on Norwegian gas profits when you talk about breakevens of $60 and $50?

Thank you for that question. I'll start and maybe you continue, [indiscernible]. As a general information, we have in the additional information more on the composition or CapEx profile, so that's being released outside the presentations. It's part of the additional information. The expenditure level on the Norwegian continental shelf is half of the offshore investments for next year, maintained at high-level. One of the explanations is, of course, the Johan Sverdrup project, which is a unique project where we continue to invest. You mentioned decline, it's been around 5%, fairly much the same rate as the international. When it comes to improvements, as you're aware of, for the full year per barrel, Theepan, it's 11% down, so we get more outdoor investment, and that's the traction in our efficiency program as well.

So when it comes on the natural gas of breakevens, actually if you look at our portfolio and what is at hand is very much an -- a liquids portfolio, actually. So like the name [ph] our projects are liquids and oil, mainly. There's one project that is in the pipeline, the Aasta Hansteen project on the Norwegian continental shelf, which I would say at the point of decision-making, had a breakeven which was somewhat above the levels that we are talking about now. So I was basically stopped there, and the project has been 1 year delayed and some cost increase, so obviously this project hasn't increased. Eventually, I am confident that it will also be a good project and particularly because it adds optionality, adds infrastructure in the area, which will open up for further developments, which then will be more profitable. And by the way, we have made 3 discoveries surrounding Aasta Hansteen, which add approximately 25% to the resource base. So that's the dynamic of this industry, that individual project that might not look that good now, but it opens up for future value-creation.

Okay. One last question before we have a very short break and a little bit of choreography on stage to get ready for the second session. So Neill, to close this session.

It's Neill Morton at Investec. I just wanted to clarify. You've talked about lower CapEx and lower OpEx but -- versus a year ago. Your cash flow targets also look to have reduced at sort of broadly similar oil prices. So what's changed? Eldar Sætre: I think what is changed is that we are -- we see the opportunity to improve the project portfolio, right, and we are prioritizing, continuously learning what we can do, and we also get more impact from the commodity price environment. So it's the totality that has taken down the CapEx stricter prioritization. Basically, we're moving forward with the same projects and some delays. We have delayed some projects because we need more time to improve them. But it's simply, I would say, the main driver is actually the opportunity set we see and what we can do with the projects when we give ourselves slightly more time to optimize and not be driven by volumes as much as value. Get it right, spend the time it takes, and don't push any button until you feel comfortable with the answer.

Okay. Let me bring this session to a short close. We got a quick break and some sandwiches and food waiting outside. And then, if you -- we can be back in the room for 10 -- just before 10 past 1, please. And we'll will start the sessions with the business leaders as well. Thank you very much. See you in a few minutes. [Break]

Okay. Ladies and gentlemen, I hope you've had at least some chance to refresh and refill. I haven't, unfortunately, but the show goes on. I'd now like to start a series of presentations from many of our business areas. We'll do these fairly quickly. I won't get up and introduce everybody in between every single presentation, but just let me start with the first 3 presentations. Arne Sigve Nylund will be talking about DPN, and then as you'd be very aware, our international business is composed of -- it's actually 2 areas. It's the U.S., and it's all the rest of the world. We've got each of the EVPs for those 2 areas. Starting off with Lars Christian Bacher who does the international part. And then Torgrim Reitan who does the U.S. So it will be those 3. Then we'll have a very quick reshuffle, and then we'll go into Margareth talking about TPD and Tim talking about exploration. So with that, Arne Sigve, if I could introduce you to the stage. Thank you very much.

Thank you so much, Peter, and good afternoon, everyone. From Eldar's and Hans Jakob's presentations, you have seen how DPN -- the DPN organization contribute to Statoil's results. And my focus is to share with you how we work to improve the operations on the Norwegian continental shelf. Statoil has a solid competitive position with a world-class portfolio of producing assets and development projects on the NCS. The NCS offers predictable framework conditions designed to stimulate technology, development, industrial growth and value creation. We produce with half the CO2 emissions per barrel compared to the industry average. And I consider that as a competitive advantage. So let me focus on what we have achieved. We have delivered strong safety results. And as Eldar referred to in his priorities, we have gone faster and deeper in reducing field cost. And we have a solid operational performance and a competitive project portfolio. At the same time, we have maintained control of our maintenance portfolio and technical integrity. In other words, deliver sustainable improvements. So let me now elaborate on how we have worked to deliver these results. And first, I would like to start with the safety. There has been a positive trend in our serious incident frequency due to systematic work overtime. However, statistics become irrelevant when experiencing a fatality like we did on COSL Innovator at the Troll field last year. To secure the sustainability of our improvements, we monitor key indicators to ensure that we don't compromise on HSE and integrity. Both preventive and corrective maintenance has a positive trend since we started the Statoil Technical Efficiency Programme, and you may know the abbreviation STEP. And we have systematically reduced the preventive, corrective and safety and also critical maintenance portfolio between 40% and 50%. And I believe there is still room for further improvement on all these elements. Secondly, if we look at the operating expenses, the operating expenses consist of transportation costs and production costs. And the main element of the production cost is field cost, accounting for approximately 40% of our operating expenses. 2 years ago, we promised to reduce field cost by 20% by 2016. And we have delivered 19% in 2015 and that is almost 1 year ahead of plan. And let's have a closer look at some of the improvements in our field cost. We almost halved the subsea operations and maintenance cost. We have reduced our external cost by 35% and we have reduced maintenance cost by 25%. In my perspective the main drivers for the reductions are one leadership, one message, one culture, to drive that through the organization. We have optimized our logistics products and more efficient planning and execution of our operations and maintenance activities. So what can you expect in 2016? We have increased the ambition level and set tougher targets. We are attacking the total OpEx and SG&A and have increased, as Hans Jakob alluded to, the field cost target to 25% by 2016. We will reduce external costs by capturing market effects through renegotiated contracts with lower rates and also increased efficiency from our suppliers. We will reduce internal cost by increasing efficiency and reducing manning in line with the corporate targets that we have already communicated to the market. And we also expect lower cost from our partner-operated assets. Thirdly, the production and production efficiency, using the abbreviation PE. We have seen a positive trend over the last couple of years. And in 2015, the production efficiency is a record high level and we see concrete results from the Statoil technical efficiency program. And I think that the close cooperation with our Chief Operating Officer, Anders Opedal, and his team has challenged and supported us to achieve a better planning and execution as a whole. Close attention over time towards the assets with significant production losses has paid off. And one example is the Oseberg South, which have increased their PE by 20%, during the last 2 years. Planned losses have also been reduced due to optimized turnaround program and unplanned losses also has been significantly reduced. Since 2013, production efficiency has increased with more than 6.5 percentage points. And as a rule of thumb, a 1% increase in the PE accounts for approximately 10,000 barrels of oil equivalents per day in the Statoil equity. So for 2016, the target is to deliver the same record high level or higher. And please note that in 2016, we have planned for higher turnaround activity compared to 2015. Now let's talk about production. We have an underlying production growth of 10% from 2013 to 2015 and if you adjust for redeterminations and divestments. We have offset decline and achieved a production growth due to strong operational performance. And I must add that, at the same time, we have improved well deliveries and managed to get new wells into production faster. My fourth message is that we work hard to improve our competitive project portfolio. And I know that Margareth will tell you all about the project portfolio and the significant improvements we made in a short while. When it comes to conventional offshore oil and gas activities, the Norwegian continental shelf is the place to be. According to the Norwegian Petroleum Directorate, more than 50% of the expected NCS resources -- resource potential still remains to be produced. Statoil has a unique competitive position with our world-class portfolio of producing assets and development projects. All this form a robust base providing positive cash flow from operations even in a low price environment. And we have what it takes. We have the scale, we have the experience, the technology, the people and the leadership. This has brought us to a leading position on the NCS. We have been a driving force for that development. And I'm certain that we, as a company, will be in the first line for future opportunities for the reasons that you see behind me. The NCS has the resources, we have the position and we have the skill set. Our ambition is now to extract the resources and maximize value without compromising on safety. And I think the best example, it has been mentioned several times already today, is Johan Sverdrup, and it's a fantastic asset. It ticks off all the boxes, and it's expected to create value for the next 50 years. Johan Castberg is another good example and we are on track, as mentioned by Eldar, with that project. And when sanctioned, it will be an important asset capturing value in the Barents and for further development in the Barents. The NCS offers a world-class petroleum system with exploration potential for decades to come and we will then have to identify the opportunities. The newly awards and predefined areas: Statoil was awarded 24 licenses. And the 23rd NCS concession round in 2016 offers, for the first time in more than 20 years, completely new exploration acreage. And we look forward to the upcoming announcement of the awards later this year. And I'm sure that Tim will touch upon that in his presentation. So let me sum up the key messages. We have delivered significant improvements in 2015, the targets for 2016 are more ambitious and leadership matters. And as I said, my experience is that it's all about leadership, one leadership, one message, one culture, and drive that through the organization to be aligned for deliveries and future opportunities. So by delivering on the elements on the screen, we are responding to the corporate priorities that Eldar presented earlier. And we do see faster and deeper cost reductions. We are postponing -- we are positioning ourselves, sorry, we are positioning ourselves to invest in the next-generation portfolio. And we will be ready to capture the upturn in the market. So in other words efficiency today creates opportunities tomorrow. So thank you very much ladies and gentlemen, and let me then introduce Lars Christian, who will continue with his business area.

Thank you, Arne Sigve, and good afternoon. You have seen the results for the fourth quarter and the results for the full year presented earlier today. Needless to say, we are not satisfied with our financial performance within the international segment. Affected by liquids prices, we reported negative net operating income. However, let me underline that for the quarter we are breakeven, if you exclude exploration costs. And for the full year, we delivered positive underlying results, demonstrating the quality of our current portfolio. Ladies and gentlemen, we are not in a business as usual situation and our international business is exposed to the same market as the rest of Statoil. And we compete for capital and opportunities, I really like that. But we need to continue improving by focusing our efforts on what we can -- on where we can have an impact. At the same time, my view is that the current market also represents opportunities to lower operating cost even further, to drive capital discipline even stronger and to prioritize even better. Looking at 2015, our underlying performance is good. And solid operations will always be important and even more so during periods of lower prices. We are building on even stronger safety security culture, production is stable and for the year we produced 487,000 barrels a day. And overall, our production efficiency is also quite strong. But there is no doubt that our heavy oil assets struggle when the Brent price is at the current level, mainly due to the price discount. However, our assets in Azerbaijan, Algeria, Angola, Nigeria, to mention a few, all make money, also at this level. In 2016, our DPI portfolio will be profitable around $46 a barrel before exploration expenses. We cannot influence the prices, but we can and we must continue to influence the performance and efficiency of our portfolio. Profitability and cash flow are on top of our agenda. We will continue to work hard to further reduce our costs and improve our efficiency, and this also includes capturing market effects. Since 2013, we have taken down the annual capital expenditure by USD 1.1 billion. The reduction has been achieved through utilizing the strength and the flexibility of our portfolio. We are divested of our ownership share in Shah Deniz, Azerbaijan, Schiehallion and Rosebank in U.K., as well as Block 15/06 in Angola. We have postponed and improved projects like Peregrino Phase II and Bressay. And we have also addressed the operational CapEx. In sum, capital sale expenditure have been fiercely addressed. We started early to address the challenge and have experienced that all our main operators have followed. Our capital expenditure in 2015 is actually more than half compared to the level it was forecasted to be when we entered 2013. And the spending level will be further reduced this year. I look for improvements in all corners of our business. And our OpEx has been reduced by 16% since 2013. Approximately half of that reduction can be ascribed to lower prices, oil prices, then influencing royalty and diluent. The other half is due to the underlying strong cost improvements both in our own operated assets as well as partner-operated assets. Other administrative costs have seen a significant drop. Last 2 years almost 40%. This has come as a result of several organizational efficiency initiatives, both in our country organizations as well as in our central staffs. And to give you some more color to the numbers. We have reduced manning and expats, renegotiated contracts, optimized vessels and logistics, and also implemented a more efficient maintenance work. We will continue to hunt for more cost savings. And also in this area, we expect further reduction this year. Moving on to partner-operated licenses. About 80% of DPI's production is operated by others. I would love to operate more. However, based on benchmarks we have done, many of the assets in the portfolio are world-class. Overall, the production efficiency compete well with Arne Sigve and NCS. During the last 2 years, we have seen our potential to further enhance value from our partner-operated assets. We have reorganized our teams to have a maximum impact in the licenses we are partnered and where we see an upside. We have set up a fit for purpose organization, extracted efficiency gains from our asset management resources and we also have achieved greater impact from our activities. And tangible results have been achieved by reducing CapEx, improving reutilization and by running more efficient drilling programs. This is due to us influencing and working with the operator. Seeing this effect is definitely rewarding and we believe there is still a potential for further improvements. We will continue to challenge and support our operators. Let me move from partner-operated assets to our joint ventures. A few words on Algeria, a very important country in our portfolio. We have a significant positioning in 2 legacy assets, In Amenas and In Salah, representing more than 15% of Algeria's total gas production. The 2 fields provides approximately 50,000 barrels equity per day to Statoil in 2015. We like our position. And the PSAs that govern these activities demonstrates a reduced sensitivity to price fluctuations which, again, is valuable when prices are low. Our production in Algeria is profitable even at current prices. And this year, we expect the In Amenas 23 [ph] to come back on stream, as well as the compression project to start up. For In Salah, we expect In Salah Southern Fields project to start up, and all these will increase Statoil's Algerian equity production by some 15% to 20% this year. Moving from the Algerian desert to the beaches of Rio. Our strategic intent in Brazil remains the same, it's all about profitable growth. We believe scale is an enabler for synergies, cash flow and value creation. But ultimately, only profitability will earn us the right to grow. It starts with our operational performance, and I'm pleased to see the 5 percentage point improvement in production efficiency for Peregrino. This is in accordance with the Statoil Technical Efficiency Programme's target. For a heavy oil field like Peregrino, being efficient on the drilling side is critical for the ultimate recovery and value of the field. In 2013, we drilled an average of 136 meters per day. Last year, it was 193 meters per day. This as a result of improvements we have made, especially standardized well concepts and repeatable operations. We have sharpened performance management including common and topside [ph] targets, and we have set an even clearer expectation towards our suppliers. 2 weeks ago, we decided to further optimize Peregrino drilling operations. It comes as a direct response to the current price level and to improve our financial position. By moving from 2 to 1 drilling and workover operations, we have reduced CapEx with only minor effects on production. But we are also deepening our position in Brazil. Peregrino Phase II is under development and we have delivered a number of improvements. This project was sanctioned late 2014, and we have since achieved significant cost reductions, taking down the breakevens by 35%. We have identified and worked on improvements in 4 main categories. In facilities and execution model, in drilling and well design, reduction of management cost and we are also capturing market effects. We believe we are approaching a robust and solid project. And it's more. You have seen the transaction we made with Repsol end of last year, allowing us to take over the operatorship of Pão de Açúcar. We are excited and look forward to use our deepwater and gas experience to develop BM-C-33. This is about value creation and capturing synergies. And we are also ready for a big exploration campaign in Espirito Santo Basin. Ladies and gentlemen, let me sum up. My mandate is to deliver profitable international growth and to strengthen our competitiveness, and it always starts with our current portfolio. We are positioned in some of the most attractive areas in the world. We have substantial share of our production from legacy assets operated by our partners, with high production efficiency, low breakevens and attractive returns. But we also have assets not making money at current prices. And moving forward, we need to and I will drive operational performance even harder, ensure faster and deeper cost reductions, and continue influencing and working with our partners. The future DPI portfolio will be more balanced in terms of partner positions and operatorships. We have several projects in our portfolio. In the current price environment, they require a lot of work. But with the Peregrino Phase II experience, we have demonstrated our ability to improve the value proposition. And we need to apply the same mind- and skill set to all of our projects, enabling us to capture the upturn in oil and gas prices. And I know Margareth, she has more examples to share with you later. Finally, a global and competitive portfolio offer strength, economy of scale, flexibility and resilience. Having activities and resources in different geographies and assets with different phasing provides optionality and creates a stronger company. This gives us a robust financial standing as Hans Jakob discussed earlier today. And as we all know this is particularly important in an uncertain macroenvironment. By that, I thank you for your attention and leave the work to Torgrim Reitan, Head of DPUSA.

Good afternoon, everyone. It is very good to see you. And yes, I have missed you. I'm half a year into this job, and we are reporting losses in the U.S. And we will do what it takes to make money in the U.S. business, but also to create growth options. So today, I will talk about how we are transforming to make money also at lower prices. And there is no better time than this to get business right. We have already made significant changes. In October, we restructured our business and we reduced manning by some 20%. We have taken down investments significantly and costs are coming down, and we have established a clear road map to making money. We will transform the U.S. business from being dependent on high prices to making money at low prices. We needed $90 per barrel in 2014, we will take it down to $50 in 2018. We will need $50 to have a positive earnings. From $90 to $50. So how are we going to do that? First, we will step up our improvements. We have delivered more than we promised, but that is not enough. And I will present a new set of targets to you today. Second, we will grow with quality. We have the potential to grow by more than 50% by 2018. But much more important, the cash margin per barrel will double in the same period. So this is an ambitious plan that I will show you today. It will not be easy, but it is very necessary. So first, an overview of our business. Our U.S. business has been built over 10 years. It has been a stepwise growth, starting with Gulf of Mexico assets acquired from EnCana in 2005. Over the years, we have built a portfolio of quality assets, both offshore and onshore. And we are now operating in all our 3 onshore assets. This growth has been based on acquisitions and investments in a high price environment leading to high depreciations and also significant impairments as prices dropped. But still the quality of the assets is solid and they will be a significant part of Statoil's growth and cash flow going forward. And I'm proud of the assets we have in the Gulf of Mexico, high quality assets with mainly liquid production. Offshore production will be more than double over the next few years and that's based on projects that are well underway. Heidelberg started a few weeks ago, Julia will start in the first half of the year and Stampede will come in 2018. And our offshore growth will be important to Statoil's cash flow after-tax. Our operators, except for the unfortunate situation with Big Foot, has executed our projects on time, on cost and with good overall safety results. And I'm glad to see that the operators want to put our experience to work like water injection on Tahiti, fines migration on Stampede and subsea boosting on Jack and São Paulo. We entered onshore early. High-quality acreage that will work at lower prices and we are well positioned in 3 of the best U.S. plays. We have improved a lot and we now get much more out of each dollar that we spend. And our investment program is profitable in the current price environment. We also have a very solid and profitable downstream position in the U.S. This is reported through MMP and Jens is responsible for that, and that's not part of the numbers that you'll see today. So our U.S. business is important to Statoil's future. Our income, cash flow and growth is without tax for quite some years still, and total resources in the U.S. is around 20% of Statoil's resources. So we will grow, but we have a job to do. We must make money. So we will transform our U.S. business to make money at lower prices. So let me explain. We built the portfolio at very different prices than we see today. In 2014, we needed an oil price of $90 to make a net operating profit. And all these numbers exclude exploration and they exclude the downstream results. The turning point has happened. We have already reduced the price needed to less than $8 in 2015. And over the next year we will get to $15. And by 2018, we need about $50 per barrel to have positive earnings. So how will we achieve this? There are 3 components to this transformation. First, we will step the cost needs to be taken down further and we will step up our improvements across the organization even more. Secondly, there will be a higher liquid share going forward and that will contribute strongly to this, and we are ramping up and bringing new production in from the Gulf of Mexico. And all onshore investments are also directed more towards liquids. And third, all onshore wells that is now drilled and complete are much more competitive, and they improve our earnings. The onshore and offshore portfolio contributes about equally to this transformation. We have been an important contributor to the corporate improvements. We achieved our targets 1 year ahead of plan. It was a great achievement by our people. Onshore CapEx per barrel is reduced by 38%. We have reduced the drilling time, we have reduced the costs and we are getting more resources out of every well that we complete. We stepped up regularity and our SG&A per barrel has come down by 25% or about $1 per barrel. And this comes from the restructuring and the reduction of staff. However, that is not enough. We will reduce onshore CapEx per barrel by further 25%. And in total, our development cost will be more than halved. We will have a laser focus on the lease operating expenses and reduce our unit production cost by more than 25%. And this is in spite of moving towards more liquids, which have a higher value but also a higher unit cost. And we will keep administrative cost low and reduce further an additional 20% on a per barrel basis. We have consolidated all onshore operations in Austin, where we have our Bakken operations. And there are significant synergies to be taken. We have established one super asset, and this drives learning quickly across the 3 assets, taking all synergies rapidly. And we have created an onshore organization with fit for purpose requirements, but that still will benefit from the knowledge and resources in the greater Statoil. Based on the planned investments, we have the potential to grow production by more than 50% over the next 3 years. But more importantly, cash margin will more than double on flat prices. From $5 to more than $10 per barrel after-tax at an oil price at $15. And I do like that. And I'm encouraged by what I see in the U.S. portfolio. We have many investment opportunities, both onshore and offshore with breakeven below $50. In our offshore portfolio, we work with partners to optimize the investments and reduce cost. And we will continue to use our flexibility onshore to time our CapEx and production: value over volume. We have reduced CapEx onshore with more than 60% since peak [ph], 30% reduction over the last year and we will further reduce it in 2016 as we adopt to the current price environment. So in summary, we will transform our business. In 2018, we will make money and have positive earnings at $50 oil. From $90 to $50. We will step up improvements. We have restructured our U.S. business. We have taken down cost. But this is not enough, we will step up further. And third, we will grow with quality. And here is my summary slide. We will grow with quality. 50% growth over the next years and we will double our after-tax cash margin to more than $10 in a $50 environment. So this is an ambitious plan, it will not be easy, but it is necessary. Thank you very much for your attention.

If I just sort of -- in terms of I need to put these into context. Now you will be aware that we report the U.S. and the international part of the business together as international, and we will continue to do so. So you won't see quarterly changes on these. But one of the things why -- one of the reasons why we wanted to present these through today is because, in a area at the moment where there's a lot going on, we get a lot of questions, we wanted to provide some visibility. And we will continue to do this. So on an annual basis, you'll be able to see how we're doing and progressing against these targets and these challenges as we go forward, not on an individual quarterly basis, as we go forward. Okay. Now the other thing I wanted to do before we go on with Margareth's presentation is just a reminder, if we can open up for polls for the questions in the presentations 2 away from now, so we have plenty of time for people to register their questions ahead of those. With that, I'll call Margareth. Thank you. Margareth Øvrum: Just have to tidy up. Okay. It's good to see you all. You've heard a lot of ambitious targets today and guess who has to deliver on most of them? My responsibility is to deliver project development and execution, drilling in wells, procurement and technology globally. Last year, we set the bar high and I can assure you we have worked very hard to impress you today. So if at all I talk too fast and too much, it's just because I'm so eager to tell you about our achievements. I have 3 messages for you today. We make very strong progress on the efficiency side, we continue to deliver competitive project and execution, and we capture significant cost reduction in the market. In the following, I will elaborate on the 3 key messages. And I will also give you some concrete examples to prove that we walk the talk. Through this Statoil Technical Efficiency Programme, the STEP, we set ourselves tough and very ambitious targets. We define actions and we have exceeded the 2016 targets 1 year ahead of time. And remember, this is real annual CapEx and OpEx efficiency effect, not activity postponements. In addition, increased production efficiency and accelerated production from wells add positive cash flow effect. But let me assure you, just as Eldar did today, this does not mean we can relax. Instead, we step up and increase our targets. So let me get into the details on what we have done to contribute to these results. In 2015, we delivered 20 projects. Here it's showcased by our selection. Despite challenges with 2 of our Korean projects, we still managed to deliver on overall project portfolio. The estimated cost from investment decision to start up is lower than the sanctions estimates. And the trend will continue beyond 2016 according to our forecast. In particular, I'm excited to see how the project increased recovery on existing fields, Åsgard Subsea Compression, Smørbukk South Extension and Troll third and fourth compression have increased their recovery with more than 845 million barrels of oil equivalents. And that is more than expected production from Aasta Hansteen and Johan Castberg combined. Going forward, we will focus on improving our project execution model even further. The first step has to be and has been to establish a leaner organization. And the next step is to further develop the perfect project as a target for all project execution. We have had success with the perfect well approach in drilling and well. And we believe the same methodology can be used for facility projects. We believe this means setting targets for each element of a project. For example, a target cost for subsea template or for umbilicals, and work systematically towards these targets. Based on our experience, I'm confident that the perfect project approach will reduce cost and increase efficiency. But maybe even more important, we have made radical improvements or extreme makeover in our early-phase projects. Actually, so good that both Eldar and Hans Jakob included it in your presentations. Early 2015, we set a target to reduce the breakeven in below $50 on our early-phase project. This was, at that time, a very challenging target, but we mobilized all our efforts. And to the left, you see the breakeven result for major project decision from 2015 to '17. We constantly work to improve the breakeven for all our project and we are not finished. We have increased the robustness in our non-sanctioned project portfolio by reducing the average breakeven cost with almost USD 30 per barrel. From $17 -- $70 in 2013 to the current $41. Numbers so good that it's worth repeating, a reduction of more than 40%. I want to mention a few project in particular, and that is Oseberg Vestflanken and Trestakk. Oseberg Vestflanken is a very exciting achievement and it was sanctioned just before Christmas. Through several improvements, the breakeven has been reduced by 52%. Currently, it is well below 30%. A main reason is a concept change to a simplified subsea on slim legs, as I call it, and unmanned wellhead platform. The concept solution will also, in itself, increase our competitiveness because it is an alternative to subsea in shallow water. On Trestakk, we have achieved 38% reduction in breakeven. Currently, well below $40. And that is due to standardization of the subsea concept, it's about optimized pipeline design, marine scope and schedule, utilization of existing infrastructure and changed contract strategies. In my opinion, a breakeven target of USD 50 per barrel is not sufficient anymore. We will challenge, as Eldar said, every project to pursue profitability below $40. And in my younger days, I was used to call -- be called the techno-babe of Statoil. I think from now on they will probably call me the mature breakeven-babe. So I want to share a few more example, if that's okay. On Johan Castberg, we postponed the concept selection to use more time to deliver the leanest possible development solution. The result is a reduction from above USD 80 to below USD 45 per barrel. But we are still not finished. To the left you see the CapEx reduction in some more details. we are nearly [ph] half the total cost estimate. Systematic work has led to a concept change from a semi to a lean floating production FPSO. We have improved all elements of the project. Examples are a new drilling and reservoir strategy with simplified and standardized solutions, reducing the number of wells from 40 to 33. Changes in the subsidiary side, the number of templates from 15 to 11. And in addition, capturing the deflation in the market. Johan Castberg is the largest oil discovery in the Barents Sea. And when speaking about great projects, I have to talk about the North Sea giant, Johan Sverdrup. The Johan Sverdrup project is truly unique, a fantastic reservoir and is signed for 50 years of operation, and a project for generations. I'm soon to be a grandmother, so now it means even more for me to secure jobs, secure projects for the future generations. We are currently executing Phase 1 of the development. And in parallel, we are planning for the future phases. In Phase 1, our current estimate is NOK 108.5 billion nominal, a reduction of NOK 14.5 billion compared to the PDO. This has contributed to a reduction breakeven, which is now below the USD 30 per barrel. The reduction in CapEx are a result of proactive procurement strategies such as new contract formats, performance-based incentives, bundling on contract and of course, market deflation. A reduction of the drilling and well cost by NOK 3 billion and also simplification. As an example, I can mention the new improved routing for the oil export pipeline, which alone accounts for more than NOK 1 billion in savings. We are also working hard to improve the future phases of the project. So far, the full field development cost range is reduced significantly as you can see on this slide. But I still think there are more to go. Within drilling and well, we truly made some groundbreaking improvements in 2015. And last year, at the CMU, I promised you that we will further increase the drilling and well efficiency. And I kept my promises. Compared to our 2013 baseline for production wells, we have increased the meters per day by 50%. The days per well is reduced by 30% and the spend per well reduced by 20%. This is a result of continued focus on leaner well design, standardized solutions, operational efficiency and the perfect well approach, which means setting targets from the best drill sections ever and drive towards these targets. On the right-hand side, we have included an external benchmark. This is a benchmark which is used in the oil and gas industry on drilling. The external benchmark is meters per day from different regions in the world, and it's provided by Rushmore. Historically, it has been a close race, as you can see, but now Statoil is taking the lead. Just have a look at the nice line, the magenta line, shooting upwards. Do you see it? However, the race is not finished and we will continue our efforts to make this gap even bigger. Due to these improvements, we have been able to drill more for less. Our drill plan for 2015 included 95 wells. We finalized 117, and at a cost well below the original planned total spend. Other examples like Peregrino was mentioned by Lars Christian, and Tim will give you more results on what we have achieved with our exploration wells. But I hope you see that this is a cross-BA effort. I need Lars Christian and Arne Sigve's petroleum technology people. I need unleashed [ph] challenging. I need the DMG [ph] people in Tim's part of the organization to be able to deliver such results. More and faster deliveries also led to accelerated production. The total amount is approximately USD 200 million Statoil share for 2015. In addition, we have also stepped up our well intervention activity with an increase of more than 20% the last year. This gives us very cheap barrels at an average cost of USD 5 per barrel. So far, I have mostly showed you on how we have simplified, how we have standardized to increase efficiency. We are, of course, also capitalizing on the market opportunities and we will continue to do so through renegotiating and rebidding contracts. So far, we have had more than 550 initiatives towards our suppliers. Achieved rate reduction in the contracts are seen across the portfolio with examples shown on the left-hand side. Within, for instance, equipment, the Johan Sverdrup project has achieved very good prices on multidiscipline equipment packages. The reduction have been up to 25% compared to previous project. Other examples are steel and logistics, where we have negotiated up to 30% in reduction. The capture market effects, which you see on the right-hand side refers to Statoil's share on market savings on our operated fields. These numbers exclude currency effects and efficiency improvements. There is a time delay in realizing effects. This is, of course, due to the rolling over of the contract portfolio and project spend coming in later, as the project is maturing and developing and gets payables. We expect increased savings over time. For instance, the largest market effect for Johan Sverdrup will come in 2017 and onwards. And lastly, I have to talk about the hunt for value-adding technologies. Even my technology nerds have stepped up and intensified their commercial drive. It is important to simplify and standardize to reduce cost, but to secure future competitiveness we also have to develop radical and innovative solution to stay ahead of our peers. We need high-impact technologies, we need to implement them broadly, and we have to make them the new standard. And to succeed, we need to think outside the box. Innovation is not just new technologies, it's also existing technologies used in another way. In my 34 years with Statoil, we have made the impossible possible and profitable many times. Many thought our subsea gas compression was too extreme, but now we have delivered the technology with the Åsgard Subsea Compression, it is the first and only subsea factory in the world, with an outstanding regularity. I want to share 2 more examples with you, both of them have the potential of reducing the cost significantly and transform the industry. Handling plug and abandonment of wells safe and efficient is crucial for our industry. Over the next 25 years, there will be more than 1,200 wells to be plugged on the Norwegian continental shelf. How we do it and at what cost will have a significant impact on our business. Short term, we have reduced the cost by 25%, through or by challenging and simplifying existing requirements and procedures. Through close collaboration with our suppliers, we work to develop new technology and new solutions. Will it be possible to melt the steel in the well to create the plug? Can we do it without the rig? In the medium term, we aim to reduce the cost by 75% and reduce the time for plug and abandonment from an average of 35 days to less than a week. My last example is within digitalization. A large portion of Statoil's investments are related to offshore drilling and well activities, and about 80% of offshore well construction cost is time related. By developing automated drilling control, we can reduce costs by speeding up the process and avoid the risk of unit failures. Statoil has, as the first operator, installed a permanent offshore drilling automation system, and the pilot shows real potential for increased drilling efficiency. The potential is significant. The journey ahead is very exciting. And together with our suppliers, we are just getting started. I could have given you many more technology examples, but I am not allowed. With this, I want to sum up the main messages. We have exceeded the efficiency targets in all areas ahead of time, but we are stepping up. We deliver strong project execution and continuously strive to improve it, and we have a strong commitment and commercial mind-set to hunt, to capture all market effects. We are enthusiastic and proud of our results so far, but as a lesson, we are not here to celebrate, we are here to accelerate. So more is to come. And thank you for your attention. And I would like to introduce -- I'm supposed to introduce, I am not -- yes? Introduce my very best colleague, Mr. Exploration, Tim Dodson. I'm going to tidy up.

Thank you, Margaret. Nice and tidy. No, thank you. I thought that was a very impressive story. And your messages were very clear, Margareth. So it's going to be a different act to follow, but I'll do my best. Good afternoon, everyone. It's good to be back and to have the opportunity to give you an update on our exploration progress and plans. So let me start with our exploration strategy. I think it's fair to say that our exploration strategy has served us well and it stands firm. During the period 2011 to 2015 we delivered approximately 800 million barrels per year on average at a finding cost of approximately $4 per barrel. And in total, we discovered 4.8 billion barrels of oil equivalents. Approximately 80% of those volumes came from impact discoveries. And we were very successful at testing impact opportunities in 2011, '12, and '13. Since then, we have tested fewer such opportunities as we appraised and matured the discoveries and focused on replenishing our portfolio. Ultimately, exploration is about the ability to create value through the drill bit. And I am very pleased to say that we have already moved 3.5 billion of these barrels through the value chain, delivering projects for Margareth to develop and Arne Sigve and Lars Christian to produce. In 2015 alone, exploration passed on 16 new discoveries and more than 800 barrels of resources. And as you have seen in previous presentations, we have reduced the breakeven for our next-generation portfolio to $41, which gives me confidence that the majority of our discoveries in recent years will be profitable. Continued replenishment of our exploration portfolio is needed to replace resources in order to sustain and grow production. And we intend to do that by: first, exploiting prolific basins, i.e. deepening our presence in core areas; second, by testing impact opportunities, i.e. testing new plays; and third, accessing at scale, i.e. positioning Statoil for transformational upside. We aim to replenish our portfolio with high-quality opportunities that are robust at the level Eldar mentioned today. But to sustain such delivery, we have to be efficient in all we do also within exploration. Broadly speaking, exploration costs can be split into 3 main categories; Wells, seismic and our running costs. When it comes to our running costs, we've reduced those by more than 20% since 2013. For example, we reduced our headcount by 11%, number of expats by 56% and our travel costs by 41%. We've also closed offices where we don't -- didn't see a long-term potential in places such as Kazakhstan, the Faroes and Alaska. On those 4 items alone, we've saved approximately $80 million compared with 2013, and that's equivalent to investing in 2 to 3 extra exploration wells. Access to data is fundamental for exploration success. And we have acquired more seismic data for less. Again, compared to 2013, we have more than halved our 3D seismic acquisition unit costs. And that's been achieved through a dedicated effort with focus on both commercial and operational improvements. And they include: enhanced cooperation with our suppliers and the introduction of new techniques, new acquisition solutions and new technologies to increase operational time. However, well costs is the major cost item for exploration, typically 50% to 60%. So improving drilling efficiency is key. And as mentioned by Margareth, we've made some groundbreaking improvements within drilling a well. I'm pleased to say that exploration is no exception and like production, we have improved well efficiency by 30% since 2013. One of the most impressive examples is the deepwater exploration campaign on the Transocean Spitsbergen rig in Norway last year. Compared with the Snefrid South well, which was drilled in 2008, all 3 wells you see to the right on the chart were drilled significantly faster. The Gymi well, which was the final of these third last year was completed in just 15 days, 3x faster than the Snefrid South well and 3 days ahead of the perfect well concept. And by the way and as Eldar mentioned, all 3 wells resulted in discoveries, adding 25% to the Aasta Hansteen reserve base. I could also have talked about similar drilling efficiency gains in the Gulf of Mexico and Tanzania, where we've had first-quartile drilling performance, but unfortunately time does not allow. The main reason for drilling improvement is a new way of working, a new mindset. Instead of designing a well based on which data we want to collect, and I can guarantee you geologists want to collect a lot of data, we plan for the most efficient well possible: the perfect well. That's a slim well concept allowing us to mitigate any shortcomings on data collection at the lowest possible cost. It's not only cheaper, but it's actually less likely to have technical issues and is therefore a safer way to execute operations. So whilst we have to be efficient in all we do and at all times, our main task in exploration is to replenish the portfolio with high-quality opportunities. And there is no better time than now to do exactly that. So how are we doing in that respect? 2015 was a really good year for access to new acreage for Statoil. We entered 5 new basins in: South Africa, Mozambique, Nicaragua, more recently in Uruguay and Nova Scotia in Canada, truly shaping the future of our exploration portfolio. In Norway, as Arne Sigve mentioned, Statoil was awarded 24 license in the recent APA round, the highest number of licenses since 2005. And in the Flemish Pass in Canada, we were awarded 6 new licenses. One of my top 3 priorities last year was to replenish and reshape our portfolio, so I'm really pleased with our achievements. And I can assure you that we will continue these efforts in 2016. Last year, we delivered our exploration program $300 million below our original guiding of $3.2 billion. We made one high-impact discovery in Tanzania, Mdalasini. We successfully appraised and tested the Pão de Açúcar discovery in Brazil. And I am pleased to confirm today that Statoil has made an oil discovery in Statoil's part of the Pawon Alp [ph] structure in the Gulf of Mexico. We are in the process of assessing the size and potential of the discovery and are currently in dialogue with Shell and Freeport-McMoRan on the way forward for veto area, regional development, including Pawon Alp [ph]. As both Hans Jakob and Eldar have already mentioned, we will reduce our spend in 2016 to $2 billion, still a significant exploration spend. We will drill fewer wells this year. But on the other hand, and as Hans Jakob mentioned, capital discipline is extremely important in times like this, and cutting well cost is where exploration can contribute the most right now. But as I said, we will continue to work very hard to build the next wave of drilling candidates. This will not prevent us from testing 5 new plays, and I'm particularly happy about that, in Russia, in Australia, in Algeria and in Uruguay. And we will also continue to deepen our position in core areas, like Krafla area in Norway and Bay du Nord in Canada. We will continue our recent counter-cyclical access efforts, positioning ourselves for long-term growth. The 23rd round in Barents Sea in Norway, where new exploration acreage is available for the first time since 1994, is one of the most important. At the other end of the exploration chain -- the value chain, we will continue to mature our discovered resources in Norway, Canada and Brazil. And I guess, I can add to that the, U.S. Following the successful appraisal and testing of Pão, as you know, we are -- we will be over -- taking over the operatorship. I expect to hand over that significant discovery to Lars Christian later this year. So let me further exemplify how we create value through deepening into our core areas and testing new plays. I've always said and I always say that where lots of oil and gas is being found, more will be discovered, prolific basins tend to get more prolific. So we will continue to exploit our core areas where we are well-positioned to create more value. Oseberg is one of our core producing assets, and we believe the Oseberg area holds an attractive remaining potential. In the Krafla area, just south of Oseberg, we made 5 discoveries between 2011 and 2015 and proved up somewhere between 140 and 220 million barrels. We've identified several new prospects, and we plan to drill 4 exploration wells in multiple targets this year. Depending on the results of those wells, the volume potential could support the standalone development of Krafla rather than a tieback solution as originally thought. My second example of exploiting prolific basins is in East Coast, Canada, where Statoil's built a very strong acreage position in the frontier Flemish Pass basin. Starting back in November 2014, we are undertaking an 18-month exploration and appraisal drilling program in the Flemish Pass. The program will appraise the Bay du Nord discovery, it will also test new prospects in the greater area. And we plan to communicate the result of that campaign upon completion in second quarter. Our aim, our primary aim, is to prove up a robust resource base for a future development of Bay du Nord. And in parallel, of course, we will mature our 6 new licenses. So let me now turn to some of the frontier positions which we will be testing in 2016. Exploration is a portfolio game and you have to place a number of select bets on high risk, high reward opportunities in order to open up new plays with transformational upside. Recently, we've taken a number of positions along the South Atlantic margin. As previously mentioned, we've farmed-in to licenses in South Africa with Exxon Mobil and finalized a farm-in deal with Total in Uruguay. Those, together with Mozambique, are access efforts which are guided by the same geological concept, a play called base of slope that has proved successful elsewhere on the South Atlantic margin. And I must say, I'm really excited, again, to participate in the testing of a new geological concept with significant upside potential, albeit significant risk. In Algeria, we are aiming to test the onshore rich gas potential of our Timissit license towards the end of this year. And should the results be positive, the license could provide low-cost hydrocarbons for profitable development in a low-price environment. And then finally as an example, in Australia, we will participate in 2 wells in Ceduna basin, an under-explored basin, but which has a proven hydrocarbon system but no commercial discovery yet. So we have a diverse set of play opening opportunities in our portfolio, 5 of which will be tested this year, a situation not dissimilar to the one back in 2010 and 2011. So let me sum up. The industry at large is facing tough times, and exploration is no exception. For many years, the industry has produced more, actually much more, than has been discovered. And this is likely to continue, especially as exploration investments have been cut significantly. We too have cut annual spend, but that does not alter our fundamental belief in exploration as an important vehicle for creating long-term value. We are committed to exploration. Our exploration strategy stands firm, and we will continue to capture and invest in high-quality opportunities, shaping and replacing the next-generation portfolio, a portfolio of the future, competitive at all times. Thank you for your attention.

Thanks, Tim, and thanks to all the presenters this afternoon. We're going to move a table here so that we can get some -- get everybody on stage who's presented here for the Q&A over the next half an hour or so. I hope that the presentations this afternoon have given you a bit of a clearer picture about all the things that are going on in Statoil and how they conform to the themes of deeper -- faster and deeper cost reduction, capital discipline and flexibly and positioning competitively for the upside. I -- it's a lot to cover in one afternoon, but they're part of the day-to-day in Statoil that we want to give you a picture of while you're here with us this afternoon. So if I can do -- if I can ask people to come and stand on stage. Again, before -- as before, we'll take some questions from the floor. We'll -- we've opened it up for questions on the phones. We've got people with the mics, and we'll have an opportunity to -- for people to ask the various EVPs what they wish to do. Okay. Just let people get comfortable. Okay.

Right. Okay. Haythem, we got a mic coming.

My question is to the extent that it can be answered by the various different business units, but of the particular CapEx reduction targets that are in place, can you give us a sense of how much of that is cost deflation? You've sort of given in some parts of these presentation, for some of the operating projects, how much of that is related to the market deflation. But overall, how much are you now baking into the numbers you've given us for, say, 2016 and beyond? Eldar Sætre: So maybe I should start on that one. First of all, looking at a cost improvement program of $2.5 billion that we have stepped up now. Most of that is structural improvements, and -- but there are some. It's very difficult to carve out all components of market impacts when we measure them. So there are some. There are around 600 that Margareth showed you in terms of market impacts for 2016, let's say 200 to 300 is most likely incorporated -- Margareth Øvrum: Half. ... Eldar Sætre: ...or half is incorporated into the $2.5 billion. And some of that goes also -- goes into the CapEx program. I would say when it comes to CapEx program in terms of market impacts, there is not a lot. There is some impacts related to, I would say, drilling a well, maybe on modifications, not a huge impact. As Margareth said, the major impact from the market side will come as we rollover these contracts into new -- the new projects, our new projects. So for instance, when it comes to the ongoing projects, like Mariner, Aasta Hansteen and so on, they are basically based on contracts that have been in place since these projects were launched. So I don't know, Margareth, if you going to add to that. Margareth Øvrum: Maybe could I just add one thing, yes? Well because for instance, for the multidiscipline equipment packages for Johan Sverdrup we got very, very good prices. But prior to the bidding process, we issued much leaner requirement, technical requirement. And when you get the prices, is it due to the leaner technical requirement? Or is it due to the market side? And it's a combination, so it's not a strict answer, just for your information and so it's easier to understand. But of course, the market-to-market or the market deflation is coming in when it's payable and, of course, when we have rolled over the contract portfolio. Eldar Sætre: From the U.S. position to we have [ph] the covenant? Margareth Øvrum: You have already locked in.

Yes, no. Well, yes. I mean, it's -- the improvements are mainly coming from more drilling efficiency. We drill much faster rate and we get more out of each reservoirs. And then there are some cost improvements, but it's limited onshore. It's mainly linked to performance and activity. We ran 9 rigs last years, in last year in our operations. We are down to 5 now, and we are likely to go down to 3 rigs across the 3 plays during the year. So that's mainly activity and performance. Eldar Sætre: Would you like to add something, Hans Jakob?

Yes, a more specific one is in fourth quarter, in DPI, we had a 22% reduction in the OpEx, SG&A and more than -- and less than $100 million is related to price-driven production fee and diluent.

Okay. Rolf [ph] and then Hamish.

If I think about Statoil over the last 5 years, one of the trends has been a sort of internationalization, right? Moving out of Norway and going more and more to far-flung interesting places. I don't think I -- roughly in my head, had something like a 60-40 split of CapEx internationally versus in Norway upstream. Looking at some of the ideas you presented today and the profitability and the costs and particularly the deflating breakevens, do you think there's a Norway-ization coming ahead? Is it reverting back to putting much more of the incremental CapEx back into that core business rather than international? And is that the right thing? I mean, that's a question for everyone on the stage. Eldar Sætre: I think I'll try to cover it first, if some people may want to add. It's a corporate-shaped type of question as well. The Norwegian continental shelf has been and still is and will be the backbone of our company for long time. There is no doubt about it. We are -- the CapEx program that we presented for this year, approximately half of that is going to be Norwegian continental shelf. So despite as we are sort of reducing our overall CapEx, at the Norwegian side, we are pretty much maintaining the CapEx level. So right now, we are in a position where we have a lot of opportunities on the Norwegian continental shelf coming from the exploration efforts that Tim talked about earlier. But that's more -- and the Norwegian continental shelf, our knowledge, our competence. I learned at business school that to leverage your competitive edge is a good idea. So we would like to do that to the extent possible. But it will just take us that far. And we will like to grow and extend the company, and that means we will have to continue to look outside the Norwegian continental shelf to leverage our competence. And we see a lot of opportunities, with Tim has showed you this on the exploration side. We have a project portfolio also outside of Norway. So there's no change in strategy as such, but the opportunity set at hand now puts a lot of emphasis on the Norwegian continental shelf. Strategically, our company would like to grow definitely based on a growing international portfolio. Would anyone like to add? Lars Christian first.

Yes, I mean, we are having in, In Salah southern fields coming on-stream this year, In Amenas compression project. Next year, it's Hebron, then it's Mariner. And we are very close to putting sort of start of Peregrino Phase 2 into execution. So I have several projects. The good thing in that I like is that we compete the 3 DPs with good help from Margareth. And best project always wins. And that is the way it should be. Eldar Sætre: I think Norwegian continental shelf would like to [indiscernible] the competition.

Well, as Lars Christian says, we are competing for good projects. And really, when it comes to Norwegian continental shelf is work on the concepts together with Margareth's organization to make them as robust as possible. And we have several examples. Margareth touched upon them, and by working with the solutions concept, driving down cost by almost 50%. So it's really to make them as robust as possible, either you're on the Norwegian continental shelf or internationally. Margareth Øvrum: But Eldar, well he was the backbone, what am -- what are we, then? We must be the brain and the body.

So could we [indiscernible] Margareth. So Torgrim, your comment.

Okay. I don't feel privileged, so I have to compete everyday with the rest of the team. And I'm actually very glad to see that both offshore and onshore, we have assets and programs that really compete on equal terms with the rest of the company. But we are not done yet. We have a big job to do and we are not satisfied. I'm sure that we can prove ourselves to be an important part of Statoil's future and I'm very confident that we are going to be a very important contributor. Eldar Sætre: Okay. I think we are heading for the next question.

Hamish?

Actually I'm going to just focus on the U.S. because I think it was the most exciting slide, actually, of the day. Torgrim's Slide 6, 50% growth potential and the cash margin doubling at $50 oil. And so just first of all, on the cash margin, I wondered if you could maybe tell us, you talked about the oil price required for that, could you give us some insight to gas? Because there's quite a large element of your U.S. portfolio with gas, if I'm not mistaken. And shall I ask the other bit on your volume growth, or do you want me to wait? Eldar Sætre: Sure. Torgrim.

So just on the volume growth, I wondered if you could maybe specify little bit on what basins you think will be the biggest contributors to that, and where the CapEx would be in theory if that potential was fully realized. And can you just confirm that's an organic target?

All right. That's the best question I have ever had. So first, let me start with the cash margin. This is on a $50 WTI basis. And in that price, we have weighted in our gas production and a gas price, meaning that our realized price is actually significantly below the WTI. A bit technical here, but it's a very important assumption. And we also use local prices in our realized price while Jens is getting the market prices. So all realized prices are actually approximately half of WTI. So when I say $50 WTI, my revenues is actually close to $25 to $30 in that environment. And it is in that environment that we are generating a positive cash margin of more than $10 by 2018, and that is after tax because we are not in a tax position in the U.S. And that's why we -- the U.S. business will be so important for the growth in the cash flow and operating cash flow for Statoil for the years to come. When it comes to the production mix, it will be more liquid. We are currently running around 50% gas today, that will be down to some -- no, 43% liquid today, that will be up to 50% by 2018. This requires a limited investment program to make this happen. We have taken down CapEx significantly, and it is a level that we are spending this year approximately over the next 3 years. And there's a potential to grow substantially more. We will double the offshore production from 40 to maybe around 80 by those 3 years. And onshore, we will focus our investments into Bakken mainly and also some into Eagle Ford, while we are keeping a low production growth within our Marcellus assets. Yes. Was there more in the question?

I think that was it Torgrim.

[indiscernible] forecast.

Yes, it is organic. All organic.

All organic. Okay. We're going to go from over there to over there. And Anish?

It's Anish Kapadia from Tudor, Pickering. Also wanted to focus somewhat on the U.S. business. It seems like some of your peers are focusing a bit more on short-cycle CapEx versus longer-cycle CapEx in this environment. I just wanted to see if you could contrast the risk-adjusted returns and capital allocation in your portfolio between longer-cycle projects, such as offshore; and some of the shorter-cycle projects, such as the U.S. or infill drilling. And then just on the U.S., I just wanted to get a better idea in terms of that outlook for U.S. onshore. So in terms of getting to that 50% growth in U.S. onshore, how many rigs do you think you need to run in the U.S. from that 3 that you're expect to be running now? And what's the amount of CapEx that you're planning to spend in the U.S. over the next few years? Eldar Sætre: So you will give it a try Torgrim? Long questions, many questions, try to be brisk.

Yes and not get carried away I guess. So when it comes to the onshore part and the short-cycle part of it, it's actually very useful to have a solid chunk of that in the current environment because you can adapt. And the environment, you can actually -- the changing environment, you can actually have -- head into your earnings pretty quickly. And so that's sort of a very good part of it, and we see that's happening. But there is generally a good mix of long-term investments in there, actually much higher in the current program. They are like 2/3 offshore and 1/3 onshore. So it will take a limited number of rigs over the next few years to deliver this growth. We have quite a few wells behind pipe waiting for completion to happen over the next years.

Okay. Mike, I'm going to have one more question from the floor, and then we'll open it to the telephones. Michael?

Michael Alsford from Citi. Can I just go back to the CapEx? I guess one of the other drivers, I guess, is the currency. So could you maybe talk a little bit about how much of your spending is in NOK? What you are assuming in terms of your NOK rate in your CapEx numbers? I just referred to the Johan Sverdrup slide, and I think the CapEx reduction looks like it's still on the PDO number of NOK 6 to the dollar. And I'm just wanting to get a sense is whether there's more potential for CapEx come down given where the krona sits today, and whether you're changing your approach to maybe hedging the currency going forwards. Eldar Sætre: Hans Jakob?

Yes. You're right. In the Sverdrup numbers, from 123 nominal to 108.5, there is a significant portion of currency, but money is money in a way. So moving forward, and you're talking about the exchange rate for 2016, it's 8.50.

Okay. Can I open up for questions from the phones, please?

We will now take our next question from Teodor Nilsen from Swedbank.

Actually, yes, another question on [indiscernible] on the U.S. business. You showed on Slide 5 that the onshore CapEx has declined by 38% from 2013 to 2015. What was actually the onshore CapEx per barrel, the absolute number in 2013? And how much of the decline going forward do you expect that will be market driven, i.e. lower supply prices?

Thank you, Teodor. Quick answer is that the 38% improvement is very limited part of that, that is market driven. We don't assume any further market affect in the targets we have put forward.

Next one [indiscernible].

And then on the CapEx in 2013 per barrel, the starting point?

Well, we won't go into that very, very detailed per barrel basis. But it's a 38% improvement from the level in 2013.

We will now take our next question from Anne Gjøen from Handelsbanken. Anne Gjøen: I have a question related to tax. Normally, you would give a tax guiding, but I understand that this is very difficult nowadays, particularly, internationally. But let's say, roughly like $40. And in Norway, I would assume it's not that difficult to give some indication on tax rate. Is that possible? Eldar Sætre: Yes, it is. Hans Jakob?

Yes. Thank you for the question. We paid NOK 66 billion in the taxes for the full year, NOK 19 billion in the quarter, 89.5% effective tax rate and 75% for the full year. So this indicates the variations that you would see. We have indicated that MMP would be in the range of 55 to 60. We have indicated DPN around 70. And we've also been quite clear that international is more exposed to variations as a subset of the lower prices. Anne Gjøen: Okay. But said -- it said that there was a fair assumption if we assume closer to the oil price that we have today.

Yes, we have not changed our communication around this, but the variations around profitability and the prices around the international business is really creating the most risk related for being very specific on this.

Another question from the phones, and then we'll come back to a couple to wrap up on the floor.

There are no further questions on the phone lines.

Okay. Then we got another couple of questions. I got Lydia and another one down here. And then we'll start to wrap up. Thank you very much.

I'll try to put the mic back [ph]. Can I ask a couple of questions on Norway, if can come back to that one? And particularly, the field cost slides that you showed, I think it was Slide 4. Just I think you mentioned in the presentation that the field cost was 40% of the OpEx number. I was just wondering what the other 60% actually is, and what's happening on that bit. And then within that slide, you also show '13 to '15 field cost down 19%, but with subsea costs down 45%, the external cost down 35%, et cetera. So given those numbers, what isn't going down quite so much? What is the sticky part there? And what can you do about that? Eldar Sætre: Okay. You got the question, Arne Sigve?

Yes. When it comes to the field cost, as you said, it's the 40% of the total OpEx. And apart from that, we have insurance, we have taxation on CO2 issues, for instance, and other issues. We also have well cost, modification cost linked to OpEx activities. So it's really, as I tried to convey to you, is to really also focus on those elements going forward. And the field cost is very important, but focus on those elements. And Eldar alluded to the climate issue. We worked, I think, pretty systematically with issues that can reduce taxation on CO2 emissions, which will be profitable. And we are working with those issues. We are working with other issues, and I think Margareth has very well conveyed what we are doing on the well cost. So it's those elements that we are focusing in addition to the field cost. And when it comes to the sticky part, of course, there are commitments that we have to comply with when it comes to cost, as such with regards to we have contracts that we have to stick to and be compliant to and other issues that really is also -- regard as fixed cost when it comes to not only activity-related cost.

Okay. One more question and then...

I am going to ask 2, actually, if you don't mind. Just -- so one, just in terms of the NCS. The OpEx reductions that you are seeing, can you just help me understand? It seems to me if I make some simple assumptions just on the FX, there's quite a bit of FX improvement in there. So I was just trying to understand how much of that OpEx reduction the NCS is benefiting from the weaker NOK. And then on Sverdrup as well, I think some of your partners have spoken about potential debottlenecking and perhaps increasing the first phase of Sverdrup. Just wondered if that's possible. And then I think, Margareth, you made one point on market effects in 2017 for Sverdrup potentially accelerating. I assume that's in the 108 number, but I just wanted a clarification on that, if you don't mind. Eldar Sætre: So on the foreign exchange part of your operating costs, Arne Sigve? Maybe you think about it. And Johan Sverdrup, Margareth? Margareth Øvrum: Yes, we are working hard on Phase 2, and there are further phases for Johan Sverdrup. And we have been looking at different alternative. The base alternatives as of today is a new production platform with the production connected to the fuel center. And the production platform is much leaner than it used to be in the PDO. But at the same time, we are looking at debottlenecking and increasing the capacity of the Phase I. So that's true.

When it comes to -- if I understand your question correctly, when it comes to on the currency issue on field cost or operating cost, mostly are though -- are selling to Norwegian kroner. Just a small, small portion may be in other currency, but mostly on Norwegian kroner.

Okay. With that, ladies and gentlemen -- oh, there's one last one. Neill Morton, just under the wire there.

It's Neill Morton at Investec. I just wanted to go back to some of the cost reductions you were achieving. You showed quite remarkable reduction, for example, at Castberg. I guess my question is really you talk about sort of a leaner concepts and simplification, et cetera. That's been driven by a change in mind-set, which has been driven by the fall in the oil price. But if oil prices are cyclical and they go back up, why doesn't that mind-set change and costs go back up? But alternatively, if you in industry can change its mind-set, but doesn't imply that could the -- oil prices don't go up? Eldar Sætre: So I will cover that question. I will not allow that to happen. It simply cannot happen. In this industry for so long time, I've seen it happen before. This time, it will not happen. I know the heat will be turned on, so I know there will be pressure. So the market out there and rates and so on, there will be the pressure on rates. But what you apply those rates on is that -- that is sustainable. We're going, really, this time, making sure that we are integrating, institutionalizing the improvements into our system, into the way we are organized, into how we structure our requirements and the culture that we work on, on sustainable and continued improvement. So it's not going to happen. We will not allow it, but I know that there will be pressure on this. But that's the whole idea. Get down there. Find ways of working, new approaches. And I believe a subject like standardization. We haven't talked about that. I think there's a huge potential in the industry, but it's basically an industry. So we can standardize within Statoil, but we need to bring that outside of Statoil and into the industry. And I think the industry collectively will pursue that route forcefully as we move forward. And that is also -- will add support to a continued low price environment. Margareth? Margareth Øvrum: You remember, we started the step program very early and long time before the downturn. And I think for us, it has been so important to really work on the efficiency side because that is sustainable. But at the same time, we just have to capture market effect as well. And I hope I -- it got through how much we are working on the market effect and the deflation as well. But I could give you one examples. I was talking about the perfect well approach and the perfect project approach. This is -- you will never, ever be satisfied because when you are exceeding one target, you get a new target. And then if you are exceeding in that one, you get a new one. So this is where we try to drive it. So Tim alluded to that we have beat the perfect well, but then, we have a new perfect well. So I think this is in the way of continuous improvement. Eldar Sætre: Yes. Thank you, Margareth. Last question, then onto you?

It's a very good question. And this is something that is discussed internally a lot, how to avoid this from happening. And Eldar has been internally as clear as he was now on this is not going to happen. And part of the way we're thinking is let's assume this project to be marginal regardless of price. Let's assume it to be marginal. Let's improve it and then we develop it. And then if the oil price is $60 or way higher, I mean, it just means that we make more money. So that's kind of the instilled mind-set.

Just a quick comment. This a cultural journey, as Eldar says. And there has been lots of improvement initiatives around Statoil in the previous period. But what I see by introducing the step program corporate-wise, it has really been a muscle to drive this culture forward. And that is what we will now make sustainable even if we have a shift in the market.

Okay. I think that's a great moment to round off with the questions. So before Eldar just can get some concluding remarks, I just like to, on my behalf, thank everybody for coming, and thank all the corporate executive committee for coming through and being able to meet investors and analysts today. Eldar? Eldar Sætre: So thank you, Peter. And thanks to all of you for coming. I know it's busy times. And I really appreciate that you took time that you have shared with us. So allow me to just give you a personal reflection, actually. I've been in the industry for even longer than Margareth. So it's more than 35 years now and I might be starting to forget things, but I don't think so. So -- and honestly, to be -- what we are experiencing now, what we are trying to do in the company and we are well on the way is really the biggest transformation I've seen, really changing the nature of the curves, turning them downwards and really moving them and wanting to do even more. That's the biggest transformation I've ever seen. So we could stand here, all of us, and talk about numbers, even more numbers the whole day. But what I would say to you, and this is something I feel very strongly about as a CEO, is that what really matters if we're going to make all these changes, it's that the organization, all the people, 22,000 people, are with us. That they are engaged. That they are energized. That they can bring up the ideas. They want to improve. They collaborate. And that's exactly what I see. I spend a lot of time out there. I see exactly these things happening. We are addressing the cultural components of our company, and it's surprising to see the energy level and the enthusiasm on this journey throughout the organization. So today, you have met the management team, part of it, the rest of it is here. So have we all been here for you today. Monday, I will gather the remaining part of the top management, so approximately 120, 130 leaders. And guess what we will discuss? Basically what we have promised here today, the messages that we have given. And the messages are clear: It's faster and deeper. And we are stepping up and we will do more on our project portfolio, and there are more projects to be worked on. So that's obvious. We will all pursue this effort. But there's one more thing. We will talk about the last thing that we mentioned now, the culture. Because this is -- to make this sustainable, you really also have to build a culture. It takes time, but if we do that by actions, what we do, not just what we say and talk about, but what we actually do over time. Consistency over time, that is what creates the culture. That's what we need to do, and that's what we also are going to talk about on Monday. So 1 leadership, as Arne Sigve said, 1 message, 1 culture. And one of the most important components of that culture is to drive a continued improvement, continuous improvement. This is what we are doing now, you could say in many ways is a program-type of approach. We will move on with that, but I have to translate that into a consistent, continuous way of working, which is about continued improvements. That's what this journey is about. So I will never allow it to happen that we will -- when the heat is turned back on, the cost is coming back. So with that, thank you, again, very much for coming. I wish you a safe journey wherever you're going. Safety first. So thank you very much.