1. Classification: Internal Status: Draft Meeting the CO2 challenge with technology Knut Åsnes Discipline advisor environmental protection, StatoilHydro Oslo, 18.09.2008

2. 2 StatoilHydro climate policy StatoilHydro’s ambition is to provide energy to meet the growing demand that is needed for economic and social development while at the same time caring for the environment and actively combating global climate change. StatoilHydro recognizes that there is a link between the use of fossil fuel and man-made climate change. We will apply a precautionary approach in operations and business development, and take into account the impact on climate change and sustainable development before entering into new businesses and projects. We will achieve our amibtions through the following measures: (1-7) –Measure 1, 3 and 4 will be further presented

3. 3 A new energy platform We will increase energy efficiency We welcome global mechanisms for carbon trading We will keep our position as a world- leader in carbon capture and storage The cornerstones in our new energy portfolio will be offshore wind and biofuel

4. 4 SH climate policy measure 1 - Operations We strive to implement the best available technologies and practises to operate our facilities with a high degree of energy efficiency, and to reduce greenhouse gas emission –The last 3 years StatoilHydro has cut the annual CO2 emissions on NCS by ca. 200 000 tonn CO2 through energy efficiency measures –Energy management in use –CO2 tax has made many energy efficiency measures ”profitable”

5. 5 Energy efficiency – oil and gas production

6. 6 Important to design energy efficiency in field development! Kvitebjørn: High Pressure/High Temperature - from challenge to advantage Emissions to air: – 2,5 kg CO2 eq./barrel o.e –0.0003 kg NOx /barrel o.e. Reservoir pressure utilized for gas export and injection of produced water to the Utsira formation Well stream heat utilized as process heating

7. 7 Heimdal new power generator - replacing old turbines Transported to Heimdal Summer 2008 (Saipem 7000) New module will be integrated with 14 different systems Wight: 550 ton Cost: almost 1 billion NOK Annual reduction of CO2: 50 000 tonn 25% reduction of Heimdal’s emissions

8. 8 Preparing for power from shore on floating installations Gjøa: Planned start up 2010 Power from Mongstad combined heat and power plant will supply Gjøa –Better energy efficiency than traditional offshore turbines –Reduced emissions Troll A, power from shore since start up in1996

9. 9 Energy efficiency CHP station : 70-80% New gas pipeline 280 MW electricity 180 MW to Troll Refinery Surplus gas Mongstad Turbines Abt 350 MW heat 60 MW to refinery Gas to Europe Gas Kollsnes Terminal Troll A Electricity Power grid Combined heat & power station (CHP) 40 MW to Gjøa Mongstad combined heat and power plant (EVM) project launched to improve energy efficiency Natural gas pipeline, refinery modifications and CHP plant

10. 10 Flare gas recovery system Gullfaks A: Closed flare in 1994 System later used on ca. 30 installations in Norway, UK, Aserbadsjan and Trinidad Worldwide: Annual flaring/ventilation of 150 billion m3 gas, resulting in 400 mill ton CO2. Norway: Flaring of 100 mill m3 gas, 0,1% of flared volumes worldwide

11. 11 StatoilHydro cooperation with Petroleos Mexicanos Cooperating to close down gas flares on the oil field Tres Hermanos Ongoing application pocess for approval from UN –Clean Development Mechanism (CDM), Kyoto Protocol

12. 12 Oil sand Canada Steam Assisted Gravity Drainage (SAGD): Energy consuming: 40 – 65 kg CO2 / barrel o. e. Large consumption of water StatoilHydro goal: Reduce steam needed to warm up sand, reduce energy needed Possible measures: –Re-use water –Use of solvents in steam –CO2 Capture and Storage

13. 13 SH climate policy measure 4 – CO2 capture and storage (CCS) We are actively working to establish CCS as business opportunity and evaluate CCS solutions as part of CO2 intensive projets –Sleipner: 1 mill. ton CO2 per year is separated from natural gas and injected in deep saline aquifer. –Reduces CO2 emission by 13% on the Norwegian Cont. Shelf –In operation since 1996

14. 14 CO2 Capture and storage (CCS) – removal of CO2 from natural gas Carbon capture and storage –Sleipner –In Salah, Algeria –Snøhvit Sleipner

15. 15 CO2 Capture at Mongstad Result of permitting process for Mongstad combined heat and power plant (EVM) October 2005. Statoil and the Norwegian Government entered into an agreement on October 12th 2006 to cooperate on CO 2 capture at Mongstad: European CO 2 Test Centre Mongstad (TCM)European CO 2 Test Centre Mongstad (TCM) June 20th, 2007: Cooperation agreement between the Norwegian State and Statoil ASA extended with new partners: Vattenfall AB, Norsk Hydro Produksjon AS, Dong Energy Generation AS and AS Norske Shell for the planning phase 1). TCM owners are all parties who have a strategic interest in developing CO2 capture technology Large scale CO 2 capture plant at MongstadLarge scale CO 2 capture plant at Mongstad CO2 Masterplan Mongstad, a StatoilHydro ASA project, shall in accordance with the agreement present a master plan for large scale CO2 capture to the Government by the end of 2008. Further development of large scale CO2 capture at Mongstad is at the discretion of the Government

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17. 17 European CO2 Test Centre Mongstad The test facility shall, in accordance with the agreement, reduce risk and cost for large scale CO2 capture. See next slide. The plant shall be designed to capture 100 000 tonnes CO2. The captured CO2 will be released back into the atmosphere Two CO2 capture technologies will be tested on two different flue gas sources Technology goals: Amine: –Flexible demonstration plant –Test of equipment, internals, process configurations –Test of different operating conditions and different / new solvents Chilled ammonia: –Validation of process and engineering design for full-scale application –Determination of performance –Gain more insight into aspects as thermodynamics, kinetics, engineering, materials of construction, safety, process, environmental etc. Reducing environmental risk related to large scale CO2-capture –The capture technologies have their own unique environmental footprint which presently are not fully understood

18. 18 CO2 Masterplan Mongstad The large scale CO2 capture plant is designed to capture 2.1 million tonnes of CO2 from two separate sources; the combined heat and power plant (CHP) and one Mongstad refinery source – the residue catalytic cracker Building a large scale CO2 capture plant will require technology qualification (TQP). TQP is recommended to be based on results/information from pilot plants, demonstration units and commercial units in addition to TCM. Theoretical studies and mathematics modelling are also integrated parts of the TQP. TQP is required not only the capture technologies, but also for large mechanical equipment The captured CO2 will transported a suitable reservoir for storage. Investigation of transport and storage solutions is the responsibility of the MPE and Gassnova SF. The Utsira and Johansen formations are under assessment as potential storage locations

19. 19 SH climate policy measure 3 – Renewable energy We develop a business portifolio within non fossil energy and clean energy technologies and carriers 2 wind power plants in operation –Havøygavlen in Finnmark (picture above) –Utsira in Rogaland 14 projects in StatoiHydro’s wind portifolio

20. 20 Hywind StatoilHydro will build world’s first full scale floating wind turbine west of Karmøy Will be tested over a 2 year period Project is pilot for the Hywind concept Investment: 400 MNOK Planned start up Autumn 2009 2,3 MW wind turbine Combination of offshore and wind experience

21. 21 Sheringham Shoal – permit given by British authorities 8/8-08 Developed by Scira Offshore Energy Ltd. (SH 55%, Evelop 45%) 88 wind turbines, 315 MW Final decision regarding investment in StatoilHydro will be taken within this year Planned start up 2011 Impact assessment performed –radar –air traffic –fishery –birds

22. 22 Sheringham Shoal

23. 23 Biofuel - Life Cycle Assessment Groving and Harvest Land use Transport Conversion Transport to market Fertilizer Natural Gas Petroleum Electric Power Petroleum Natural Gas Wide variation of CO2 reduction compared to fossile fuels, ranging from 10 to 90%

24. 24 StatoilHydro: 42,5%, Linas Agro 57,5% Production based on rapeseed from the Baltic area, Belarus and Russia. Green House Gas (GHG) reduction of approx. 30- 40% LoadingTermi nal 5 km ”Well-to-wheel”- StatoilHydro biodiesel Lithuania

25. Classification: Internal Status: Draft WTW GHG eq calculations for Mestilla RME CO 2 N2ON2O

26. 26 Biofuel - Traceability system needed Life Cycle Assessment Direct Land Use Change (LUC) –Palm oil displaces rain forests in Indonesia Indirect LUC –Corn replaces soy in the US, soy replaces rain forest in Brazil Loss of biodiversity Small farmers and indigenous people Rights and conditions for workers

27. Classification: Internal Status: Draft Thank you for your attention!