Equinor — M&A Activity 2016

Jul 29, 2016

Statoil acquires operated interest in Brazilian offshore licence containing a substantial part of the Carcará pre-salt oil discovery

Statoil acquires operated interest in Brazilian offshore licence containing a substantial part of the Carcará pre-salt oil discovery

Statoil ASA (OSE:STL, NYSE:STO) and Petróleo Brasileiro S.A. - Petrobras

("Petrobras") (BVMF: PETR4, NYSE:PBR) have agreed that Statoil will acquire

Petrobras' 66% operated interest of the BM-S-8 offshore licence in Brazil's

highly prolific Santos basin. The acquisition includes a substantial part of the

Carcará oil discovery, one of the largest discoveries in the world in recent

years.

Carcará was discovered in 2012, on the geological trend of the nearby Lula field

and Libra area. It is a world-class discovery of high-quality oil of around 30°

API and with associated gas in a thick reservoir with excellent properties. It

straddles both BM-S-8 and open acreage to the north, which is expected to be

part of a licence round in 2017. Statoil is well positioned for operatorship of

a unitised Carcará field following this transaction and the licence round will

provide an opportunity to scale up the position in the field. Statoil estimates

the recoverable volumes within the BM-S-8 licence to be in the range of 700 to

1,300 million boe.

In addition to the Carcará discovery, BM-S-8 holds exploration upside that may

significantly increase its resource base. The licence is in its final

exploration phase with one remaining exploration commitment well to be drilled

by 2018.

"Through this acquisition we are accessing a world class asset, and we

strengthen our position in Brazil, one of Statoil's core areas due to its large

resource base and excellent fit with our technology and capabilities. The

Carcará field will significantly enhance our international production volumes in

the 2020s and beyond. We are developing a strong Brazilian business with a broad

portfolio, material production, high impact exploration opportunities and

excellent potential for long term value creation and cash flow," says Eldar

Sætre, president and chief executive officer of Statoil.

The total consideration for the acquisition is USD 2.5 billion. Half of it will

be paid upon closing of the transaction, with the remainder being paid when

certain milestones have been met. These are partly related to the licence award,

but mainly to the future unitisation of Carcará. The effective date for the

transaction is 1 July 2016. Closing is subject to customary conditions,

including partners' and government approval.

Statoil and Petrobras are also in discussions regarding a long-term strategic

cooperation. The focus will be in the Campos and Espírito Santo basins, as well

as new cooperation within gas and technology projects in the Santos basin.

Statoil assets offshore Brazil:

Location Interest Status

Peregrino Campos basin 60% (operator) Production at 100,000

barrels a day

Reserves of 300-600 million

barrels of oil

Peregrino Phase Campos basin 60% (operator) Construction

II

Production from 2020 at c.

60,000 barrels a day

Reserves ~255 million

barrels of oil

Licence BM-C-33 Campos basin 35%  Evaluation/development

comprising the

Pão de Açúcar, gas Approximately 1bn boe

Gavea and Seat in recoverable reserves.

discoveries

Eight exploration Espírito Santo Four operated by Exploration

blocks  basin Statoil, four by

Petrobras

Licence BM-S-8 Santos basin 66% and operator

comprising the after transaction

Carcará discovery

and exploration

prospects

Further information:

Statoil will host a webcast and telephone conference for analysts and investors

11:30 CEST. Dial-in details will be published on www.statoil.com

Investor relations

Peter Hutton, Senior vice president Investor relations,

+44 7881 918 792 (mobile)

Morten Sven Johannessen, Vice president Investor relations US,

+1 203 570 2524 (mobile)

Press

Bård Glad Pedersen, Vice president Media relations,

+47 918 01 791 (mobile)

This information is subject of the disclosure requirements acc. to §5-12

vphl (Norwegian Securities Trading Act)

Facts

Statoil has been in Brazil since 2001. This year marks five years of production

at the Statoil-operated Peregrino field. Peregrino Phase II is due to commence

production in 2020, and in the third quarter of 2016 Statoil expects to assume

operatorship of licence BM-C-33 in the Campos basin which includes the Pão de

Açúcar discovery. Statoil also has interests in eight licences in the Espirito

Santo basin, working in partnership with Petrobras, and expects to spud its

first exploration wells during 2017. It has developed a strong local

organisation with nearly 90% of its workforce from Brazil and its operations

have so far created 1,000 direct jobs. The addition of BM-S-8 to Statoil's

Brazil portfolio will help deliver profitable growth through greater operational

flexibility and efficiencies.

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