Annual Report 2003 - Svenska Petroleum Exploration

Transcription

The holding company of
SVENSK A PETROLEUM EXPLOR ATION
Annual Report
2003
ANNUAL REPORT 2003 PETROSWEDE AB
1
2
PETROSWEDE AB ANNUAL REPORT 2003
Contents
SUBJECT
PAGE
CEO Letter .....................................................4
Company Profile.............................................6
Financial Overview .........................................7
Angola...........................................................8
The Baltic Region ......................................... 10
Ivory Coast................................................... 12
Norway........................................................ 14
United Kingdom .......................................... 16
Summary of Fields ....................................... 18
]
OTO
H
P
[
Report of the Board of Directors .................. 19
Statement of Income.................................... 20
Cash Flow .................................................... 21
Balance Sheet ..............................................22
Shareholders’ Equity .................................... 24
Supplementary............................................. 26
Info about Individual Items........................... 29
Audit Report ................................................ 39
Board of Directors and Auditors...................40
Executive Management ................................40
The Owner................................................... 41
Terms and Definitions .................................. 42
©2004 Petroswede AB
Photage: Petroswede/Creatas/Stockbyte
Art director: M Littholt, Infobahn AB
Production: Infobahn AB/Alfaprint AB, 2004
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CEO letter
“The Baobab field development is the
most important activity at the moment
and a lot of effort is dedicated from all
parts of the organisation.“
Building for
the future
The oil workers strike in Venezuela and particularly the geopolitical tensions in Iraq sent oil prices far above $30 per barrel in
the first quarter of 2003. Although the price dropped after the
invasion of Iraq in March the price continued to be in the upper
$20’s, leaving the average for the year at $28.8 per barrel.
Svenska’s oil production continued to decline in line with expectations. Production for 2003 amounted to 3.1 mmbo compared with 3.6 mmbo for 2002. Svenska has a well diversified
portfolio but it consists mainly of mature fields. We will continue to try to improve oil recovery in the producing fields but the
company’s main focus is to broaden the portfolio with new development projects.
Baobab deepwater field development
An important step in broadening the portfolio is the development of the more than 200 mmbo Baobab field in Ivory Coast.
In April, a Presidential Decree was issued allowing the development of the Baobab field to commence.
4
The development is running according to plan and a number
of important contracts were awarded during 2003. Transocean
Offshore was awarded the rig contract for the Transocean
George Richardson to drill eight producers and three water injector wells under the first development phase.
FMC Kongsberg is supplying the subsea trees, manifolds,
flowlines and associated control equipment. Technip has been
awarded the contract to supply and install rigid pipelines, flexible risers and umbilicals in 2004 followed by installation of the
water injection manifolds and other subsea tie-ins early in 2005.
The Baobab field development is the most important activity
at the moment and a lot of effort is dedicated from all parts of
the organisation.
Exploration
The CI-40 Block outside of Baobab has excellent exploration potential and the probability for additional oil discoveries is deemed
to be high. An initial review of 3D seismic data acquired in early
2003 indicates two interesting prospects; the Zaizou prospect
located south-west of Baobab and the Limblai prospect located
due south of the Kossipo oil discovery.
In Norway, Svenska entered into an agreement with Enterprise
to acquire a 25% interest in exploration block 30/11. The commitment well will be drilled during the summer of 2004.
In the UK, well 30/17a-15 in the Janice block was spudded
in January to test the James prospect. The present estimate
indicates reserves of 5-8 mmbo, however further work is required to establish the commerciality of the prospect.
In Qatar, Svenska terminated its exploration activities in June
2003 after failing to find commercial quantities of hydrocarbons
in the 2002 drilling campaign. Exploration is the long term key
to success and is of course of highest priority. Patience and perseverance are important aspects of this strategy since only
around one in twenty initial drillings is commercially successful.
at 40,000 bopd increasing to 60,000 bopd and hence significantly increase Svenska’s production.
2004 will be the most intense year so far in the development
of the field and a lot of effort will be dedicated to the technical
as well as the financial aspects of this important project.
In addition Svenska will continue its exploration activities to
facilitate a long term increase in production.
Satisfactory arbitration award
The dispute with Geonafta regarding Svenska’s rights under the
joint venture agreement in Lithuania reached an important milestone in 2003. Svenska referred the dispute to arbitration by the
International Chamber of Commerce (ICC) in 2000, where the
State of Lithuania and Geonafta were both respondents. An ICC
Tribunal heard the case in 2001 and 2002, and the ICC announced the final Award in November 2003.
In summary, the Tribunal has ordered Geonafta and the
Government, jointly and severally, to pay to Svenska a substantial compensation.
Finally, I would like to thank all employees for their outstanding
contributions during 2003.
Stockholm, May, 2004
Sven-Erik Zachrisson
CEO of Svenska Petroleum Exploration AB
Outlook
Oil prices has continued to trend higher in the first quarter of
2004 reaching levels not seen since the Iraqi invasion of Kuwait
in 1990. This will mitigate the effects of an expected lower production from the Svenska portfolio during 2004.
In first half of 2005, Baobab is expected to start production
5
Overview
Company Profile
Geographic presence
Petroswede is a holding company which primary asset is the
100 percent ownership of Svenska Petroleum Exploration AB
(”Svenska”).
Svenska is a private Swedish oil and gas company engaged in
exploration and production of oil and gas.
The Svenska Group has production activities in Norway, UK,
Angola and Lithuania as well as exploration activities in Norway,
UK, Ivory Coast and the Baltic Sea.
Petroswede AB
100%
Svenska Petroleum
Exploration AB
Branches:
Angola
Ivory Coast
100%
100%
50%
100%
Svenska
Petroleum
Exploration
(UK)
Svenska
Petroleum
Exploration
(Norway)
Genciu
Nafta
OPAB
(Lithuania)
(Sweden)
On the market Petroswede is acting under the brand name Svenska
(Svenska Petroleum Exploration).
Health, Environment and safety
Petroswede has committed itself to achieving solutions in its
area of operations while maintaining a high level of safety, offering prudent working conditions for all people involved and
being the least harmful to the environment. This is particularly
valid for licences operated by Petroswede where it can assert
greatest influence, but also for non-operated licences through
encouraging the operator to comply with good health, environment and safety practices.
2003 Production and reserves
Oil production by field
Oil reserves by field
Cobo/Pambi 15%
Genciai 7%
Janice 9%
Nelson 13%
Oombo 7%
Ula 33%
Veslefrikk 16%
Baobab 67%
Cobo/Pambi 3%
Ettrick * 2%
Genciai 1%
Janice 2%
Nelson 2%
Oombo 1%
Snøhvit * 2%
Ula 16%
Veslefrikk 4%
* The sale of these assets was
finalised after 2003–12–31
6
Five year overview
Financial overview
2003
2002
2001
2000
1999
Net turnover, MSEK
Operating income, MSEK
Net income for the year, MSEK
811.2
175.8
96.3
873.0
224.7
–13.8
1,070.9
425.1
266.4
1,110.5
557.7
332.8
736.5
198.3
209.6
21.7%
11.9%
0.00
68.4%
25.7%
neg
0.00
69.7%
39.7%
24.9%
0.00
76.7%
50.2%
30.3%
0.01
68.3%
26.9%
28.5%
0.01
83%
9.0%
neg
24.5%
38.9%
28.6%
3.1
8.5
27.6
3.6
9.7
24.2
4.1
11.2
22.3
4.3
11.8
8.0
4.8
13.2
6.4
Operating margin
Profit margin
Net debt/equity ratio
Equity-to-assets ratio
Return on equity
Production (mmbo)
Average production (mbopd)
Reserves/production ratio
(Definitions to the financial overview)
Operating margin: Operating income/Net
turnover
Profit margin: Net income/Net turnover
Net debt/equity ratio: Interest-bearing
liabilities/Equity
Equity-to-assets ratio: Equity/Total assets
Return on equity: Net income/Average equity
for the year
Oil price development
Reserves/Production ratio
Oil production (mmbo)
Remaining oil reserves (mmbo)
*
*
* The sale of these assets was
finalised after 2003–12–31
7
Angola
Improved water injection will lead
to increased oil recovery
Angola is beginning its recovery from a devastating 28 year civil
war that began shortly before the nation achieved independence
from Portugal in 1975. After the failure of several previous attempts to find peace, an agreement was finally signed in April
2002. Despite the new agreement, the crucial disarmament and
demobilization provisions of the agreement had not yet been
fully implemented.
Angola is a key player in Africa’s oil industry as both a major
producer and exporter. It is the second largest producer of oil in
Sub-Saharan Africa after Nigeria and offshore Angola is recognised as a world-class area for oil exploration and production.
The Angolan economy is highly dependent on its oil sector, which accounts for nearly half of the country’s GDP and
about 90% of the government’s revenues and export earnings.
Angola’s crude oil production has increased by nearly 600%
since 1980. Crude oil production averaged 923,000 bopd in
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2003, and is expected to reach 2 million bopd by 2008, as new
deep-water production sites are expected to begin operating.
Block 0, located offshore the enclave of Cabinda, accounts
for the majority of Angola’s crude oil production. During the last
years, there have been significant discoveries of major oilfields in
Blocks 14 (Kuito), 17 (Girassol, Rosa, Dalia, Lirio) and 15 (Kissanje,
Marimba, Hungo). These offshore discoveries have stimulated interest in Angola’s deepwater concessions.
Svenska’s fields
Svenska has a 6.25% interest in two fields, Cobo/Pambi and
Oombo, located in offshore block 3. These two fields have been
in production since 1993 and 1997 respectively and represents
approximately 22% of the company’s total oil production and
4% of Svenska’s total remaining reserves.
Cobo/Pambi
Svenska’s share of production from the Cobo/Pambi fields totalled 0.46 mmbo of oil in 2003. During the year the field produced at an average rate of 20,300 bopd.
Two additional infill producers and two work-overs of existing
wells were planned during 2003 in order to increase the recovery. The first infill producer incurred technical problems which
will be rectified in a work-over planned in mid 2004. The second
infill producer has been postponed until 2004.
One of the work-overs gave an additional production increase
of 1,200 bopd and the second one was considered as not economical and has been deleted from the well programme.
 = Producing oil field
Cobo/Pambi
Oombo
Current total recoverable reserves stand at 187 mmbo. However,
according to the preliminary results of the ongoing Cobo/Pambi
reservoir model, the Original Oil In Place (OOIP) could increase
by 60 mmbo and this should lead to an increase in the recoverable reserves. When finalised, the new reservoir model will, no
doubt, have a positive impact on the reservoir management of
the field and the ultimate reserves.
Oombo
Svenska’s share of production from the Oombo field totalled
0.22 mmbo in 2003. During the year the field produced at an
average rate of 9,560 bopd.
The first water injector in the Oombo field was completed at
the beginning of 2003. The average injection rate during 2003
was 23,500 barrels of water per day. Furthermore, a delineation
well was drilled in the summer. This well found good reservoir
characteristics confirming good injection potential and will be
completed as an injector at the beginning of 2005.
The Oombo reservoir study has been finalised. The outcome
of this study indicates that the aquifer has good communication
with the oil pool and it also confirms the presence of excellent
reservoir qualities over the field. This should result in increased
recovery of oil reserves. During 2003 Svenska upgraded current
recoverable reserves from 44 to 50 mmbo.
A new 3D seismic will be shot over the Cobo/Pambi and Oombo
fields in May 2004. The main objective will be to investigate the
upside potential on the field’s flanks as well as obtaining a better imaging of the internal reservoir architecture. New maps will
be available in the first quarter of 2005.
Field:
Cobo/Pambi
Oombo
Licence/block
Operator
Total reserves
Remaining reserves
Production 2003
Start of production
Obtained by Svenska
Svenska’s interest
Block 3/85
Total
187 mmbo
44.6 mmbo
7.4 mmbo
1993
1985
6.25%
Block 3/91
Total
50 mmbo
19.8 mmbo
3.5 mmbo
1997
1991
6.25%
9
The Baltic Region
Satisfactory
arbitration
award, but
Genciai Field
in decline
Svenska is active in the Baltic region
mainly through its ownership in the Genciai oil field in Lithuania. The company
has a 50% interest in the field which is
steadily producing and exporting oil to
the international market. Svenska is however also active and still ambitious with
regards to exploration in the Baltic Sea.
Oil exploration in Lithuania started
in 1958 and the first crude oil production commenced in 1968. Lithuania’s oil
production is limited, accounting for less
than ten percent of domestic demand.
Most of Lithuania’s production is
being exported to obtain international
market prices, since the domestic refinery
at Mazeikiai is connected to the Druzhba
pipeline, receiving Russian crude at discounted prices.
Three companies produce the majority of oil in Lithuania; the Joint Ventures
Genciu Nafta and Minijos Nafta and the
former state oil company, Geonafta.
Geonafta was privatised in 2000, and has
a 50% interest in both the two JV companies.
Genciu Nafta
Svenska is the Operator of the onshore
Genciai oil field in Lithuania. The licence is
owned by the Joint Venture UAB Genciu
Nafta formed in 1993, which is owned
50% each by Svenska and Geonafta.
10
The Genciai oil field is located in the
northwest part of Lithuania about 0.5km
southwest of the town of Kretinga. The
field commenced production in 1993,
and recoverable reserves are estimated
to 9.4 mmbo. In 2003 the daily production rate was more than 1,200 bopd
whilst the overall watercut was in excess
of 80%.
The production facilities continue to
perform exceptionally well, with only occasional negligible trips. However, the increasing water cut in the wells and drop
in reservoir pressure is resulting in lower
and lower production.
The two horizontal wells which were
drilled into the lower reservoir sand are
still producing approximately 2/3 of the
total output, but water breakthrough in
the G13H well occurred in November resulting in a considerable reduction in production from this well (7%). The most
likely reason for the water breakthrough
is that water has fluxed from the above
layers which had watered out earlier.
The production in 2003 was 220,000
barrels of oil net to Svenska, representing
approximately 7% of the company’s overall production for the year.
In accordance with the Joint Venture
Agreement (JVA), Svenska has a right to
evaluate the economic feasibility to develop and produce from two other oil
Dalders
Genciai
 = Development/exploration field
Field:
Genciai
Operator
Total reserves
Remaining reserves
Production 2003
Start of production
Obtained by Svenska
Svenska
9.4 mmbo
1.2 mmbo
0.4 mmbo
1993
1993
50%
Prospect:
Dalders
License/block
Sweden sub-area 4 and Latvia Blocks
5619–16, 5518–3 and 5519–1
OPAB
Sweden 1969, Latvia 1995
Sweden 100%, Latvia 90%
Operator
Obtained by Svenska
fields, Kretinga and Nausodis, and also
holds the rights to explore, develop and
produce oil and gas from a larger area
of preferred position in northern Lithuania. Geonafta is currently operating the
Kretinga and Nausodis fields and dispute
Svenska’s rights.
Svenska referred the dispute to arbitration by the International Chamber of
Commerce (ICC) in 2000, where the State
of Lithuania and Geonafta were both respondents. An ICC Tribunal heard the
case in 2001 and 2002, and the ICC announced the final Award in November
2003.
In summary, the Tribunal has ordered
Geonafta and the Government, jointly
and severally, to pay to Svenska a significant amount together with interest on
the principal sum until payment. The
Tribunal also ordered the Government
and Geonafta to reimburse Svenska for
its costs accrued during the case.
The Dalders prospect is the largest undrilled prospect in the Baltic Sea. The
mapping and prospect evaluation of
the concessions on both sides of the
Swedish/Latvian border is at a stage
where drilling locations have been identified. The Swedish authorities are presently processing an application for a five
year extension of the Swedish concession.
The Latvian license agreement signed
in 1995 will become effective when the
sea border between Latvia and Lithuania
is ratified by both parliaments. Measures
are taken to secure the successful effectiveness of the Swedish and Latvian
licenses.
Baltic Sea
In the Baltic Sea, Svenska operates through Oljeprospektering AB (OPAB). The
company is the operator of two concessions covering the Dalders prospect, one
in Sweden (Subarea 4) and one in Latvia.
In Sweden, OPAB is the sole concessionaire while in Latvia it has 90% with the
Latvian state holding a 10% carried interest.
11
Ivory Coast
Government approval and
partner sanction gets the
Baobab Field Development
underway
Ivory Coast is an independent republic, with a democratic government, and lies on the Gulf of Guinea. The country has a free
economy and an active stock exchange. The economy is highly
dependent on agriculture and related products and is among
the world’s largest producers and exporters of coffee, cocoa
beans and palm oil.
The oil industry is one of the key elements in the economy,
with a well developed downstream industry. Natural gas reserves and excess electricity generating capacity could lead to Ivory
Coast becoming a significant regional energy supplier in coming
years. Recent offshore oil discoveries make the country a leading
area for hydrocarbon exploitation in Sub-Saharan Africa.
Exploration for oil and gas in Ivory Coast has been ongoing for
more than thirty years and several US and European oil companies are actively involved in the exploration and production activities in the country. Offshore oil reserves were first discovered
in the 1970’s and natural gas reserves in the 1980’s. The national oil company Petroci, was established in 1975.
Ivory Coast’s refining facilities are composed of the 65,000
bopd SIR refinery and an adjacent 10,000 bopd asphalt plant in
Abidjan. The refinery is connected to the Panther and Lion fields
via an oil pipeline, and also refines crude from Nigeria.
Svenska’s fields
Svenska has interests in two fields in Ivory Coast, 27.39% interests in the Baobab field and the Kossipo field. The Baobab field
is currently being developed and will commence production in
2005. The Ivory Coast fields represent approximately 67% of
Svenska’s total remaining recoverable reserves.
12
Baobab
In 1998 Block CI-40 was carved out from Block CI-26 as a separate exploration Block. Svenska had entered into a farm-in agreement in Block CI-26 with Addax in 1996 and thereby earned an
equity interest in Block CI-40 (originally 21%). Svenska later withdrew from CI-26, but kept its equity interest in Block CI-40. The
Block is now regulated by a Production Sharing Contract (PSC)
were CNR International (57.6%) is the operator, the State has a
10% carried interest and the other partners are Svenska (27.4%)
and Petroci (5%).
A Presidential Decree was issued in April 2003, which allowed the development to commence. Prior to the Decree, a Field
Development Plan (FDP) had been approved by the Director of
Hydrocarbons, and the Ministers of Energy and Finance respectively had signed an Exclusive Exploitation Authorisation (EEA)
for the acreage covering the Baobab field and the Kossipo discovery. The Environmental Impact Assessment (EIA) has also been
approved by the Government.
The Baobab field lies in the north-western part of Block CI-40
off the Ivorian coast south of the Espoir field in 1,500m water
depth. The field was discovered in 2001 by Well 1X drilled 8km
south of Espoir. Two drill stem tests produced a combined flow
rate of over 6,700 bopd of 22–23° API crude. One year later, a
second well on the southern part of the structure, Well 2X, produced more than 10,000 bopd on test. This result led to an upward revision of oil in place from 700 mmbo to 1 Billion barrels
of oil, of which more than 206 mmbo appears to be recoverable.
The Field Development Plan is a full scale, 600 million USD
development, based on two subsea production drill centres,
each facilitating six production wells, and two water injection
clusters tied back to a 2.4 mmbo storage FPSO moored in 900m
of water with tanker loading facilities. The FPSO will be supplied and operated by Modec International. Development drilling
commenced in the autumn of 2003 and first oil is targeted for
spring 2005. Oil production should start at 40,000 bopd, building to a peak of 60,000 bopd. This will be offloaded directly
from the FPSO, with gas exported to the Espoir FPSO through a
15.5km, 6 inch rigid flowline, to be installed in 2004.
Under the first development phase, the semi-submersible drilling rig Transocean Richardson is drilling eight producers and
three water injector wells. FMC Kongsberg is supplying the subsea trees, manifolds, flowlines and associated control equipment. Technip has been awarded the contract to supply and
install rigid pipelines, flexible risers and umbilicals in 2004 followed by installation of the water injection manifolds and other
subsea tie-ins early in 2005.
Kossipo
The Kossipo field is situated in 1200m deep water 8km southeast of Baobab. The discovery well, Kossipo-1X, reached TD
in April 2002. The well penetrated a limited oil column which
did not justify a drill stem test (DST). However, the well did penetrate nearly 1000ft of good sand reservoir. These sands are
expected to be in the oil zone on the western portion of the
structure and are thought to contain some 40 mmbo of recoverable oil.
The other parts of the Kossipo structure are being re-interpreted and could also contain substantial amounts of reserves.
From all initial indications, the Kossipo structure appears to have
sufficient reserves to warrant development via a sub-sea tie-back
to the Baobab facilities. The field has therefore been included in
the same EEA.
Prospect:
Baobab
Kossipo
Licence/block
Operator
Total reserves
Remaining reserves
Start of production
Obtained by Svenska
Cl–40
CNR
206 mmbo
206 mmbo
E2005
1998
27.39%
Cl–40
CNR
40 mmbo
40 mmbo
TBA
1998
27.39%
Exploration
Svenska has a 29% equity interest in the parts of Block CI-40
which excludes the Baobab Exploitation Area. The block still has
excellent exploration potential, and the 3rd exploration period
was therefore entered into on 8 September 2002 for a further
36 months with a 12 months optional extension.
A 320km2 3D seismic programme was acquired in early 2003
in conjunction with 3D seismic being shot by CNR in adjacent
blocks CI-400 and CI-26. An initial review of the data indicates
two interesting prospects; the Zaizou prospect located southwest of Baobab in 4,000ft of water and extending into CNR’s
block CI-400, and the Limblai prospect located due south of
Kossipo in 5,500 to 6,000 ft of water.
A considerable amount of geophysical and geological work
still need to be carried out on these two prospects to determine
if one or both warrant drilling during the final year of the licence
period.
Baobab
Kossipo
 = Development/exploration field
13
Norway
Norwegian portfolio rationalised –
Snøhvit and Huldra fields sold and new
exploration licence acquired
The overall petroleum production on the Norwegian Continental Shelf (NCS) is still increasing however with oil production
stagnating while gas is on the increase. In spite of low exploration drilling on the NCS during the year, 11 new discoveries were
made, 7 in the North Sea and 4 in the Norwegian Sea, together
replacing some 40% of the production. The oil companies in
Norway who have long complained about the lack of new exploration acreage got their prayers answered when in December the largest concession round since 1965 was announced, the
18th round, including 95 blocks. The award is planned for late
spring of 2004.
During 2003, some 30 new E&P licences were awarded, 11 in
connection with the North Sea 2002 round and 19 in connection with the Award in Pre-defined Areas in the North Sea and
on the Mid-Norway shelf.
One of the hottest topics during the past year was the opening of areas for exploration outside Lofoten islands and in the
Barents Sea. The Government decided in December 2003 that
the Barents Sea shall be opened up while the Lofoten area shall
still continue to be off-limits.
In December 2003 the development plan for Ormen Lange in
the Norwegian Sea was sent to authorities for approval. Ormen
Lange is the largest gas discovery on the NCS after Troll. Another
major event was the decision to build a new gas transport system to the UK.
Svenska’s fields
Svenska’s main producing assets in Norway, the Ula and Veslefrikk fields have produced well through the year. The Ula field
is the main contributor to the production in Norway as in the
overall portfolio of Svenska. With effective date 1 January 2004
Svenska sold its interest in the Snøhvit and Huldra fields to
Statoil. The company still holds a 15% interest in the Ula field
and a 4.5% interest in the Veslefrikk field and the adjacent
PL 276. The Norwegian fields represent approximately 49% of
the company’s total oil production and 22% of Svenska’s total
remaining reserves.
In the spring of 2003 the company entered into an agreement with Enterprise to acquire a 25% interest in exploration
block 30/11, 27 kms southwest of the Oseberg Syd field.
14
The commitment well will be drilled during the summer of 2004.
Depending on the success in the exploration well, additional
wells will be drilled in the years to come.
Ula
The 15% equity in the Ula field was acquired from Conoco in
1982. The reserves in the field have tripled since the PDO was
submitted in 1986, to present reserves of 499.3 mmbo.
The liquid production from Ula during 2003 was 7.3 mmbo,
1.1 mmbo for the account of Svenska. The average production
during the year was 20,000 bopd, of which 3,000 bopd was
Svenska’s share.
About 2/3 of the Ula production comes from the Unit 1 reservoir which will continue to be the prime reservoir for the future. One infill well was drilled during the year, A17A, located in
the south eastern part of the field. It was completed as an open
hole oil producer. Further infill wells are planned and alternative
drilling techniques and methods will be employed to access the
remaining reserves in the field. Gas has been injected since 1998
and for the time being four wells are used for injection of water
alternating with gas (WAG). A WAG effect is reported in one
well which shows a clear increase in oil production rate. A largescale WAG scheme is under evaluation for future implementation. The large scale WAG project will potentially add significant
reserves to the Ula field.
The possibility of developing the Triassic resources underlying
the producing Ula reservoir is under investigation. The Triassic
oil accumulation was first penetrated in 1976 by one of the first
wells drilled on the Ula field. In a later well the Triassic sandstones tested 2,350 bopd.
Veslefrikk
The interest in the Veslefrikk field was acquired in two tranches
during 1986/87. The reserves in the field have been significantly
upgraded from 229 mmbo at PDO time to present reserves of
345.8 mmbo.
In 2002 the company was awarded a 4.5 % interest in the
adjacent PL 276 licence, comprising the Mjød prospect. If drilled,
the Mjød prospect will be drilled from the Veslefrikk A platform.
The total oil production from Veslefrikk during 2003 was 10.8
mmbo, 0.5 mmbo for the account of Svenska.
The average daily production during 2003 was 29,600 bopd of
which Svenska had 1,300 bopd. The majority of the gas produced was re-injected in the reservoir to enhance the oil recovery.
Two new oil producers were drilled during the year, A-19A
and A-3B. A third well was initiated towards the end of the year.
A-19A was drilled as a slim hole TTRD (Through Tubing Rotary
Drilling) side-track from the mother well A-19. The primary objective of this new horizontal well was to drain reserves in the
low permeable and un-flooded Etive 3 reservoir and the well is
completed as a multilateral well producing from the new well
and the mother well. Well A-3 B was completed as a producer in
the upper clinoforms of the Oseberg Formation in the A- and Bsegments of the Veslefrikk field.
A 4D seismic project on the Veslefrikk field is underway. The
aim with the study is to identify areas of un-drained oil. Drilling
targets will be identified on the basis of the results of the 4D
study. Pre-stack depth migration of seismic 3D data covering the
Mjød prospect has been performed. Seismic interpretation is
underway and the evaluation of the Mjød prospect will be finalised in 2004.
The Veslefrikk Tail-End Production project has worked out a
proposal for a new operational model for the field. The effect
of the re-organisation which will be implemented in spring of
2004, will be a yearly reduction of operating costs in the order
of 150 MNOK.
Huldra
A small portion of the Huldra accumulation is located within
block 30/3 where Svenska has taken part in the exploration.
Veslefrikk
Ula
Following unitisation Svenska ended up with a 0.21 % equity in
the field. Production started late 2001, and the condensate is
sent to Veslefrikk for processing while the gas is piped to Heimdal. The processing at Heimdal host centre has been unstable
from the start, affecting the regularity of production at Huldra.
During the year the total gas production from the Huldra
field was 6.0% lower than prognosis while the condensate production was 27% lower than prognosis although the processing
regularity at the Heimdal host platform improved compared to
previous years. Svenska divested its interest in the Huldra field to
Statoil with effective date 1 January 2004.
Snøhvit
Svenska participated in the exploration drilling in the Albatross
licence in the middle of the 1980’s when gas reserves were proven. In the year of 2000 the Albatross discovery became part of
the Snøhvit Unit and the PDO was submitted for approval in the
fall of 2001. The final decision to go ahead with the project was
taken in the early summer of 2002. Late in 2002 it became evident that the project cost would rise with 5.8 billion NOK.
During 2003 the Snøhvit Unit LNG project went ahead with
full speed. The site construction at Melkøya peaked, as it did
with the detailed engineering at Linde, however with delays.
The barge topsides fabrication at Dragados yard in Spain was
also very intense. Severe problems with keeping the schedule
with the topsides at Dragados were experienced from the late
autumn of 2003.
Svenska divested the 1.24% interest in the Snøhvit Unit to
Statoil with effective date 1 January 2004.
Field:
Ula
Veslefrikk
Licence/block
Operator
Total reserves
Remaining reserves
Production 2003
Start of production
Obtained by Svenska
Block 7/12
BP
499.3 mmbo oil, 34.1 mmbngl
1986
1982
15%
Block 30/3 and 30/6
Statoil
345.8 mmbo, 255 bcf gas
72.2 mmbo, 116.5 bcf gas
10.8 mmbo, 0.07 bcf gas
1989
1986/87
4.5%
15
United
Kingdom
Stable production and
exiting exploration
Despite ten new field development approvals in 2003, forecasts
for near term oil and gas production from the UK Continental
Shelf (UKCS) continued to slip. Although the North Sea remains
a world class basin, production for the year was just over 4 million barrels of equivalent per day of oil and gas, only 2% below
2002 production levels. The industry continues to invest and
capital expenditure in 2003 was estimated to £3.4 billion. Operating costs remain fairly constant, but as a consequence of a
declining production profile the unit operating costs per barrel
increased by more than 10% in 2003 (to £3.00 per barrel), a
trend which will continue unless there is an increase in the current rate of developments in the North Sea.
Drilling activities in the UKCS was much lower in 2003 than
in recent years with only 40 exploration and appraisal wells drilled which is 10% down on 2002. Development wells show an
even bigger decline with only 200 wells projected in 2003 compared with 249 in 2002.
Svenska’s fields
Svenska has interests in two producing fields on the UK continental shelf, 1.66% interest in the Nelson Field and 6.45% interest in the Janice Field. The fields commenced production in
1994 and 1999 respectively and account for approximately 22%
of the company’s oil production. Svenska also held a 9.8% interest in Block 20/2a which contains part of the Ettrick field. The
UK fields represent approximately 6% of Svenska’s total remaining recoverable reserves.
Nelson
Svenska obtained its interest in Nelson by purchase of BP’s interest in Block 22/12a jointly with Neste in 1991. After unitisation in 1993 this interest represented 1.31% of the Nelson field.
In 1997 Svenska purchased Total’s 46.5% interest in the Nelson
Sub-Area of Block 22/7, equivalent to 0.35% of the Nelson field.
Thus Svenska holds a 1.66% in the field today.
16
Nelson was operated by Enterprise from 1994 to 2002 when
Shell acquired Enterprise. The field reached peak production in
1996 at a rate of 180,000 bopd which is now down to an average 67,000 bopd for 2003. The aggregate production from
Nelson in 2003 was 24.3 mmbo, 0.4 mmbo for the account
of Svenska.
Following the successful completion of the Phase III drilling
campaign in 2002, the deterministic simulation model was revised to integrate the results in 2003. Subsequently the total
STOIIP for the model is now 784 mmbo and the recoverable
reserves have been increased to 486 mmbo.
The Phase IV drilling campaign, incorporating the new 3D
which was interpreted during 2003 to better identify oil migration through the reservoir, has been postponed to 2005 to allow
more time to incorporate technical and engineering work to
identify prospects and optimize well engineering work for the
Phase IV drilling campaign.
At the end of 2003 the Nelson field was producing from 28
wells with 4 wells providing pressure support.
Janice
In 1995 Svenska swapped its 15% interest in Block 22/2a
(Chestnut) for British Gas’ 6.45% interest in Block 30/17a
(Janice). Kerr-McGee had entered into an “earn-in” agreement
with Phillips and Agip committing them to drill 3 appraisal wells
in the Janice structure. This led to the development of the Janice
field, which commenced production in 1999 and reached peak
production of over 60,000 bopd the same year.
The aggregate production from the field in 2003 was 4.2
mmbo, reflecting an average daily production of just over
11,600 bopd. Svenska’s share of the production from Janice
during 2003 was 280,000 barrels.
An infill well, Well J9, was drilled in 2003 and subsequently
sidetracked to a deeper location, in order to intersect better
quality sand. The sidetrack (J9y) encountered a full section of
good quality Upper Fulmar and initially produced 3,000 bopd.
At year end this well was adding approximately 2,400 bopd to
the Janice production. Water injection in Janice has reached the
level of voidage replacement resulting in a slower rate of water
cut increase for the field than previously predicted and hence increasing the amount of recoverable oil reserves.
The revised Life of Field forecast was presented in October
2003 and confirmed the recoverable reserves to be 66.1 mmbo
with remaining reserves from the start of 2004 of 24.7 mmbo.
Exploration Potential in Block 30/17A
The Janice Block exploration well 30/17a-15 on the James prospect was spudded on the 22nd January. The well encountered
a pay thickness of 179 ft with high porosity, excellent quality
Fulmar oil bearing sands and an Oil/Water Contact (OWC).
However, the well was 100 ft high to prognosis due to inaccuracies in the Layer Cake depth conversion over the area. The
well was sidetracked to the West in order to determine the lateral extent of the prospect but the sidetrack Well 30/17a–15z
found less than 1 ft of pay with the same OWC.
The present estimate is for a STOIIP of 21–23 mmbo and
reserves of 5–8 mmbo, however further work is required to establish the commerciality of the prospect and the viability of a
tie back to the Janice facilities.
Ettrick
The Ettrick field was first discovered in 1981. Several appraisal
wells were drilled in 1982-85, four of which produced hydrocarbon to the surface. In November 2003, EnCana became the
new operator when it acquired Shell’s interest in blocks 20/2a
and 20/3a.
In line with the work in the exploration part of block 20/2a,
EnCana will re-process and re-interpret the total data set in an
effort to reduce the uncertainties on the reserve estimates of
the field. Concerning any development plan, obviously a development involving a tie-back to the Buzzard Field would be the
best option but EnCana acknowledged that this would not be
possible before 2009. As a result Svenska negotiated a deal with
EnCana to divest its interest in Block 20/2a which contains part
of the Ettrick field. A Sales and Purchase Agreement was signed
in December 2003.
Field:
Nelson
Janice
License/block
22/6a, 22/7 (Nel),
22/11 and 22/12a(Nel)
Shell
486 mmbo
103.4 mmbo
24.3 mmbo
1994
1991
1.66%
Block 30/17a
Operator
Total reserves
Remaining reserves
Production 2003
Start of production
Obtained by Svenska
Kerr-McGee
66.1 mmbo
24.7 mmbo
4.2 mmbo
1999
1995
6.45%
Nelson
Janice
17
Summary of Fields
Svenska’s share of remaining reserves (proven and probable)
Svenska’s
equity interest
Oil
(mmbbls)
6.25%
6.25%
2.8
1.2
2.8
1.2
Lithuania
Genciai
50.00%
0.6
0.6
Norway
Ula
Veslefrikk
Huldra*
15.00%
4.50%
0.21%
13.8
3.2
0.0
1.66%
6.45%
1.7
1.6
1.7
1.6
27.39%
56.4
56.4
1.24%
1.4
Field
Gas
(bcf)
NGL
(mmbbls)
Total
(mmboe)
Producing
Angola
Cobo/Pambi
Oombo
UK
Nelson
Janice
0.5
1.8
0.5
14.1
3.5
0.01
Under development
Ivory Coast
Baobab
Norway
Snøhvit*
84.5
0.7
16.9
Under consideration
Ivory Coast
Kossipo
UK
Ettrick*
Latvia/Sweden
East Baltic Sea
Norway
Mjød
Total
27,39%
7.35%
2.1
2.1
90–100%
4.50%
86.0
85.3
1.2
100.9
* The sale of these assets was finalised after 2003–12–31.
Proven reserves | The amount which geophysical and engineering data indicate to be in place or recoverable to a high degree of
certainty. For the purpose of this definition, there is a 90 percent chance that the actual quantity will be more than the amount estimated as “Proven” and a 10 percent chance it will be less.
Probable reserves | The amount which geophysical and engineering data indicate to be in place or recoverable but with a greater
element of risk than in “Proven”. For the purpose of this definition, there is a 50 percent chance that the actual quantity will be
more than the amount estimated as “Proven and probable” and a 50 percent chance it will be less.
18
Translated from the Swedish Annual Report
Report of the Board of Directors
Petroswede AB
Corporate identity number: 556199–7320
The Board of Directors of PETROSWEDE AB hereby submit their annual report and the
consolidated accounts for the financial year 2003. All amounts are in SEK thousands if
nothing else is stated.
Group organisation
Petroswede AB became 30 December 1996 parent company in a group through acquisition of Svenska Petroleum
Exploration AB (SPE AB) including following operating subsidiaries: Svenska Petroleum Exploration AS (SPE AS) in Norway,
Svenska Petroleum Exploration U.K. Ltd (SPE UK) in Great Britain, Oljeprospektering AB (OPAB) in Sweden, Petroswede
Insurance Company Ltd in Ireland and the dormant company Petroswede U.K. Great Britain. The Group’s share of a joint
venture is included in the Group, Genciu Nafta, Lithuania.
Petroswede’s operations
Petroswede is engaged in exploration for and production of oil and gas and related activities. The sales of oil and gas are
mainly to partners within the licences held by Petroswede.
Result and balance
The production of oil has decreased from 3.6 to 3.1 million barrels. The Group’s net sales amounted to 811 SEK million
(873 SEK million). The decrease in sales was related to a lower production during 2003. The crude oil price (the mean
of Platt’s Dated Brent) for 2003 was 28.8 USD/bbl compared to 24.6 USD/bbl in 2002. The consolidated Group’s net
income for 2003 was 96.3 SEK million (–13.7 SEK million). The parent company’s net income was –0.1 SEK million (198
SEK million). Present impairment valuations resulted in a write down of Ula (17 SEK million), Huldra (3 SEK million) and
Snøhvit (44 SEK million). At the same time it was decided to reinstate the value of Janice (31 SEK million). The net of
these transactions are –33 SEK million. In January 2004 an agreement was made with Statoil regarding sale of Huldra and
Snøhvit. This agreement needs the government permission. Petroswede makes no long-term conclusions from the recent
oil-prices (29.38 USD/bbl Jan 2004).
During 2003 the work with the development of the Baobab field in Ivory Coast has been intensified. The field Baobab is
estimated to have 200 mmbo of recoverable reserves (54 Mbo is Petroswede’s share). Production is planned to commence
late 2005.
Petroswede is currently discussing a finance solution with the owner to fully finance the development of the Baobab field in
Ivory Coast.
Petroswede is currently evaluating several projects aimed to add recoverable reserves.
Ownership of the parent company
Petroswede is wholly owned by Moroncha Holdings Ltd, Cyprus.
Proposed appropriation of profits
The following profits are at the disposition for the general meeting:
Retained profits
Net income for the year
849,876,965 SEK
–75,000 SEK
849,801,965 SEK
The Board of Directors propose unrestricted equity to be distributed the following way:
Brought forward
849,801,965 SEK
The Group’s unrestricted equity capital according to the Balance Sheet amounts to 1,008,933 SEK thousands.
19
Statement of Income
Group
(SEK thousand)
Net turnover
Stock variation
Other operating income
Note
2003
2002
1
811,213
–15,911
8,899
873,030
23,190
5,584
804,201
901,804
–399,692
–25,964
–19,343
–140,513
–33,386
–9,493
–415,661
–37,728
–24,424
–162,735
–23,604
–12,985
175,810
224,667
2
Total operating turnover
Operating expenses
Operational- and exploration costs
Other external costs
Personnel costs
Depreciation
Write-downs
Other operating expenses
3
4, 5, 6
7
7
8
Operating income
Income from financial investments
Anticipated dividend
Income from participations in group companies
Income from other securities and receivables
accounted for as fixed assets
Interest income and similar profit/loss items
Interest expense and similar profit/loss items
Net profit/loss for the year
20
2003
2002
–75
–28
–75
–28
–
–
84,700
113,500
10
Total income from financial investments
Profit/loss after financial items
Tax on profit for the year
Parent Company
11
854
3,469
–28,728
–13,556
18,298
–52,711
–24,405
–47,969
–
198,200
151,405
–55,102
176,698
–190,453
–75
–
198,172
96,303
–13,755
–75
198,172
Cash Flow Statement
Group
(SEK thousand)
Note
Parent Company
2003
2002
2003
2002
151,405
176,698
–75
198,172
151,868
230,793
–
–
Taxes paid
303,273
–116,610
407,491
–137,154
–75
–
198,172
–
Cash flow from the continuous operation
before changes in working capital
186,663
270,337
–75
198,172
Cash flow from changes in working capital
Decrease(+)/increase(–) in inventories
Decrease(+)/increase(–) in current receivables
Decrease(–)/increase(+) in current liabilities
4,707
16,511
–4,469
–1,584
–51,869
23,061
–
84,700
75
–
–84,675
3
Cash flow from changes in working capital
203, 412
239,945
84,700
113,500
Investments operation
Acquired intangible fixed assets
Acquired tangible fixed assets
Acquired financial assets
Disposal financial assets
–
–396,028
–868
14,886
–165,717
–152,540
–11,090
–
Cash flow from investment operation
–382,010
–329,347
0
0
Financing operation
Raising of loan
Dividend
70
–84,700
107
–113,500
–84,700
–113,500
Cash flow from the financing operation
–84,630
–113,393
–84,700
–113,500
–263,228
–202,795
0
0
408,411
–2,802
142,381
608,663
2,543
408,411
0
0
0
0
Indirect method
Continuous operations
Profit/loss after financial items
Adjustments for non cash items
25
Cash flow of the year
Liquid fund at the beginning of the year
Exchange rate difference in liquid assets
Liquid funds at the end of the year
26
21
Balance Sheet
Group
(SEK thousand)
Note
2003
2002
ASSETS
Intangible assets
Capitalised exploration costs
12
4,378
252,520
Tangible assets
Production facilities
Production rights
Construction in progress
Machinery and equipment
13
14
15
16
621,190
119,909
488,208
1,250
602,623
104,244
30,994
1,848
5,531
3,546
26,683
778
6,710
20,585
40,867
516
1,271,473
1,060,907
3,172
8,270
36,792
58,560
10
1,428
52,297
10,777
Financial assets
Participations in group companies
Receivables from joint venture
Participation in other companies
Deferred taxes recoverable
Other long-term receivables
2003
2002
850,000
850,000
850,000
850,000
–
84,700
17
22
Total fixed assets
Inventories
Current receivables
Accounts receivable
Receivables from group companies
Receivables from associated companies
Prepaid tax
Other receivables
Prepaid expenses and accrued income
19
20
103
1,249
45,650
6,229
Investments
26
61,121
285,972
Cash and bank balances
26
81,260
122,439
235,576
539,753
–
84,700
1,507,049
1,600,660
850,000
934,700
Total current assets
TOTAL ASSETS
22
Parent Company
Group
(SEK thousand)
Note
Parent Company
2003
2002
2003
2002
EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital
Restricted reserves
100
22,229
100
58,136
100
20
100
20
Total restricted equity
22,329
58,236
120
120
912,630
96,303
1,071,109
–13,755
849,877
–75
736,405
198,172
Total unresticted equity
1,008,933
1,057,354
849,802
934,577
Total equity
1,031,262
1,115,590
849,922
934,697
2,333
242,710
2,183
68,446
149,453
4,417
247,226
222,316
Long-term liabilities
Other liabilities
873
883
Total long-term liabilities
873
883
22,880
58,338
58,990
87,480
22,974
72,389
74,847
91,661
78
3
227,688
261,871
78
3
1,507,049
1,600,660
850,000
934,700
non
non
non
non
non
non
non
non
Unrestricted equity
Profit or loss brought forward
Profit/loss for the year
Provisions
Deferred taxes payable
Provisions for abandonment costs
Other provisions
22
21
Total provisions
Current liabilities
Accounts payable
Income tax liability
Other liabilities
Accrued expenses and deferred income
23
20
Total current liabilities
TOTAL EQUITY AND LIABILITIES
MEMORANDUM ITEMS
Pledged assets
Contingent liabilities
24
23
Change of Shareholders’ Equity
Change of Shareholders’ equity for the Group
Share
capital
Restricted
reserves
Unrestricted
reserves
Closing balance December 31, 2001
Effect of change in accounting principle
100
22,356
47,095
1,183,575
19,391
Adjusted closing balance December 31, 2001
100
69,451
1,202,966
–11,315
–113,500
–18,357
–13,755
58,136
1,057,354
(SEK thousand)
Dividend
Translation difference foreign currency
Net profit/loss
100
Dividend
Transfer from Unrestricted to Restricted reserves
Net profit/loss
–36,499
–84,700
–592
96,303
–59,432
22,229
1,008,933
592
100
Restricted reserves
Restricted reserves are not allowed decreasing through dividend according to law and other restrictions.
Unrestricted equity
The Group’s unrestricted equity consists of unrestricted equity in the parent company with addition of the group share in the
subsidiary’s unrestricted equity. The dividend can be paid if the parent company does not need to write down the shares in
the subsidiaries. Allowance has been made with impact of the unrestricted equity of the eliminated internal profit and possible differences in the accounting principles.
24
Specification of the year exchange rate difference in equity
(SEK thousand)
2003
2002
This year exchange rate in foreign subsidiaries
–95,931
–29,672
The period exchange rate
–95,931
–29,672
Specification of accumulated exchange rate in equity:
Accumulated exchange rate beginning of year
This years exchange rate in foreign subsidiaries
159,487
–95,931
189,159
–29,672
63,556
159,487
Share
capital
Unrestricted
reserves
Equity December 31, 2001
Dividend
Net profit/loss
100
20
Dividend
Net profit/loss
100
20
100
20
Accumulated exchange rate at end of year
Change of Shareholders’ equity for the
parent company
(SEK thousand)
Restricted reserves
Swedish law demands restricted reserves. The purpose is to save the part of the net profit that is not used to cover accumulated losses.
Unrestricted equity
Unrestricted equity consists of previous years unrestricted equity with addition of this years result, and with deduction
for dividend.
Numbers of shares
Numbers of shares are 1,000 and consists class A shares. The shares are fully paid and the number of shares
are the same at the beginning as at the end of the year.
25
Supplementary Disclosure
Amounts are in SEK thousands unless otherwise specified.
The group accounts of Petroswede have been prepared
in accordance with the Swedish Annual Accounts Act and
the recommendations of the Swedish Financial Accounting
Standards Council (SFASC).
The company domicile
Petroswede AB is a limited liability company, organised
under the laws of Sweden, with the head office in Stockholm.
Segmental reporting
The primary classification of division in the group segmental reporting is the geographical area. The group internal
reporting system is build up by the thought of following
up the income of the group’s operations in the different
countries or different geographical area, where the geographical area is the primary classification of division.
Classification etc
Fixed assets, long term liabilities and provisions comprise
mostly of amounts that are expected to be recovered or
paid after more than twelve month from closing day. Current assets and short term liabilities comprise mostly of
amounts that are expected to be recovered or paid after
more than twelve months from closing day.
Valuation principles etc
Intangible assets
The group adopts the successful efforts method of capitalisation for exploration costs. This method means that all
exploration costs per field are initially capitalized as intangible fixed assets as appropriate pending determination
of commercial reserves. Directly attributed administration
costs and interest payable are capitalised insofar as they
can be related to specific exploration and development activities. If an exploratory well is in progress at the end of an
accounting period and the well is determined not to have
found proved reserves before the financial statements for
the period are issued, the capitalized costs are written off.
Following the discovery of a commercially viable field, the
intangible fixed assets are reclassified to tangible fixed assets, by field, as production rights (product sharing agreements) or production facilities.
Tangible assets
Capitalized costs in the unit of production calculation comprise the net book value of exploration costs, the estimated
future field development costs plus the net present value
of estimated abandonment costs (see below). Capitalised
costs are depreciated from the beginning of the production. The depreciation is calculated according to the unit of
production method, which is based on the year’s production and its relation to proved and probable reserves of oil.
26
Machinery and equipment (excluding computer equipment)
is depreciated over 5 years. Computer equipment is depreciated over 3 years.
Impairment of value
Where there has been a change in economic conditions
that indicate a possible impairment of value in a discovery
field, the recoverability of the net book value relating to
that field, is assessed by comparison with the estimated discounted future net cash flows. The calculation is based on
management’s expectations of future oil and gas prices and
future costs. If the book value exceeds the discount value of
the cash flow, an impairment of value is made. If the book
value is lower than the discount value of the cash flow, the
impairment of value is reverse.
Abandonment costs
At the end of the producing life of a field, costs are incurred in removing and abandoning the production facilities.
The group recognizes the full discounted estimated costs of
abandonment as a provision and a fixed asset (see above)
when the obligation to rectify environmental damage arises. The unwinding of the discount is included within finance costs.
Inventories
According to Swedish Financial Accounting Standards Council (SFASC) no 2:02 the inventories are reported at the lower
of production cost or net realizable value. The production
cost includes operating expenses, depreciation and fixed
transportation costs.
Over lift and under lift
Lifting or off take arrangements for oil produced in jointly
owned operations are frequently such that it is not practicable for each participant to receive or sell its precise share
of the overall production during the period. Any imbalance
between cumulative production entitlement and cumulative sales attributable to each participant represents over lift
or under lift. If sales have exceeded production a liability to
the operator (over lift) is recorded at market price at the balance sheet date. When sales are below production, a receivable from the operator (under lift) is recorded at the lower
of cost or net realizable value.
Receivables
Receivables are reported at the amount expected to be collected based on individual assessment of collectibles.
Receivables and liabilities in foreign currency
Receivables and liabilities denominated in foreign currency
are stated in accordance with Standard no 8 of the Swedish
Financial Accounting Standards Council at the exchange rate
ruling at the balance sheet date, except that non-current
monetary receivables from foreign entities are stated at the
historical rate of exchange.
Exchange rate differences on current receivables and liabilities are reported in operating profit or loss while differences on financial receivables and liabilities are reported with
financial items.
Employee benefits
The Group operates a number of defined benefit and
contribution pension plans for the employees. In Sweden
the pension plans for the employees are based on employees’ income, but the pension plan for the CEO is a defined contribution plan. Pension solutions outside Sweden
are made according to local rules and praxis. The pension
plans for the subsidiary in United Kingdom are based on a
defined contribution plan.
The Swedish Financial Accounting Standards Council
recommendation no 29 “Compensations to the employees” are in use from 2004. According to this recommendation the pension plan must be classified either as a defined
benefit plan or defined contribution plan. This recommendation has no material effect on the Group’s income
statement or balance sheet.
Financial receivables and liabilities
The group financial receivables and liabilities are mostly in
short terms, and theirs book value assumed to be the same
as the marked value. The market value of the put option is
2,6 MSEK (8,7) compare to the book value of 4,6 MSEK
(8,7).
change risk for the Group. The Group policy is that all funding and investment is in USD.
Interest rate risk
The Group interest’s rate risk management policy is to
synchronise the cost of capital with the financed assets expected economic life.
Commodity Risk
Historically the oil prices have fluctuated. The Group earnings are exposed to oil price fluctuation. To handle the
supply risk the Group has bought put options estimated to
a quarter of the year productions for 2004.
Revenue recognition
Sales revenues from the production of oil properties in
which Petroswede has interests with other companies are
recognized, on the basis of sales, and when the major risks
and benefits are passed on to the customers.
Leasing
All leasing costs are expensed over the duration period
based on the usage, according to regulations for operational leasing.
Provision and liabilities
Liabilities have, unless otherwise stated, been included at
acquisition values with provision for accrued costs. Provisions have been made to cover known or expected risks
after individual consideration.
Financial Risk Management
The Group operate internationally and is thus exposed to
currency risk arising. The Group management have the responsibility to handle this according to the policy made
by the board. The Groups overall target is to handle those
risks in a cost effective way, and to minimize the effect in
the Group income. The main exposures for the Petroswede
group are funding risk, interest rate risk, foreign exchange
risk and supply risk.
Funding risk
Funding risk arises from the difficulty of obtaining finance
for operations at a given point in time. The group management negotiates with the Group’s owner regarding funding
of the construction in progress for the oil field Baobab in
Ivory Coast.
Foreign Exchange Risk
The Group operates internationally and is therefore exposed to currency risk arising from the exchange rate fluctuation. Transaction risk, being foreign currency-denominated
sales and purchases, translation risk being net investment
in foreign subsidiaries, comprises the foreign currency ex-
27
Supplementary Disclosure (continued)
Taxes
The Company applies Swedish Financial Accounting Standards Council’s Standard RR 9, Income taxes. Income tax
expense comprises current and deferred tax. Income tax
is recognized in the Income Statement except to the extent that it relates to items credited or charged directly to
equity. Current tax (earlier referred to as taxes paid) is the
expected tax payable on the taxable income for the year
and any adjustment to tax in respect of previous years. Deferred tax is provided using the liability method, based on
temporary differences between the carrying amounts of
assets and liabilities and their tax bases. The amount of deferred tax provided is based on the expected manner of realization and settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantially enacted at the balance sheet date.
No deferred tax is recognized for temporary differences relating to goodwill on consolidation, or for temporary
differences relating to investments in subsidiaries and associated companies if it is probable that the temporary difference will not reverse in the foreseeable future. Untaxed
reserves are reported inclusive of the deferred tax portion
in the Balance Sheet in single company accounts, but are
reported in their deferred tax and equity portions in the
consolidated accounts.
Deferred tax assets relating to deductible temporary difference and loss carry forwards are recognized only to the
extent that it is probable that future taxable profits will be
available.
Events after the Balance Sheet Date
In January 2004 an agreement was sign between the Group
and Statoil concerning the sale of Huldra and Snøhvit. This
agreement needs the government permission.
Basis of Consolidation
The consolidated financial statements have been prepared
in accordance with Standard No RR 1:00 of the Swedish
Financial Accounting Standard Council. The consolidation
financial statements include all companies in which the parent company owns, directly or indirectly, more than 50
percent of the votes. The consolidated financial statements
have been prepared in accordance with the purchase method whereby assets and liabilities of acquired companies
are reported at fair value at the time of acquisition.
Information regarding the parent company
The parent company is Moroncha Holdings Ltd (Cyprus).
Joint ventures
The investment in the jointly controlled company Genciu
Nafta is reported by using the proportionate consolidation
method. Accordingly, the joint venture is included in group
accounts as if is was a subsidiary except that only the
group’s share of income and expenses, and of assets and
liabilities, are shown in the consolidated income statement
and balance sheet. This method is applied in order to give
a true and fair view of the effects of the investment.
28
Application of SFASC standard
The following standards from SFASC recommendations are
in use from 1st of January 2003:
· RR 2:02 Inventory
· RR 22 Presentation of Financial Statements
· RR 24 Investment property
· RR 25 Segmental reporting
· RR 26 Events after the Balance Sheet Date
· RR 27 Financial Instruments: Disclosure and Presentation
· RR 28 Government support
These recommendations have no effect on the income
or the balance sheet of the group, but have been taken
into consideration.
Deviations from basic principles, guidelines and standards from standard-setting bodies
The exceptions to the use of SFASC standards involves accounting of decommissioning costs, where the group’s financial statements have been prepared in accordance with
the provisions of the SORP, “Accounting for Oil and Gas Exploration, Production and Decommissioning Activities”, issued by the Oil Industry Accounting Committee. This has
not effect income.
Transaction with associated companies
With fellow companies
The company buys services at market prices and has a financial agreement giving the company the right to invest its short term liquidity to market prices with the fellow
company Preem Petroleum AB (reg. no. 556072–6977) domiciled in Stockholm. 31st December 2003 the invested
amount was 61 SEK millions (286 SEK millions at the end of
2002) see note 26.
Individual Items
Note 1
Information geographical areas
(SEK thousand)(Primary segment)
Net turnover
············ Group ··········
2003
2002
UK
Norway
Lithuania
Angola
177,489
420,143
53,693
159,888
187,390
426,127
49,104
210,409
Total
811,213
873,030
Operating income
············ Group ··········
2003
2002
UK
Norway
Lithuania
Angola
Other/consolidation adjustments
130,312
59,271
21,440
23,928
–59,141
–15,116
238,242
19,231
68,107
–85,797
Total
175,810
224,667
Depreciations & write downs
············ Group ··········
2003
2002
UK
Norway
Lithuania
Angola
–10,300
148,613
3,012
31,806
768
139,976
6,982
164
38,345
872
Total
173,899
186,339
Assets
UK
Norway
Lithuania
Angola
Ivory Coast
Total
············ Group ··········
2003
2002
571,574
517,379
82,573
93,512
402,768
–160,757
581,253
648,927
90,248
59,276
165,717
55,239
1,507,049
1,600,660
Capex
············ Group ··········
2003
2002
UK
Norway
Lithuania
Angola
Ivory Coast
24,069
182,366
296
43,164
145,937
195
34,753
112,553
533
23,404
165,717
669
Total
396,027
337,629
Liabilities & Provisions
············ Group ··········
2003
2002
UK
Norway
Lithuania
Angola
63,521
248,788
14,844
32,451
116,183
49,213
355,999
15,488
28,911
35,459
Total
475,787
485,070
The primary classification in geographical areas is based on
location of the groups assets.
Note 2
Other operating income
············ Group ··········
2003
2002
Exchange rate gains
8,899
5,584
Total
8,899
5,584
Note 3
Operational- and exploration costs
Operational- and exploration costs include administrative
costs. Operational and administrative expenses are reported
as one item.
············ Group ··········
2003
2002
Royalties
Transportation expenses
Operating expenses
Exploration and project expenses
–73,935
–38,786
–256,368
–30,603
–119,336
–45,275
–181,223
–69,827
Total
–399,692
–415,661
29
Individual Items (continued)
Note 4
Average number of employees
2003
Of whom men
2002
Of whom men
–
–
–
–
Subsidiary
Sweden
England
Norway
Ireland
12
6
–
–
9
4
–
–
10
6
–
–
7
4
–
–
Group total
18
13
16
11
Joint venture
Genciu Nafta*)
30
25
31
25
Parent company
*)
The group share is 50%. 100% of Genciu Nafta is shown
Note 5
Division of gender in management
(of whom women)
················ Group ················
2003
2002
Parent company
Board
Other directors
0%
0%
0%
0%
Subsidiaries
Sweden
UK
0%
0%
0%
0%
Group total
0%
0%
Note 6
Personnel costs, pension costs, fee to auditors
and other (SEK thousand)
Payroll and other costs
Parent company
······················· ···2002·······················
Board of
Other
directors, MD
employees
–
–
–
–
Subsidiary
Sweden
Bonus
England
Bonus
2,670
1,228
2,657
37
4,519
179
2,150
55
3,185
1,548
2,787
36
3,829
153
2,208
57
Total Subsidiary
6,592
6,903
7,556
6,247
Joint venture
Lithuania
Bonus
176
31
532
180
219
21
534
229
Total Joint venture
207
712
240
763
6,799
7,615
7,796
7,010
Group total
30
··························2003·······················
Board of
Other
directors, MD
employees
Payroll overhead
··························2003·······················
Board of
Other
directors, MD
employees
······················· ···2002·······················
Board of
Other
directors, MD
employees
Parent company
–
–
–
–
Total Parent company
–
–
–
–
Subsidiary
Payroll overhead
Pension costs
1,497
32
1,534
767
1,482
3,241
2,504
1,190
Total Subsidiary
1,529
2,301
4,723
3,694
Joint venture
Payroll overhead
65
107
74
238
Total Joint venture
65
107
74
238
1,594
2,408
4,797
3,932
Other personnel costs
Parent company
Subsidiary
Joint venture
–
337
2
–
1,060
–
–
47
2
–
799
426
Group total
339
1,060
49
1,225
8,732
11,083
12,642
12,167
–
–472
–
–385
8,732
10,611
12,642
11,782
Group total
Total Personnel costs
Dissolvement of KP–funds
Personnel costs
SPE AB and the President have a formal agreement to a period of notice of 24 months from the company’s side.
The President in SPE AB is entitled on his own initiative and is obligated on the company’s initiative to retire at the age of 60.
Fee to auditors during the year
2003
2002
KPMG
Auditing assignment
Other assignments
375
742
604
484
Ernst&Young
Auditing assignment
Other assignments
60
17
60
5
Other auditors
Auditing assignment
17
10
1,211
1,163
Total
31
Note 7
Note 9 cont.
Depreciations and write-downs on exploration costs,
production facilities, production rights, construction
in progress, machinery and equipment.
(SEK thousand)
············ Group ··········
Depreciations
2003
2002
The total of future minimum lease payments under noncancellable operating leases for each of the following
periods:
One year
713
713
Two to five years
713
713
After five years
–
–
Ula
Veslefrikk
Huldra
Nelson
Janice
Genciai
Total
56,052
28,182
–
18,005
2,688
3,012
46,073
28,780
3
13,455
35,043
164
Production rights
Cobo/Pambi
Oombo
25,054
6,752
30,806
7,539
768
872
Total depreciations
140,513
162,735
Reinstatements
Ula
Nelson
Janice
–
–
–30,993
–103,846
–20,692
–
1,426
Note 10
Result from financial investments
(SEK thousand)
············ Group ··········
2003
2002
Result from participations in
other companies
Write-down
Dividend
Result divestments of shares
Total
Other interest income and similar
profit/loss items
Exchange gain
Other interest income
–3,020
3,147
727
–15,143
1,587
–
854
–13,556
–2,940
6,409
7,726
10,572
3,469
18,298
Write-downs
Ula
Veslefrikk
Huldra
Janice
Snøhvit
17,146
–
3,558
–
43,675
–
28 046
7 926
112 170
–
Total write–downs and
reinstatements
Interest expense and similar
profit/loss items
Exchange loss
Other interest expense
Unwind of discount
Other finance expense
–2,254
–3,592
–21,307
–1,575
–33,175
–499
–10,252
–8,785
33,386
23,604
Total
–28,728
–52,7110
Total
Note 8
Other operating expenses
(SEK thousand)
············ Group ··········
2003
2002
Exchange rate losses
9,493
12,985
Total
9,493
12,985
Note 9
Operating lease (SEK thousand)
············ Group ··········
2003
2002
32
1,426
Minimum lease payments
Contingent rents
820
13
819
13
Total leasing payments
833
832
Note 13
Note 11
Production facilities (SEK thousand)
Tax on profit for the year (SEK thousand)
Specification of tax expense
Tax expense for the period
–113,427
–133,301
Currents tax expense
–113,427
–133,301
Deferred taxes relating to
temporary differences
58,325
–58,829
Deferred tax income/expense
58,325
–58,829
–
1 677
–55,102
–190,453
Tax related to participation
in joint ventures
Total tax expense for the Group
Reconciliation of effective
tax rate
2003
2002
Profit before taxes
151,405
176,699
Tax at the domestic rate of 28%
Adjustment prior years
Permanent differences
Deferred tax from change in
temporary differences
Expected petroleum tax
Effect of uplift
Other items
Effect of different tax rates in
foreign jurisdictions
–42,393
–15,465
–25,077
–49,476
965
–8,608
43,130
–23,375
15,194
1,470
–62,402
–63,242
5,340
–16,365
–8,586
3,335
Tax expense
–55,102
–190,453
Note 12
(SEK thousand)
Open balance acquisition value
Purchase
Reclassification Ivory Coast to
············ Group ··········
2003
2002
252,520
150,301
86,803
165,717
–398,443
–
4,378
252,520
Open balance depreciation
Depreciation this year
–
–
–
–
Closing balance accumulated
depreciation
–
–
Closing balance residual value
4,378
252,520
Ivory Coast
Janice
–
4,378
252,520
Total
4,378
252,520
acquisition value
············ Group ··········
2003
2002
············ Group ··········
2003
2002
Purchase
Sales/disposal
Translation diff. foreign currency
Reclassification of Huldra from
construction in progress
Reclassification of Genciai from
construction in progress
Abandonment asset
acquisition value
Open balance depreciations
Translation difference foreign
currency
Depreciations this year
Disposal
Abandonment depreciation
4,363,570
97,234
–
–538,121
4,151,459
118,223
–
70,692
–
16,310
574
92,778
–
6,886
4,016,035
4,363,570
–3,344,107 –3,137,499
465,316
–85,703
–1,667
–22,132
depreciation
–79,650
–117,102
3,610
–13,466
–2,988,293 –3,344,107
Open balance write-downs
Write-downs this year
Reinstatements
–416,840
–20,705
30,993
–393,236
–148,142
124,538
write-downs
–406,552
–416,840
621,190
602 623
Ula
Veslefrikk
Huldra
Nelson
Janice
Genciai
409,280
54,781
4,326
90,846
61,700
257
400,665
57,113
8,947
119,973
11,463
4,462
Total
621,190
602,623
33
Note 16
Note 14
Production rights (SEK thousand)
············ Group ··········
2003
2002
(SEK thousand)
············Group ··········
2003
2002
Purchase
Abandonment asset
455,724
43,163
4,308
432,225
23,499
–
acquisition value
Opening balance acquisition value
3,764
Purchase
296
Sales/disposal
–102
–88
3,690
258
–204
20
503,195
455,724
acquisition value
3,870
3,764
Open balance depreciation
Abandonment depreciation
Disposal
–351,480
–28,885
–2,921
–
–312,494
–34,126
–4,209
–651
depreciation
Opening balance depreciations
–1,916
Sales/disposals
93
–32
–765
–2,406
1,387
–19
–878
–383,286
–351,480
depreciation
–2,620
–1,916
119,909
104,244
1,250
1,848
Cobo/Pambi
Oombo
100,542
19,367
100,289
3,955
Total
119,909
104,244
160
95
860
135
219
222
1,124
283
1,250
1,848
SPE AB
SPE AS
SPE UK
Genciu Nafta
Total
Note 15
(SEK thousand)
Note 17
············ Group ··········
2003
2002
Opening balance
30,994
16,310
Accrued expenses this year
105,020
30,334
Reclassification of Ivory Coast from
398,443
–
–
–16,310
–574
–
–2,000
660
–43,675
–
488,208
30,994
Genciu Nafta
Snøhvit
Ivory Coast
–
89,765
398,443
358
30,636
–
Total
488,208
30,994
Reclassification of Huldra/Snøhvit
to production facilities
Reclassification of Genciu Nafta
to production facilities
currency
34
Financial assets (SEK thousand)
············ Group ··········
2003
2002
Receivables from associated companies
Genciu Nafta
5,531
Participation in other companies
Opening balance acquisition value
Investments
Disposal
6,710
35,754
868
–30,246
20,300
15,454
–
6,376
35,754
Opening balance write-downs
Disposal
–15,169
–3,021
15,360
–
–15,169
–
write-downs
–2,830
–15,169
3,546
20,585
778
516
acquisition value
Other long-term receivables
Note 18
Participations in group companies (SEK thousand)
Direct holdings
Share of
capital
Share of
votes
Par
value
Number of
shares
Book
value
100%
100%
50,000
500,000
850,000
Svenska Petroleum Exploration AB
Total
850,000
Information about the group companies corporate identity numbers and registered office:
Direct and indirect holdings
Oljeprospektering AB
Svenska Petroleum Exploration AS
Svenska Petroleum Exploration U.K. Ltd
Petroswede Insurance Company Ltd.
Petroswede U.K. Ltd
Svenska Petroleum Exploration CI AB
SPE Qatar AB
Genciu Nafta (50%)*)
Corporate id number
Registered office
556093–2583
556126–4671
910229958
1241035
266707
1191501
556594–2512
556594–2553
BI93–357
Stockholm
Stockholm
Stavanger, Norway
London, England
Dublin, Ireland
London, England
Stockholm
Stockholm
Klaipeda, Lithuania
*) The influence of Genciu Nafta, which is reported according to the proportional method, on the consolidated accounts of
Petroswede is explained in the following table:
2003
2002
Net sales
Operating expenses
53,693
–33,729
49,104
–29,873
19,964
–9,967
–
19,231
–11,438
1,677
9 997
9,470
Fixed assets
Current assets
13,180
69,392
18,948
73,366
Total assets
82,572
92,314
Equity
Provisions
Long-term liabilities
Current liabilties
67,729
3,242
6,396
5,205
74,514
2,313
7,579
7,908
Total equity and liabilities
82,572
92,314
Operating income
Financial items
Taxes
Net profit
Note 19
Other receivables (SEK thousand)
············ Group ··········
2003
2002
Receivables operators
Insurance recoverable costs
Others
Total
42,126
1,931
1,593
49,190
2,186
921
45,650
52,297
35
Note 21
Note 20
Accruals (SEK thousand)
············ Group ··········
2003
2002
Prepaid expenses and accrued income
Accrued interest income
69
Prepaid rent payments
210
Prepaid put option*)
4,532
Other items
1,418
Total
6,229
1,078
–
8,665
1,034
10,777
Accrued expenses and deferred income
Accrued costs of personnel
including tax on salaries
3,985
Accrued project expenses
78,338
Accrued guarantee expenses
2,224
Allocation for ongoing dispute
–
Other items
2,933
2,096
80,086
2,136
5,161
2,182
Total
91,661
87,480
*) Put-option contract
(SEK thousand)
············ Group ··········
2003
2002
Production facilities/abandonment costs
Opening balance abandonment
provisions
149,453
Change in abandonment estimate
88,505
Discount unwound in the year
21,307
currency
–16,555
136,884
–
10,252
2,317
Closing balance abandonment
provision
242,710
149,453
Ula
Veslefrikk
Nelson
Janice
Genciai
Cobo/Pambi
Oombo
158,430
24,193
10,193
24,597
2,567
19,610
3,120
74,102
14,741
20,442
12,780
2,313
22,230
2,845
Total
242,710
149,453
SPE AB has bought a put-option that will protect approximately one fourth of the yearly production from the downside of 2004 crude oil prices. The option will be straight-line
depreciated during its lifetime (2004). The depreciation cost
is charged as a production cost.
Note 22
Deferred tax assets/liabilities (SEK thousand)
Group 2002-12-31
Production rights
Inventories
Equipment
Provisions for abandonment
costs
Other provisions
Other liabilities
Uplift
Offset
36
Deferred
tax asset
Deferred
tax provisions
Net
56,454
-155,520
-7,701
-99,066
-7,701
730
102
730
102
21,204
4,048
15,617
37,487
135,642
-94,775
40,867
-163,221
94,775
-68,446
21,204
4,048
15,617
37,487
-27,579
-27,579
Note 23 cont.
Group 2002-12-31
Deferred
tax asset
Deferred
tax provisions
Net
Production rights
Financial fixed assets
Other provisions
Uplift
28,772
33,410
255
93
142,445
9,520
46,540
261,035
-234,352
26,683
-225,675
-11,010
-196,903
22,400
255
93
142,445
9,520
46,540
24,350
Offset
-236,685
234,352
-2,333
24,350
The change in deferred taxes is 51,929 TSEK, of which 58,325 has been taken up as income in the Income statement, outstanding amount on -6,396 is exchange differences and deferred tax on revaluation of provision for abandonment costs.
Note 23
Note 25
Other current liabilities
(SEK thousand)
Adjustments for items not included
in cash flow
············ Group ··········
2003
2002
Personnel costs
Royalty
Project items
Overlift
Income tax liability
Others
450
3,922
43,821
10,797
1,086
17,839
52,406
358
2,986
172
Total
58,990
74,847
············ Group ··········
2003
2002
Effect of change in accounting principle
Depreciations and writedowns
176,920
Other provisions
12,850
Unrealized exchange differencies
-37,902
66,486
186,339
15,267
-37,299
Total
230,793
Note 24
Note 26
Contingent liabilities (SEK thousand)
Liquid assets
SPE AB guarantees its subsidiary’s, SPE AS, obligations in
Norway under existing licence agreements
SPE AB is involved in a litigation with GeoNafta (50%
owner of Genciu Nafta) and the State of Lithuania. The
proceedings are currently with international arbitration
(ICC) which started in the summer 2000. The ICC issued
their award in November 2003. In the award the amounts
granted to SPE AB exceeded the amounts payable by
SPE AB. In the 2003 accounts none of the amounts was
entered due to the high grade of uncertainty on how,
when and if these amounts will be paid.
151,868
············ Group ··········
2003
2002
Cash and bank balances
Short-term investments
Preem Petroleum
Total
81,260
122,439
61,121
285,972
142,381
408,411
Short-term investments according to the balance sheet
match the short-term investments reported among liquid
assets in the cash-flow statement. The Group’s unutilized
credit facilities amounted to 5 USD millions (5).
37
Stockholm, March 18 2004
Mohammed Al-Amoudi
Ghazi Habib
Karim Karaman
Lennart Wikström
Our audit report have been rendered, March 18, 2004
KPMG Bohlins AB
Roland Nilsson
Authorised Public Accountant
38
Richard Öhman
Chairman
Translated from the Swedish Annual Report
Audit Report
To the general meeting of the shareholders of Petroswede AB
Corporate identity number 556199–7320
We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the
board of directors of Petroswede AB for the financial year 2003. These accounts and the administration of the company
are the responsibility of the board of directors. Our responsibility is to express an opinion on the annual accounts, the
consolidated accounts and the administration based on our audit.
We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require
that we plan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated
accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their
application by the board of directors, as well as evaluating the overall presentation of information in the annual accounts
and the consolidated accounts. As a basis for our opinion concerning discharge from liability, we examined significant
decisions, actions taken and circumstances of the company in order to be able to determine the liability, if any, to the
company of any board member.
We also examined whether any board member has, in any other way, acted in contravention of the Companies Act,
the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our
opinion set out below.
The annual accounts and the consolidated accounts have been prepared in accordance with the Annual Accounts Act
and, thereby, give a true and fair view of the company’s and the group’s financial position and results of operations in
accordance with generally accepted accounting principles in Sweden.
We recommend to the general meeting of shareholders that the income statements and balance sheets of the parent
company and the group be adopted, that the profit for the parent company be dealt with in accordance with the
proposal in the administration report and that the members of the board of directors be discharged from liability for
the financial year.
Stockholm, 18 March, 2004
KPMG Bohlins AB
Roland Nilsson
Authorised Public Accountant
39
Board of Directors and Auditors
Board of Directors
Sheikh Mohammed H.
Al-Amoudi, born 1946
Lennart Wikström,
born 1938
Ghazi Habib,
born 1950
Member of the board of
Petroswede since 1996.
Petroswede and chairman
and member of the board
of Svenska Petroleum
Exploration since 1996.
Petroswede and Svenska
Petroleum Exploration
since 1996.
Auditors
Sven-Erik Zachrisson,
born 1950
Richard Öhman,
born 1951
Karim Karaman,
born 1966
Roland Nilsson,
born 1943
Member of the board
of Svenska Petroleum
Chairman and member of
the board of Petroswede
and Svenska Petroleum
Petroswede and Svenska
Petroleum Exploration
since 2001.
Auditor for Petroswede and
Svenska Petroleum Exploration
AB since 1989.
Authorised Public Accountant,
KPMG Bohlins AB, Stockholm.
Executive Management
40
Sven-Erik Zachrisson,
born 1950,
CEO and President, Svenska
Petroleum Exploration AB
Fredrik Ardbo,
born 1959
CFO, Svenska Petroleum
Exploration AB
Mike Schmeitzner,
born 1940
Exploration manager,
Svenska Petroleum Exploration UK Ltd.
Jan Ivar Hagen,
born 1952
Managing Director, Svenska
Petroleum Exploration UK
Ltd.
Torgny Berglund,
born 1953
Managing Director, Svenska
Petroleum Exploration AS
and OPAB
Employed since 1996
Employed since 1997
Employed since 1973
Employed since 1989
Employed since 2000
M.Sc. (Chemical and engineering) Royal Institute
of Technology (1976) and
MBA Stockholm University
(1983).
More than 20 years experience in the integrated oil
industry. Process engineer
at Shell’s refinery in Gothenburg. Experience in production planning, oil trading
and business development
for OK Petroleum. President
of OK Petroleum AB (later
Preem Petroleum), 1992–
1996.
Other positions: Chairman,
Preem Petroleum AB and
UAB Genciu Nafta.
MBA, Stockholm University,
(1984).
Previous experience as Deputy Treasurer at Sveriges
Investeringsbank AB, various
controller and management
positions within Dagab and
the Axel Johnson Group.
B.Sc. in Petroleum Geology,
University of California,
Santa Barbara (1963).
Nearly 40 years of experience in the oil industry:
Well Logging Company,
1963; Signal Oil & Gas Co.,
1964–1973. Extensive experience from exploration
projects in Northwestern
Europe, North and West
Africa, and in the Middle
East.
B.Sc., Naval Architecture
and Shipbuilding (1978),
University of Newcastle, UK.
More than 20 years experience in the oil industry, including thirteen with
Svenska. Offshore Department Manager, Borregaard
Engineering, 1986–1989.
Nine years with McDermott
International Inc. and Aker,
managing offshore engineering and construction
projects in Norway, other
European countries and
West Africa.
M.Sc. Petroleum Prospecting, Technical University of
Norway (NTH), Trondheim,
Norway.
Nearly 30 years of experience in the oil industry;
Mobil Exploration 19781980; Norsk Hydro 19802000. Extensive experience
from exploration in Norway,
North Africa and Middle
East.
The Owner of Petroswede AB
Sheikh Mohammed H. Al-Amoudi, the
owner of Petroswede AB, is one of the
largest private investors in Sweden. In
addition to Petroswede, Mohammed AlAmoudi owns Preem Petroleum AB and
Midroc Scandinavia AB. His companies
employ altogether some 6,000 people.
Along with the business in Sweden,
Al-Amoudi conducts business in Saudi
Arabia, Ethiopia, Morocco and
other countries.
41
Terms and Definitions
Abandon To stop work on, or plug, non-productive well,
or close down and remove facilities.
Appraisal well Well drilled close to a discovery well to determine the extent of the find.
Barrel Unit for crude oil measurement (= 159 litres).
Brent Reference oil for the North Sea.
Cap rock An impermeable rock layer capping the oil or
gas reservoir and preventing the escape of fluids.
Condensate Hydrocarbons which are in the gaseous state
under reservoir conditions and which become liquid
either during passage up the borehole or at the surface
due to reduced temperature and pressure.
Crude oil Includes condensate and natural gas liquids.
Cuttings Rock fragments or chippings brought to the surface in the drilling fluid.
Field An area defined by one or more wells which are capable of producing hydrocarbons in commercial quantities.
Proven reserves The amount which geophysical and
engineering data indicates to be in place or recoverable to a high degree of certainty. For the purpose of
this definition, there is a 90 percent chance that the actual quantity will be more than the amount estimated as
“Proven” and a 10 percent chance it will be less.
Recovery factor The percentage of oil recoverable from
a reservoir.
Reservoir The underground formation where oil or gas
has accumulated. It consists of porous rock to hold the
oil or gas and a cap rock that prevents its escape.
Royalty The cash or physical liquid/mineral paid to the ultimate owner, in most cases the host country’s government.
Seismic survey Exploration method in which reflected
shock waves, recorded by seismometers, map underground formations.
Structure A discrete area of deformed sedimentary rocks,
where the resultant bed configuration is such as to form
a potential trap for migrating hydrocarbons.
Gas injection Injection of gas into a reservoir to maintain
reservoir pressure.
Hydrocarbon An organic hydrogen/carbon compound.
Volumes
Infill well Well drilled into previously unswept areas of a
defined field.
bbl Barrel
mbbls Thousand barrels
mmbbls Million barrels
mbo Thousand barrels of oil
mmbo Million barrels of oil
bopd Barrels of oil per day
mmbopd Million barrels of oil per day
boe Barrels of oil equivalents
mboe Thousand barrels of oil equivalents
mmboe Million barrels of oil equivalents
boepd Barrels of oil equivalent per day
mmcf Million cubic feet
bcf Billion cubic feet
mcm Thousand cubic meters
mmcm Million cubic meters
bcm Billion cubic meters
mmbngl Million barrels of NGL
Injection well Used to inject gas, oil or water into the
reservoir for various purposes: maintaining pressure,
flushing out oil, etc.
LNG Liquified natural gas, means lean gas, i.e. primarily
methane – converted to liquid form through refrigeration
to –163°C under atmospheric pressures.
Natural gas Comprises mainly methane, although heavier
gases are also usually present.
NGL Natural gas liquids light hydrocarbons consisting
mainly of ethane, propane and butane which are liquid
under pressure at normal termperature.
Oil equivalents See “Conversion table”.
Petroleum A collective term for hydrocarbons, whether
solid, liquid or gaseous. Gas is a light hydrocarbon and
oil is a heavier hydrocar-bon.
Probable reserves The amount which geophysical and
engineering data indicates to be in place or recoverable but with a greater element of risk than in “Proven”.
For the purpose of this definition, there is a 50 percent
chance that the actual quantity will be more than the
amount estimated as “Proven and probable” and a 50
per-cent chance it will be less.
42
Conversion table
1 barrel = 159 litres (at 15 degrees Celsius)
1 barrel of oil equivalent = approximately 6 thousand
cubic feet gas
1 barrel of oil equivalent = approximately 1.6 barrels NGL
1 m³ gas = 35.3 cubic foot gas
1 tonne oil = 7.49 barrels oil
Contact
Head office
Visiting address: Sandhamnsgatan 51
Mail address: P.O. Box 27823
SE-115 93 STOCKHOLM, SWEDEN
Telephone: +46 8 450 15 50
Telefax: +46 8 667 24 32
E-mail: [email protected]
Subsidiaries
Svenska Petroleum Exploration U.K. Ltd
Mail address: 1 Hamilton Mews
Hyde Park Corner
LONDON W1J 7HA
UK
Telephone: +44 20 7647 2500
Telefax: +44 20 7647 2501
E-mail: [email protected]
Svenska Petroleum Exploration AS
Visiting address:
Sandhamnsgatan 51
Mail address:
P.O. Box 27823
SE-115 93 STOCKHOLM
SWEDEN
Telephone: +46 8 450 15 50
Telefax: +46 8 667 24 32
Oljeprospektering AB (OPAB)
Visiting address:
Sandhamnsgatan 51
Mail address:
P.O. Box 27823
SE-115 93 STOCKHOLM
SWEDEN
Telephone: +46 8 450 15 50
Telefax: +46 8 667 24 32
UAB Genciu Nafta
Mail address:
Sauliu 19
5800 KLAIPEDA
LITHUANIA
Telephone: +370 63 130 51
Telefax: +370 63 130 52
43
www.infobahn.nu
Petroswede is a holding company which primary asset is the 100 percent
ownership of Svenska Petroleum Exploration AB (”Svenska”).
Svenska is a private Swedish oil and gas company engaged in exploration
and production of oil and gas.
The Svenska Group has production activities in Norway, UK, Angola and
Lithuania as well as exploration activities in Norway, UK, Ivory Coast and
the Baltic Sea.
44

Annual Report 2003 - Svenska Petroleum Exploration

Transcription

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