Statoil Has Price Hedging in Place for 2002

The price of roughly a third of Statoil's 2002 production has been hedged at US $18 per barrel. This has been achieved with the aid of "put" options, which were acquired at low cost some time ago. The hedging is based on an average crude oil price of US $18 per barrel for each quarter of 2002, which means the mechanism activates if the quarterly average falls below this level.

"We've only purchased 'downside' protection," says Mari Thjome, vice president for investor relations. "So we haven't given away any gain on possible price increases." Brent Blend reference crude has traded below US $18 per barrel over the past couple of days, the lowest level since the summer of 1999. According to Tor Kartevold, special adviser in the oil trading and supply unit, this decline in the cost of crude reflects the general downturn in the world economy and the terror attacks in the USA on September 11. In addition, the OPEC decided on November 14th not to cut crude output unless other producers did the same.