Refining ABC. Kjetil Hauge Head of Technical Oil Analysis Oil Trading & Supply

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1 Refining ABC Kjetil Hauge Head of Technical Oil Analysis Oil Trading & Supply

2 Outline Introduction to oil refining Distillation Refinery configurations Topping Hydroskimming Cracking Refinery development Refinery Margins -> Sandrine

3 Introduction to Crude oil Refining - Distillation 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Alba Brent Statfjord Sleipner VAC. RES. VAC. GO HGO LGO KERO HVN LVN GAS

4 Introduction to Crude oil Refining - Distillation 100 % % 80 % % % 50 % 40 % $/bbl Physc Diesel HSFO 3.5% Brent Dated 30 % % % 0 % Alba Brent Statfjord Sleipner VAC. RES. VAC. GO HGO LGO KERO HVN LVN GAS

5 Refinery type/complexity World Refining Capacities (Total = kbpd) Topping Hydroskimming Cracking Other Majority Cracking refineries Increasing share of more complex refineries Topping refineries - small share Source: PIRA

6 World Refining Capacities (Total = kbpd) Topping refinery Topping Hydroskimming Cracking Other Products Light naphtha CRUDE- DISTILLATION Heavy naphtha Source: PIRA 100 Crude Kerosin 80 Gasoil Diesel / gasoil wt% Diesel/Gasoil SRFO Atmospheric residue 20 HFO Straight run fuel oil 0 TOP A Topping Refinery is the simplest kind of oil refinery. It only splits the crude oil in its main components. A large portion of SR fuel oil.

7 World Refining Capacities (Total = kbpd) Hydroskimming refinery Products Topping Hydroskimming Cracking Other Light naphtha CRUDE- DISTILLATION Heavy naphtha REFORMER Reformate 100 Source: PIRA Crude Kerosine Hydrogen 80 Atmospheric residue Gasoil HYDRO- TREATER Diesel / gasoil wt% Diesel/Gasoil SRFO HFO 20 Heavy fuel oil 0 TOP HSK A Hydroskimming Refinery is a little more advanced. It has a naphtha reformer (REF) and can produce gasoline, but maintain a high SR fuel oil production.

8 A FCC Refinery -is a medium upgraded refinery -can convert SR fuel oil to gasoline and diesel in the FCC unit. There is still some fuel oil production. World Refining Capacities (Total = kbpd) Topping Hydroskimming Cracking Catalytic cracking (FCC) refinery Products Other Source: PIRA Light naphtha ISOMERI- SATION Isomerate 100 Crude CRUDE- DISTILLATION Heavy naphtha Kerosine REFORMER H2 Reformate Iso-butane ALKY- LATION Alkylate wt% Gasoil HYDRO- TREATER Diesel / gasoil 40 Atmospheric residue Vacuum distillation VGO CATALYTIC CRACKER (FCC) Vacuum Residue Gasoil FCC naphtha C3/C4 Olefines Heavy fuel oill 20 0 TOP HSK FCC HCR HFO SRFO Diesel/Gasoil

9 World Refining Capacities (Total = kbpd) Topping Hydroskimming Cracking refinery Products Other Source: PIRA Light naphtha ISOMERI- SATION Isomerate 100 Crude CRUDE- DISTILLATION Heavy naphtha Kerosine REFORMER H2 Reformate Iso-butane ALKY- LATION Alkylate wt% 40 Gasoil HYDRO- TREATER Diesel / gasoil 20 Atmospheric residue Vacuum distillation VGO CATALYTIC CRACKER (FCC) Gasoil FCC naphtha C3/C4 Olefines Heavy fuel oill 0 TOP HSK FCC HCR/ VRES Coker Diesel/gasoil Heavy fuel oil HFO Diesel/Gasoil SRFO A Coker Refinery is the most advanced oil refinery. It upgrades most of the fuel oil to lighther products

10 refinery Distribution (Total = kbpd) Additional coking capacity > NAM LAM Europe Middle East China Rest Asia Africa FSU ANS NAM LAM Middle East China Rest Asia Africa ANS

11 Refinery development - History Refinery capacity changes > 2009 kbpd Other Cracking Hydroskimming Topping Major changes in refinery capacity in period Cracking an close to 100% of the increase Hydroskimming decreasing Have seen marginal refinery drifting towards Cracking type refineries

12 Refinery development Going forward Expect increasing demand on distillates on expense of gasoline Best margins expected on refineries producing higher share of distillates ( and Hydrocracking) Weaker margins on refineries producing high share of gasoline (FCC) Effectivisation of the refinery business expected (i.e. some of the refineries with lowest margins expected to close down) Cracking type refineries marginal refinery

13 Forward Looking Statements This presentation contains certain forward-looking statements that involve risks and uncertainties. In some cases, we use words such as "believe", "intend", "expect", "anticipate", "plan", "target" and similar expressions to identify forward-looking statements. These forward-looking statements reflect current views with respect to future events and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including levels of industry product supply, demand and pricing; currency exchange rates; the political and economic policies of Norway and other oilproducing countries; general economic conditions; political stability and economic growth in relevant areas of the world; global political events and actions, including war, terrorism and sanctions; changes in laws and governmental regulations; the timing of bringing new fields on stream; material differences from reserves estimates; an inability to find and develop reserves; adverse changes in tax regimes; the development and use of new technology; geological or technical difficulties; operational problems; the actions of competitors; the actions of field partners; natural disasters and adverse weather conditions; and other changes to business conditions; and other factors discussed elsewhere in this report. Additional information, including information on factors which may affect Statoil's business, is contained in Statoil's 2008 Annual Report on Form 20-F filed with the US Securities and Exchange Commission, which can be found on Statoil's web site at Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Unless we are required by law to update these statements, we will not necessarily update any of these statements after the date of this review, either to make them conform to actual results or changes in our expectations.