Board of Statoil looking to partly privatise and grow

Aug 13, 1999 02:00 AM

The board chairman of Norway's state-owned oil company recommended the operation be partly privatised and that it take over all or most of the agency that controls 40 % of Norway's natural gas and oil reserves. The recommendation was made by Ole Lund in a report to the government.
The reserves, controlled by an agency known by the initials SDOE, are estimated to be worth three to four times as much as Statoil itself. Putting the two operations together would create one of the world's largest oil groups behind the planned Exxon Mobil grouping, BP Amoco PLC and Shell AG.
The company would control some 17 bn bpd and gas, as compared to the top three, which each control about 20 bn bpd and gas. "The state would grow richer, and Statoil would become a more powerful and competitive company in the international oil market," Lund said.

SDOE was created by the government in 1984 to fend off a potentially overwhelming Statoil dominance in the Norwegian economy. It is managed by Statoil on behalf of the government.

Lund recommended selling up to two-thirds of Statoil to private interests, but said the state should maintain a significant role in the company. Lund would not specify how much of SDOE the board thinks should be transferred to Statoil, but the other Norwegian oil company, Norsk Hydro, is likely to recommend taking over parts of SDOE when it presents its report to the government. The parliament is expected to make a decision on Statoil and SDOE in February.

Norway is the world's second largest oil exporter after Saudi Arabia. Statoil currently produces 450,000 bpd.

Source: AP
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