Edgar Filing: STATOIL ASA

F-4/A

As filed with the Securities and Exchange Commission on April 24, 2007

Registration No. 333-141445

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

Form F-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

STATOIL ASA

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)


Norway	2911	Not Applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

Forusbeen 50, N-4035

Stavanger, Norway

Tel. No.: 011-47-5199-0000

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

CT Corporation

111 Eighth Avenue, 13th Floor

New York, New York 10011

(Name, address, including zip code, and telephone number, including area code, of agent for service)


*Copy to:*
		Pamela Gibson, Esq.
Kathryn A. Campbell, Esq.		James M. Bartos, Esq.
Sullivan & Cromwell LLP		Shearman & Sterling LLP
1 New Fetter Lane		Broadgate West
London EC4A 1AN		9 Appold Street
England		London EC2A 2AP
Tel. No.: 011-44-20-7959-8900		England
		Tel. No.: 011-44-20-7655-5000

Approximate date of commencement of proposed sale to the public: As promptly as practicable after the date this Registration Statement becomes effective.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

CALCULATION OF REGISTRATION FEE






		Proposed Maximum	Proposed Maximum
Title of Each Class of	Amount to be	Offering Price	Aggregate	Amount of
Securities to be Registered	Registered	Per Unit	Offering Price	Registration Fee


Ordinary Shares, nominal value NOK 2.50 (1)	150,000,000 (2)	$24.61 (3)	$3,691,500,000 (3)	$113,329.10

6.36% Notes due 2009	$300,000,000	100%	$300,000,000 (4)	$9,210.00 (4)

9.00% Notes due 2012	$152,850,000	100%	$152,850,000 (4)	$4,692.50 (4)

9.125% Notes due 2014	$99,520,000	100%	$99,520,000 (4)	$3,055.26 (4)

7.50% Notes due 2016	$243,820,000	100%	$243,820,000 (4)	$7,485.27 (4)

6.70% Notes due 2018	$250,000,000	100%	$250,000,000 (4)	$7,675.00 (4)

7.75% Notes due 2023	$300,000,000	100%	$300,000,000 (4)	$9,210.00 (4)

7.15% Notes due 2025	$250,000,000	100%	$250,000,000 (4)	$7,675.00 (4)

7.25% Notes due 2027	$480,510,000	100%	$480,510,000 (4)	$14,751.66 (4)

6.80% Notes due 2028	$250,000,000	100%	$250,000,000 (4)	$7,675.00 (4)

7.15% Notes due 2029	$275,000,000	100%	$275,000,000 (4)	$8,442.50 (4)

9.125% Debentures due 2014	$480,000	100%	$480,000 (4)	$14.74 (4)

7.25% Debentures due 2027	$19,490,000	100%	$19,490,000 (4)	$598.34 (4)

Total			$6,313,170,000.00 (4)	$193,814.32 (4)

(1)

A portion of the ordinary shares of the Registrant may be represented by the Registrant’s American Depositary Shares (“Statoil ADSs”), evidenced by American Depositary Receipts, each of which represents one ordinary share of the Registrant (“Statoil Share”) to be issued at a specified ratio to holders of American Depositary Shares of Norsk Hydro ASA (“Norsk Hydro” and such American Depositary Shares, “Norsk Hydro ADSs”), evidenced by American Depositary Receipts, each of which represents one ordinary share of Norsk Hydro (“Norsk Hydro Share”). The Statoil Shares are being registered in connection with the proposed merger of Statoil with Hydro Petroleum described herein.

Statoil ADSs issuable upon deposit of a portion of the Statoil Shares registered hereby have been registered under a separate registration statement on Form F-6 (Registration No. 333-13508), as amended.


(2)	Based upon (a) the number of Norsk Hydro Shares estimated to be held by U.S. residents (within the meaning of Exchange Act Rule 12g-3-2) as of the date hereof, including the ADS depositary, plus an additional amount of shares to cover any flow back into the United States, and (b) the ratio of 0.8622 Statoil Shares to be issued for each Norsk Hydro Share in connection with the merger described herein. The securities to be issued in connection with the merger outside the United States are not registered under this Registration Statement.

(3)	Pursuant to Rule 457(c) under the Securities Act and estimated solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is equal to the approximate market value of the approximate number of Statoil Shares to be issued in the merger to U.S. residents and is based upon the average of the high and low prices of Statoil Shares of NOK 151.13 per share on the Oslo Stock Exchange, converted into U.S. dollars at the rate of 6.1404 NOK/ USD, the noon buying rate for NOK on March 14, 2007.

(4)	Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(f)(2) based upon the principal amount being registered hereunder.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

This Registration Statement on Form F-4 contains two separate prospectuses: (i) a prospectus (“Shareholder Prospectus”) relating to the merger of Hydro Petroleum with Statoil ASA, which will be mailed to shareholders of both Norsk Hydro ASA and Statoil ASA in connection with their approval of the transaction; and (ii) a consent solicitation and prospectus (“Bondholder Prospectus”), which will be mailed to holders of certain bonds of Norsk Hydro ASA in connection with the transaction. The Shareholder Prospectus will be appended as an exhibit to the Bondholder Prospectus.

The information in this circular/prospectus is not complete and may be changed. Statoil may not distribute and issue the ordinary shares of Statoil being registered pursuant to this registration statement until the registration statement filed with the Securities and Exchange Commission is declared effective. This circular/prospectus is not an offer to sell these securities and Statoil is not soliciting an offer to buy these securities in any state where such offer or sale is not permitted.

Subject to Completion, dated April 24, 2007

Norsk Hydro ASA Statoil ASA

Merger of Hydro Petroleum with Statoil

The boards of directors of Statoil and Norsk Hydro have approved a merger plan that provides for the merger of Statoil with Hydro Petroleum, which principally comprises the oil and gas business of Norsk Hydro, along with Norsk Hydro’s wind power business and interests in a power generation company and an information technology subsidiary. The merger will be implemented by means of a demerger transaction effected in accordance with Norwegian law whereby the assets and liabilities, rights and obligations of Hydro Petroleum will be transferred to the merged company for consideration in the form of shares of Statoil.

In connection with the proposed transactions, Statoil is registering 150,000,000 ordinary shares, nominal value NOK 2.50 per share in the United States. If the merger plan is adopted and the merger completed, shareholders of Norsk Hydro will receive 0.8622 shares of Statoil for each Norsk Hydro share that they own and will also continue to be owners of the Norsk Hydro shares that they currently own. Holders of Norsk Hydro American Depositary Shares, or ADSs, will receive 0.8622 Statoil ADSs for each Norsk Hydro ADS that they own and will also continue to hold the Norsk Hydro ADSs they currently own. Statoil shareholders will not receive any new shares in the merger.

Statoil will hold an extraordinary general meeting to consider and vote upon the approval of the merger plan between Statoil and Norsk Hydro and upon the election of members to the merged company’s corporate assembly and election committee. The resolution relating to the approval of the merger plan requires the affirmative vote of a two-thirds majority of the share capital of Statoil represented at the extraordinary general meeting. The election of members to Statoil’s corporate assembly and election committee is made by simple majority.

Norsk Hydro will hold an extraordinary general meeting to consider and vote upon the approval of the merger plan [and the election of members to Norsk Hydro’s corporate assembly]. The resolution approving the merger plan requires the affirmative vote of a two-thirds majority of the share capital represented at the extraordinary general meeting of Norsk Hydro. The election of members to Norsk Hydro’s corporate assembly is made by simple majority.

The Norwegian Government has requested from Parliament authorization to vote in favor of the merger at the extraordinary shareholders’ meetings of Statoil and Norsk Hydro, and Parliament’s vote on this request is expected in June 2007.

There are no quorum requirements applicable to the general meetings of Statoil and Norsk Hydro. Other than the general right to contest the legality of a decision taken by the general meeting, shareholders are not entitled to exercise dissenters’ rights or appraisal rights should the merger plan be approved.

Upon completion of the merger, Statoil’s shareholders will own 67.3 per cent of the shares of the merged company and Norsk Hydro shareholders will hold 32.7 per cent of the shares of the merged company. The merged company’s shares will be listed on the Oslo Stock Exchange and its ADSs will be listed on the New York Stock Exchange.

For a discussion of risk factors that you should consider in evaluating the transactions, see “Risk Factors” beginning on page 16.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in the transactions or determined whether this circular/prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The accompanying circular/prospectus provides you with detailed information about the proposed transactions. We encourage you to read this entire document carefully. In addition, Statoil shareholders and Norsk Hydro shareholders may obtain more information about the merger from documents that Statoil files with the Securities and Exchange Commission. To find out how to obtain these documents, see “Where You Can Find More Information”.

This document is dated , 2007

QUESTIONS AND ANSWERS ABOUT THE MERGER

The Merger of Statoil and Hydro Petroleum



1.	Q:	Why are Statoil and Norsk Hydro proposing a combination of Statoil with Hydro Petroleum?
	A:	Statoil’s and Norsk Hydro’s boards of directors each believe that the combination of Statoil with Hydro Petroleum will create a Norwegian-based international oil and gas company that will be a more forceful international competitor than either Statoil or Hydro Petroleum would be on its own, with greater capabilities to accelerate growth, respond to the challenging competitive landscape of the energy industry and deliver long-term value to shareholders.

2.	Q:	How will the merger be accomplished?
	A:	The merger will be implemented by means of a demerger transaction in accordance with Norwegian law whereby the assets and liabilities, rights and obligations relating to Hydro Petroleum will be transferred to the merged company in consideration for shares of Statoil to be issued to the shareholders of Norsk Hydro.

3.	Q:	What assets of Norsk Hydro will be contributed to the merged company?
	A:	Norsk Hydro will contribute Hydro Petroleum, which principally comprises the oil and gas business of Norsk Hydro, along with Norsk Hydro’s wind power business and interests in a power generation company and an information technology subsidiary to the merged company. Hydro Petroleum is an international oil and energy enterprise and a major player in the Nordic and European energy markets. It develops, produces and supplies oil and gas and takes an active role in developing new energy forms like wind power and hydrogen.

4.	Q:	What will Norsk Hydro’s shareholders receive when the merger is completed?
	A:	Shareholders of Norsk Hydro will receive 0.8622 shares of Statoil for each Norsk Hydro share that they own, and Norsk Hydro ADS holders will receive 0.8622 ADSs of Statoil for each Norsk Hydro ADS that they own. They will also continue to own the Norsk Hydro shares or ADSs that they currently own.

5.	Q:	What are the conditions to completion of the merger?
	A:	Completion of the merger is subject to the satisfaction or waiver of a number of conditions, including that the deadline for objections from creditors shall have expired and that Statoil and Norsk Hydro shall have received all necessary regulatory and third party consents and approvals. See “The Merger Plan — Conditions to Completion of the Merger”.

6.	Q:	What are the tax consequences to Norsk Hydro’s shareholders of the merger?
	A:	The issuance of the new Statoil shares to Norsk Hydro shareholders will not trigger tax in Norway. See “Material Tax Consequences — Tax Consequences of the Merger for Norsk Hydro Shareholders in Norway”.

		A U.S. shareholder that receives Statoil shares or ADSs should be treated as receiving a taxable distribution from Norsk Hydro in an amount equal to the fair market value of the shares in U.S. dollars at the time of distribution. A non-corporate U.S. shareholder meeting certain conditions (including a holding period) would be taxed on the dividend amount at the same preferential rate allowed for long-term capital gains. See “Material Tax Consequences — Tax Consequences of the Merger for Norsk Hydro Shareholders or ADS holders in the United States”.


7.	Q:	When will the merger be completed?
	A:	We expect to complete the merger promptly after Statoil and Norsk Hydro shareholders approve and adopt the merger plan and after the satisfaction or waiver of all other conditions to the merger.

The Extraordinary General Meetings



8.	Q:	When and where is the extraordinary general meeting of Norsk Hydro taking place?
	A:	The Norsk Hydro extraordinary general meeting will take place on [ ], 2007 at [ ] [a.m/p.m] (Oslo time) at [place].

9.	Q:	When and where is the extraordinary general meeting of Statoil taking place?
	A:	The Statoil extraordinary general meeting will take place on [ ], 2007 at [ ] [a.m/p.m] (Oslo time) at [place].

10.	Q:	What will Norsk Hydro’s shareholders vote on?
	A:	With respect to the merger, Norsk Hydro’s shareholders will vote on the following proposals:
		• approval of the merger plan between Statoil and Norsk Hydro; and
		• [election of members to Norsk Hydro’s Corporate Assembly].

11.	Q:	What will Statoil’s shareholders vote on?
	A:	With respect to the merger, Statoil’s shareholders will vote on the following proposals:
		• approval of the merger plan between Statoil and Norsk Hydro; and
		• election of members to the merged company’s Corporate Assembly and Election Committee.

12.	Q:	What does the Norsk Hydro board of directors recommend?
	A:	The Norsk Hydro board unanimously recommends the approval and adoption of the merger plan and the transactions contemplated thereby by Norsk Hydro’s shareholders.

13.	Q:	What does the Statoil board of directors recommend?
	A:	The Statoil board unanimously recommends the approval and adoption of the merger plan and the transactions contemplated thereby by Statoil’s shareholders.

14.	Q:	Who can vote at Norsk Hydro’s extraordinary general meeting?
	A:	Norsk Hydro’s articles of association provide that all Norsk Hydro shareholders may attend and vote at the extraordinary general meeting (in person or by proxy) provided they notify Norsk Hydro of their intention to attend at least five days prior to the meeting. It is necessary to attend the meeting (in person or by proxy) in order to vote on the proposals before the shareholders. A holder of Norsk Hydro American Depositary Shares (ADSs) may give voting instructions to Norsk Hydro’s ADR Depositary, JPMorgan Chase Bank, N.A., subject to certain conditions. See “The Norsk Hydro Extraordinary General Meeting — Quorum — Vote Required — Shareholders Entitled to Vote”.


15.	Q:	Who can vote at Statoil’s extraordinary general meeting?
	A:	All Statoil shareholders are entitled to attend and vote at the extraordinary general meeting. It is necessary to attend the meeting (in person or by proxy) in order to vote on the proposals before the shareholders. A holder of Statoil American Depositary Shares (ADSs) may give voting instructions to Statoil’s ADR Depositary, The Bank of New York, subject to certain conditions. See “The Statoil Extraordinary General Meeting — Quorum — Vote Required — Shareholders Entitled to Vote”.

16.	Q:	What is the vote necessary to adopt the resolutions that will be proposed at Norsk Hydro’s extraordinary general meeting?
	A:	The resolution approving the merger plan requires the affirmative vote of a two-thirds majority of the share capital represented at the extraordinary general meeting. [The election of members to Norsk Hydro’s Corporate Assembly is made by simple majority.]

17.	Q:	What is the vote necessary to adopt the resolutions that will be proposed at Statoil’s extraordinary general meeting?
	A:	The resolution approving the merger plan requires the affirmative vote of a two-thirds majority of the share capital represented at the extraordinary general meeting. The election of members to Statoil’s Corporate Assembly and Election Committee is made by simple majority.

18.	Q:	What dissenters’ or appraisal rights do Norsk Hydro’s shareholders have?
	A:	Under Norwegian law, other than the general right to contest the legality of a decision taken by the general meeting, shareholders are not entitled to exercise dissenters’ rights or appraisal rights should the merger plan be approved.

19.	Q:	What dissenters’ or appraisal rights do Statoil’s shareholders have?
	A:	Under Norwegian law, other than the general right to contest the legality of a decision taken by the general meeting, shareholders are not entitled to exercise dissenters’ rights or appraisal rights should the merger plan be approved.

20.	Q:	Where can additional information be obtained?
	A:	You can find more information about Statoil and Norsk Hydro from various sources described under the heading “Where You Can Find More Information” beginning on page 1 of this circular/prospectus.

iii

TABLE OF CONTENTS


QUESTIONS AND ANSWERS ABOUT THE MERGER		i
WHERE YOU CAN FIND MORE INFORMATION		1
	Incorporation by Reference	1
SUMMARY		3
	Statoil	3
	Hydro Petroleum	3
	The Merger and the Merger Plan	4
	Summary Historical Financial Data	7
	Dividend Data	10
	Summary Oil and Gas Production Information — Statoil	11
	Summary Oil and Gas Sales Information — Statoil	11
	Summary Oil and Gas Production Information — Hydro Petroleum	12
	Summary Unaudited Pro Forma Combined Financial Data	13
	Comparative Per Share Data	15
	Directors’ and Senior Management’s Share Ownership of Statoil and Norsk Hydro	15
	Regulatory Matters, Pre-Emption Rights and Third Party Consents	15
	Dissenters’ Rights of Appraisals	15
	Summary of Tax Consequences	15
RISK FACTORS		16
	Risks Related to the Transaction	16
	Risks Related to the Business of Statoil	20
	Risks Related to the Business of Hydro Petroleum	20
THE NORSK HYDRO EXTRAORDINARY GENERAL MEETING		26
	Date, Time, Place and Matters to be Considered	26
	Quorum — Vote Required — Shareholders Entitled to Vote	26
THE STATOIL EXTRAORDINARY GENERAL MEETING		28
	Date, Time, Place and Matters to be Considered	28
	Quorum — Vote Required — Shareholders Entitled to Vote	28
THE MERGER		30
	Background of the Merger; Past Material Contacts with Norsk Hydro	30
	Reasons for the Merger	33
	Recommendation of, and Factors Considered by, the Norsk Hydro Board	35
	Recommendation of, and Factors Considered by, the Statoil Board	37
	Opinion of Norsk Hydro’s Financial Advisor	39
	Opinion of Statoil’s Financial Advisor	44
	Plans for Hydro Petroleum after the Merger	52
	Interests of Certain Persons in the Merger	52
	Accounting Treatment	54
	Expenses	54
	Cautionary Statements Concerning Forward-Looking Statements	54
REGULATORY MATTERS, PRE-EMPTION RIGHTS AND THIRD PARTY CONSENTS		56
	Antitrust	56
	Other Regulatory Consents	58
	Pre-Emption Rights and Third Party Consents	58


MATERIAL TAX CONSEQUENCES		59
	Tax Consequences of the Merger for Norsk Hydro Shareholders in Norway	59
	Tax Consequences of the Merger for Norsk Hydro Shareholders or ADS Holders in the United States	59
	Tax Consequences of the Merger for Norsk Hydro Shareholders in the United Kingdom	60
	Norwegian Tax Consequences of Owning Merged Company Ordinary Shares	61
	United States Tax Consequences of Owning Merged Company Ordinary Shares or ADSs	64
THE MERGER PLAN		68
	Structure of the Merger	68
	Implementation of the Merger	68
	Timing of Execution	69
	Merger Consideration	69
	Allocation of Assets and Liabilities, Rights and Obligations Pursuant to the Merger Plan	69
	Inter-company Balance Account Between Hydro Petroleum and Hydro’s Other Activities	70
	Employees	70
	Pensions	70
	Merger-Related Business Agreements Between Norsk Hydro and the Merged Company	71
	Taxation	71
	Founders and Subscription Certificates	71
	Conduct of Business Pending the Merger	71
	Conditions to Completion of the Merger	72
	Corporate Name and Logo	72
	Registered Office and Location	72
	Expenses	72
THE MERGED COMPANY		73
	Group Structure	73
	Dividends and Share Buy-Backs	73
	Directors and Management of the Merged Company	73
	Statement on Corporate Governance	78
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION		79
SELECTED FINANCIAL INFORMATION		91
	Statoil	91
	Hydro Petroleum	94
COMPARATIVE PER SHARE DATA		96
RECENT MARKET PRICES		97
EXCHANGE RATES		99
STATOIL		100
	General	100
	Business Overview	100
HYDRO PETROLEUM		102
	Introduction	102
	Exploration and Production	102
	Energy and Oil Marketing	102
	Operational Information	102
	Drilling Activity	105
	In Process Drilling Activity	105
	Oil and Gas Reserves	107


	Proved Reserves	107
	Productive Wells	110
	Hydro Petroleum’s Share of Average Daily Production	111
	2006 Production of Oil and Gas	112
	Research & Development	119
	Legal Proceedings	120
	Material Contracts	120
HYDRO PETROLEUM MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		121
	Overview	121
	Operating Income (Loss) — Oil & Energy	122
	Oil & Energy	124
	Operating Statistics	124
	Market Statistics	124
	Exploration and Production	125
	Energy and Oil Marketing	127
	Liquidity and Capital Resources	129
	Liquidity	129
	Balance Sheet Data	129
	Contractual Obligations	131
	Market Risk — Quantitative and Qualitative analysis	137
MAJOR SHAREHOLDERS OF STATOIL AND NORSK HYDRO		140
	Certain Information Concerning the Relationship of Statoil and the Norwegian State	140
	Certain Information Concerning the Relationship of Norsk Hydro and the Norwegian State	140
DESCRIPTION OF STATOIL’S SHARES AND SHARE CAPITAL		142
	Share Capital	142
	Development of the Share Capital	142
	Authorization to Acquire Statoil’s Own Shares	142
	General Meetings	143
	Voting Rights	143
	The VPS System and Transfer of Shares	143
	Amendments to Statoil’s Articles of Association, Including Variation of Rights	144
	Additional Issuances and Preferential Rights	144
	Minority Rights	144
	Mandatory Bid Requirement	145
	Compulsory Acquisition	145
	Election and Removal of Directors and Corporate Assembly	145
	Payment of Dividends	146
	Rights of Redemption and Repurchase of Shares	147
	Shareholders’ Votes on Certain Reorganizations	147
	Liability of Directors	147
	Indemnification of Directors and Officers	148
	Distribution of Assets on Liquidation	148
	Summary of Statoil’s Articles of Association	148
	Exchange Controls and Other Limitations Affecting Shareholders	149
DESCRIPTION OF STATOIL AMERICAN DEPOSITARY SHARES		150
	General	150


	Share Dividends and Other Distributions	150
	Deposit, Withdrawal and Cancellation	151
	Voting Rights	152
	Record Dates	153
	Reports and Other Communications	153
	Fees and Expenses of the ADR Depositary	154
	Payment of Taxes	154
	Reclassifications, Recapitalizations and Mergers	154
	Amendment and Termination	155
	Limitations on Obligations and Liability to Statoil ADS Holders	155
	Disclosure of Interests	156
	Requirements for ADR Depositary Actions	156
	Direct Registration System (DRS)	156
	Books of the ADR Depositary	157
	Pre-Release of ADSs	157
	The ADR Depositary	157
COMPARISON OF SHAREHOLDER RIGHTS		158
VALIDITY OF SECURITIES		160
EXPERTS		160
ENFORCEMENT OF CIVIL LIABILITIES		160
HYDRO PETROLEUM CARVE-OUT COMBINED FINANCIAL STATEMENTS		F-1
APPENDIX A — MERGER PLAN		A-1
APPENDIX B — OPINION OF MORGAN STANLEY & CO. LIMITED		B-1
APPENDIX C — OPINION OF GOLDMAN SACHS INTERNATIONAL		C-1
EX-4.10
EX-4.11
EX-5.1
EX-8.2
EX-23.4
EX-23.5
EX-23.6
EX-23.7
EX-23.8
EX-23.9

vii

WHERE YOU CAN FIND MORE INFORMATION

Statoil and Norsk Hydro, the current owner of Hydro Petroleum, file or furnish annual reports, quarterly reports, special reports, and other information with the Securities and Exchange Commission or SEC. You may read and copy any document Statoil or Norsk Hydro files with or furnishes to the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. You may also inspect certain reports and other information concerning Statoil and Norsk Hydro at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. Documents filed with or furnished to the SEC by Statoil or Norsk Hydro on or after September 10, 2002 are available on the website maintained by the SEC (www.sec.gov). You can also get more information by visiting Statoil’s website (www.statoil.com) and Norsk Hydro’s website (www.hydro.com). Website materials are not part of this circular/prospectus.

Statoil has filed a registration statement on Form F-4, as amended, to register with the SEC the Statoil ordinary shares that Norsk Hydro ordinary shareholders will receive in the offer. This document is a part of the registration statement on Form F-4. As permitted by rules and regulations of the SEC, this circular/prospectus does not contain all the information included in the registration statement. You should refer to the registration statement on Form F-4 (file no. 333-141445) and the registration statement on Form F-6 (file no. 333-13508), as amended, for information omitted from this circular/prospectus.

You may also request a copy of such documents by calling or writing to Statoil at +47 51 99 00 00 or Forusbeen 50, N-4035 Stavanger, Norway no later than [ ].

Incorporation by Reference

The SEC allows Statoil to “incorporate by reference” important business and/or information in this circular/prospectus that has been previously filed with the SEC in other documents, which means:


	•	Statoil can disclose important information to you by referring you to those documents;

	•	incorporated documents are considered part of this circular/prospectus; and

	•	information in this circular/prospectus automatically updates and supersedes information in earlier documents that are incorporated by reference in this circular/prospectus, and information filed with the SEC after the date of this circular/prospectus automatically updates and supersedes information in this circular/prospectus.

Statoil incorporates by reference in this circular/prospectus its Annual Report on Form 20-F/A for the year ended December 31, 2006 (referred to as the Statoil 2006 Form 20-F), which was filed with the SEC on March 20, 2007.

Solely for purposes of U.S. law and for the information of investors in the United States, Statoil also incorporates in this circular/prospectus by reference each of the following documents that Statoil files with the SEC after the date of this circular/prospectus until the date of Norsk Hydro’s extraordinary general meeting:


	•	any annual reports filed under Section 13(a), 13(c) or 15(d) of the Exchange Act, as amended, and

	•	any reports furnished on Form 6-K that indicate that they are incorporated by reference in this circular/prospectus.

Except as provided above, no other information, including information on Statoil’s or Norsk Hydro’s website, is incorporated by reference into this circular/prospectus.

You should rely only on the information contained in, or incorporated by reference into this circular/prospectus to vote on the merger. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this circular/prospectus. This circular/prospectus is dated [ ], 2007. You should not assume that the information contained in, or incorporated by reference into, this circular/prospectus is accurate as of any date other than that date, or the date of such information incorporated by reference.

SUMMARY

You should read the following summary together with the more detailed information about Statoil and Hydro Petroleum, their recent developments and the merger contained later in this circular/prospectus and the additional documents incorporated by reference in this circular/prospectus. Please refer to the Statoil 2006 Form 20-F and the Statoil Reports on Form 6-K, which are incorporated by reference in this circular/prospectus, for more information about Statoil.

Statoil

Statoil ASA is an integrated oil and gas company organized under the laws of Norway and headquartered in Stavanger, Norway. Based on both production and reserves, Statoil is a major international oil and gas company and the largest in Scandinavia. The operations of Statoil commenced in 1972 with a primary focus on the exploration, development and production of oil and natural gas from the Norwegian Continental Shelf, or NCS. Since then, Statoil has grown both domestically and internationally into a company with 25,435 employees and business operations in 34 countries as of December 31, 2006. Statoil divides its operations into four business segments: Exploration and Production Norway, International Exploration and Production, Natural Gas, and Manufacturing and Marketing. See “Statoil” in this circular/prospectus for more information about Statoil.

As of March 12, 2007, the Norwegian State owned 70.9 per cent of Statoil’s outstanding share capital. In addition, the Norwegian State owns 1.18 per cent of the shares of Statoil through the State Pension Fund. For more information regarding Statoil’s relationship with the Norwegian State, see Item 7 of the Statoil 2006 Form 20-F. As of March 12, 2007, Statoil’s directors, executive officers and their affiliates owned less than 0.1 per cent of Statoil’s share capital.

Statoil’s principal executive offices are located at Forusbeen 50, N-4035 Stavanger, Norway. Its telephone number is +47 51 99 00 00 (or from the U.S. 011 47 51 99 00 00).

Hydro Petroleum

Hydro Petroleum comprises the oil and gas business of Norsk Hydro, along with Norsk Hydro’s wind power business and interests in a power generation company and an information technology subsidiary. Hydro Petroleum is an international oil and energy enterprise and a major player in the Nordic and European energy markets. It develops, produces and supplies oil and gas and takes an active role in developing new energy forms like wind power and hydrogen. In recent years, Hydro Petroleum’s businesses have grown as a result of substantial investments undertaken by Norsk Hydro, including the acquisition of Saga Petroleum ASA, a Norwegian-based oil company, in 1999, and new oil and gas licenses on the NCS obtained from the Norwegian State. Based on production, Hydro Petroleum is the second largest operator on the NCS and, as a stand-alone enterprise, would be among the leading international oil and energy companies. See “Hydro Petroleum” in this circular/prospectus for more information about Hydro Petroleum.

As of February 28, 2007, excluding the non-voting treasury shares, the Norwegian State owned 46% of the outstanding shares of Norsk Hydro. In addition, the Norwegian State owns 3.9% of the outstanding shares of Norsk Hydro through the State Pension Fund. For more information regarding Norsk Hydro’s relationship with the Norwegian State, see “Major Shareholders of Statoil and Norsk Hydro — Certain Information Concerning the Relationship of Norsk Hydro and the Norwegian State” in this circular/prospectus. As of February 28, 2007, Norsk Hydro’s directors, executive officers and their affiliates owned 0.0002 per cent of Norsk Hydro’s share capital.

Hydro Petroleum’s principal executive offices are located at Drammensveien 264, Vækerø, N-0240 Oslo, Norway. Its telephone number is +47 22 53 81 00 (or from the U.S. 011 47 22 53 81 00).

The Merger and the Merger Plan


	*Terms of the Merger*

On December 18, 2006, Statoil and Norsk Hydro announced that their respective boards of directors had agreed to recommend to their shareholders a merger of Norsk Hydro’s oil and gas activities and certain other related activities with Statoil. On March 12 and 13, 2007, the board of directors of Norsk Hydro and Statoil, respectively, entered into a merger plan, which sets out the terms for implementation of the merger.

The merger will be implemented by means of a demerger transaction effected in accordance with Norwegian law whereby the assets and liabilities, rights and obligations relating to Hydro Petroleum will be transferred to the merged company for consideration in the form of shares of Statoil to be issued to the shareholders of Norsk Hydro. Shareholders of Norsk Hydro will receive 0.8622 shares of Statoil for each Norsk Hydro share that they own and 0.8622 ADSs of Statoil for each Norsk Hydro ADS that they own and they will also continue to own the Norsk Hydro shares or ADSs that they currently own. Upon completion of the merger, Statoil’s shareholders will own 67.3 per cent of the shares of the merged company and Norsk Hydro shareholders will hold 32.7 per cent of the shares of the merged company. Following completion of the merger, the Norwegian State will own 62.5 per cent of the merged company’s shares. The merged company’s shares will be listed on the Oslo Stock Exchange and its ADSs will be listed on the New York Stock Exchange.

In accordance with the terms of the merger plan, effective as of the financial effective date of January 1, 2007, the merged company will assume certain assets and liabilities, rights and obligations related to Hydro Petroleum, including:


	•	all payment obligations relating to outstanding bonds of the Norsk Hydro group, totaling in aggregate approximately NOK 19 billion as of January 1, 2007;

	•	all guarantee obligations relating to the Norsk Hydro assets transferred to the merged company, representing a guarantee liability of approximately NOK 20 billion as of January 1, 2007;

	•	allocation of assets and liabilities, rights and obligations related to discontinued activities of Norsk Hydro (including environmental and pension liabilities) in accordance with the merger plan;

	•	the inter-company demerger balance will represent a loan or claim of such size that the net interest-bearing debt of Hydro Petroleum is NOK 1 billion as of January 1, 2007;

	•	assumption of pension obligations relating to employees of the Norsk Hydro group transferred to the merged company and certain former and retired employees; and

	•	all historical and future rights and obligations with respect to taxation issues of Hydro Petroleum activities from January 1, 2007.

Under the merger plan, Norsk Hydro and Statoil have agreed that all employees of Norsk Hydro whose primary relationship as of the financial effective date of the merger relates to Hydro Petroleum will become employees of the merged company. In addition, approximately 120 employees of Norsk Hydro’s Corporate Centre in Norway and 15 corporate employees working outside of Norway will be transferred to the merged company. The transfer of employment of the affected employees will be effected in accordance with the rules and regulations of the Working Environment Act and other relevant labor legislations.

Statoil will be the surviving entity in the merger. The name of the merged company, effective upon the completion of the merger, will be StatoilHydro ASA. However, the board of directors of the merged company will develop a new name and a new logo which will symbolize the merged company’s business strategy, values and vision, and which will be different from the present companies’ names. A proposal for a new name shall be presented at the first annual general meeting of the merged company. The registered office of the merged company will be in Stavanger. The corporate functions of the merged company will be located in both Oslo and Stavanger, and the Chief Executive Officer of the merged company will have offices in both locations.

Statoil’s and Norsk Hydro’s extraordinary general meetings are expected to be held in June 2007 to vote on the approval of the merger. The merger plan provides that completion of the merger by registration in the Register

of Business Enterprises in Norway will occur on the first business day of the month that follows the month in which the period for creditor’s objections under Norwegian law will have elapsed and all other necessary conditions to completion set forth in the merger plan will have been satisfied.


	*Background of the Merger*

For a description of the events leading up to the execution of the merger plan, see “The Merger — Background of the Merger; Past Material Contacts with Norsk Hydro”.


	*Reasons for the Merger*

Statoil’s and Norsk Hydro’s boards of directors each believe that the combination of Statoil with Hydro Petroleum will create a Norwegian-based international oil and gas company that will be a more forceful international competitor than either Statoil or Hydro Petroleum would be on its own, with greater capabilities to accelerate growth, respond to the challenging competitive landscape of the energy industry and deliver long-term value to shareholders. For a more detailed description of the strengths of the merged company and of the areas in which, in the opinion of Statoil’s and Norsk Hydro’s boards of directors, the benefits of the business combination will be realized, see “The Merger — Reasons for the Merger”. In addition, the merged company is expected to ensure a more efficient sustainable development of the Norwegian Continental Shelf (“NCS”).


	*Recommendation of, and Factors Considered by, the Norsk Hydro Board*

The Norsk Hydro board has determined that the merger plan and the transactions contemplated thereby are fair to and in the best interests of Norsk Hydro and Norsk Hydro’s shareholders. Accordingly, the Norsk Hydro board has recommended the approval and adoption of the merger plan and the transactions contemplated thereby by Norsk Hydro’s shareholders. In addition to the reasons described under “The Merger — Reasons for the Merger”, the Norsk Hydro board considered several other factors and risks in reaching its decision. The principal factors and risks considered by the Norsk Hydro board are described in “The Merger — Recommendation of, and Factors Considered by, the Norsk Hydro Board”.


	*Recommendation of, and Factors Considered by, the Statoil Board*

The Statoil board has determined that the merger plan and the transactions contemplated thereby are fair to and in the best interests of Statoil and Statoil’s shareholders. Accordingly, the Statoil board has recommended the approval and adoption of the merger plan and the transactions contemplated thereby by Statoil’s shareholders. In addition to the reasons described under “The Merger — Reasons for the Merger”, the Statoil board considered several other factors and risks in reaching its decision. The principal factors and risks considered by the Statoil board are described in “The Merger — Recommendation of, and Factors Considered by, the Statoil Board”.


	*Opinion of Norsk Hydro’s Financial Advisor*

Goldman Sachs International (“Goldman Sachs”) delivered its opinion to Norsk Hydro’s board of directors that, as of March 12, 2007 and based upon and subject to the factors and assumptions set forth therein, the merger ratio pursuant to the merger plan is fair from a financial point of view to Norsk Hydro’s shareholders.

The full text of the written opinion of Goldman Sachs, dated March 12, 2007, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Appendix C to this circular/prospectus. Norsk Hydro’s shareholders should read this opinion in its entirety. Goldman Sachs provided its opinion for the information and assistance of Norsk Hydro’s board of directors in connection with its consideration of the merger. The Goldman Sachs opinion is not a recommendation as to how any of Norsk Hydro’s shareholders should vote with respect to the merger.


	*Opinion of Statoil’s Financial Advisor*

Morgan Stanley & Co. Limited (“Morgan Stanley”) delivered its opinion to Statoil’s board of directors that, as of March 13, 2007 and based upon and subject to the factors and assumptions set forth therein, the merger ratio

is fair from a financial point of view to Statoil’s ordinary shareholders solely in their capacity as ordinary shareholders of Statoil.

The full text of the written opinion of Morgan Stanley, dated March 13, 2007, which sets forth assumptions made, procedures followed, matters considered and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion, is attached as Appendix B to this circular/prospectus. Statoil’s shareholders should read the opinion in its entirety. Morgan Stanley provided its opinion for the information of Statoil’s board of directors in connection with its consideration of the merger. The Morgan Stanley opinion is not a recommendation as to how any holder of Statoil’s ordinary shares should vote at Statoil’s shareholder meeting to be held in connection with the merger.


	*Interests of Certain Persons in the Merger*

When you consider whether to approve the merger plan, you should keep in mind that Norsk Hydro’s and Statoil’s executive officers may have interests in the merger that are in addition to the interests of other shareholders of Norsk Hydro or Statoil generally. See “The Merger — Interests of Certain Persons in the Merger”.


	*Accounting Treatment*

In accordance with Norwegian requirements, Statoil will prepare its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) from January 1, 2007. For the purposes of IFRS accounting, both Statoil and Norsk Hydro are deemed to be controlled by the Norwegian State. Accordingly, under IFRS, the merger will be accounted for as a transaction between entities under common control and, accordingly, the carrying amount of the assets and liabilities of the parties to the transaction will not be adjusted to fair value, and prior periods will be restated to present the combined entity as if it had constituted a consolidated entity throughout the periods presented. However, the pro-forma financial information included in this circular/prospectus has been prepared on the basis of U.S. GAAP, which contemplates that the merger be accounted for as a purchase of Hydro Petroleum by Statoil and Hydro Petroleum’s assets and liabilities be partly recorded at fair value and partly recorded at the historical carrying amount. For a description of the accounting treatment of the merger see “The Merger — Accounting Treatment”.


	*Conditions to Completion of the Merger*

Under the terms of the merger plan, completion of the merger is subject to the satisfaction or waiver of a number of conditions, including that the deadline for objections from Norsk Hydro’s creditors shall have expired and the relationship with any creditors that have raised objections shall have been settled (or the District Court shall have determined that the merger may nevertheless proceed) and that Statoil and Norsk Hydro receive all necessary regulatory and third party consents and approvals. See “The Merger Plan — Conditions to Completion of the Merger”.

Summary Historical Financial Data

The following summary financial data for Statoil and Hydro Petroleum is derived from the selected financial information of Statoil and of Hydro Petroleum that can be found later in this circular/prospectus. See “Selected Financial Information.” This summary financial data may not contain all the information that is important to you. For a complete picture you should read the entire financial statements contained in, or incorporated by reference into, this circular/prospectus.

Summary Income Statement Data — Statoil



		Year Ended December 31,


		2006
								2005			2004			2003			2002
		NOK			USD⁽¹⁾			NOK			NOK			NOK			NOK


		(in millions, except per share amounts)
Revenues:
	Sales		423,528			67,996			384,653			299,015			244,817			238,845
	Equity in net income (loss) of affiliates		410			66			1,090			1,209			616			352
	Other income		1,228			197			1,668			1,219			207			1,250

Total revenues			425,166			68,259			387,411			301,443			245,640			240,447
Expenses:
	Cost of goods sold		(239,544	)		(38,458	)		(230,721	)		(184,234	)		(146,832	)		(145,365	)
	Operating expenses		(34,320	)		(5,510	)		(30,243	)		(27,258	)		(26,569	)		(28,229	)
	Selling, general and administrative expenses		(6,990	)		(1,122	)		(7,189	)		(5,720	)		(4,845	)		(4,646	)
	Depreciation, depletion and amortization		(21,767	)		(3,495	)		(20,962	)		(17,318	)		(16,151	)		(16,732	)
	Exploration expenses		(5,664	)		(909	)		(3,253	)		(1,828	)		(2,370	)		(2,410	)

Total expenses before financial items			(308,285	)		(49,494	)		(292,368	)		(236,358	)		(196,767	)		(197,382	)

Income before financial items, other items, income taxes and minority interest			116,881			18,765			95,043			65,085			48,873			43,065
Net financial items			4,814			773			(3,512	)		5,755			1,417			8,267
Other items			—			—			—			—			(6,025	)		—

Income before income taxes and minority interest			121,695			19,538			91,531			70,840			44,265			51,332
Income taxes			(80,360	)		(12,902	)		(60,036	)		(45,419	)		(27,422	)		(34,333	)
Minority interest			(720	)		(116	)		(765	)		(505	)		(289	)		(153	)

Net income			40,615			6,521			30,730			24,916			16,554			16,846

Ordinary and diluted earnings per share⁽²⁾			18.79			3.02			14.19			11.50			7.64			7.78
Dividend paid per share⁽³⁾			9.12			1.71			8.20			5.30			2.95			2.90


(1)	The USD amounts in the table above are based on the noon buying rate for Norwegian kroner on December 31, 2006, which was NOK 6.2287 to USD 1.00.

(2)	The weighted average number of shares outstanding was 2,161,028,202, 2,165,740,054, 2,166,142,636, 2,166,143,693 and 2,165,422,239 in 2006, 2005, 2004, 2003 and 2002, respectively.

(3)	See “Item 3 — Key Information — Dividends” and “Item 8 — Financial Information — Dividend Policy” in the Statoil 2006 Form 20-F for a description of how dividends are determined and share repurchases.

Summary Balance Sheet Data — Statoil



	At December 31,


	2006
							2005			2004			2003			2002
	NOK			USD⁽¹⁾			NOK			NOK			NOK			NOK


	(in millions)
Assets:
Cash and cash equivalents		7,367			1,183			7,025			5,028			7,316			6,702
Short-term investments		1,031			166			6,841			11,621			9,314			5,289
Accounts receivable		41,273			6,627			42,816			31,007			29,935			33,623
Accounts receivable — related parties Inventories		11,872			1,906			8,369			6,858			4,894			5,349
Prepaid expenses and other current assets		15,538			2,495			12,815			11,710			8,801			8,275
Total current assets		77,081			12,375			77,866			66,224			60,260			59,238
Investments in affiliates		4,917			790			4,352			10,258			10,944			9,568
Long-term receivables		6,855			1,101			9,618			8,070			14,111			6,968
Net properties, plants and equipments		209,601			33,656			180,669			151,993			125,720			121,569
Other assets		17,014			2,732			16,474			11,698			10,565			8,087

Total Assets		315,468			50,647			288,979			248,243			221,600			205,430


Liabilities and Shareholders’ Equity:
Short-term debt		5,515			885			1,529			4,730			4,287			4,323
Accounts payable		22,373			3,592			22,518			18,893			17,832			19,482
Accounts payable — related parties		7,551			1,212			9,766			5,621			6,114			5,649
Accrued liabilities		12,148			1,950			14,030			12,937			11,665			11,779
Income taxes payable		30,219			4,852			29,752			19,119			17,664			18,340

Total current liabilities		77,806			12,492			77,595			61,300			57,562			59,573
Long-term debt		30,271			4,860			32,564			31,351			32,991			32,805
Deferred income taxes		44,987			7,223			43,314			44,233			37,815			43,129
Other liabilities		38,711			6,215			27,370			24,713			21,575			11,356

Total liabilities		191,775			30,790			180,843			161,597			149,943			146,863
Minority interest		1,465			235			1,492			1,616			1,483			1,550

Common stock (NOK 2.50 nominal value) ⁽²⁾		5,415			869			5,474			5,474			5,474			5,474
Treasury shares⁽³⁾		(54	)		(9	)		(156	)		(60	)		(59	)		(59	)
Additional paid-in capital		33,761			5,421			37,305			37,273			37,728			37,728
Retained earnings		88,262			14,172			65,401			46,153			27,627			17,355
Accumulated other comprehensive income		(5,156	)		(828	)		(1,380	)		(3,810	)		(596	)		(3,481	)

Total shareholders’ equity		122,228			19,626			106,644			85,030			70,174			57,017

Total Liabilities and Shareholders’ Equity		315,468			50,647			288,979			248,243			221,600			205,430


(1)	The USD amounts in the table above are based on the noon buying rate for Norwegian kroner on December 31, 2006, which was NOK 6.2287 to USD 1.00.

(2)	The number of shares authorized and issued was 2,189,585,600 prior to the cancellation of 23,441,885 treasury shares in 2006. The number of shares authorized and issued was 2,166,143,715 as at year-end 2006.

(3)	The number of treasury shares at year-end in each of the five years presented was 21,399,616; 24,208,212; 23,452,876; 23,441,885 and 23,441,885 in 2006, 2005, 2004, 2003 and 2002, respectively.

Summary Income Statement Data — Hydro Petroleum



	Year Ended December 31,


	2006
							2005			2004			2003			2002
NOK million (except per share data)	NOK			USD⁽¹⁾			NOK			NOK			NOK			NOK


	(in millions)
Operating revenues		95,138			15,274			80,806			66,238			54,695			57,846
Depreciation, depletion and amortization		18,202			2,922			10,518			10,315			9,602			8,982
Other operating costs		32,519			5,221			28,474			26,144			25,338			34,406

Operating income		44,417			7,131			41,814			29,778			19,755			14,458
Equity in net income on non-consolidated investees		201			32			102			73			131			180
Financial income (expense), net		983			158			(2,073	)		(716	)		470			393
Other income (loss) net		53			9			66			58			(1,718	)		77

Income from continuing operations before tax		45,654			7,330			39,909			29,193			18,638			15,108
Income tax expense		(35,229	)		(5,656	)		(28,972	)		(20,891	)		(12,224	)		(11,337	)

Income before cumulative effect of change in accounting principle		10,425			1,674			10,937			8,302			6,413			3,771
Cumulative effect of change in accounting principle		—			—			—			—			282			—

Net income		10,425			1,674			10,937			8,302			6,695			3,771

Basic and diluted earnings per share from continuing operations (in NOK) ⁽²⁾⁽³⁾		8.40			1.35			8.70			6.50			5.00			2.90
Basic and diluted earnings per share before change in accounting principles (in NOK)⁽²⁾⁽³⁾		8.40			1.35			8.70			6.50			5.00			2.90
Basic and diluted earnings per share (in NOK)		8.40			1.35			8.70			6.50			5.20			2.90

Weighted average number of outstanding shares (million)		1,241			1,241			1,254			1,272			1,288			1,289


(1)	The USD amounts in the table above are based on the noon buying rate for Norwegian kroner on December 31, 2006, which was NOK 6.2287 to USD 1.00.

(2)	Basic earnings per share are computed using the weighted average number of ordinary shares outstanding. There were no diluting elements.

(3)	Previously reported earnings per share and total number of outstanding shares have been adjusted to reflect the 5-for-1 stock split effective 10 May 2006.

Summary Balance Sheet Data — Hydro Petroleum



	Year Ended December 31,


	2006
					2005		2004		2003		2002
	NOK		USD⁽¹⁾		NOK		NOK		NOK		NOK


	(in millions, except per share amounts)
Cash, cash equivalents and short-term investments		153		25		203		190		274		98
Total assets		128,146		20,573		127,596		93,566		92,832		89,311
Short-term debt		1,146		184		2,175		1,847		2,117		1,799
Long-term debt		15,291		2,455		16,322		14,487		20,840		22,088

Deferred tax liabilities		26,341		4,229		30,613		26,271		27,105		28,666

Total shareholder’s equity		33,071		5,309		36,399		19,069		17,143		15,750


(1)	The USD amounts in the table above are based on the noon buying rate for Norwegian kroner on December 31, 2006, which was NOK 6.2287 to USD 1.00.

Dividend Data

Dividends in respect of the fiscal year are declared at Statoil’s annual general meeting in the following year. Under Norwegian law, dividends may only be paid in respect of a financial period as to which audited financial statements have been approved by the annual general meeting of shareholders, and any proposal to pay a dividend must be recommended by the board of directors, accepted by the corporate assembly and approved by the shareholders at a general meeting. The shareholders at the annual general meeting may vote to reduce, but may not increase, the dividend proposed by the board of directors.

The following table shows the amounts paid to all shareholders since 2002 on a per share basis and in the aggregate, as well as dividends proposed by Statoil’s board of directors to be paid in 2007 on Statoil’s ordinary shares for the year 2006.



	Per Ordinary Share						Total (in Millions)

	Ordinary		Special		Total
	Dividend⁽²⁾		Dividend⁽²⁾		Dividend⁽²⁾		Total Dividend

Year	NOK		NOK		NOK		USD⁽¹⁾		NOK		USD⁽¹⁾

2002		2.90		—		2.90		0.43		6,282		931
2003		2.95		—		2.95		0.44		6,390		947
2004		3.20		2.10		5.30		0.79		11,481		1,702
2005		3.60		4.60		8.20		1.22		17,756		2,633
2006		4.00		5.12		9.12		1.46		19,690		3,161


(1)	The USD amounts in the table above are based on the noon buying rate for Norwegian kroner on December 29, 2006, which was NOK 6.2278 to USD 1.00.

(2)	For fiscal years 2006, 2005 and 2004 the total dividend per share consisted of an ordinary dividend and a special dividend. There is no distinction between ordinary and special dividends under Norwegian law. The 2006 dividend is expected to be paid in early June 2007.

Since Statoil only pays dividends in Norwegian kroner, exchange rate fluctuations will affect the U.S. dollar amounts received by holders of ADSs after the ADR Depositary converts cash dividends into U.S. dollars.

Summary Oil and Gas Production Information — Statoil

The following table sets forth Statoil’s Norwegian and international production of crude oil and natural gas for the periods indicated. The stated production volumes are the volumes that Statoil is entitled to in accordance with conditions laid down in concession agreements and production sharing agreements, or PSAs. The production volumes are net of royalty oil paid in kind and of gas used for fuel and flare. Statoil’s production is based on its proportionate participation in fields with multiple owners.



	Year Ended
	December 31,

Production	2006		2005		2004

Norway:
Crude oil (mmbbls)⁽¹⁾		194		205		229
Natural gas (bcf)		893		865		751
Natural gas (bcm)		25.3		24.5		21.3
Combined oil and gas (mmboe)		353		359		363
International:
Crude oil (mmbbls)⁽¹⁾		54		52		37
Natural gas (bcf)		62		87		31
Natural gas (bcm)		1.8		2.5		0.9
Combined oil and gas (mmboe)		65		67		42
Total:
Crude oil (mmbbls)⁽¹⁾		248		257		265
Natural gas (bcf)		955		953		781
Natural gas (bcm)		27.1		27.0		22.1
Combined oil and gas (mmboe)		418		427		405


(1)	Crude oil includes LPG and condensate production. NGL includes both LPG and naphtha.

Summary Oil and Gas Sales Information — Statoil

In addition to Statoil’s own volumes, Statoil markets and sells oil and gas owned by the Norwegian State through the Norwegian State’s share in production licenses, known as the State’s direct financial interest, or SDFI, together with Statoil’s own production. For additional information see “Major Shareholders of Statoil and Norsk Hydro — Certain Information Concerning the Relationship of Statoil and the Norwegian State” and “Item 7 — Major Shareholders and Related Party Transactions” in the Statoil 2006 Form 20-F. The following table sets forth SDFI and Statoil sales volume information for crude oil and natural gas, as applicable, for the periods indicated. The SDFI volumes shown below include royalty oil sold by Statoil on behalf of the Norwegian State for 2004 and 2005. The payment of royalty obligations on the NCS was abolished on December 31, 2005. The Statoil natural gas sales volumes include equity volumes sold by Natural Gas, natural gas volumes sold by International E&P and ethane volumes.



	Year Ended December 31,

Sales Volumes:	2006		2005		2004

Statoil:⁽¹⁾
Crude oil (mmbbls)⁽²⁾		248		256		261
Natural gas (bcf)		953		953		781
Natural gas (bcm)⁽³⁾		27.0		27.0		22.1
Combined oil and gas (mmboe)		418		426		400



	Year Ended December 31,

Sales Volumes:	2006		2005		2004

Third-party volumes:⁽⁴⁾
Crude oil (mmbbls)⁽²⁾		207		229		220
Natural gas (bcf)		109		93		139
Natural gas (bcm)⁽³⁾		3.1		2.6		3.9
Combined oil and gas (mmboe)		226		245		244
SDFI assets owned by the Norwegian State (including royalty):
Crude oil (mmbbls)⁽²⁾		250		281		318
Natural gas (bcf)		1,168		1,116		1,069
Natural gas (bcm)⁽³⁾		33.1		31.6		30.3
Combined oil and gas (mmboe)		458		480		508
Total:
Crude oil (mmbbls)		705		768		796
Natural gas (bcf)		2,230		2,079		1,985
Natural gas (bcm)		63.0		58.9		56.2
Combined oil and gas (mmboe)		1,102		1,138		1,150


(1)	The Statoil volumes included in the table above assume that volumes sold were equal to lifted equity volumes in the relevant year.

(2)	Sales volumes of crude oil include NGL and condensate. All sales volumes reported in the table above include internal deliveries to Statoil’s manufacturing facilities.

(3)	At a gross calorific value (GCV) of 40 MJ/scm.

(4)	Third-party volumes of crude oil include both volumes purchased from partners in Statoil’s upstream operations and other cargos purchased in the market. The third-party volumes are purchased either for sale to third parties or for Statoil’s own use. Third-party volumes of natural gas include third-party LNG volumes related to Statoil’s activities at the Cove Point regasification terminal in the United States.

Summary Oil and Gas Production Information — Hydro Petroleum

The following table sets forth Hydro Petroleum’s Norwegian and international production of crude oil and natural gas for the periods indicated.


	2006		2005		2004

Norway
Oil/ NGL million boe⁽¹⁾		125		125		132
Gas billion scf⁽²⁾		354		334		312
Total million boe⁽¹⁾		189		185		188
International
Oil/ NGL million boe⁽¹⁾		16		21		21
Gas billion scf⁽²⁾		25		1		0
Total million boe⁽¹⁾		20		21		21
Total
Oil/ NGL million boe⁽¹⁾		141		146		153
Gas billion scf⁽²⁾		379		335		312
Total million boe⁽¹⁾		209		206		209


(1)	Barrels of oil equivalents

(2)	Square cubic feet measured at 60 degrees Fahrenheit

Summary Unaudited Pro Forma Combined Financial Data

The following financial data are derived from the pro forma condensed combined financial information that can be found later in this circular/prospectus and show the pro forma effect of the merger of Hydro Petroleum and Statoil as if the transaction had occurred on January 1, 2006, for the income statement and at December 31, 2006, for the balance sheet. The following information is presented for illustrative purposes only and, therefore, does not purport to represent what the actual results of operations or the merged company’s financial position would have been if the merger occurred on the dates assumed and it is not necessarily indicative of the merged company’s future operating results or combined financial position.

Unaudited Pro Forma Condensed Combined Income Statement



	Historical

				Hydro						Notes to
	Statoil			Petroleum			Pro Forma			Pro Forma
	Consolidated			Combined*			Adjustments			Adjustments		Pro Forma			Pro Forma

	(NOK)			(NOK)			(NOK)			(NOK)		(NOK)			(USD)

REVENUES
Sales		423,528			95,138			(8,157	)		(b)		510,509			81,961
Other revenue		1,638			346								1,984			319

Total revenues		425,166			95,484			(8,157	)				512,493			82,280
EXPENSES
Cost of goods sold		(239,544	)		(24,078	)		8,401			(c)		(255,221	)		(40,975	)
Operating expenses		(34,320	)		(3,053	)							(37,373	)		(6,000	)
Selling, general and administrative expenses		(6,990	)		(492	)							(7,482	)		(1,201	)
Depreciation, depletion and amortization		(21,767	)		(18,202	)		(5,966	)		(d)		(45,935	)		(7,375	)
Exploration expenses		(5,664	)		(4,988	)							(10,652	)		(1,710	)

Total expenses before financial items		(308,285	)		(50,813	)		2,435					(356,663	)		(57,261	)

Income before financial items, income taxes and minority interest		116,881			44,671			(5,722	)				155,830			25,019
Net financial items		4,814			983			(230	)		(e)		5,567			894

Income before income taxes and minority interest		121,695			45,654			(5,952	)				161,397			25,913

Income taxes		(80,360	)		(35,229	)		4,093			(f)		(111,496	)		(17,900	)
Minority interest		(720	)										(720	)		(116	)

NET INCOME		40,615			10,425			(1,859	)				49,181			7,987

Net Income Per Share of Common Stock
Basic		18.79			8.40								15.35			2.49
Diluted		18.79			8.40								15.35			2.49
Weighted Average Common Shares Outstanding
Basic		2,161,028,202			1,240,804,344								3,203,690,436	(g)
Diluted		2,161,028,202			1,240,804,344								3,203,690,436	(g)


*	Certain line items are reclassified to conform to the Statoil presentation.

The notes to the unaudited Pro Forma Condensed Combined Financial Information are an integral part of the Statement of Income Information. See “Unaudited Pro Forma Condensed Combined Financial Information”.

Unaudited Pro Forma Condensed Combined Balance Sheet



	Historical
							Pro Forma
				Hydro			Merger Plan					Notes to
	Statoil			Petroleum			Contribution by		Pro Forma			Pro Forma			Pro			Pro
	Consolidated			Combined*			Hydro (note a)		Adjustments			Adjustments			Forma			Forma

	(NOK)			(NOK)			(NOK)		(NOK)			(NOK)			(NOK)			(USD)

ASSETS
Cash and cash equivalents		7,367			152			12,065								19,584			3,144
Accounts receivable		41,273			12,255					(3,515	)		(h	)		50,013			8,029
Inventories		11,872			2,277											14,149			2,272
Other current assets		16,569			11,272					(404	)		(o	)		27,437			4,405

Total current assets		77,081			25,956			12,065		(3,919	)					111,183			17,850
Investments in affiliates		4,917			1,675											6,592			1,058
Other non current assets		23,869			6,698					43,551			(i	)		74,118			11,899
Net property, plant and equipment		209,601			93,818					90,154			(j	)		393,573			63,187

Total assets		315,468			128,147			12,065		129,786						585,466			93,994

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable		29,924			6,070					(4,584	)		(k	)		31,410			5,043
Other current liabilities		17,663			13,690					525			(l	)		31,878			5,118
Income taxes payable		30,219			16,946											47,165			7,572

Total current liabilities		77,806			36,706					(4,059	)					110,453			17,733
Long-term debt		30,271			15,291			3,961		1,494			(m	)		51,017			8,191
Other non current liabilities		38,711			16,738					1,290			(n	)		56,739			9,109
Deferred income taxes		44,987			26,341					62,384			(o	)		133,712			21,467

Total liabilities		191,775			95,076			3,961		61,109						351,921			56,500

Minority interests		1,465														1,465			235

Common stock, net of treasury shares		5,361			8,697					(6,089	)		(p	)		7,969			1,279
Additional paid-in capital		33,761			12,997			8,104		80,546			(p	)		135,408			21,739
Retained earnings		88,262			15,470					(7,859	)		(p	)		95,873			15,392
Accumulated other comprehensive income		(5,156	)		(4,093	)				2,079			(p	)		(7,170	)		(1,151	)

Total equity		122,228			33,071			8,104		68,677						232,080			37,259

Total liabilities and shareholders’ equity		315,468			128,147			12,065		129,786						585,466			93,994


*	Certain line items are reclassified to conform to the Statoil presentation.

The notes to the unaudited Pro Forma Condensed Combined Financial Information are an integral part of the Balance Sheet Information. See “Unaudited Pro Forma Condensed Combined Financial Information”.

Comparative Per Share Data

[To be drawn from “Comparative Per Share Data” section below.]

Directors’ and Senior Management’s Share Ownership of Statoil and Norsk Hydro

The directors and senior management of Norsk Hydro and their affiliates collectively hold [ ] per cent of Norsk Hydro’s share capital and [less than 1 per cent] of Statoil’s share capital. The directors and senior management of Statoil and their affiliates collectively hold [ ] per cent of Statoil’s share capital and [less than 1 per cent] of Norsk Hydro’s share capital. In order to approve the merger plan, no less than two-thirds of the share capital represented at the Extraordinary General Meetings of each of Norsk Hydro and Statoil must vote in favor of the plan.

Regulatory Matters, Pre-Emption Rights and Third Party Consents

Statoil and Norsk Hydro must obtain approval for the merger from the European Commission, the United States Federal Trade Commission (or the FTC), or the Antitrust Division of the United States Department of Justice (or the DOJ), and the Canadian Commission of Competition, each of which has jurisdiction to review the transaction under applicable competition/ antitrust laws. Consent from the Norwegian Ministry of Petroleum and Energy is required for the transfer of operatorships and any direct and/or indirect interests in exploration and production licenses and installations on the Norwegian Continental Shelf currently held by Norsk Hydro in connection with the merger. Moreover, consent of the Norwegian Ministry of Finance to the tax treatment of such transfer, as well as other consents by Norwegian regulatory authorities, are required prior to completion of the merger. Completion of the merger may also require regulatory approvals of other foreign regulatory authorities.

Third parties hold pre-emption rights in certain licenses and assets of Hydro Petroleum and such rights may be exercisable in connection with the merger. Norsk Hydro and Statoil may also have to obtain certain other consents from third parties under certain joint venture agreements, license agreements and other agreements and instruments, which contain change of control provisions.

For a more complete description of the consents, approvals and waivers that Norsk Hydro and Statoil will have to obtain in connection with the merger see “Regulatory Matters, Pre-Emption Rights and Third Party Consents”.

Dissenters’ Rights of Appraisal

Under Norwegian law, other than the right to contest the legality of a decision taken by the general meeting, shareholders are not entitled to exercise dissenters’ rights or appraisal rights if the transaction is approved. See “The Norsk Hydro Extraordinary General Meeting” and “The Statoil Extraordinary General Meeting”.

Summary of Material Tax Consequences

Statoil believes that the merger complies with the requirements for treatment as a tax-free transaction in Norway. Accordingly, no Norwegian tax liability will arise for shareholders of Norsk Hydro in respect of the receipt of Statoil shares. For a more complete description of the material tax consequences of the merger for shareholders in Norway, the United States and the United Kingdom, see “Material Tax Consequences”.

RISK FACTORS

In addition to the other information included in this circular/prospectus, including the matters addressed under “The Merger — Cautionary Statements Concerning Forward-Looking Statements”, you should carefully consider the following risks before deciding whether to vote for approval and adoption of the merger plan and the transactions contemplated by the merger plan. In addition, you should read and consider the risks associated with the business of Statoil because these risks will relate to the merged company. See “Item 3 — Risk Factors” in the Statoil 2006 Form 20-F. You should also consider the other documents incorporated by reference into this circular/prospectus. See “Where You Can Find More Information”.

Risks Related to the Transaction

The merger ratio will not be adjusted for changes in the value of Statoil’s shares and Hydro Petroleum before the merger is completed. As a result, the value of the shares of Statoil relative to the value of Hydro Petroleum’s business at the time that Norsk Hydro shareholders receive the shares of Statoil could be less or more than the value of those at the time the merger ratio was established.

In the merger, Norsk Hydro’s shareholders will be entitled to receive 0.8622 of a share of Statoil’s shares for each share of Norsk Hydro they own and 0.8622 of an ADS of Statoil for each ADS of Norsk Hydro they own. This ratio will not be adjusted for changes in the value of Statoil’s shares or the value of Hydro Petroleum’s business. If the value of Statoil’s shares relative to the value of Hydro Petroleum increases or decreases (or the value of Hydro Petroleum increases or decreases relative to the value of Statoil’s shares) prior to the completion of the merger, the market value of the merged company’s shares that Norsk Hydro’s shareholders receive in the merger may be higher or lower than the then-current relative values of the individual entities.

Norsk Hydro shareholders will have a reduced ownership and voting interest in the merged company and will exercise less influence over management of the merged company.

After completion of the merger, Norsk Hydro’s shareholders will own a significantly smaller percentage of the merged company than they currently own of Hydro Petroleum. Following completion of the merger, Norsk Hydro’s shareholders will own approximately 32.7 per cent of the merged company. Consequently, Norsk Hydro’s shareholders will have less influence over the management and policies of the merged company than they currently have over the management and policies of Hydro Petroleum.

Statoil and Hydro Petroleum will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainty about the effect of the merger on employees, suppliers, partners, regulators and customers may have an adverse effect on Statoil and Hydro Petroleum. These uncertainties could cause suppliers, customers, business partners and others that deal with Statoil or Hydro Petroleum to defer purchases, the consummation of other transactions or other decisions concerning the two businesses, or to seek to change existing business relationships with them. In addition, employee retention may be particularly challenging until the merger is consummated, as employees may experience uncertainty about their future roles with the merged company. If key employees depart because of issues relating to the uncertainty and difficulty of integration, the merged company’s business could be harmed. In addition, the merger plan restricts Statoil and Norsk Hydro from undertaking major investments and taking other specified actions until the merger occurs unless otherwise agreed. These restrictions may prevent Statoil and Norsk Hydro from pursuing attractive business opportunities that may arise prior to the completion of the merger. See “The Merger Plan — Conduct of Business Pending the Merger” for a description of the restrictive covenants applicable to Statoil and Norsk Hydro.

If Norsk Hydro fails to obtain all required consents, approvals and waivers, third parties may terminate or alter existing contracts.

by the merger. In addition, other agreements of Norsk Hydro may require the payment of fees in connection with a change of control transaction. If Norsk Hydro is unable to obtain any necessary waiver or consent, the operation of change of control provisions or the exercise of pre-emption rights may cause the loss of significant contractual rights and benefits, the termination of joint venture agreements and licensing agreements or may require the renegotiation of financing agreements and/or the payment of significant fees. See “Regulatory Matters, Pre-Emption Rights and Third-Party Consents — Pre-Emption Rights and Third-Party Consents”. Investors cannot be assured that the merged company will be able to negotiate new agreements on terms as favorable to it as those that Norsk Hydro had, or at all.

Failure to complete the merger could result in certain non-recoverable costs, negatively affect Statoil’s and Norsk Hydro’s ability to realize their strategic goals, and negatively impact the share price and the future business and financial results of Norsk Hydro and Statoil.

Statoil and Norsk Hydro cannot assure you that the conditions to the completion of the merger will be satisfied. See “Merger Plan — Conditions to Completion of the Merger”. If the merger is not completed for any reason, Statoil and Norsk Hydro will be subject to several risks, including the following:


	•	Statoil and Norsk Hydro would not realize any of the expected benefits of having completed the merger;

	•	the current market price of Statoil and/or Norsk Hydro shares may reflect a market assumption that the merger will occur. Failure to complete the merger could result in a negative perception by the stock market of Statoil and Norsk Hydro generally and a resulting decline in the market price of Statoil’s and Norsk Hydro’s shares;

	•	certain costs relating to the merger (such as legal, accounting and financial advisory fees), estimated to be up to approximately NOK 160 million, are payable by Statoil whether or not the merger is completed;

	•	there may be substantial disruption to the business of Statoil and Norsk Hydro and a distraction of their management and employees from day-to-day operations, because matters related to the merger, including integration planning, may require substantial commitments of time and resources, which could otherwise have been devoted to other opportunities that could have been beneficial to Statoil and Norsk Hydro; and

	•	Statoil and Norsk Hydro would continue to face the risks that they currently face as independent entities.

The failure to integrate the operations of Statoil and Hydro Petroleum successfully and on a timely basis could reduce the profitability of the merged company and adversely affect its share price.

Statoil and Norsk Hydro expect certain benefits to arise from the merger, such as new growth opportunities, improved performance, efficiencies, synergies and cost savings. See “The Merger — Reasons for the Merger”. Achievement of these benefits will depend in part upon whether the operations and the personnel of Statoil and Hydro Petroleum can be integrated in an efficient, effective and timely manner. If the merged company is not successful in this integration, its financial results could be adversely impacted. The challenges involved in this integration include the following:


	•	obtaining the required approvals of various regulatory agencies, any of which could impose conditions or restrictions on its approval;

	•	retaining key employees;

	•	redeploying resources in different areas of operations to improve efficiency;

	•	minimizing the diversion of management attention from ongoing business concerns; and

	•	addressing possible differences in the business cultures, processes, controls, procedures and systems of Statoil and Hydro Petroleum.

The anticipated benefits from the merger may not be achieved.

The success of the merger will depend, in part, on the merged company’s ability to effectively pursue additional growth opportunities, achieve improved performance, and realize efficiencies, synergies, cost savings and certain other benefits from combining the operations of Statoil and Hydro Petroleum. See “The Merger — Reasons for the Merger”. Even if the merged company is able to successfully combine the operations of Statoil and Hydro Petroleum, it may not be possible to realize the full benefits that Statoil and Norsk Hydro currently expect to result from the merger, or to realize these benefits within the time frame that is currently expected. The benefits of the merger may be offset by operating losses relating to changes in commodity prices or in oil and gas industry conditions, risks and uncertainties relating to the merged company’s exploration and production prospects, an increase in operating or other costs, unanticipated difficulties and costs related to the integration, the impact of competition and other risk factors relating to the industry.

Competition and other regulatory authorities may oppose the transaction or impose conditions on the transaction that may delay and/or lessen the anticipated benefits of the transaction.

Completion of the merger is subject to certain regulatory approvals, including competition approvals, from various regulatory authorities in Norway, the European Union, the United States and other jurisdictions.

Completion of the merger is subject to the Norwegian Ministry of Petroleum and Energy’s consent to the transfer of operatorships and any direct and/or indirect interests in exploration and production licenses and installations on the Norwegian Continental Shelf currently held by Norsk Hydro. Moreover, under the Norwegian Petroleum Taxation Act, approval by the Norwegian Ministry of Finance of the tax treatment of such transfer is required prior to completion of the merger. Norsk Hydro owns certain other energy-related assets that are subject to concessions granted pursuant to the Energy Act, and the transfer of such assets in connection with the merger may require the consent of the Norwegian Water Resources and Energy Directorate (NVE).

Statoil and Hydro Petroleum both conduct business in member states of the European Union. Council Regulation (EC) 139/2004 requires that certain concentrations involving parties with aggregate annual worldwide sales and individual European Union sales exceeding certain thresholds be formally notified to and approved by the European Commission before such mergers are implemented. Statoil and Norsk Hydro have commenced pre-notification discussions with the European Commission staff and have submitted on [ ] a formal notification. The transaction is also subject to the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and may therefore not be completed until notification has been filed with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice and the required waiting period has expired. Statoil and Norsk Hydro are required to notify the Commissioner of Competition in Canada of the transaction, which may not be completed until a 42-day waiting period has terminated or the Commissioner otherwise consents.

Statoil and Norsk Hydro conduct operations in a number of jurisdictions where other regulatory filings or approvals may be required or advisable in connection with the proposed transaction. Statoil and Norsk Hydro are currently in the process of reviewing whether other filings or approvals may be required or desirable in other jurisdictions that may be material to Statoil and Norsk Hydro and their subsidiaries. See “Regulatory Matters Pre-Emption Rights and Third Party Consents”.

These regulatory authorities may not grant the approvals or may not grant them on favorable terms or may otherwise challenge the transactions. Receipt of all necessary or material regulatory approvals and consents is a condition to the completion of the transactions according to the merger plan unless, in the opinion of the Norsk Hydro and Statoil boards, neither the failure to obtain consents nor potential conditions imposed by regulatory approvals would have a material adverse effect on the business of the merged company. It is possible that certain regulatory approvals will be subject to conditions that will adversely affect the merged company’s financial position or operations, including the divestiture of certain assets and businesses or the making of restrictive undertakings. Any such divestitures or undertakings, if required and implemented, could have a material adverse effect upon the merged company’s business and lessen the anticipated benefits of the transaction. Combination of the businesses in some countries following completion of the transaction may be delayed until such approvals (or any approvals for which filings are made after the completion of the transaction) have been obtained in the countries concerned.

Significant costs will be incurred in the course of the merger.

Statoil expects to incur significant transaction-related expenses related to the merger, which are estimated to be NOK 450 million. Transaction-related expenses include financial advisory, legal and accounting fees and expenses, filing fees, printing expenses and other related charges. Moreover, for the first fiscal years following the merger, the merged company will incur significant expenses to integrate the operations of Hydro Petroleum and Statoil. Statoil may also incur additional unanticipated expenses in connection with the merger. In addition, the merged company may incur unanticipated costs and experience unforeseen difficulties related to the integration of the operations, information systems and personnel of the two entities.

Some of the executive officers of Norsk Hydro and Statoil may have interests that are different from, or in addition to, the interests of other shareholders of Norsk Hydro and Statoil and that may have influenced their decision to support or approve the merger.

The interests of some of the executive officers of Norsk Hydro may be different from those of other Norsk Hydro’s shareholders. Some of Norsk Hydro’s executive officers are expected to be appointed as executive officers of the merged company. In addition, the successful completion of the merger of Hydro Petroleum with Statoil may positively impact the 2006 and 2007 bonuses of certain executive officers of Norsk Hydro. Similarly, the interests of certain executive officers of Statoil in the merger may be different from those of Statoil’s shareholders. The total remuneration of Statoil’s executive officers consists in part of an annual variable bonus payment that is based on the performance of the company and on the officer’s individual performance. The successful completion of the merger may have a positive impact on the 2006 and 2007 bonus amount to be paid to certain executive officers. See “The Merger — Interests of Certain Persons in the Merger”.

The financial information for Hydro Petroleum presented here may not be indicative of future results.

The Carve-Out Combined Financial Statements relating to Hydro Petroleum included in this document are derived from the historical financial statements of Norsk Hydro and are presented as though Hydro Petroleum was a separate enterprise, based upon the structures in place during the periods covered. Accordingly, such information may not reflect what the results of operations, financial position and cash flows would have been had Hydro Petroleum been a separate, stand-alone entity during the periods presented and it may not be indicative of the results of operations, financial position and cash flows of the merged company in the future.

Norwegian law subjects Norsk Hydro and the merged company to joint liability after the merger.

The transaction results in the obligations of Norsk Hydro being apportioned between Norsk Hydro and Statoil in accordance with the principles of the merger plan. If either Norsk Hydro or Statoil fails to satisfy an obligation that arose prior to completion of the merger, and which was allocated to it pursuant to the merger plan, the other party will be jointly and severally liable under Norwegian law for such obligation unless it is or has been otherwise provided for in respect of the creditor in question. This statutory liability is unlimited in time, but limited in amount to the equivalent of the net value allocated to the non-defaulting party in the demerger (which is the value of Hydro Petroleum in the case of Statoil and the value of the remaining Norsk Hydro business in the case of Norsk Hydro).

The Merger Plan subjects the merged company to contingent liabilities related to discontinued activities of Norsk Hydro.

If the merger is completed, the merged company will assume a portion of the contingent liabilities relating to discontinued activities of Norsk Hydro (including environmental and pension liabilities relating to the company’s former fertilizer and magnesium operation). The contingent liabilities relate to former activities that due to restructurings, divestments, spin offs and close downs are no longer part of the Norsk Hydro group. These obligations include but are not limited to contingent environmental obligations related to the former magnesium and fertilizer business, as well as statutory joint liability resulting from the demerger of Norsk Hydro’s former fertilizer business (now Yara International ASA) for pre-demerger obligations. The division of these liabilities

between Hydro Petroleum and Norsk Hydro was agreed upon by the parties in the Merger Plan as an equitable allocation in light of the fact that those liabilities do not relate to either Hydro Petroleum or the business that will be conducted by Norsk Hydro following the merger. The merged company may incur significant costs in connection with remediation of environmental contamination at the formerly held fertilizer manufacturing, distribution, storage and blending facilities which could negatively affect the merged company’s financial condition. See “The Merger Plan — Allocation of Assets and Liabilities, Rights and Obligations Pursuant to the Merger Plan”.

Transfers of assets to be effected prior to completion of the merger could cause the merged company to incur unanticipated tax liabilities.

Norsk Hydro has agreed to carry out a number of intra-group transfers of assets, including shares, prior to completion of the merger in order to reorganize the ownership of Norsk Hydro’s subsidiaries and other entities that comprise Hydro Petroleum and to facilitate the merger with Statoil. Although such transfers are expected not to trigger significant tax liabilities in Norway or in other jurisdictions, it is an inherent risk in such transfers that the relevant tax authorities may subject one or more of these transfers to unanticipated capital gains taxes, duties and stamp taxes or other taxes. In addition, changes in the business or corporate structure of Hydro Petroleum after the merger may result in tax liabilities for one or more companies in the Norsk Hydro group to the extent that those changes constitute a breach of the conditions for tax exemption in connection with a transfer of assets effected prior to completion of the merger. Under the merger plan, Statoil and Norsk Hydro have agreed that the merged company will indemnify Norsk Hydro for any tax liabilities arising out of or connected to such transfers. See “The Merger Plan — Implementation of the Merger” and “— Taxation”.

Risks Related to the Business of Statoil

You should read and consider the risks associated with the business of Statoil because these risks will relate to the merged company. See “Item 3 — Risk Factors” in the Statoil 2006 Form 20-F which is incorporated by reference in this circular/prospectus.

Risks Related to the Business of Hydro Petroleum

A substantial or extended decline in oil or natural gas prices would have a material adverse effect on Hydro Petroleum’s business.

Historically, prices for oil and natural gas have fluctuated widely in response to changes in many factors, including:


	•	Global and regional economic and political developments in resource-producing regions, particularly in the Middle East;

	•	Changes in the supply of and demand for oil and natural gas;

	•	Agreements among the members of the Organization of the Petroleum Exporting Countries (OPEC) regarding oil price and production controls; and

	•	Oil companies’ spending on exploration and production activities.

Notwithstanding current high oil prices, it is impossible to predict future oil and natural gas price movements. Declines in oil and natural gas prices will reduce Hydro Petroleum’s financial results. See “Hydro Petroleum Management Discussion and Analysis of Financial Condition and Results of Operations — Market Risk — Quantitative and Qualitative Analysis” for an analysis of indicative price and currency sensitivities of earnings to changes in these factors. Declines in prices may also affect the economic viability of Hydro Petroleum’s projects, leading to cancellation or postponement and the subsequent failure to maintain production levels or develop new reserves.

The future performance of Hydro Petroleum depends on the ability to find or gain access to additional oil and gas reserves that are recoverable in a profitable way.

Hydro Petroleum’s future production is dependent upon its success in finding or acquiring, and developing, additional reserves in a manner that allows economically viable production. Over 90 per cent of its proved reserves are located on the NCS. The southern part of the NCS, the location of the most easily accessible and exploitable fields offshore Norway, is a maturing resource province from which reserve additions have been low in recent years. Internationally, national oil companies control roughly two-thirds of the potential resource base, with only the remainder available for exploration by international oil companies like Hydro Petroleum. Accordingly, to the extent that national oil companies choose to develop their oil and gas resources without the participation of international oil companies or to the extent that Hydro Petroleum is not viewed as a sufficiently attractive collaborating partner, its exploration and development opportunities would be limited to a much smaller potential resource base.

Because of limited access to major new exploration provinces, the bidding for available properties and prospects has intensified and is characterized by high price expectations and increasingly stringent conditions. In addition, the substantial increase in exploration activities by the industry as a whole has had a significant effect on the rates and availability of drilling rigs and other technical resources. While Hydro Petroleum has secured drilling rig capacity for its own operated fields on the NCS through 2009 and in the GoM through 2013, capacity beyond those dates is not guaranteed. Nor does it control such capacity on fields operated by its third-party partners.

Unless Hydro Petroleum conducts successful exploration and development activities or acquires properties containing proved reserves or resources to be matured into proved reserves, or both, its proved reserves will decline as reserves are produced, which could have an adverse impact on operating results and its future financial position. If Hydro Petroleum is unable to consistently replace its oil and gas reserves, targets for future production may not be met.

Expansion of Hydro Petroleum’s business in emerging and transitioning market countries presents a higher degree of financial, political, economic and business risk.

Hydro Petroleum is exposed to general financial, political, economic and business risks in connection with its international exploration, development and production activities. The degree of these risks for Hydro Petroleum is generally higher in emerging and transitioning markets such as Angola, Brazil, Iran, Libya and Russia, where it has substantial or potentially expanding oil and energy business interests as field mature in more developed areas.

In Russia, recent developments within the oil and energy industry indicate that national oil companies may play a more dominant role in developing and operating major new projects. For example, Hydro Petroleum has been involved with the giant Shtokman gas field project since 1989 and was short-listed as a possible partner for development of the field in 2005. In October 2006, Gazprom, the Russian-owned gas company, communicated that it would develop the field without awarding international oil and gas companies working interests in the field.

Emerging or transitioning market countries may experience political instability, civil strife, acts of war and local security concerns that threaten the safe operation of facilities, and governments in such countries may engage in expropriation or nationalization of property, restrictions on production or imports and exports, price controls, tax increases and cancellation of contract rights. Any of these conditions occurring could disrupt or terminate Hydro Petroleum’s operations, causing development activities to be curtailed or terminated in these areas or production to decline and could result in additional costs. In addition, legal, fiscal and regulatory systems may be less stable and have a lower degree of transparency, making investment evaluation more difficult and increasing the risk that actual returns are substantially lower than expected.

Emerging and transitioning market countries represent a competitive threat to Hydro Petroleum’s businesses that could be exacerbated by regulatory developments in Europe.

Emerging or transitioning market countries with abundant natural resources, low cost labor and energy and lower environmental standards have posed and will continue to pose a competitive threat to Hydro Petroleum’s business.

Natural gas production and sale is becoming increasingly important to Hydro Petroleum’s business.

While 70 per cent of Hydro Petroleum’s annual gas production is committed for delivery to the EU through long-term contracts, regulatory changes attempting to open the European gas market to greater competition — which commenced with the EC Directive 98/30 effective in August 2000 — could fundamentally alter the structure of European gas markets, affecting Hydro Petroleum’s ability to expand or maintain its current market position in the EU. Hydro Petroleum’s most significant competition in the EU gas market is from deliveries from Russia and Algeria, and EU policies could result in significant increases in deliveries of gas from Russia and Algeria into the EU market, thereby creating downward pricing pressure. Consequently, Hydro Petroleum could suffer a decline in the value of its gas reserves or quantities of gas sold under its contracts could become subject to a material reduction in gas prices.

Hydro Petroleum is exposed to foreign currency exchange rate fluctuations.

Hydro Petroleum’s core businesses are impacted by changes in exchange rates primarily relating to the Norwegian kroner, Euro and U.S. dollar.

Oil prices are denominated in U.S. dollars while Hydro Petroleum’s gas sales are denominated in Euro. Its operating results are reported in Norwegian kroner. Accordingly, operating results will, in general, decline when the Norwegian kroner strengthens against the U.S. dollar or Euro. See “Hydro Petroleum Management Discussion and Analysis of Financial Condition and Results of Operations — Market Risk — Quantitative and Qualitative Analysis” for an analysis of indicative price and currency sensitivities of earnings to changes in these factors.

Hydro Petroleum’s reported earnings are subject to substantial volatility as a result of fluctuations in the market value of commodity contracts.

Hydro Petroleum is exposed to market risks from commodity price fluctuations. Market risk exposures are determined on a net exposure basis taking advantage of offsetting positions. Hydro Petroleum uses derivative contracts to hedge certain exposures. Hydro Petroleum has initiated a program to secure prices of the expected oil and gas production from fields acquired as part of the Spinnaker acquisition for the period from 2006 to 2008. In addition, certain of Hydro Petroleum’s purchase and sales contracts are deemed to be derivatives under U.S. GAAP. For example, certain of Hydro Petroleum’s gas contracts are deemed to be derivative contracts in accordance with SFAS 133 Accounting for Derivative Instruments and Hedging Activities. In accordance with SFAS 133, all derivative instruments are required to be included in the balance sheet at fair value with changes in fair value recognized in earnings unless specific hedge criteria are met. Changes in the fair value of such contracts could cause significant fluctuations in Hydro Petroleum’s reported earnings. See Note 23 to the Carve-Out Combined Financial Statements for further information on derivative instruments and market risk.

Hydro Petroleum is exposed to risks relating to trading and commercial activities.

Hydro Petroleum is engaged in substantial trading and commercial activities in the physical markets and also uses financial instruments such as forwards, futures and options both on and off exchanges in order to manage and hedge certain fluctuations in prices and production volumes.

Although Norsk Hydro believes it has established appropriate risk management procedures, trading activities involve elements of forecasting and Hydro Petroleum bears the risk of market movements, the risk of significant losses if prices move contrary to expectations and the risk of default by counterparties. See Note 23 to the Carve-Out Combined Financial Statements for further information on derivative instruments and market risk. Any of these risks could result in lower profits and could cause the enterprise value of Hydro Petroleum to decline.

Hydro Petroleum’s oil and gas reserves are only estimates and may prove to be inaccurate.

There are numerous uncertainties inherent in estimating quantities of proved reserves and their values, including many factors beyond the control of the producer. The reserve data included in this circular/prospectus represent only Hydro Petroleum’s estimates. The estimates of other companies with interests in the same oil and gas field or fields may differ and the magnitude of the differences may be substantial. This reflects the degree to which reservoir engineering is a subjective and inexact process, requiring the estimate of underground accumulations of oil and natural gas that cannot be measured in an exact manner. Evaluating properties for their recoverable reserves of oil and natural gas entails the assessment of geological, engineering and production data, some or all of which may prove to be unreliable. Accordingly, reserve estimates may be subject to downward or upward adjustment. Actual production, revenues and expenditures with respect to Hydro Petroleum’s reserves will likely vary from estimates, and those variances may be material. Any downward adjustment in its reserve data could lead to lower future production, which would negatively affect operating results and financial condition. See discussion under “Hydro Petroleum Management Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” for further information on estimates of proved oil and gas reserves.

Hydro Petroleum’s development projects and production involve many uncertainties and operating risks that can prevent it from realizing profits and can cause substantial losses.

Hydro Petroleum is involved in potential development projects in remote locations with limited operational histories and, consequently, the success of these projects is uncertain. In addition, some of its development projects are located in deepwater or other hostile physical environments, such as areas on the NCS, the U.S. Gulf of Mexico and Angola. Some projects are also engaged in developing solutions for highly complex reservoirs. Planning and development of the Ormen Lange field, for example, has been described as one of the most challenging assignments any oil company has tackled, not just in Norway, but in a global context, given the combination of deepwater, harsh weather conditions, freezing water temperatures and the need to transport gas for processing over long distances and a very uneven seabed. Such complexity increases the risk of significant cost overruns or delays in completion. Failures in project delivery could also reduce Hydro Petroleum’s ability to gain important operator licenses for future major development projects.

The production of oil and natural gas is vulnerable to weather conditions, operator error or other incidents, which can result in oil spills, gas leakages, equipment failure, unplanned maintenance stops, loss of well control or other occurrences disrupting production and potentially causing harm to the environment. In addition, reservoir conditions may differ from design expectations resulting in higher production cost, lower output or lower total recovery without additional significant investment in infrastructure.

Hydro Petroleum is also exposed to operational risks, including uncertainties related to costs of drilling, completing or operating wells. It may be required to curtail, delay or cancel drilling because of unexpected drilling conditions, pressure or irregularities in geological foundations, equipment failures or accidents, adverse weather and other operating risks. It may also experience engineering or design failures relating to highly complex or advanced technical field solutions.

Any of the risks above could result in cost overruns and potentially impair Hydro Petroleum’s ability to make discoveries and/or economical production on a consistent basis, thereby negatively affecting its financial condition.

Hydro Petroleum may be subject to the imposition of sanctions by the U.S. government in connection with its activities in Iran.

Since 2000 Hydro Petroleum has been engaged in certain petroleum exploration activities in Iran, which in 2005 resulted in the Azar oil discovery and in 2006 resulted in the Changuleh West oil discovery, both in the Anaran Block. LUKOIL farmed into the block in 2003 with an equity share of 25 per cent.

Following the commerciality declaration of the Azar discovery on August 1, 2006, the National Iranian Oil Company and Hydro Petroleum/ LUKOIL agreed to conduct negotiations of a Master Development Plan and a Development Service Contract.

In September 2006, Hydro Petroleum entered into the Khorramabad Exploration and Development Contract, with a total commitment of USD 49.5 million over four years related to seismic survey and other exploration activities.

Hydro Petroleum has no petroleum production in Iran, and does not receive any fees or income from petroleum production in Iran.

The Iran Sanctions Act of 1996 (the “ISA”) (as amended) requires the President of the United States to impose two or more sanctions against any person or company, regardless of nationality, that makes investments in Iran of USD 20 million or more in any 12-month period that directly and significantly contribute to the enhancement of Iran’s ability to develop its petroleum resources. To date, no sanctions have ever been imposed against any person or entity under ISA, which makes it difficult to predict the political and other policy considerations that would prompt the U.S. government to impose sanctions under the ISA for Hydro Petroleum’s activities in Iran. Should the U.S. government, however, determine that Hydro Petroleum has violated the ISA, it would face sanctions that could include a ban on the issuance of a license to export goods or technology to a sanctioned person, the prohibition of loans or extensions of credit by U.S. financial institutions to a sanctioned person and restrictions on imports into the United States from a sanctioned person. The imposition of such sanctions may have a material adverse effect on Hydro Petroleum.

Hydro Petroleum may suffer a major operational incident resulting in loss of life or extensive damage to the environment or communities, resulting in substantial damage to its reputation or financial position.

Hydro Petroleum’s business demands large and complex industrial sites involving extensive numbers of employees. Certain of the Hydro Petroleum’s operations are located in close proximity to sizable communities while other operations are situated in areas highly sensitive to environmental harm. Important and sizable production facilities are located both on and offshore Norway, an area subject to extreme and dramatic weather on a periodic basis.

The safe operation of all facilities is paramount in Norsk Hydro’s governance model and management systems. However, major accidents due to human error, systems failures, extreme weather or deliberate sabotage, while considered remote, could result in loss of life or extensive damage to the environment or communities, resulting in substantial damage to Hydro Petroleum’s reputation, financial position and future prospects.

Hydro Petroleum is exposed to tax increases or other changes in fiscal regimes on its petroleum production.

Hydro Petroleum has income from petroleum production which is taxed under the applicable tax laws of Norway, Angola, Canada, Libya, Russia and the United States. Any of these countries could modify its tax laws in ways that would adversely affect Hydro Petroleum.

Historically, the long-term marginal tax rate applicable to oil and gas production has tended to change in correlation with the price of crude oil. The currently high oil and gas prices increase the risk of adverse changes in tax regimes. Significant changes in the tax regimes of countries in which Hydro Petroleum operates could have a material adverse effect on its liquidity and results of operations.

Hydro Petroleum is subject to a broad range of environmental, health and safety laws and regulations in the jurisdictions in which it operates.

Hydro Petroleum incurs, and expects to continue to incur, substantial capital and operating costs and expenditures to comply with new laws and regulations increasing the protection of the environment and natural resources and the promotion of health and safety. These laws and regulations impose more stringent standards and requirements and potential liabilities regarding accidents and injuries, the construction and operation of its plants and facilities, oil spills or discharges, air and water pollutant emissions, the storage, treatment and discharge of waste waters, the use and handling of hazardous or toxic materials, waste disposal practices, and the

remediation of environmental contamination, among other things. Although Hydro Petroleum believes it is in substantial compliance with currently applicable environmental, health and safety laws and regulations, there is a possibility of unintentional violation by it or violations by partners or other parties that it may be involved with. Violations of such laws and regulations could result in substantial fines or penalties, costs of corrective works and, in rare instances, the suspension or shutdown of Hydro Petroleum’s operations.

In addition, new laws and regulations, the imposition of tougher licensing requirements or increasingly strict enforcement or new interpretations of existing laws and regulations, may result in additional, substantial capital or operating costs, including for modifying operations, installing pollution control equipment and implementing additional safety measures.

Environmental laws may impose cleanup liability on owners and occupiers of contaminated property, including past or divested properties, regardless of whether the owners and occupiers caused the contamination or whether the activity that caused the contamination was lawful at the time it was conducted.

Hydro Petroleum is also subject to claims made for damage to property or injury, including adverse health effects, to employees and other persons resulting from the environmental, health or safety effects of its operations or past contamination. While Hydro Petroleum is not presently the subject of any material claims in this regard, there can be no assurance that such claims will not be made or that, if made, such claims will not have a material adverse effect on its business, financial condition or results of operations.

Hydro Petroleum is exposed to the risk of a deterioration or sudden dramatic decline in its reputation among important stakeholders.

Hydro Petroleum’s future success depends on acknowledging and actively monitoring the concerns of all legitimate stakeholders, including employees, governments, civil society groups, non-government organizations and the communities in which it operates. Failure to take appropriate consideration of legitimate corporate responsibility issues in investment decisions and day-to-day operations could have a material impact on its reputation and business.

Inappropriate or inadequate communication following a major crisis, such as a major operational incident, breach of law or ethics or leak of market-sensitive confidential information could quickly and seriously impair Hydro Petroleum’s reputation. Depending on the nature of such a major crisis, effective communication may not mitigate serious damage to its reputation and may render it subject to criminal and civil prosecution or class action suits by shareholders and other interested parties. Any of these risks could have a material impact on its reputation and business.

Hydro Petroleum may not be successful in attracting and retaining sufficient skilled employees.

Hydro Petroleum is highly dependent on the continuous development and successful application of new technologies. In addition, its position as a major, global industrial company requires substantial capacity and competence in terms of complex management and critical business processes. In order to manage new developments in a rapidly changing world and to achieve future growth, Hydro Petroleum must recruit and retain qualified scientists, engineers, managers and other professionals within the areas of human resources, finance and accounting, law and communications.

Demand for personnel with the range of capabilities and experience required in the petroleum business is high, and success in attracting and retaining such employees is not guaranteed. Failure to retain and attract critical personnel could result in a shortage of such people due to normal attrition. This could result in the inability to maintain the appropriate technological or business improvements or take advantage of new opportunities that may arise. A subsequent decline in competitiveness could have a negative impact on Hydro Petroleum’s operating results and financial condition.

THE NORSK HYDRO EXTRAORDINARY GENERAL MEETING

Date, Time, Place and Matters to be Considered

At the extraordinary general meeting of Norsk Hydro’s shareholders, to be held on [ ], 2007 at [ ] [a.m/p.m] (Oslo time) at [place], Norsk Hydro’s shareholders will vote on the following proposals:


	•	approval of the merger plan between Statoil and Norsk Hydro, attached to this circular/prospectus as Appendix A;

	•	[election of members to Norsk Hydro’s Corporate Assembly;]

	•	reduction of the share capital through (i) the cancellation of treasury shares and (ii) the redemption of a portion of the Norwegian State’s shares, in a number sufficient to ensure that the Norwegian State’s ownership interest in Norsk Hydro remains unchanged after the cancellation of the treasury shares; and

	•	authorization to repurchase [ ] shares in the market, corresponding to the number of treasury shares sold to employees in Norway as part of a general share incentive scheme.

For details regarding the merger plan, see “The Merger Plan”.

[Details of Corporate Assembly election if applicable]

By approving the merger plan, Norsk Hydro’s shareholders will approve a reduction of the company’s share capital and the related change in Norsk Hydro’s articles of association to permit the transfer of Hydro Petroleum to Statoil in exchange for Statoil shares as contemplated by the merger plan. The proposed change to Norsk Hydro’s articles of association is set out in full in the merger plan attached to this circular/prospectus as Appendix A.

Norsk Hydro’s annual general meeting on May 9, 2006 authorized the board to repurchase up to 22,470,482 shares in the market for subsequent cancellation. In connection therewith, the Norwegian State agreed to the redemption and the cancellation of a number of its shares proportional to the number of Norsk Hydro shares that are repurchased and cancelled. As a result, the Norwegian State’s ownership interest will remain unchanged following such repurchase and cancellation. The Norwegian State has undertaken to vote in favor of such cancellation and redemption at the extraordinary general meeting. Pursuant to the buyback agreement, the compensation to the Norwegian State for the redeemed shares will be determined by the volume weighted average price paid in the market under the buyback, plus interest at NIBOR + 1 per cent per annum, calculated from the dates of each purchase of shares until the time of cancellation. In accordance with the existing authorization and in reliance on the agreement with the Norwegian State, Norsk Hydro has acquired 21,627,000 treasury shares through purchases in the market. The board of directors of Norsk Hydro proposes that the company’s share capital be reduced by NOK 140,904,531.96 by (i) cancellation of such treasury shares and (ii) redemption of 16,871,506 shares owned by the Norwegian State against payment of an amount calculated as described above.

Quorum — Vote Required — Shareholders Entitled to Vote

Under Norwegian law, there are no quorum requirements applicable to general meetings. The resolutions approving the merger plan, the reduction of the share capital and the authorization to acquire treasury shares require the affirmative vote of a two-thirds majority of the share capital represented at the extraordinary general meeting. [The election of members to Norsk Hydro’s Corporate Assembly is made by simple majority.] Under Norwegian law, other than the general right to contest the legality of a decision taken by the general meeting, shareholders are not entitled to exercise dissenters’ rights or appraisal rights should the merger plan be approved.

The Norwegian Government has submitted a “White Paper” proposal to the Norwegian Parliament, which, among other things, contemplates that the Government be authorized by Parliament to vote to approve the merger plan at the Norsk Hydro ASA EGM. It is expected that Parliament will vote on the White Paper in June 2007.

Norsk Hydro’s Articles of Association provide that all shareholders may attend and vote at the extraordinary general meeting (in person or by proxy) provided they notify Norsk Hydro of their intention to attend at least five

days prior to the meeting. It is necessary to attend the meeting (in person or by proxy) in order to vote on the proposals before the shareholders. In order to attend and vote at the meeting, an acquirer of shares must ensure that such shares are registered in his own name in Norsk Hydro’s share register with the VPS System prior to the date of the general meeting.

A registered holder of Norsk Hydro ADSs on the date established by JPMorgan Chase Bank, N.A., as depositary for the Norsk Hydro ADRs (the “Norsk Hydro Depositary”) may provide voting instructions with respect to the meeting of shareholders. In order to so vote, registered holders of Norsk Hydro ADSs must timely and properly deliver their voting instructions to the Norsk Hydro Depositary along with their American Depositary Shares, which will be blocked until after the meeting date. Investors holding ADSs through a bank, broker or other participant within The Depository Trust Company can become a registered holder of such ADSs for purposes of voting by timely delivering their ADSs to an account established by the Norsk Hydro Depositary and contacting the Norsk Hydro Depositary for a voting instruction card. Upon timely receipt of voting instructions and the requisite Norsk Hydro ADSs, the Norsk Hydro Depositary will endeavor to temporarily re-register the Norsk Hydro shares represented by the Norsk Hydro ADSs so delivered to the Norsk Hydro Depositary in the name of the registered holder thereof or as otherwise directed by him.

After the meeting, the re-registered Norsk Hydro shares will automatically be further re-registered into the name of the Norsk Hydro Depositary or its nominee and the Norsk Hydro Depositary will return any ADSs previously delivered to it in connection with such voting.

The Norsk Hydro Depositary will inform all registered holders of Norsk Hydro ADSs as to the deadline established by it for providing such voting instructions and become a registered holder of Norsk Hydro ADSs and the underlying shares represented thereby.

There is no guarantee that holders of Norsk Hydro ADSs will be able to provide voting instructions at the extraordinary general meeting or become a registered holder of the shares represented by their Norsk Hydro ADSs in a timely manner so as to enable their voting instructions to be considered. Neither the Norsk Hydro Depositary nor its agent shall be responsible for failing to carry out any voting instructions, for re-registration of the shares represented by their ADSs or for any other matter related thereto. This means that Norsk Hydro ADS holders may not be able to exercise their right to vote and there may be nothing Norsk Hydro ADS holders can do if the Norsk Hydro ordinary shares underlying their Norsk Hydro ADSs are not voted as requested.

Alternatively, a holder of Norsk Hydro ADSs may convert the ADSs to ordinary shares and register those shares in the VPS System. A shareholder holding shares through a nominee account must withdraw his shares from the nominee account and register such shares in his own name in Norsk Hydro’s share register with the VPS System. For a description of the VPS System, see ”Description of Statoil’s Shares and Share Capital — The VPS System and Transfer of Shares”.

THE STATOIL EXTRAORDINARY GENERAL MEETING

Date, Time, Place and Matters to be Considered

At the extraordinary general meeting of Statoil’s shareholders, to be held on [ ], 2007 at [•] [a.m./p.m.] (Oslo time) at [place], Statoil’s shareholders will vote on the following proposals:


	•	approval of the merger plan between Statoil and Norsk Hydro attached to this circular/prospectus as Appendix A;

	•	election of members to the merged company’s Corporate Assembly and Election Committee;

	•	reduction of capital through (i) the cancellation of treasury shares and (ii) the redemption of a portion of the Norwegian State’s shares, in a number sufficient to ensure that the Norwegian State’s ownership interest in Statoil remains unchanged after the cancellation of the treasury shares.

For details regarding the merger plan and the associated issuance of Statoil ordinary shares to Norsk Hydro’s shareholders, see “The Merger Plan”.

By approving the merger plan, Statoil’s shareholders will approve changes to Statoil’s articles of association, which would only become effective upon completion of the merger. Those changes include increasing the company’s share capital to permit the exchange of Statoil shares for the Hydro Petroleum business as contemplated by the merger plan, increasing the size of the Corporate Assembly from twelve to eighteen members, of which twelve shall be elected by shareholders and six shall be elected by employees of the merged company, removing reference to the appointment duration for members of the board of directors and the Corporate Assembly and changing the name of the company after the merger. The proposed changes to Statoil’s articles of association are set out in full in the merger plan attached to this circular/prospectus as Appendix A.

In accordance with the merger plan, of the twelve members to the Corporate Assembly to be elected by shareholders, Norsk Hydro’s election committee shall nominate five and Statoil’s election committee shall nominate seven. Accordingly, the Election Committee of Norsk Hydro has nominated [ ], [ ], [ ], [ ] and [ ] and the Election Committee of Statoil has nominated [ ], [ ], [ ], [ ], [ ], [ ] and [ ] for election to the Corporate Assembly of the merged company. Furthermore, the merger plan provides that the merged company shall have an Election Committee composed of four members, of which the election committee of Norsk Hydro and Statoil shall each nominate two. Accordingly, the Election Committee of Norsk Hydro has nominated [ ] and [ ], and the Election Committee of Statoil has nominated [ ] and [ ] for election to the Election Committee of the merged company. The election of the new Corporate Assembly and Election Committee will be conditional on, and be effective from, completion of the merger.

Statoil’s annual general meeting on May 10, 2006 authorized the board to repurchase up to 50 million shares in the market for subsequent cancellation. In connection therewith, the Norwegian State agreed to the redemption and the cancellation of a number of its shares proportional to the number of Statoil shares that are repurchased and cancelled. As a result, the Norwegian State’s ownership interest will remain unchanged following such repurchase and cancellation. The Norwegian State has undertaken to vote in favor of such cancellation and redemption at the extraordinary general meeting. Pursuant to the repurchase agreement, the compensation to the Norwegian State for the redeemed shares will be determined by the volume weighted average price paid in the market under the buyback, plus interest at NIBOR + 1 per cent per annum, calculated from the dates of each purchase of shares until the time of cancellation. In accordance with the existing authorization and in reliance on the agreement with the Norwegian State, Statoil has acquired 5,867,000 treasury shares through purchases in the market. The board of directors of Statoil proposes that the company’s share capital be reduced by NOK 50,397,120 by (i) cancellation of such treasury shares and (ii) redemption of 14,291,848 shares owned by the Norwegian State against payment of an amount calculated as described above.

Quorum — Vote Required — Shareholders Entitled to Vote

Under Norwegian law, there are no quorum requirements applicable to general meetings. The resolution approving the merger plan and the reduction of share capital require the affirmative vote of a two-thirds majority

of the share capital represented at the extraordinary general meeting. The Norwegian Government has submitted a “White Paper” proposal to the Norwegian Parliament, which, among other things, contemplates that the Government be authorized by Parliament to vote to approve the merger at the Statoil ASA EGM. It is expected that Parliament will vote on the White Paper in June 2007. The election of members to Statoil’s Corporate Assembly and Election Committee is made by simple majority. Under Norwegian law, other than the general right to contest the legality of a decision taken by the general meeting, shareholders are not entitled to exercise dissenters’ rights or appraisal rights should the merger plan be approved.

It is necessary to attend the meeting (in person or by proxy) in order to vote on the proposals before the shareholders. In order to attend and vote at the meeting, an acquirer of shares must ensure that such shares are registered in the VPS System prior to the date of the general meeting or provide other evidence of ownership satisfactory to Statoil. A holder of Statoil ADSs who desires to vote at the meeting may instruct Statoil’s ADR Depositary, The Bank of New York, as to the exercise of voting rights pertaining to the deposited Statoil shares represented by the Statoil ADSs, and The Bank of New York shall endeavor, insofar as practicable and permitted, to cause the deposited Statoil shares to be voted in accordance with those instructions. The Bank of New York will distribute further information regarding this procedure and its restrictions to Statoil ADS holders directly. See “Description of Statoil’s American Depositary Shares — Voting Rights.” Alternatively, a holder of Statoil ADSs may withdraw the underlying Statoil shares from the ADR Depositary and register such shares in his own name in Statoil’s share register in the VPS System prior to the date of the general meeting. A shareholder holding shares through a nominee account must also withdraw his shares from the nominee account and register such shares in his own name in Statoil’s share register with the VPS. For a description of the VPS System, see “Description of Statoil’s Shares and Share Capital — The VPS System and Transfer of Shares”.

THE MERGER

The following is a description of the material aspects of the merger. Statoil and Norsk Hydro encourage you to carefully read this entire circular/prospectus, including the merger plan attached to this circular/prospectus as Appendix A, for a more complete description of the merger.

Background of the Merger; Past Material Contacts with Norsk Hydro

The board and senior management of Statoil have regularly discussed opportunities for growth as well as Statoil’s overall position in the industry. Norsk Hydro’s board and senior management have also engaged in similar discussions over time, and continued to evaluate the strategic advantages and disadvantages of the integration of Norsk Hydro’s petroleum business with its aluminium business.

In the course of 2006, in response to increasing competition for access to resources in the international oil and gas industry, Statoil and Norsk Hydro, independently of one another, engaged in a strategic review of their growth strategy and their competitive environment with a view to enhancing their respective competitive positions internationally. Furthermore, in the summer of 2006, Norsk Hydro’s board of directors and senior management began to assess the desirability of operating its aluminium business and its petroleum business within an integrated group, and started to look at a combination with Statoil as one option.

The companies had had exploratory discussions in 2004 regarding the desirability and feasibility of a merger. On January 12, 2004, Mr. Eivind Reiten, President and Chief Executive Officer of Norsk Hydro, and Mr. Inge K. Hansen, then acting Chief Executive Officer of Statoil, had a meeting to discuss general industry trends, one of which was strategic cooperation. At this meeting, the possibility of closer cooperation between Statoil and Norsk Hydro was raised. During the following two weeks, senior executives of the two companies engaged in further exploratory discussions with respect to the desirability and feasibility of a merger and the issues that would need to be addressed in negotiations. On February 10, 2004, in response to public rumors that Statoil and Norsk Hydro were holding strategic discussions, each company issued a press release, after consultation between Mr. Hansen, Mr. Reiten and Sven Arild Andersen, head of the Oslo Stock Exchange, acknowledging that the two companies had engaged in preliminary discussions with respect to the possibility of closer cooperation but that such discussions had been terminated. The discussions were terminated because Statoil’s and Norsk Hydro’s management had determined that publication of the rumours made it impossible to continue any exploratory merger discussions because the media attention would prevent the parties from engaging in constructive confidential negotiation. The merger discussions in 2004 had remained at a very early stage and had not matured sufficiently for a full board evaluation by either company.

Morgan Stanley had originally performed financial advisory and investment banking services for Statoil in the context of the contemplated transaction in 2004. Given its previous involvement, Morgan Stanley worked with Statoil between May 2006 and November 2006 examining various strategic options, including a merger with the oil and gas business of Norsk Hydro. This work included the valuation of Norsk Hydro, evaluation of potential transaction structures, and addressing various strategic and tactical issues.

Goldman Sachs and Citigroup had advised Norsk Hydro regarding different strategic options over the past two years. As part of the in-depth review conducted by Norsk Hydro of the structural options for its two key business areas in 2006, Goldman Sachs was retained as Norsk Hydro’s primary advisor in June 2006. Goldman Sachs worked with Norsk Hydro to assess and evaluate the impact on shareholder value of several strategic options, including a possible de-merger of Hydro Petroleum and subsequent combination with Statoil. Among the alternative options considered were the acquisition of other exploration and production companies and the demerger and subsequent separate listing of the Norsk Hydro aluminium business. These options were evaluated with respect to a number of criteria, such as the potential to create shareholder value and feasibility. The merger of Hydro Petroleum with Statoil was considered by management of Norsk Hydro to best fulfill such criteria.

On August 29 and October 17, 2006, Mr. Reiten, President and Chief Executive Officer of Norsk Hydro, and Mr. Lund, President and Chief Executive Officer of Statoil, met to discuss a number of topics of mutual interest including the strategic options available to the two companies in light of the changes in the global energy industry such as consolidation among industry players, rising energy prices, increased competition for access to resources

and higher production costs due to capacity constraints. At the Norsk Hydro board meeting held on October 30, in the course of which strategic issues related to both Norsk Hydro’s oil and gas and aluminium businesses were discussed, the board expressed support for the CEO to explore the basis for negotiations on a possible combination of the company’s oil and gas activities with Statoil, amongst other alternatives. On November 3, 2006, Mr. Reiten and Mr. Lund met to discuss strategic options for the two groups, including a discussion of a possible merger of Statoil and the oil and gas activities of Norsk Hydro and also explored the necessary pre-conditions for a successful negotiation of a potential merger. They discussed the strategic rationale for a possible merger, identified key negotiation topics and discussed the design of a possible merger process. These discussions were further progressed in meetings held between them on November 15, November 30 and December 12, 2006. These meetings addressed key elements of principle for a “merger of equals”, such as pricing principles and general organizational principles. Statoil and Norsk Hydro agreed that any combination among them should be informed by the principles of a merger of equals in light of the companies’ status as Norway’s significant oil and gas companies, their commonality of interests in several producing fields and the objective of preserving Hydro Petroleum management and technical competencies as part of the merged company. The companies believe that those principles were eventually successfully implemented through, among other things, the composition of the merged company’s board and senior management which is expected to include Norsk Hydro representatives, including the merged company’s chairman. Representatives from Goldman Sachs and Morgan Stanley were present at the November 15 meeting and presented possible approaches to arrive at a merger ratio in the event of a merger after a preparatory meeting amongst themselves on November 9th.

While discussions among the CEOs progressed, a meeting was held on November 24, 2006 in Oslo between Mr. Sætre and Mr. Ottestad, together with a small group of other senior executives from the two companies. The meeting was exploratory in nature and focused on identifying the technical and financial preconditions for a possible negotiation. The possible deal structures were discussed including the simultaneous demerger of Hydro Petroleum and merger with Statoil and the all-stock nature of the combination and Statoil as the surviving company. The parties also discussed the scope of the assets and liabilities of Norsk Hydro that could be part of a possible merger, and the level of debt to be transferred. In addition, the parties outlined in broad terms the scope of and process for a due diligence review. Possible price adjustment mechanisms between the effective date of the merger and closing were discussed but not agreed. The parties ended the meeting with a discussion of the overall timetable contemplating negotiations between Christmas and New Year of 2007 with an announcement immediately thereafter. In light of the exploratory nature of the discussions, and absent any board mandate to negotiate, which was at that time outstanding, no agreement on the substance of the transaction was reached at the meeting.

Executives from both companies held further meetings and conference calls on November 30, December 8, December 12 and December 13, 2006 to discuss the topics addressed at the November 24 meeting and other issues relating to the potential transaction and the approval process. On December 13, 2006, a confidentiality agreement was entered into by Norsk Hydro and Statoil. While progress was made in identifying issues and designing further the process, those discussions remained preliminary in nature and all of the principal terms of the transaction, including the merger ratio, were still outstanding.

The board of Norsk Hydro held a regularly scheduled board meeting on December 13, 2006, at which an update was given on the discussions that had been held with Statoil. The board again expressed support for the CEO to continue to explore the basis for negotiations of a possible combination of the company’s oil and gas activities with Statoil, amongst other alternatives. In addition, it was proposed that the Norwegian government be contacted in order to obtain its views with respect to a possible merger of Statoil and Hydro Petroleum.

The board of Statoil met on December 13 and 14, 2006 principally to discuss ordinary course matters relating to Statoil’s business, as well as to be informed of the recent discussions between Mr. Lund and Mr. Reiten. Mr. Lund described to the board his understanding of Norsk Hydro’s views with respect to its oil and gas business. It was contemplated that another board meeting would be held on December 21, 2006 and that a decision on whether to engage in formal negotiations would be taken at that meeting. In addition, it was proposed that the Norwegian government be contacted regarding its views with respect to a possible merger.

Mr. Reiten and Mr. Reinas, the Chairman of the Norsk Hydro board, met with the Minister of Trade and Industry on December 14 to inform him of the ongoing discussions. Also in the evening of December 14, the Chairman of the board of Statoil, Mr. Jannik Lindbæk, and Mr. Lund briefed the Minister of Petroleum and Energy and the Secretary General of the Ministry of Petroleum and Energy about the ongoing contacts between the two companies. On December 15, Mr. Reiten and Mr. Lund met with the Prime Minister of Norway and representatives of the government to give them a similar briefing. In the course of the afternoon of December 15, representatives of the government were contacted and informed that Statoil and Norsk Hydro contemplated entering into merger negotiations during the ensuing weekend. Also in the afternoon of December 15, Mr. Reiten and Mr. Lund agreed that they would clarify with their respective board whether a basis existed for an accelerated timetable for the transaction. Accordingly, extraordinary board meetings were called for December 16 and 17 and the two chief executive officers began in the evening of December 15 to brief individual board members on the status of the discussions. The following morning Mr. Reiten and Mr. Lund again met to review the feasibility of an accelerated negotiation leading to announcement on December 18; the two concluded that the conditions for such a process were present and agreed that they would recommend to their respective board that they provide them with the mandate to negotiate the terms of the merger.

The Statoil board held a conference call on December 16 to discuss the possible merger. Mr. Lund and Mr. Tom Melbye Eide, General Counsel of Statoil, attended this meeting, gave a presentation on the status of the negotiations and briefed the board on the proposed terms of a draft integration agreement. The board agreed to meet the following day to evaluate the result of further negotiations and an updated integration agreement. On the same date, the board of Norsk Hydro held a board meeting to discuss the status of the discussions and to formulate a mandate to negotiate.

During the weekend of December 16 and December 17, 2006, the parties engaged in intensive discussions and negotiations, acting pursuant to mandates from their respective boards, with a view to arriving at a binding agreement to be announced in the morning of Monday, December 18. In the course of those meetings, the parties engaged in a review of their respective businesses and in negotiation of the integration agreement, a draft of which was first provided to Statoil on December 15, including key terms of the transaction, with the assistance of their respective financial and legal advisors. In the late afternoon of Sunday, December 17, shortly prior to the board meetings that had been convened for that evening, a merger ratio of 0.8622 Statoil shares per Norsk Hydro share was agreed between Mr. Lund and Mr. Reiten. A follow-up meeting with the Prime Minister of Norway and representatives of the government was also held on December 17 to update the principal shareholder of both companies of the result of the negotiations.

During the evening of December 17, 2006, the board of directors of Statoil met to approve the merger of Statoil and Hydro Petroleum. Also attending this meeting were Mr. Lund and representatives of Morgan Stanley and Thommessen Krefting Greve Lund AS, Norwegian legal advisor to Statoil. Mr. Sætre and Mr. Eide gave a presentation on the background, financial aspects, merger ratio, result of negotiations and the draft integration agreement. Morgan Stanley provided an opinion that, as of December 17, 2006 and subject to various considerations consistent with those relating to and described in its March 13, 2007 opinion, the merger ratio of 0.8622 Statoil shares per Norsk Hydro share was fair from a financial point of view to Statoil’s ordinary shareholders. Various aspects of the transaction and the process going forward were discussed, including the structure and proposed operations of the merged company. The board unanimously approved the merger on the terms and conditions of the integration agreement.

On December 17, 2006, the board of Norsk Hydro held a board meeting to approve the merger of Hydro Petroleum with Statoil. Mr. Reiten, Mr. Odd Ivar Biller, Chief Legal Officer of Norsk Hydro, and Mr. Tor Ove Horstad, Head of Corporate M&A of Norsk Hydro, presented the status of the negotiations of the integration agreement. Various aspects of the transaction and the process going forward were discussed, including the structure and proposed operations of the new company. The board noted in particular that the terms of the proposed transaction appropriately reflected the principles of a merger of equals through the proposed composition of the senior management team, the fact that the company created by the merger would have a new name and the fact that affected employees from Norsk Hydro and Statoil would have equal opportunity to be employed in the merged company. Goldman Sachs provided an oral opinion, later confirmed in writing, that, as of December 18, 2006 and subject to various considerations, the merger ratio of 0.8622 Statoil shares per Norsk

Hydro share was fair from a financial point of view to Norsk Hydro’s shareholders. The board unanimously approved the merger on the terms and conditions of the integration agreement.

During the morning of December 18, 2006, the two companies signed the integration agreement and announced the transaction shortly thereafter.

The integration agreement contemplated that the companies would engage in a due diligence exercise for the purpose of confirming the information exchanged between the companies prior to signing the integration agreement that formed the basis for the determination of the merger ratio. On January 27, 2007, representatives of Statoil and Norsk Hydro’s senior management met in Stavanger to present and discuss information relating to their respective businesses. On January 28, the board of directors of Norsk Hydro met to review the findings of the due diligence exercise and authorized Norsk Hydro’s management to negotiate and approve possible amendments to the terms and conditions of the integration agreement. On the same day, the board of directors of Statoil held a telephone meeting during which it was informed of the main due diligence findings. The board mandated Mr. Lund to continue the discussion with Norsk Hydro and approve possible amendments to the integration agreement. Later that day Statoil and Norsk Hydro agreed that, in light of information that was exchanged in the course of due diligence review, including but not limited to the disclosure of an increase in Statoil’s indebtedness, Hydro Petroleum’s liabilities to be transferred in the demerger would include interest-bearing debt in the amount of NOK 1 billion, instead of the nil amount which the parties had contemplated at the time the integration agreement was signed and the merger was first announced. The parties announced their agreement on January 29, 2007. On January 30, 2007 the parties signed an addendum to the integration agreement through which the two companies confirmed that the due diligence review had been completed and agreed to the increase in Hydro Petroleum’s net interest-bearing debt described above.

On March 7, 2007, the board of directors of Norsk Hydro and Statoil agreed to recommend to their respective shareholders that the merged company initially be named StatoilHydro ASA. The merged company will develop a proposal for a new name and logo based on business strategy, vision and values, which shall be different from the present companies’ names. The proposal will be presented at the first ordinary general meeting of shareholders in 2008. The merged company’s retail business will operate under the name Statoil until a new name is adopted and may continue to operate under that name going forward.

On March 12, 2007, the board of directors of Norsk Hydro met to approve, among other matters, the merger plan. Goldman Sachs delivered an oral opinion, subsequently confirmed in writing, that, as of March 12, 2007 and subject to various considerations, the merger ratio of 0.8622 Statoil shares per Norsk Hydro share pursuant to the merger plan was fair from a financial point of view to the shareholders of Norsk Hydro; this opinion reflected events which took place between December 18, 2006 and March 12, 2007, and replaced and superseded the opinion rendered to the board of directors of Norsk Hydro dated December 18, 2006. Following discussion of the terms of the merger plan, the board unanimously determined that the merger plan and the transactions contemplated thereby were fair to and in the best interest of Norsk Hydro and Norsk Hydro shareholders, and approved the merger plan.

On March 13, 2007, the board of directors of Statoil met to approve, among other matters, the merger plan. Morgan Stanley provided an oral and written opinion that, as of March 13, 2007 and subject to various considerations, the merger ratio of 0.8622 Statoil shares per Norsk Hydro share was fair from a financial point of view to Statoil’s ordinary shareholders solely in their capacity as ordinary shareholders of Statoil. Following discussion of the terms of the merger plan, the board unanimously determined that the merger plan and the transactions contemplated thereby were advisable and in the best interest of Statoil and Statoil’s shareholders, and approved the merger plan.

Reasons for the Merger

Statoil and Norsk Hydro believe that the combination of Statoil with Hydro Petroleum will create a Norwegian-based international oil and gas company that will be able to compete with the oil and gas industry’s global leaders, important regional players, including national oil companies operating in OPEC and other major producing countries, as well as new competitors from emerging economies. The combined entity will be a more forceful international competitor than either Statoil or Hydro Petroleum would be on its own, with greater

capabilities to accelerate growth, respond to the challenging competitive landscape of the energy industry and deliver long-term value to shareholders. In addition, the merged company is expected to ensure a more efficient sustainable development of the Norwegian Continental Shelf, or the NCS.

The merged company will have 3.9 billion boe pro forma combined proved developed reserves as of December 31, 2006, and will benefit from:


	•	industry leading sub-sea technology and highly developed skills in advanced drilling and well technology innovation;

	•	strengthened production and development portfolio in Norway and internationally;

	•	presence in nearly 40 countries;

	•	extensive exploration and project execution and operation skills;

	•	strengthened position as a reliable European energy supplier thanks to the world’s largest system of offshore gas pipeline, several large gas fields with proven regularity, quality and competitive cost levels and a professional and transparent system of regulation for the overall gas infrastructure system;

	•	integrated refining and marketing, with substantial trading business; and

	•	leading position in pursuing cleaner and more sustainable energy production, including carbon capture and storage.

Statoil and Norsk Hydro believe that the benefits of the business combination will be realized in several different areas:

Strength and scale. The business combination will create the world’s largest operator of offshore fields at water depths of more than 100 meters and one of the world’s leading oil and energy companies. The merged company will have greater financial, operational and technical strengths that should enable it to pursue more effectively additional growth opportunities. For example, it is expected that:


	•	greater scale and financial strength will improve access to reserves and production as producing countries have been imposing increasingly more demanding access conditions;

	•	as the oil and gas industry is increasingly subject to geo-political factors, relations with host governments are increasingly important. The merged company will be able to leverage the experience and expertise of Statoil and Hydro Petroleum in negotiations with host governments and national oil companies;

	•	by better utilizing its available internal pool of talent with a combined workforce of 31,000, of which 20,000 work in the exploration and production activities, the merged company will better address the current shortage of qualified personnel in the oil and oil service industries;

	•	as the world’s largest operator of offshore fields at water depths of more than 100 meters, the merged company will be a more attractive counterparty for oil service companies, oil rig operators and suppliers. In the current capacity-constrained market environment, this is expected to result in better use of resources in the medium term and slower cost inflation of important production inputs than if the companies were operating separately; and

	•	by combining the resources of Statoil and Hydro Petroleum, the merged company will be able to better respond to the increasing demand for renewable energy than the companies will be capable of individually.

Geographic fit and operational benefits. The exploration and production assets of Statoil and Hydro Petroleum are largely complementary with overlap in Norway (where Statoil has an interest in all but six of the producing fields in which Hydro Petroleum also participates). In addition, Statoil is present in all countries where Hydro Petroleum has production licensees, except in Canada. Statoil and Norsk Hydro believe that the merged company will realize operational benefits from the combination of these assets. In particular, the integration of Statoil’s and Hydro Petroleum’s operations on the Norwegian Continental Shelf is expected to provide an

opportunity to increase efficiency of operations and improve utilization of resources, which, in turn, is expected to improve operations and extend the lifetime of existing fields in production on the Norwegian Continental Shelf. Statoil and Norsk Hydro expect that as exploration of the shelf progresses, new finds will be progressively smaller and more difficult to develop and there will be further pressure to increase the efficiency of operations. It is expected that the integration of Statoil’s and Hydro Petroleum’s operations will strengthen the merged company’s ability to explore for, develop and produce oil and gas in technically challenging frontier regions of the Norwegian Continental Shelf such as the Barents Sea.

Stronger global exploration and production or presence. By combining the portfolios of production assets and development projects of Statoil and Hydro Petroleum, the merged company will benefit from an expanded geographic footprint as well as from a stronger presence in several geographic areas, including the Gulf of Mexico, North Africa and West Africa. It will also secure an improved comprehensive portfolio of projects under development and a more diversified portfolio of future developments. Finally, by combining the resources of Statoil and Hydro Petroleum, the merged company will be able to undertake simultaneously multiple exploration and development projects worldwide and, with time, achieve greater geographic diversification in production assets. Statoil and Norsk Hydro believe that geographic diversification in production assets is of crucial strategic importance to reduce the risk of depletion of their combined proved reserves in the medium to long term.

Capitalizing on technological leadership. Both Statoil and Norsk Hydro have been at the forefront of offshore exploration and production technology and have pioneered sub-sea developments, multiple-phase pipeline technology, lateral and long-reach drilling technology and thin oil-zone technology. Statoil and Norsk Hydro believe that the ability to combine their respective skills and efforts in technology innovation and development will help stimulate more rapid developments and consolidate the merged company’s position among the most innovative and technology-driven oil companies. In addition, Statoil and Norsk Hydro believe that specialized technological expertise from the two companies and a broader technology portfolio in advanced technologies and alternative energy will allow the merged company to leverage more effectively its technological know-how, negotiating access to resources, in expanding its international exploration and production presence and addressing the future challenges on the NCS, especially in its Arctic area.

Complementary management strategies. Statoil and Norsk Hydro share certain fundamental management philosophies and corporate values, including commitments to sustainable growth and financial discipline, innovation and use of technology, a high standard of environmental and technology safety, renewable energy and carbon capture and ethical standards. The two companies are equally committed to actively supporting the communities where they operate and promoting diversity and opportunity in the companies’ workforces and among their respective business partners. Statoil and Norsk Hydro believe that complementary strategic commitments and corporate values will facilitate a smooth integration of Statoil and Hydro Petroleum and increase the prospects for value creation.

Synergies and cost savings. Statoil and Norsk Hydro believe that the merger will give rise to substantial synergies and cost savings that will be achieved in full by 2009-2010 once the integration process is completed. Cost synergies are expected to include both increased efficiencies in development, operations and explorations activities, as well as within administration and business support activities. Important measures to realize the operating cost synergies will be reduced external sourcing, and internal redeployment of personnel. Part of the synergies will be reflected in lower future capital expenditure. Norsk Hydro and Statoil believe that redundancies will be addressed through natural attrition and other measures to be discussed with the trade unions.

Recommendation of, and Factors Considered by, the Norsk Hydro Board

At its meeting on March 12, 2007, the Norsk Hydro board unanimously determined that the merger plan and the transactions contemplated thereby were fair to and in the best interests of Norsk Hydro and Norsk Hydro’s shareholders. The Norsk Hydro board unanimously recommends the approval and adoption of the merger plan and the transactions contemplated thereby by Norsk Hydro’s shareholders. In reaching its decision, the Norsk Hydro board consulted with Norsk Hydro’s management and its financial advisors. In addition to the reasons set

forth above under “Reasons for the Merger”, the Norsk Hydro board considered, among others, the following factors:


	•	The current industrial, economic and market conditions and their effects on the oil and gas industry. In particular, the Norsk Hydro board considered that global competition in the industry has increased with respect to replacing reserves and delivering growth, that an increasing proportion of remaining resources were expected to be under the control of national oil companies and that measures must be evaluated to increase the company’s negotiating advantage vis-à-vis such players.

	•	That the energy company formed by the merger would combine the best of Norwegian expertise to create the world’s largest offshore operating company for fields at water depths of more than 100 meters with world-leading technological capabilities, a strong financial position and the scale to pursue a greater number of opportunities internationally. The board judged that the combination of these factors would form the basis for significantly higher long-term shareholder value generation than if Hydro Petroleum continued to operate in the existing Norsk Hydro context.

	•	The merger ratio for the merger, the resulting ownership interest in the merged company by Hydro’s current shareholders and the other key financial aspects of the merger proposal.

	•	That Norsk Hydro management would continue to have significant responsibilities in the merged company and that the proposed merger model recognized the operational, technical and commercial competence strengths within the current Norsk Hydro organization.

	•	That experience and competence from Norsk Hydro will be well represented in the board of directors of the merged company.

	•	That the principle of merger of equals would guide the assignment of positions and the allocation of responsibilities in the merged company and the seniority of employees of Norsk Hydro and Statoil would be given equal consideration.

	•	That geographic location and the new name of the merged company would reflect equality between the parties in the merger.

	•	The current industrial, economic and market conditions and their effects on the aluminium industry. In particular that restructuring of Hydro Aluminium was progressing satisfactorily and the business was demonstrating competitive returns, thus forming the basis for an attractive and sustainable continuation of Norsk Hydro.

	•	That the proposed transactions would allow both Hydro Petroleum and Norsk Hydro’s aluminium and power businesses to be valued by shareholders on their respective business merits and not in the existing conglomerate context.

	•	That the proposed transaction is structured as a tax-free reorganization (demerger) and is expected not to be taxable in Norway either to Norsk Hydro or its shareholders.

	•	The opinion, dated March 12, 2007, of Goldman Sachs to the Norsk Hydro board to the effect that, as of that date, the merger ratio was fair from a financial point of view to Norsk Hydro and Norsk Hydro’s shareholders based upon and subject to various considerations set forth in the opinion.

	•	The risks and potential rewards associated with, as an alternative to the merger, continuing to execute Norsk Hydro’s strategic plan as a combined oil and energy and aluminium company and the feasibility of potential business combinations or joint ventures with an entity other than Statoil.

	•	The long-time associations between Statoil and Norsk Hydro, and their knowledge of each other’s business.

The Norsk Hydro board also identified and considered risks and potential disadvantages associated with the merger, including:


	•	The risk that there may be difficulties in combining the operations of Hydro Petroleum with Statoil. In particular, the Norsk Hydro board considered the possibility that the process of planning for the integration of Statoil and Hydro Petroleum and the regulatory approval process and effects might adversely affect the delivery of Hydro Petroleum performance targets. The board noted that the integration risk will be mitigated by the appointment of a dedicated team to plan and execute an efficient integration process.

	•	The risk that the potential benefits sought in the merger might not be fully realized, including the possibility of encountering difficulties in achieving cost savings in the amounts currently estimated or in the time frame currently contemplated.

	•	That the merger will include risks commonly associated with similar transactions, including unanticipated liabilities and unanticipated costs; and that the merged company may also experience operational interruptions or the loss of key employees, customers or suppliers.

	•	The risk of diverting management focus and corporate resources from other strategic opportunities and operational matters for an extended period of time.

	•	The risk that the merger plan is subject to many factors, such as approval by public authorities, non-occurrence of major negative changes prior to the extraordinary general meetings of both companies and approval of the merger by the general meetings of both companies.

In the judgment of the Norsk Hydro board, the potential benefits of the merger outweigh the risks and the potential disadvantages. The foregoing discussion of the recommendations and factors by the Norsk Hydro board is not exhaustive but does include the material factors considered by the board. In view of the variety of factors considered in connection with its evaluation of the proposed merger and the terms of the merger plan, the Norsk Hydro board did not quantify or assign relative weights to the factors considered in reaching its conclusion. Rather, the board views its recommendation as being based on the totality of the information presented to and considered by it. In considering the recommendation of the Norsk Hydro board with respect to the merger, you should also be aware that some executive officers of Norsk Hydro, who have supported the transaction, have interests in the merger that may be different from, or in addition to, the interests of Norsk Hydro’s shareholders generally. The Norsk Hydro board was aware of these interests in approving the merger and merger plan. Please refer to “Interests of Certain Persons in the Merger” for more information about these interests. Finally, it should be noted that this explanation of the reasoning of the Norsk Hydro board and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “Cautionary Statements Concerning Forward-Looking Statements” of this document.

Recommendation of, and Factors Considered by, the Statoil Board

At its meeting on March 13, 2007, the Statoil board, by unanimous vote of the directors, determined that the merger plan and the transactions contemplated thereby were advisable and in the best interests of Statoil and Statoil’s shareholders. The Statoil board has unanimously approved the merger plan and recommends the approval and adoption of the merger plan and the transactions contemplated thereby by Statoil’s shareholders. In reaching its decision, the Statoil board consulted with Statoil’s management, as well as its financial and legal advisors. In addition to the reasons set forth above under “Reasons for the Merger”, the Statoil board considered, among others, the following factors:


	•	The current industry, economic and market conditions and their effects on the oil and gas industry. In particular, the Statoil board considered that global competition in the industry has increased as a result, among other things, of the emergence of new competitors and because an increasing number of companies are facing the same challenges with respect to delivering growth.

	•	Statoil’s results of operations and competitive prospects in the oil and gas industry. In particular, the Statoil board considered the current competitive environment and expected developments and the relative sizes of Statoil and other participants in the oil and gas industry.


	•	Statoil board’s belief that the merged company will be more competitive in the global oil and gas industry and will be able to ensure further development of the NCS in the deeper waters and in the Arctic zones.

	•	The merger ratio, the resulting ownership interest in Statoil by Statoil’s current stockholders and the other key financial aspects of the merger proposal.

	•	The merged company will mainly build on Statoil’s organizational model and management systems. Statoil’s current management will continue to have significant management responsibilities in the merged company.

	•	The proposed transaction structure and the merger plan.

	•	The proposed transaction is structured as a tax free reorganization (demerger) and is not expected to be taxable in Norway either to Statoil or its shareholders.

	•	Under IFRS, the proposed merger will be accounted for as a transaction between entities under common control.

	•	The opinion, dated March 13, 2007, from Morgan Stanley to the Statoil board to the effect that, as of that date and based upon and subject to the factors and assumptions set forth therein, the merger ratio was fair from a financial point of view to Statoil’s ordinary shareholders solely in their capacity as ordinary shareholders of Statoil.

	•	Statoil board’s belief that the merged company will be able to consider future transactions that would otherwise be hard to achieve for Statoil.

	•	The risks and potential rewards associated with, as an alternative to the merger, continuing to execute Statoil’s strategic plan as an independent entity and the feasibility of potential business combinations or joint ventures with an entity other than Hydro Petroleum.

	•	The long-time associations between Statoil and Norsk Hydro, and their knowledge of each other’s business.

The Statoil board also identified and considered risks and potential disadvantages associated with the merger, including:


	•	The risk that one or more of the conditions to completion of the transactions according to the merger plan, including approvals and consents by public authorities, non-occurrence of major negative changes prior to the extraordinary general meeting of both companies and approval of the merger by general meetings of both companies, may not be satisfied or may delay the closing and completion of the merger.

	•	The risk that there may be difficulties in combining the operations of Statoil and Hydro Petroleum. In particular, the Statoil board considered the possibility that the process of planning for the integration of Statoil and Hydro Petroleum and the regulatory approval process and effects might adversely affect the delivery of Statoil business performance targets. The board noted that the integration risk will be mitigated by the appointment of a dedicated team to plan and execute an efficient integration process.

	•	The risk that the potential benefits sought in the merger might not be fully realized, including the possibility of encountering difficulties in achieving cost savings in the amounts currently estimated or in the time frame currently contemplated.

	•	The merger will include risks commonly associated with similar transactions, including unanticipated liabilities and unanticipated costs. The merged company may also experience operational interruptions or the loss of key employees, customers or suppliers.

	•	The risk of diverting management focus and corporate resources from other strategic opportunities and operational matters for an extended period of time.

In the judgment of the Statoil board, the potential benefits of the merger outweigh the risks and the potential disadvantages. The foregoing discussion of the factors considered by the Statoil board is not exhaustive but does include the material factors considered by the board. In view of the variety of factors considered in connection with its evaluation of the proposed merger and the terms of the merger plan, the Statoil board did not quantify or assign relative weights to the factors considered in reaching its conclusion. Rather, the board views its recommendation as being based on the totality of the information presented to and considered by it. In considering the recommendation of the Statoil board with respect to the merger, you should also be aware that some executive officers of Statoil, who have supported the transaction, have interests in the merger that may be different from, or in addition to, the interests of Statoil’s shareholders generally. The Statoil board was aware of these interests in approving the merger and merger plan. Please refer to “Interests of Certain Persons in the Merger” for more information about these interests. Finally, it should be noted that this explanation of the reasoning of the Statoil board and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “Cautionary Statements Concerning Forward-Looking Statements”.

Opinion of Norsk Hydro’s Financial Advisor

Goldman Sachs rendered its opinion to Norsk Hydro’s board of directors that, as of March 12, 2007 and based upon and subject to the factors and assumptions set forth therein, the merger ratio pursuant to the merger plan is fair from a financial point of view to the holders of the shares of Norsk Hydro common stock. This opinion reflected events which took place between December 18, 2006 and March 12, 2007, and replaced and superseded the opinion rendered to the board of directors of Norsk Hydro, dated December 18, 2006, in relation to the memorandum of understanding entitled the Merger Agreement dated December 18, 2006, between Norsk Hydro and Statoil, which is superseded by the merger plan between Norsk Hydro and Statoil attached to this circular/prospectus as Appendix A.

The full text of the written opinion of Goldman Sachs, dated March 12, 2007, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Appendix C. Goldman Sachs provided its opinion for the information and assistance of Norsk Hydro’s board of directors in connection with its consideration of the merger. The Goldman Sachs opinion is not a recommendation as to how any shareholder of Norsk Hydro should vote with respect to the merger.

In rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things, the merger plan; the plan for demerger between Norsk Hydro Produksjon AS and a newly formed limited company wholly owned by Norsk Hydro; annual reports to shareholders and Annual Reports on Form 20-F of Norsk Hydro for the five fiscal years ended December 31, 2005; certain unaudited financial information prepared by the management of Norsk Hydro relating to Hydro Petroleum for the fiscal years ended December 31, 2006, 2005 and 2004; certain unaudited financial information prepared by the management of Norsk Hydro for the fiscal year ended December 31, 2006; certain interim reports to shareholders of Norsk Hydro; certain other communications from Norsk Hydro to its shareholders; certain internal financial analyses and forecasts for the Hydro Petroleum prepared by the management of Norsk Hydro (the “Forecasts”); certain internal financial information prepared by the management of Norsk Hydro; and certain publicly available research analysts reports with respect to the expected future financial performance of Norsk Hydro. With respect to Statoil, Goldman Sachs reviewed annual reports to shareholders and Annual Reports on Form 20-F of Statoil for the five fiscal years ended December 31, 2005; certain unaudited financial information prepared by the management of Statoil for the fiscal year ended December 31, 2006; certain interim reports to shareholders of Statoil; certain other communications from Statoil to its shareholders; certain internal financial information prepared by the management of Statoil; and certain publicly available research analysts reports with respect to the future financial performance of Statoil, including certain reports that Goldman Sachs discussed with the management of Norsk Hydro as to the appropriateness of their use for purposes of its analysis. Goldman Sachs also held discussions (i) with members of the senior management of Norsk Hydro regarding their assessment of the strategic rationale for, and the potential benefits of, the merger and the past and current business operations, financial condition and future prospects of Hydro Petroleum and of Norsk Hydro and their discussions with

Statoil with respect to the past and current business operations, financial condition and future prospects of Statoil and (ii) with members of the senior management of Statoil regarding their assessment of the past and current business operations and financial condition of Statoil. In addition, Goldman Sachs reviewed the reported price and trading activity for the Norsk Hydro ordinary shares and Statoil ordinary shares, compared certain financial information for Hydro Petroleum and certain financial and stock market information for Norsk Hydro and Statoil with similar financial and stock market information for certain other companies the securities of which are publicly traded, reviewed the financial terms of certain recent business combinations in the oil and gas industry specifically and in other industries generally and performed such other studies and analyses, and considered such other factors, as it considered appropriate.

Goldman Sachs relied upon the accuracy and completeness of all of the financial, accounting, legal, tax and other information discussed with or reviewed by it and assumed such accuracy and completeness for purposes of rendering the opinion described above. In that regard, Goldman Sachs assumed with the consent of the Norsk Hydro board of directors that the Forecasts have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of Norsk Hydro. Statoil did not make available to Goldman Sachs or Norsk Hydro its projections of expected future financial performance. Accordingly, with the consent of Norsk Hydro, the review by Goldman Sachs of such matters was limited to discussions with members of the senior management of Norsk Hydro and Statoil, including discussions with the senior management of Norsk Hydro regarding certain research analyst estimates of the future financial performance of Statoil. Goldman Sachs also assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the merger contemplated by the merger plan will be obtained without any adverse effect on Norsk Hydro, Hydro Petroleum or Statoil or on the expected benefits of the merger in any way meaningful to its analysis. In addition, Goldman Sachs did not express any opinion as to, nor did it address, the value of the portion of Norsk Hydro that will not be demerged from Norsk Hydro. In addition, Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or off-balance-sheet assets and liabilities) of Norsk Hydro, Hydro Petroleum or Statoil or any of their respective subsidiaries, nor was Goldman Sachs furnished with any such evaluation or appraisal. Goldman Sachs’ opinion does not address the underlying business decision of Norsk Hydro to engage in the transaction, nor does it express any opinion as to the prices at which Norsk Hydro ordinary shares or Statoil ordinary shares will trade at any time.

The following is a summary of the material financial analyses delivered by Goldman Sachs to the board of directors of Norsk Hydro in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before March 9, 2007, and is not necessarily indicative of current market conditions.

Selected Companies Analysis. Goldman Sachs reviewed and compared certain financial information for Norsk Hydro and Statoil to corresponding financial information, ratios and public market multiples for the following publicly traded corporations in the oil and gas industry:


	•	BP plc

	•	Exxon Mobil Corporation

	•	Royal Dutch Shell plc

	•	Anadarko Petroleum Corporation

	•	Chevron Corporation

	•	ConocoPhillips

	•	ENI S.p.A.


	•	Repsol YPF, S.A.

	•	Total S.A.

Although none of the selected companies is directly comparable to Hydro Petroleum or Statoil, the companies included were chosen because they are publicly traded companies with operations that for purposes of analysis may be considered similar to certain operations of Hydro Petroleum and Statoil.

Goldman Sachs also calculated and compared various financial multiples and ratios based on market data as of March 9, 2007, information it obtained from public company filings, IBES estimates and Goldman Sachs Research. The multiples and ratios for each of the selected companies were based on the most recent publicly available information. With respect to the selected companies, Goldman Sachs calculated:


	•	levered market capitalization, which is the market value of common equity plus the book value of debt less cash, as a multiple of debt-adjusted cash flow, or DACF, defined as after-tax cash flow from operations excluding net working capital changes plus after-tax debt services payments.

The results of these analyses are summarized as follows:

Levered Market

Selected Companies

Capitalization

as a multiple of DACF

Range

Median

Statoil

2006

5.3x-8.2x

6.1x

5.7x

2007E

5.2x-7.9x

6.3x

5.3x

2008E

5.1x-7.9x

6.1x

4.8x

Based on public filings and Goldman Sachs Research estimates.

Goldman Sachs also calculated the selected companies’ price/earnings ratios. The following table presents the results of this analysis:

Selected Companies

Price/Earnings Ratio:

Range

Median

Statoil

2006

6.8x–10.9x

8.6x

8.3x

2007E

7.7x–11.4x

9.5x

9.2x

2008E

7.7x–11.6x

9.4x

8.6x

Based on IBES estimates.

Goldman Sachs also considered three-year average finding and development costs, reserve replacement ratios or RRR, five-year compound annual growth rates of production for the five fiscal years ending in 2005 (five fiscal years ending in 2006 for Statoil and Hydro Petroleum) and return on average capital employed, or ROACE, for 2005 for the selected companies (2006 for Statoil).

The following table presents the results of this analysis:



	Selected Companies
			Hydro
	Range	Median	Petroleum	Statoil

Three-Year Average F&D Cost ($/barrel)	$5.8–$13.1	$8.8	$14.7	$14.0
Three-Year Average RRR	33%–204%	133%	40%	94%
5-Year Compound Annual Growth Rate of Production	(6)%–77%	3%	2%	5%
ROACE 2005	8.5%–31.5%	20.4%	NA	27.1%

Based on JS Herold.

Analysis at Various Ownership Levels. Goldman Sachs performed certain analyses, based on historical information and projections provided by management of Norsk Hydro, at relative ownership levels for Norsk Hydro shareholders ranging from 30% to 34%. Assuming a share price of NOK156.25 for Statoil ordinary shares,

and ownership ranging from 30% to 34%, Goldman Sachs calculated for Norsk Hydro the implied total equity consideration (on a diluted basis) and implied enterprise value, the ratio of enterprise value to DACF, the ratio of enterprise value to proved reserves (measured in barrels of oil equivalents, or boe) and the ratio of price to earnings. The following table presents the results of Goldman Sachs’ analysis based on the relative ownership of 32.7%:


		Norsk Hydro

Ownership in the merged entity			32.7	%
Implied merger ratio			0.8622
Equity consideration — diluted			NOK 162.9bn
Enterprise value			NOK 170.0bn
Enterprise value/ DACF	FY 2005		7.2x
	FY 2006		6.3x
Enterprise value/ reserves (boe)			$14.4
Price to earnings ratio	FY 2005		15.2x
	FY 2006		14.9x


(1)	The enterprise value of NOK 170bn is comprised of the equity consideration to be paid by Statoil plus the net interest-bearing debt of 1bn of Hydro Petroleum plus the aggregrate amount of a NOK 5 per share dividend to be distributed to Norsk Hydro shareholders prior to completion of the merger.

Selected Transactions Analysis. Goldman Sachs analyzed certain information relating to the following selected upstream oil and gas asset transactions on the Norwegian Continental Shelf since 2002:


	•	Fortum Oyj/ ENI S.p.A.

	•	BP plc/ DONG Energy A/ S

	•	Norsk Hydro ASA, Svenska Petroleum Exploration AB/ Statoil ASA

	•	Government of Norway/ Norsk Hydro ASA

For each of the selected transactions, Goldman Sachs calculated and compared the levered market capitalization as a multiple of latest reported estimated proved reserves. Goldman Sachs also calculated the levered market capitalization compared to proved reserves for Statoil, based on Statoil’s current share price.

The following table presents the results of this analysis:



	Selected Transactions
					Proposed
Levered Market Capitalization as a Multiple of:	Range		Median		Transaction		Statoil

Proved Reserves ($/boe)	$	2.1-$6.1	$	5.5	$	14.4	$	13.5

Based on JS Herold.

Contribution Analysis. Goldman Sachs reviewed specific historical and estimated future operating and financial information including, among other things, earnings before interest, taxes, depreciation and amortization, or EBITDA, Discretionary Cash Flow, or DCF, Debt-Adjusted Cash Flow, or DACF, production and reserves for Hydro Petroleum, Statoil and the merged company based on Norsk Hydro and Statoil public company reports and Goldman Sachs Research forecasts. The following table presents the results of this analysis:



	Hydro Petroleum Contribution

	EBITDA		DCF		DACF		Production		Reserves

2004		33.7%		34.0%		34.0%		N.A.		N.A.
2005		32.0%		31.9%		31.9%		33.6%		33.3%
2006		32.1%		31.0%		30.4%		34.7%		32.4%
2007E		N.A.		N.A.		N.A.		34.4%		33.0%

Based on Norsk Hydro and Statoil annual reports, Q4 2006 interim reports and Goldman Sachs Research estimates.

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to the Hydro Petroleum or Statoil or the contemplated merger.

Goldman Sachs prepared these analyses for purposes of providing its opinion to Norsk Hydro’s board of directors as to the fairness from a financial point of view of the merger. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Norsk Hydro, Statoil, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

The merger ratio was determined through arm’s-length negotiations between Norsk Hydro and Statoil and was approved by Norsk Hydro’s board of directors. Goldman Sachs provided advice to Norsk Hydro during these negotiations. Goldman Sachs did not, however, recommend any specific merger ratio to Norsk Hydro or its board of directors or that any specific merger ratio constituted the only appropriate merger ratio for the merger.

As described above, Goldman Sachs’ opinion to Norsk Hydro’s board of directors was one of many factors taken into consideration by the Norsk Hydro board of directors in making its determination to approve the merger plan. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Appendix C.

Goldman Sachs and its affiliates, as part of their investment banking business, are continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and other transactions as well as for estate, corporate and other purposes. Goldman Sachs acted as financial advisor to Norsk Hydro in connection with, and provided advice to Norsk Hydro during negotiations leading to the transaction contemplated by the merger plan. In addition, Goldman Sachs has provided certain investment banking services to Norsk Hydro from time to time. Goldman Sachs also may provide investment banking services to Norsk Hydro and Statoil in the future. In connection with the above-described investment banking services Goldman Sachs has received, and may receive in the future, compensation.

Goldman Sachs is a full service securities firm engaged, either directly or through its affiliates, in securities trading, investment management, financial planning and benefits counseling, risk management, hedging, financing and brokerage activities for both companies and individuals. In the ordinary course of these activities, Goldman Sachs and its affiliates may provide such services to Norsk Hydro, Statoil and their respective affiliates, may actively trade the debt and equity securities of Norsk Hydro and Statoil (or related derivative securities) for their own account and for the accounts of their customers and may at any time hold long and short positions of such securities.

The board of directors of Norsk Hydro selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the merger. Pursuant to a letter agreement dated December 17, 2006, Norsk Hydro engaged Goldman Sachs to act as its financial advisor in connection with the merger. Pursuant to the terms of this engagement letter, Norsk Hydro has agreed to pay Goldman Sachs a customary transaction fee, the principal portion of which, in the amount of approximately USD 18 million, is payable upon consummation of the merger as well as, at Norsk Hydro’s sole

discretion, an additional $7 million fee. Such terms were agreed by Norsk Hydro’s senior management. In addition, Norsk Hydro has agreed to reimburse Goldman Sachs for its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

Opinion of Statoil’s Financial Advisor

Statoil retained Morgan Stanley to provide certain financial advisory services and an opinion in connection with the merger. Morgan Stanley was selected by Statoil based on Morgan Stanley’s qualifications, expertise, reputation and its knowledge of the business and affairs of Statoil. At a meeting of Statoil’s board of directors on March 13, 2007, Morgan Stanley delivered its oral and written opinion that as of March 13, 2007, based upon and subject to the various considerations set forth in the opinion, the merger ratio pursuant to the merger plan was fair from a financial point of view to Statoil’s ordinary shareholders solely in their capacity as ordinary shareholders of Statoil. Morgan Stanley had previously provided an opinion, dated December 17, 2006, to the board of directors of Statoil. The March 13, 2007 opinion reflected events since the date of its December 17, 2006 opinion, including full year historical financial information for 2006 received from Statoil and Norsk Hydro, the increase in Statoil indebtedness and the additional interest-bearing debt in the amount of NOK 1 billion to be transferred in the demerger as part of Hydro Petroleum’s liabilities and the merger plan superseding the integration agreement.

The full text of the written opinion of Morgan Stanley, dated March 13, 2007, is attached as Appendix B to this document. Morgan Stanley has consented to the inclusion of its opinion as Appendix B to this document. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion. Statoil shareholders should read the entire opinion carefully. Morgan Stanley’s opinion is directed only to Statoil’s board of directors and addresses only the fairness of the merger ratio pursuant to the merger plan from a financial point of view to Statoil’s ordinary shareholders solely in their capacity as ordinary shareholders of Statoil, as of the date of the opinion. It does not address any other aspect of the merger including, without limitation, the merits of the underlying rationale for the merger. Morgan Stanley’s opinion does not constitute advice or any type of recommendation to any shareholder of Statoil as to how to vote at Statoil’s shareholder meeting to be held in connection with the merger. The summary of the opinion of Morgan Stanley set forth in this document is qualified in its entirety by reference to the full text of the opinion.

In rendering its opinion, Morgan Stanley, among other things:


	•	reviewed certain publicly available financial statements and other information of or relating to Statoil, Norsk Hydro and Hydro Petroleum;

	•	reviewed certain internal financial statements and other financial data concerning Hydro Petroleum prepared by the management of Norsk Hydro;

	•	discussed the past and current operations and financial condition of Statoil with senior executives of Statoil, and analyzed the pro forma impact of the merger on Statoil’s earnings per share and debt-adjusted cash flow;

	•	reviewed the reported prices and trading activity for the ordinary shares of Statoil and Norsk Hydro, respectively;

	•	compared the financial performance of Statoil and Hydro Petroleum;

	•	reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;

	•	participated in discussions and negotiations among representatives of Statoil and Norsk Hydro and their financial and legal advisors;

	•	reviewed a draft, dated February 20, 2007, of the merger plan; and


	•	reviewed such other information and performed such other analyses as Morgan Stanley have deemed appropriate.

In rendering its opinion, Morgan Stanley assumed and relied upon, without independent verification, the accuracy and completeness of the information supplied or otherwise made available to it for the purposes of its opinion.

Morgan Stanley assumed that the merger will be consummated on the basis of the terms and conditions set out in the draft merger plan without material amendment. In addition, Morgan Stanley assumed that in connection with the receipt of all the necessary regulatory or other approvals or consents required for the merger, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived from the merger.

Morgan Stanley relied upon, without independent verification, the assessment of Statoil and its legal, tax and accountancy advisors with respect to matters of law, regulation, tax and accountancy. Morgan Stanley did not make any independent valuation or appraisal of the assets or liabilities of Statoil or Hydro Petroleum, nor was Morgan Stanley furnished with any such appraisals. Morgan Stanley did not receive any projections of the future financial performance of Statoil, Norsk Hydro or Hydro Petroleum from either Statoil or Norsk Hydro. Morgan Stanley’s opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Morgan Stanley as at, the date of Morgan Stanley’s opinion.

The following is a summary of the material analyses performed by Morgan Stanley in connection with its opinion dated March 13, 2007. These summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses.

Relative Contribution Analysis. Morgan Stanley estimated the relative contribution of Statoil and Hydro Petroleum to the merged company with respect to the following metrics:


	•	operating profit, with respect to 2005, 2006 and estimates for 2007 and 2008;

	•	earnings before interest, taxes and depreciation (“EBITDA”), with respect to 2005, 2006 and estimates for 2007 and 2008;

	•	debt-adjusted cash flow (“DACF”, defined as after-tax cash flow from operations excluding net working capital changes plus after-tax debt services payments), with respect to 2005, 2006 and estimates for 2007 and 2008;

	•	net income with respect to 2005, 2006 and estimates for 2007 and 2008;

	•	volume of production in 2005 and 2006 and estimated production in 2007 and 2008 on both a working interest and entitlement basis;

	•	proved (“1P”) reserve estimates of oil and gas at year-end 2005 and 2006 and proved and probable (“2P”) reserve estimates of oil and gas on both a working interest and entitlement basis as of the most recent practicable date prior to the date of the opinion; and

	•	value of the upstream segments of the merged company based on two third-party discounted cashflow valuations.

Morgan Stanley based the analysis on the historical financial information for 2005 and 2006 received from Statoil and Norsk Hydro, certain publicly available brokers’ estimates for 2007 and 2008 for Statoil and Norsk Hydro and third-party valuation information and analyses from Wood Mackenzie, a provider of research and consulting services to the energy industry, and John S. Herold, Inc. (“Herold”), an independent research firm that specializes in the analysis of companies, transactions and trends in the global energy industry. For Hydro Petroleum in 2006, Morgan Stanley excluded the effect of the recorded impairment charge. For Hydro Petroleum for 2007 and 2008, Morgan Stanley adjusted the brokers’ estimates for Norsk Hydro to reflect the estimated contribution of Hydro Petroleum based on Hydro Petroleum’s historical relative contribution to Norsk Hydro

reflected in the financial information received from Norsk Hydro. Morgan Stanley assumed no synergies from the merger for purposes of this analysis and, in calculating the implied equity share of Statoil and Hydro Petroleum in the merged company, Morgan Stanley took into account the dividends to be paid by Norsk Hydro (to be funded entirely by Hydro Petroleum’s activities) and Statoil prior to the merger and a net debt of Statoil of NOK 24.9 billion and of Hydro Petroleum of NOK 1 billion as of December 31, 2006. The results of the analysis are represented as follows:



		% Implied Equity
		Ownership

				Hydro
		Statoil		Petroleum

Operating profit
	2005		67.6		32.4
	2006		68.5		31.5
	2007E		69.2		30.8
	2008E		69.0		31.0
EBITDA
	2005		67.1		32.9
	2006		67.0		33.0
	2007E		67.9		32.1
	2008E		67.6		32.4
DACF
	2005		63.7		36.3
	2006		71.7		28.3
	2007E		66.8		33.2
	2008E		66.7		33.3
Net Income
	2005		74.2		25.8
	2006		77.1		22.9
	2007E		75.3		24.7
	2008E		75.9		24.1
Production
	2005		65.5		34.5
	2006		64.4		35.6
Production (Working Interest)
	2007E		67.6		32.4
	2008E		68.0		32.0
Production (Entitlement)
	2007E		65.8		34.2
	2008E		66.0		34.0
1P Reserves
	Year-end 2005		65.8		34.2
	Year-end 2006		66.7		33.3
2P Reserves (Working Interest)			69.2		30.8
2P Reserves (Entitlement)			66.4		33.6
Wood Mackenzie Upstream Value			66.6		33.4
Herold Upstream Value			63.8		36.2

Morgan Stanley noted that the pro forma ownership of the merged company implied in the merger ratio of 0.8622 would be 67.3% for Statoil shareholders and 32.7% for Norsk Hydro shareholders.

Sum-of-the-Parts Analysis. Morgan Stanley performed a sum-of-the-parts analysis to estimate the equity value of Hydro Petroleum based on the sum of the estimated valuation of each of Hydro Petroleum’s upstream segment (oil and gas exploration and production) activities, exploration acreage and downstream segment activities, on a standalone basis, and compared the value with the implied value of the consideration based on the merger ratio of 0.8622.

Morgan Stanley derived, in accordance with the methodologies described below, a valuation range for each of the three segments and estimated the value of each segment as the midpoint of the relevant valuation range.

The estimated value of Hydro Petroleum’s upstream segment of NOK 165 billion was calculated as the average of the midpoints of the valuation ranges described below.

The valuation ranges for Hydro Petroleum’s upstream segment were based on: (i) a valuation range derived by Morgan Stanley from Wood Mackenzie information, assuming in the low case scenario a crude oil price based on the consensus three-year oil price scenario used in brokers’ estimates and a long-term crude oil price of $49 per barrel and a weighted average cost of capital of 8.5% and in the high case scenario an oil price based on the three-year forward curve for crude oil as of March 9, 2007, and a long-term crude oil price of $55 per barrel in real terms thereafter and a weighted average cost of capital of 7.5%; (ii) a valuation range contained in a February 2007 Herold report; (iii) the valuation estimates of brokers; and (iv) a valuation range derived by Morgan Stanley on the basis of certain precedent oil and gas asset transactions since November 23, 2004 involving the Norwegian Continental Shelf and a value exceeding $100 million, assuming in the low case scenario $7.00 and in the high case scenario $8.50 of aggregate value per barrel of oil equivalent of the proved and probable reserves on a working interest basis of Hydro Petroleum.

The precedent transactions used in developing the valuation range for Hydro Petroleum’s upstream segment were Centrica plc’s acquisition of BP plc’s 4.84% interest in the Statfjord field, Osaka Gas Co., Ltd.’s 49.5% interest in Idemitsu Snorre Oil Development Co., Ltd., Talisman Energy Inc.’s acquisition of 100% of Petra AS, a subsidiary of Petroleum Geo-Services ASA and DONG Energy’s acquisition of BP plc’s 10.34% stake in the Ormen Lange field. Using publicly available information for each of these transactions, Morgan Stanley calculated the transaction value of the target as a multiple of the proved and probable reserves. Morgan Stanley noted that the average and median multiples for these precedent transactions was $8.4 and $6.8, respectively, per barrel of oil equivalent.

The valuation of Hydro Petroleum’s exploration acreage of NOK 16 billion was based on the midpoint of the valuation range using multiples of aggregate value per acre derived by Morgan Stanley based on certain Herold data.

The valuation of Hydro Petroleum’s downstream segment of NOK 15 billion was based on the valuation of the segment by Herold and a valuation range derived from valuation estimates of brokers.

In order to derive Hydro Petroleum’s estimated equity value excluding synergies of NOK 189 billion, Morgan Stanley adjusted the aggregate value, calculated as the sum of the valuations of the three segments, by subtracting the amount of net debt of Hydro Petroleum of NOK 1.0 billion and adjusting for the NOK 6.1 billion dividend payable prior to the completion of the merger and, to estimate Hydro Petroleum’s equity value, including synergies, of NOK 213 billion, Morgan Stanley added the net present value of the estimated synergies from the merger of NOK 24 billion. The net present value of the estimated synergies was calculated assuming a discount rate of 8% and net pre-tax synergies (including the impact of restructuring costs) of NOK (1.0) billion in 2007, NOK 2.0 billion and NOK 4.0 billion in 2008 and 2009, respectively, and NOK 4.0 billion, adjusted for an estimated inflation rate of 2.5% per annum, for 2010 and thereafter. Morgan Stanley’s estimates of the time and cost to achieve synergies were made independently and not verified by Statoil. Morgan Stanley also compared Statoil’s run-rate synergy estimate to those announced in precedent transactions.

Morgan Stanley noted that the estimated consideration for Hydro Petroleum based on the merger ratio of 0.8622 was NOK 172 billion as of December 18, 2006, the date of the announcement of the merger, and NOK

154 billion as of March 9, 2007, in each case based on Statoil’s equity value as of such date adjusted for the NOK 19.7 billion dividend payable by Statoil prior to the merger.

Implied Transaction Multiples. Morgan Stanley calculated the following transaction multiples for Hydro Petroleum as implied in the merger ratio of 0.8622 and for Statoil based on publicly available information and brokers’ reports as of December 15, 2006, the last full trading day prior to announcement of the merger, and as of March 9, 2007: (i) aggregate value (“AV”) as a multiple of 2006 and estimated 2007 DACF, and (ii) AV as a multiple of 1P reserves, estimated 2P entitlement reserves and production for 2006.

Morgan Stanley calculated the AV/ DACF multiple for Hydro Petroleum both excluding and including the announced synergies. Morgan Stanley calculated the net income including synergies and DACF including synergies by adding the full amount of estimated post-tax synergies of NOK 1.4 billion (NOK 4.0 billion pre-tax) to the results and estimates. The assumed tax rate of 65% applicable to the annual run-rate synergy estimate is based on information publicly disclosed by Statoil.

The results of the analyses are represented as follows:

Transaction Multiples

Statoil Multiples

December 15,

March 9,

December 15, 2006

March 9, 2007

2006

2007

Incl. Pro

Forma

Synergies

Excl. Synergies

Synergies

Excl. Synergies

AV/2006 DACF

7.2

7.7

6.5

6.9

6.2

5.7x

AV/2007E DACF

5.8

6.0

5.2

5.5

6.1

5.6x

AV/1P Reserves

15.0

13.6

15.3

14.0x

AV/2P Entitlement Reserves

7.8

7.1

8.0

7.4x

AV/2006 Production

50.1

45.6

56.3

51.7x

Precedent Transactions Analyses. Morgan Stanley conducted a precedent transactions analysis to assess how certain recent large corporate transactions in the oil and gas industry were valued. Morgan Stanley reviewed publicly available information related to these precedent transactions to calculate certain financial and operational transaction multiples. Morgan Stanley selected and analyzed the following large corporate transactions in the oil and gas industry since August 10, 2005:


			Transaction Size
Announcement Date	Acquiror	Target	($mm)

December 12, 2005	ConocoPhillips	Burlington Resources, Inc.		36,100
July 19, 2005	Chevron Corporation	Unocal Corporation		18,400
June 23, 2006	Anadarko Petroleum Corporation	Kerr-McGee Corporation		18,000
October 13, 2005	Occidental Petroleum Corporation	Vintage Petroleum Inc.		3,800
October 20, 2005	Talisman Energy Inc.	Paladin Resources plc		2,146

For each of these transactions and for Hydro Petroleum as implied by the merger ratio of 0.8622 both excluding and including synergies, Morgan Stanley calculated (a) the purchase price as a multiple of earnings (“P/ E”), (b) the purchase price as a multiple of cash flow defined as after-tax cash flow from operations excluding net working capital changes (“P/ CF”), and (c) AV/ DACF, in each case with respect to the preceding twelve months (“LTM”) and analyst estimates for the calendar year following the calendar year during which the announcement occurred (“FY1”). In calculating the multiples including synergies, Morgan Stanley added the full amount of estimated post-tax synergies of NOK 1.4 billion (NOK 4.0 billion pre-tax) to the results and estimates. The assumed tax rate of 65% applicable to the annual run-rate synergy estimate is based on information publicly disclosed by Statoil.

The results of the analysis are represented as follows:

P/E

P/CF

AV/DACF

LTM

FY1

LTM

FY1

LTM

FY1

Precedent transactions

Range

8.3x–34.8x

11.6x–16.9x

3.3x–15.0x

5.5x–8.0x

5.6x–8.8x

5.6x–8.0x

Average

19.8x

13.5x

8.7x

6.6x

7.3x

6.7x

Median

16.9x

13.2x

8.8x

6.3x

7.6x

6.8x

Hydro Petroleum

Including Synergies

11.5x

10.4x

5.9x

5.2x

6.5x

5.2x

Excluding Synergies

12.8x

11.4x

6.3x

5.5x

6.9x

5.5x

Morgan Stanley also conducted a precedent transaction analysis to analyze premia to the closing price of the last full trading day prior to announcement and to the closing price 30 days prior to announcement implied in the following large-scale, merger-of-equals transactions in the oil and gas industry:


Announcement Date	Acquiror	Target

November 18, 2001	Phillips Petroleum Company	Conoco Inc.
October 16, 2000	Chevron Corporation	Texaco Inc.
July 5, 1999	Total Fina S.A.	Elf Aquitaine S.A.
December 1, 1998	Exxon Corporation	Mobil Corporation
August 11, 1998	BP plc	Amoco Company

The results of the analysis are represented as follows:



	% Premium paid over

	1 day prior to		30 days prior to
Oil & Gas Mergers of Equals	announcement		announcement

Range		(0.3)–28.1		(2.9)–23.1
Mean		16.6		15.6
Median		15.2		20.2

Morgan Stanley also calculated certain premia with respect to the ratios of AV/2P entitlement reserves and AV/ DACF excluding synergies for Hydro Petroleum as implied in the merger ratio of 0.8622 relative to the ratios for Statoil implied by the closing price of Statoil shares of the last full trading day prior to announcement and 30 days prior to announcement:



	% Premium paid over

	1 day prior to			30 days prior to
Hydro Petroleum to Statoil	announcement			announcement

AV/2P Reserves (Entitlement)		(3.0	)		(3.9	)
AV/2006 DACF		23.1			21.9
AV/2007E DACF		(1.3	)		(2.3	)

Similarly, Morgan Stanley calculated premia with respect to the ratio of AV/ DACF excluding synergies for Hydro Petroleum as implied in the merger ratio of 0.8622 relative to the ratio for Norsk Hydro implied by the closing price of Norsk Hydro shares on the last full trading day prior to announcement and 30 days prior to announcement.



	% Premium paid over

	1 day prior to		30 days prior to
Hydro Petroleum to Norsk Hydro	announcement		announcement

AV/2006 DACF		54.6		54.4

No transaction included in the precedent transaction analyses is identical to the merger. In evaluating the precedent transactions, Morgan Stanley made judgments and assumptions with regard to industry performance,

general business, economic, market and financial conditions and other matters. Many of these matters are beyond the control of Statoil or Hydro Petroleum, such as the impact of competition on the business of Statoil and Hydro Petroleum and the industry in general, industry growth and the absence of any material adverse change in the financial condition and prospects of Statoil or Hydro Petroleum or the industry or in the financial markets in general. Mathematical analysis, such as determining the arithmetic mean or median, or the high or low, is not in itself a meaningful method of using precedent transaction data.

Comparable Company Trading Multiples. Morgan Stanley reviewed market price and trading multiples for the following publicly-held, integrated major companies in the oil and gas industry that Morgan Stanley deemed to have certain characteristics that are similar to those of Hydro Petroleum and compared them with certain financial data for Hydro Petroleum:


	•	Anadarko Petroleum Corporation;

	•	BG Group;

	•	ConocoPhillips;

	•	ENI S.p.A.;

	•	Marathon Oil Corporation;

	•	Occidental Petroleum Corporation; and

	•	Repsol YPF, S.A.

For each of the selected comparable companies and Hydro Petroleum, Morgan Stanley derived and compared, among other things:


	•	the ratio of prices per share as of March 9, 2007 to earnings in 2006 and earning estimates for 2007 and the ratio of prices per share as of March 9, 2007 to 2006 cash flow per share and estimated 2007 cash flow per share; and

	•	the ratio of aggregate value as of March 9, 2007 to 2006 debt-adjusted cash flow and 2007 estimated debt-adjusted cash flow.

All multiples were based on publicly available data and estimates as of March 9, 2007. For Hydro Petroleum for 2007, Morgan Stanley adjusted the brokers’ estimates for Norsk Hydro to reflect the estimated contribution of Hydro Petroleum based on Hydro Petroleum’s historical relative contribution to Norsk Hydro reflected in the financial information received from Norsk Hydro. In calculating the multiples including synergies, Morgan Stanley added the full amount of estimated post-tax synergies of NOK 1.4 billion (NOK 4.0 billion pre-tax) to the results and estimates. The assumed tax rate of 65% applicable to the annual run-rate synergy estimate is based on information publicly disclosed by Statoil.

The results of the analysis are represented as follows:

P/E

P/CF

AV/DACF

2006

2007E

2006

2007E

2006

2007E

Comparable Companies

Range

6.9x–14.5x

7.7x–13.1x

3.9x–10.0x

4.2x–8.6x

5.8x–8.7x

Average

8.9x

10.2x

5.8x

6.7x

6.8x

Median

8.4x

9.6x

5.1x

5.6x

6.2x

6.4x

Hydro Petroleum

Including Synergies

11.5x

10.4x

5.9x

5.2x

6.5x

5.2x

Excluding Synergies

12.8x

11.4x

6.3x

5.5x

6.9x

5.5x

No company included in the comparable company analysis is identical to Hydro Petroleum. In evaluating the comparable companies, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters. Many of these matters are beyond

the control of Hydro Petroleum such as the impact of competition on the business of Hydro Petroleum and the industry in general, industry growth and the absence of any material adverse change in the financial condition and prospects of Hydro Petroleum or the industry or in the financial markets in general. Mathematical analysis, such as determining the arithmetic mean or median, or the high or low, is not in itself a meaningful method of using comparable company data.

Pro Forma Analysis of the Merger. Morgan Stanley analyzed the pro forma impact of the merger and estimated pro forma Statoil earnings per share and debt-adjusted cash flow per share for 2007 and 2008 and performed accretion/(dilution) analysis based on the merger ratio of 0.8622, excluding the impact of one-time and acquisition-related expenses. Morgan Stanley performed the analysis assuming the realization of full effect from the announced annual NOK 4.0 billion pre-tax synergies in both 2007 and 2008. The results of the analysis under U.S. GAAP accounting are represented as follows:



	% Accretion/
	(Dilution)

U.S. GAAP	2007E			2008E

EPS excluding Synergies		(18.3	)		(18.3	)
EPS including Synergies		(16.0	)		(16.1	)
DACF per share excluding Synergies		(2.0	)		(1.9	)
DACF per share including Synergies		(0.6	)		(0.5	)

The results of the analysis under Norwegian GAAP accounting are represented as follows:



	% Accretion/
	(Dilution)

Norwegian GAAP	2007E			2008E

EPS excluding Synergies		(11.1	)		(11.6	)
EPS including Synergies		(8.8	)		(9.4	)
DACF per share excluding Synergies		(2.0	)		(1.9	)
DACF per share including Synergies		(0.6	)		(0.5	)

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any particular weight to any particular analysis or factor considered by it. Furthermore, Morgan Stanley believes that the summary provided and the analyses described above must be considered as a whole and that selecting any portion of Morgan Stanley’s analyses, without considering all its analyses, would create an incomplete view of the process underlying Morgan Stanley’s opinion. In addition, Morgan Stanley may have deemed various assumptions more or less probable than other assumptions, so that the range of valuations resulting from any particular analysis described above should not be taken to be Morgan Stanley’s view of the actual value of Hydro Petroleum.

In performing its analyses, Morgan Stanley made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of Statoil or Hydro Petroleum. Any estimates contained in Morgan Stanley’s analysis are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates. The analyses performed were prepared solely as part of Morgan Stanley’s analysis of the fairness of the merger ratio pursuant to the merger plan from a financial point of view to Statoil’s ordinary shareholders and were conducted in connection with the delivery of the Morgan Stanley opinion to the board of directors of Statoil. The analyses do not purport to be appraisals or to reflect the prices at which Statoil ordinary shares might actually trade following consummation of the merger. The consideration pursuant to the merger agreement and other terms of the merger plan were determined through arm’s length negotiations between Statoil and Norsk Hydro and were approved by the Statoil board of directors. Morgan Stanley provided advice to Statoil during such negotiations; however, Morgan Stanley did not recommend any specific consideration to Statoil or that any specific consideration constituted the only appropriate consideration for the merger. In addition, as described above, Morgan Stanley’s opinion was one of many factors taken into consideration by Statoil’s board of directors

in making its decision to approve the merger. Consequently, the Morgan Stanley analyses as described above should not be viewed as determinative of the opinion of the Statoil board of directors with respect to the value of Hydro Petroleum or of whether the Statoil board of directors would have been willing to agree to a different consideration.

The Statoil board of directors retained Morgan Stanley based upon Morgan Stanley’s qualifications, experience and expertise. Morgan Stanley is an internationally recognized investment banking and advisory firm. Morgan Stanley, as part of its investment banking and financial advisory business, is continuously engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwriting, competitive bidding, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. In the ordinary course of Morgan Stanley’s trading, brokerage, investment management and financing activities, Morgan Stanley or its affiliates may at any time hold long or short positions, trade or otherwise effect transactions, for its own account or for the account of customers, in the equity or debt securities or senior loans of Statoil or Norsk Hydro.

Pursuant to the terms of the engagement letter, Morgan Stanley provided financial advisory services and a written opinion on December 17, 2006 and a written opinion on March 13, 2007. Statoil has agreed to pay Morgan Stanley a fee of $15 million, 20% of which was payable upon announcement of the transaction and the balance of which is payable upon consummation of the transaction. Statoil may also, in its sole discretion, pay an additional fee of $5 million to Morgan Stanley. Such amounts payable to Morgan Stanley were determined by Statoil’s senior management. Statoil has also agreed to reimburse Morgan Stanley for certain of its expenses incurred in performing its services and to indemnify Morgan Stanley and its affiliates, their respective directors, officers, agents and employees and each person, if any, controlling Morgan Stanley or any of its affiliates against certain liabilities, including certain liabilities under the federal securities laws, related to or arising out of Morgan Stanley’s engagement. In the past, members of the Morgan Stanley group have provided financial advisory and financing services to Statoil and Norsk Hydro and their respective affiliates and have received fees in connection with such services. In the past two years, Morgan Stanley has received fees in the amount of approximately $780,000 for rendering such services to Statoil. Members of the Morgan Stanley group may also seek to provide such services to Statoil and Norsk Hydro in the future and will receive fees for the rendering of these services.

Plans for Hydro Petroleum after the Merger

Upon completion of the merger, Hydro Petroleum will be transferred to Statoil. Except as indicated in this circular/prospectus, there are no present plans or proposals that relate to or would result in an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the assets or the operations of Hydro Petroleum, a sale or transfer of a material amount of its or any of its subsidiaries’ assets, or any other material changes in Hydro Petroleum’s business.

Interests of Certain Persons in the Merger


	*Interest of Norsk Hydro’s executive officers*

When you consider the recommendation of the board of Norsk Hydro in favor of the merger plan, you should keep in mind that Norsk Hydro’s executive officers, who have supported the transaction, may have interests in the merger that are in addition to and different from the interests of other shareholders of Norsk Hydro generally.


	Board and Management Positions

The following individuals will become senior executive officers or directors in the stated positions in the merged company:


	•	Eivind Reiten, President and Chief Executive Officer of Norsk Hydro, will become Chairman of the board of the merged company;

	•	Tore Torvund, Executive Vice President Oil & Energy of Norsk Hydro, will become Executive Vice President Exploration & Production for Norway of the merged company;


	•	Morten Ruud, Senior Vice President of Norsk Hydro, will become Executive Vice President Projects of the merged company;

	•	Hilde Merete Aasheim, Executive Vice President Leadership and Culture of Norsk Hydro, will become Head of Group Functions of the merged company.


	Annual Bonuses

Norsk Hydro executive officers have individual bonus plans that are based on Norsk Hydro’s performance and their own individual performance measured on the basis of general and individual Key Performance Indicators (KPIs). For Norsk Hydro’s CEO and President Eivind Reiten, the bonus for 2006 will be determined by the Board of Directors’ Compensation Committee early in the third quarter of 2007. For the remaining executive officers of Norsk Hydro, the merger of Hydro Petroleum with Statoil has not influenced their bonus amount to be paid for 2006. The merger may impact certain executive officers’ bonuses for 2007 subject to discretionary decisions to be made in 2008.


	*Interests of Statoil’s executive officers*

When you consider the recommendation of the board of Statoil in favor of the merger plan, you should keep in mind that Statoil’s executive officers, who have supported the transaction, may have interests in the merger that are in addition to and different from the interests of other shareholders of Statoil generally.


	Management Positions

The following individuals will become senior executive officers in the stated positions in the merged company:


	•	Helge Lund, President and Chief Executive Officer of Statoil, will become President and Chief Executive Officer of the merged company;

	•	Eldar Sætre, Chief Financial Officer and Executive Vice President of Statoil, will become Chief Financial Officer of the merged company;

	•	Peter Mellbye, Executive Vice President International Exploration & Production of Statoil, will become Executive Vice President International Exploration & Production of the merged company;

	•	Jon Arnt Jacobsen, Executive Vice President Manufacturing & Marketing of Statoil, will become Executive Vice President Manufacturing & Marketing of the merged company;

	•	Rune Bjørnson, Executive Vice President, Natural Gas of Statoil, will become Executive Vice President, Natural Gas of the merged company;

	•	Margareth Øvrum, Executive Vice President Technology & Projects of Statoil, will become Executive Vice President Technology and New Energy of the merged company.

Although the position of several among those executive officers will not change, their responsibility will encompass a larger company which may give rise to potential future benefits.


	Performance Payments

The board of directors of Statoil assesses an annual performance payment for Chief Executive Officer, Helge Lund, which may amount to a maximum of 50 per cent of base salary. In addition, Statoil has established a performance pay system for the other members of the corporate executive committee, senior vice presidents and vice presidents which entails a variable remuneration based on pre-determined performance goals. The merger of Hydro Petroleum with Statoil may have a positive impact on the 2006 and 2007 performance payments to Mr. Lund and certain other executive officers of Statoil. In particular, Mr. Sætre’s compensation is linked to a number of pre-determined performance goals one of which is the identification of significant transaction opportunities. Mr. Lund received a performance payment of NOK 1,175,000 for the year 2006 and Mr. Sætre

received a performance payment of NOK 329,600 for the year 2006. However, no individual weighting was given to the merger compared to other factors in the determination of those performance payments.

Accounting Treatment

Up to and including the year 2006, Statoil has prepared its financial statements in accordance with U.S. GAAP. Under U.S. GAAP, the transaction will be accounted for as a purchase of Hydro Petroleum by Statoil, and the pro-forma financial information appearing in this circular/prospectus has been prepared on that basis. As explained in more detail in the unaudited pro forma condensed combined financial information, the Norwegian State controls Statoil and has a significant ownership interest in Hydro Petroleum through its investment in Norsk Hydro. As a result of the Norwegian State’s common ownership interests in both companies, under U.S. GAAP, the proportionate share of Hydro Petroleum’s net assets owned by the Norwegian State will be recorded at historical cost which approximates the Norwegian State’s bases in those net assets. The portion of Hydro Petroleum’s net assets that are not owned by the Norwegian State will be reflected at fair value.

In accordance with Norwegian requirements, Statoil will prepare its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) from January 1, 2007. Effective from that date, Statoil will also adopt IFRS as its primary accounting principles. Please refer to the information under the heading “Item 3 — Key Information — Implementations of International Financial Reporting Standards (IFRS)” in the Statoil 2006 Form 20-F.

Under IFRS, control can be demonstrated either by majority ownership or by de facto control. The Norwegian State has majority share ownership in Statoil and has been determined to have de facto control over Norsk Hydro. Under IFRS, the merger will be accounted for as a transaction between entities under common control and, accordingly, the carrying amount of the assets and liabilities of the merged company are recorded at their carrying amounts, and prior periods will be restated to present the merged company as if they had always been combined. As the merged company will prepare its consolidated financial statements in accordance with IFRS from January 1, 2007, the merged company’s primary financial statements as at, and for the year ending, December 3l, 2007, including comparative financial statements as at, and for the year ending, December 31, 2006, and all future financial statements, will be prepared with the transaction recorded on this basis and not recorded as a purchase of Hydro Petroleum by Statoil in accordance with U.S. GAAP.

The merged company will continue to file annual reports on Form 20-F and, accordingly, will reconcile net income and shareholders’ equity prepared in accordance with IFRS to net income and shareholders’ equity prepared in accordance with U.S. GAAP for all periods presented. The Form 20-F will also include additional disclosures necessary to understand the financial statements as if they were prepared in accordance with U.S. GAAP.

Expenses

The estimated costs of the transaction are expected to be NOK 450 million.

Cautionary Statements Concerning Forward-Looking Statements

Statements contained in this circular/prospectus or in documents incorporated by reference herein, particularly those regarding possible or assumed future performance, costs, dividends, reserves and growth of Statoil and Hydro Petroleum, industry growth and other trends and projections, and those regarding synergistic benefits of the merger and estimated company earnings, particularly those set forth under “Statoil — Recent Developments”, “The Merger — Reasons for the Merger”, “— Recommendation of, and Factors Considered by, the Norsk Hydro Board”, “— Opinion of Norsk Hydro’s Financial Advisor”, “— Recommendation of, and Factors Considered by, the Statoil Board” and “— Opinion of Statoil’s Financial Advisor”, are or may be “forward-looking statements” that contain risks and uncertainties. In some cases, we use words such as “believe”, “intend”, “expect”, “anticipate”, “plan”, “target” and similar expressions to identify forward-looking statements. These forward-looking statements reflect Statoil’s or Hydro Petroleum’s current views with

respect to future events and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. These factors include, without limitation:


	•	future levels of industry product supply, demand and pricing;

	•	general domestic and international actions and political conditions;

	•	political stability and economic growth in areas where the merged company operates;

	•	the competitiveness of alternative energy sources;

	•	the ability of Statoil and Hydro Petroleum to integrate their businesses successfully after the merger;

	•	the realization of expected synergies and cost savings from the merger;

	•	the realization of other perceived benefits expected to result from the merger;

	•	the process of, or conditions imposed in connection with, obtaining regulatory approvals for the merger;

	•	discovery, estimation, development and replacement of oil and natural gas reserves;

	•	potential failure or delay to achieve expected production from existing and future oil and gas development projects;

	•	potential delays in the development, construction or start-up of planned projects;

	•	political developments and laws and regulations, such as forced divestiture of assets, restrictions on production or on imports or exports, price controls, tax increases and retroactive tax claims, expropriation of assets, cancellation of contract rights, and environmental laws or regulations;

	•	potential liability for remedial actions under existing or future environmental regulations;

	•	the competitiveness of alternative energy sources or product substitutes;

	•	the ability to compete successfully for new assets and operatorships and the actions of competitors;

	•	development and use of new technology;

	•	crude oil and natural gas prices;

	•	natural disasters; and

	•	other factors discussed elsewhere in this circular/prospectus and in the documents incorporated by reference in this circular/prospectus.

Additional factors which could cause actual results and developments to differ from those expressed or implied by the forward-looking statements are included in the section “Risk Factors” and the sections of the Statoil 2006 Form 20-F referenced therein, which are incorporated by reference into this circular/prospectus.

REGULATORY MATTERS, PRE-EMPTION RIGHTS AND THIRD PARTY CONSENTS

Under the merger plan, receipt of all necessary or material regulatory approvals and consents is a condition to the completion of the transactions unless, in the opinion of the Norsk Hydro and Statoil boards, neither the failure to obtain consents nor potential conditions imposed by regulatory approvals would have a material adverse effect on the business of the merged company. It is possible that required regulatory and third party consents and approvals will not be obtained at all or on a timely basis or that material conditions will be imposed on these consents and approvals that could be detrimental to the business of the merged company. See “Risk Factors — Risks Related to the Transaction — Competition and other regulatory authorities may oppose the transaction or impose conditions on the transaction which may delay and/or lessen the anticipated benefits of the transaction”, “— The failure to integrate the operations of Statoil and Hydro Petroleum successfully and on a timely basis could reduce the profitability of the merged company and adversely affect its share price” and “The Merger Plan”.

Antitrust

Statoil and Norsk Hydro must obtain approval for the proposed transaction from the European Commission and the United States Federal Trade Commission, or the FTC, or the Antitrust Division of the United States Department of Justice, or the DOJ, each of which has jurisdiction to review the transaction under applicable competition/antitrust laws. A number of other jurisdictions throughout the world may also have jurisdiction to review the transaction under their competition or antitrust laws.

Although Statoil and Norsk Hydro do not anticipate that there will be any investigations or proceedings in any jurisdiction that would have a material impact on the completion of the transaction or the operations of the merged company, there can be no assurance that the necessary approvals will be granted or that they will be granted unconditionally, or that investigations or proceedings, whether by governmental authorities or private parties, will not be initiated and, if initiated, will not have a material adverse impact on the operations of the merged company.


	*European Union*

Statoil and Norsk Hydro both conduct business in the European Union. Council Regulation (EC) 139/2004 requires that certain concentrations involving parties with aggregate annual worldwide and individual European Union sales exceeding certain thresholds be notified to and approved by the European Commission. This transaction exceeds these thresholds and therefore is subject to this merger notification procedure. Statoil and Norsk Hydro cannot complete the transaction until approval from the European Commission has been obtained.

Council Regulation (EC) 139/2004 also gives Member States of the European Union the right to request that the European Commission refer jurisdiction to review a concentration to a national authority under the provisions of the relevant national law where it may have an effect on competition in a distinct local market within the requesting Member State. Such a request must be made within 15 working days of the concentration’s notification to the European Commission. The European Commission has discretion as to whether to accede to such a request unless the distinct local market within the requesting Member State does not constitute a substantial part of the common market, in which case the European Commission must grant the referral.

Generally, the European Commission has 25 working days from the date of the notification of a concentration to adopt a decision to approve the notified concentration (whether unconditionally or subject to conditions or obligations) or to open an in-depth investigation, or a Phase II review. The European Commission has the power at any stage during the initial review to declare a notification to be incomplete, which would result in Statoil and Norsk Hydro having to re-notify the concentration and in restarting the 25 working day period. The initial 25 working day period is extended automatically to 35 working days if (i) a Member State of the European Union requests a referral of jurisdiction to review all or part of the concentration for review by its competition authority, or (ii) the notifying parties offer to commit to the divestiture of overlapping assets or businesses or other conditions or obligations to eliminate any aspects of the concentration that might cause the European Commission to have serious concerns that the concentration raises competition issues such that it could be incompatible with the common market.

If the European Commission opens a Phase II review, it must, at the end of a further period of 90 to 105 working days, adopt a decision either clearing the concentration (whether unconditionally or subject to conditions and obligations) or declaring the concentration incompatible with the common market.

In certain circumstances, the 25 working day, 35 working day, and 90-105 working day review periods can be extended if the European Commission requests information from Statoil or Norsk Hydro that is not provided within the requisite time period. In such circumstances, the European Commission may suspend the review timetable until all requested information is provided.

A decision approving the concentration can be challenged before the Court of First Instance of the European Communities by, among others, competitors, customers or suppliers of Statoil or Norsk Hydro. A decision to prohibit the transaction can similarly be challenged by Statoil or Norsk Hydro.

Subject to review by the Court of First Instance, once the European Commission has adopted a decision clearing the concentration, that decision can be revoked by it only if it subsequently concludes that its approval of the concentration was granted on the basis of false or misleading information furnished in the notification or otherwise furnished by Statoil or Norsk Hydro, or if Statoil or Norsk Hydro has failed to comply with conditions or obligations to which the approval decision is subject.

As is customary in EU merger control filings, Statoil and Norsk Hydro have commenced pre-notification discussions with the European Commission staff and intend to submit a formal notification in due course.


	*United States*

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or the HSR Act, the proposed transaction may not be completed until notification has been filed with the FTC and the DOJ, and the required 30-day waiting period has expired or been terminated. The required waiting period may be extended by the issuance of a Request for Additional Information or Documentary Material by the FTC or DOJ.

The required waiting period may be terminated before its expiration by the FTC and the DOJ, but the expiration or termination of the waiting period does not bar the FTC or the DOJ from challenging the transaction after its completion.

If the FTC or the DOJ believes that the transaction would violate the federal antitrust laws by substantially lessening competition in any line of commerce affecting U.S. consumers, the FTC and the DOJ have the authority to challenge the transaction by seeking a federal court order enjoining the transaction or, if shares have already been acquired, requiring disposition of such shares. State attorneys general and private persons may also bring legal action under the antitrust laws seeking similar relief or seeking conditions to the completion of the merger.

Statoil and Norsk Hydro are currently preparing their notifications to the DOJ and the FTC.


	*Canada*

The proposed transaction is a notifiable transaction under the Competition Act (Canada). Notifiable transactions cannot be completed under the Competition Act until either (i) a required notification is filed with the Commissioner of Competition and the relevant statutory waiting period, up to a maximum of 42 days, has expired or been terminated, (ii) the Commissioner of Competition has issued an Advance Ruling Certificate (ARC) in respect of the transaction, or (iii) the Commissioner of Competition has waived the notification requirement on the basis of information received in an application for an ARC. Statoil and Hydro are currently preparing their filings with the Commissioner of Competition.


	*Other Jurisdictions*

Statoil and Norsk Hydro conduct operations in a number of jurisdictions where antitrust filings or approvals may be required or advisable in connection with the proposed transaction. Statoil and Norsk Hydro are currently in the process of reviewing whether such filings or approvals may be required or desirable.

Other Regulatory Consents


	*Consent of the Norwegian Ministry of Petroleum and Energy*

As further described below in “Hydro Petroleum — Operational Information”, Hydro Petroleum is the operator of a number of fields, the holder of a number of exploration and production licenses and the owner of installations on the NCS as well as of onshore facilities related to the offshore operations. Under the Norwegian Petroleum Act, any transfer of such operatorships and/or of any such direct and/or indirect interest in licenses and installations requires the consent of the Ministry of Petroleum and Energy. When reviewing a transfer application, the Ministry of Petroleum and Energy is authorized and obliged to consider the effect of such transfer on the overall resource management of the NSC. The Ministry of Petroleum and Energy may grant its consents subject to certain conditions. A standard condition is that the consent of the Ministry of Finance to the tax treatment of the transfer has been received.

Furthermore, under the applicable joint operating agreements entered into by the NCS licensees in accordance with the terms of the licenses granted by the Ministry of Petroleum and Energy, it is a condition precedent to the transfer of interests in the licenses that voting rights provisions be changed in order to reflect the change of participating interests and/or participating parties in the licenses.


	*Consent of the Norwegian Ministry of Finance*

Under the Norwegian Petroleum Taxation Act, the consent of the Ministry of Finance to the tax treatment of the transfer is required prior to completion of the merger. The Ministry of Finance has the authority to impose conditions to its consent for the purpose of ensuring that the transfer has no adverse impact on the tax revenues of the Norwegian State. As described under “The Merger Plan” the petroleum assets of Norsk Hydro are to be transferred to a subsidiary in a non-taxable event under Norwegian law and kept separate from the petroleum assets of Statoil. The consent by the Ministry of Finance is independent of the Ministry of Petroleum and Energy’s consent but is normally granted after the consent of the Ministry of Petroleum and Energy as described above.


	*Consent of other Norwegian Authorities*

Norsk Hydro owns certain other energy-related assets that are subject to concessions granted pursuant to the Energy Act, and the transfer of such assets in connection with the merger may require the consent of the Norwegian Water Resources and Energy Directorate (NVE).


	*Other Jurisdictions*

Statoil and Norsk Hydro conduct operations in a number of jurisdictions where other regulatory filings or governmental approvals may be required or advisable in connection with the proposed transaction. Statoil and Norsk Hydro are currently in the process of reviewing whether other filings or approvals may be required or desirable in other jurisdictions that may be material to Statoil and Norsk Hydro and their subsidiaries.

Pre-Emption Rights and Third-Party Consents

Third parties hold pre-emption rights in certain licenses and assets of Hydro Petroleum and such rights may be exercisable in connection with the merger. Norsk Hydro is also a party to joint ventures, license agreements and other agreements and instruments, some of which contain change of control provisions that may be triggered by the merger. Agreements with change of control provisions typically provide for, or permit the termination of the agreement upon the occurrence of, a change of control of one of the parties or, in the case of debt instruments, require repayment of all the outstanding debt. In addition, certain other agreements of Norsk Hydro may require the payment of fees in connection with a change of control transaction. Unless waivers are obtained by Norsk Hydro and Statoil, the operation of change of control provisions may cause the loss of significant contractual rights and benefits, the termination of joint venture agreements and licensing agreements or require the renegotiation of financing agreements and/or the payment of significant fees.

MATERIAL TAX CONSEQUENCES

General

The description below of material tax consequences for shareholders is a summary of some of the tax rules relevant to holders of Norsk Hydro shares and ADSs that are effective as of the date of this circular/ prospectus. While Statoil believes that the description below contains all material tax consequences, the description is of a general nature and does not cover all tax rules and regulations of relevance in connection with the merger. Holders of Norsk Hydro shares and Norsk Hydro ADSs should contact professional tax advisors to clarify individual tax consequences in connection with the merger.

Please note that the terms “Norwegian” and “Foreign” shareholders in the discussion below refer to the tax residence and not the nationality of such shareholders.

Tax Consequences of the Merger for Norsk Hydro Shareholders in Norway

Statoil believes that the merger complies with the requirements for treatment of the transaction as a tax free merger in Norway. As a result, the issuance of the new Statoil shares to the holders of Norsk Hydro shares will not trigger tax in Norway.

As only whole shares will be issued, the value of fractions of shares will be distributed proportionately to those Norsk Hydro shareholders entitled to the fractions. This distribution is subject to capital gain tax for Individual Shareholders, as a realization of a part of a share. For further information regarding capital gain tax see below.

Norsk Hydro shareholders’ tax positions related to the Norsk Hydro shares immediately prior to the merger, including but not limited to the tax base on the shares, will be split between the Norsk Hydro shares and the received Statoil shares in the same proportion as the net fair market value of assets and share capital transferred to Statoil as part of the merger (70 per cent) and the net fair market value of the assets and share capital remaining in Norsk Hydro (30 per cent). For each holder of Norsk Hydro shares, the aggregate tax base on the Norsk Hydro shares and the Statoil shares immediately after the merger will thus be equal to the tax base on the Norsk Hydro shares immediately before the merger (adjusted for the cost price of any fraction of shares realized for tax purposes).

Statoil shares will also be regarded as having been acquired at the same time as the corresponding Norsk Hydro shares for Norwegian tax purposes. For example, if a Norsk Hydro share has been acquired on January 1, 2000, the new Statoil share issued in respect of the Norsk Hydro share will be regarded as having been acquired on January 1, 2000 for Norwegian tax purposes (including with respect to the application of the first in, first out principle).

The issuance of Statoil shares as part of the merger will not be subject to any withholding tax in Norway.

Tax Consequences of the Merger for Norsk Hydro Shareholders or ADS holders in the United States

For the reasons explained above, there will be no material Norwegian tax consequences for Norsk Hydro shareholders in the United States.

The following discussion is a summary based on present law of certain U.S. federal income tax considerations relevant to the merger. The discussion addresses only U.S. Shareholders (as defined below) that hold Norsk Hydro shares or ADSs as capital assets and use the U.S. dollar as their functional currency. It does not address the tax treatment of U.S. Shareholders subject to special rules, such as banks, dealers, insurance companies, regulated investment companies, tax exempt entities, holders of 10 per cent or more of Norsk Hydro’s voting shares, persons holding Norsk Hydro shares or ADSs as part of a hedge, straddle, conversion, or other integrated financial transaction, or constructive sale transaction. This discussion assumes, that Norsk Hydro is not a passive foreign investment company for U.S. federal income tax purposes.

This summary does not address U.S. state or local taxes. It does not consider any investor’s particular circumstances. It is not a substitute for tax advice. Norsk Hydro’s shareholders are urged to consult their own tax advisors about the tax consequences of the merger.

As used in this discussion, U.S. Shareholder means a beneficial owner of Norsk Hydro shares or ADSs that is (i) a citizen or resident of the United States, (ii) a corporation, partnership or other business entity organized under the laws of the United States, (iii) a trust subject to the control of a U.S. person and the primary supervision of a U.S. court or (iv) an estate the income of which is subject to U.S. federal income tax regardless of its source.

A U.S. Shareholder that receives Statoil shares or ADSs should be treated as receiving a taxable distribution from Norsk Hydro in an amount equal to the fair market value of the shares in U.S. dollars. This distribution would be treated as a dividend, taxable as ordinary income, to the extent of the U.S. Shareholder’s share of current and accumulated earnings and profits of Norsk Hydro as determined for U.S. federal income tax purposes (which Norsk Hydro does not compute). A non-corporate U.S. Shareholder meeting certain conditions (including certain holding period requirements) would be taxed on the dividend amount at the same preferential rate allowed for long-term capital gains. If the amount of the distribution were to exceed Norsk Hydro’s current and accumulated earnings and profits, the excess would be treated as a recovery of basis to the extent of a U.S. Shareholder’s basis in its Norsk Hydro shares or ADSs and then as capital gain. Since Norsk Hydro does not calculate earnings and profits for U.S. tax purposes, however, a U.S. Shareholder should expect not to be able to establish that any portion of the distribution would be treated as recovery of basis or capital gain.

A U.S. Shareholder would have a basis in the Statoil shares or ADSs received equal to the fair market value at the time of receipt determined in U.S. dollars on the date of receipt, and the holding period of the Statoil shares or ADSs would commence on the day following the merger. A non-corporate U.S. Shareholder benefiting from the preferential rate for dividends may be subject to special rules treating any loss realized on the sale of Norsk Hydro shares or ADSs as long-term capital loss to the extent of the dividend.

Tax Consequences of the Merger for Norsk Hydro Shareholders in the United Kingdom

For the reasons explained above, there will be no material Norwegian tax consequences for Norsk Hydro shareholders in the United Kingdom.

The merger is not expected to give rise to a taxable capital gain for those holders of Norsk Hydro shares that hold 5 per cent or less of Norsk Hydro’s ordinary shares and that are resident or ordinarily resident in the United Kingdom. Norsk Hydro has not been notified of any holders of more than 5 per cent of Norsk Hydro’s ordinary shares that are resident or ordinarily resident in the United Kingdom. The merger should be treated for United Kingdom capital gains tax purposes as a scheme of reconstruction involving an issue of securities. Under these provisions, the reorganization is not treated as involving any disposal of the original shares or any acquisition of the new shares but the composite new holding of the Statoil shares (taken as a single asset) and the original Norsk Hydro shares (taken as a single asset) will be treated as the same asset as the original holding of Norsk Hydro shares acquired at the same time as that original holding.

As such, the original base cost of the original holding of Norsk Hydro shares will be attributed to the new holding and, if necessary in calculating future capital gains, will be allocated between the separate holdings of Statoil and Norsk Hydro shares by reference to their market values on the first day on which market values are quoted for such shares.

It should be noted that if fractional shares are sold in the market with the cash proceeds being distributed to the shareholders, these cash dividends will be taxable in the hands of the UK tax resident shareholders. However, these distributions are likely to be immaterial in the context of this transaction.

Norwegian Tax Consequences of Owning Merged Company Ordinary Shares


	*Tax Position of Norwegian Shareholders*

Taxation of Dividends

(a) Norwegian Individual Shareholders

Dividends received by shareholders who are individuals resident in Norway for tax purposes (“Norwegian Individual Shareholders”) are taxable as ordinary income for such shareholders at a flat rate of 28 per cent.

Norwegian Individual Shareholders are however entitled to deduct a calculated allowance when calculating their taxable dividend income. The allowance is calculated on a share-by-share basis. For shares acquired on or after January 1, 2006, the allowance for each share is equal to the cost price of the share multiplied by a determined risk free interest rate. For shares acquired prior to January 1, 2006, the cost price includes accumulated RISK adjustments per January 1, 2006 (RISK is the Norwegian abbreviation for the variation of the company’s retained earnings after tax during the ownership of the shareholder). Any part of the calculated allowance one year exceeding the dividend distributed on the share is added to the cost price of the share and included in the basis for calculating the allowance the following year.

The calculated allowance is allocated to the Norwegian Individual Shareholders holding shares at the end of each calendar year. Norwegian Individual Shareholders who transfer shares will thus not be entitled to deduct any calculated allowance related to the year of transfer.

(b) Norwegian Corporate Shareholders

Dividends distributed to shareholders who are limited liability companies resident in Norway for tax purposes (“Norwegian Corporate Shareholders”) are not taxable for such shareholders.

Capital Gains Tax

(a) Norwegian Individual Shareholders

Norwegian Individual Shareholders will be liable for capital gains tax arising from the sale of shares irrespective of the period of time the shares have been held and the number of shares sold. Capital gains are currently taxed as ordinary income at a flat rate of 28 per cent. Correspondingly, losses on the sale of the shares will be deductible against ordinary income. The capital gain or loss on each share will be equal to the consideration received less the cost price of the share (i.e., the tax base as derived from the original shares in Norsk Hydro) and any transaction costs related to the acquisition or sale of the share. From this capital gain, Norwegian Individual Shareholders are entitled to deduct a calculated allowance, provided that the calculated allowance has not already been used to reduce taxable dividend income, as described above. For shares acquired on or after January 1, 2006, the allowance for each share is equal to the cost price of the share multiplied by a determined risk free interest rate. For shares acquired prior to January 1, 2006, the cost price includes accumulated RISK adjustments per January 1, 2006. The allowance may only be deducted in order to reduce a taxable gain, and may not be deducted in order to increase or produce a deductible loss.

If a shareholder sells shares acquired at different times, the shares that were acquired first shall be considered to be the shares first disposed of (“first in first out” principle).

The rules regarding capital gain taxation apply for Norwegian Individual Shareholders who receive a distribution of the value of a fraction of a share, as only whole shares will be issued. The capital gain or loss on the fraction of a share will be equal to the consideration received less the cost price of the fraction of the share and any transaction costs related to the acquisition or sale of the share. The “first in first out” principle will apply.

Norwegian Individual Shareholders who move abroad and cease to be resident in Norway for tax purposes as a result of this, are deemed taxable in Norway for any potential gain related to the shares held at the time the tax residency ceased, as if the shares were realized for tax purposes at this time. Gains of NOK 500,000 or less are not taxable. Potential losses are as a main rule not deductible. If such shareholders move to a jurisdiction within the European Economic Area (“EEA”), potential losses related to shares held at the time tax residency ceases will be tax deducible when exceeding the NOK 500,000 threshold. The actual taxation (loss deduction) will occur at the time the shares are actually realized for tax purposes. If the shares are not realized for tax purposes within five years after the shareholder ceased to be resident in Norway for tax purposes, the tax liability calculated under these provisions will not apply.

Norwegian Individual Shareholders who move abroad and, as a result, cease to be resident in Norway for tax purposes, are taxable for any capital gain (regardless of the NOK 500,000 threshold as described above) related to shares which is realized within five years from the year in which they lose their Norwegian tax residency, unless the shareholders were taxed on the basis of potential gain as described above.

(b) Norwegian Corporate Shareholders

Norwegian Corporate Shareholders are exempt from tax on capital gains upon the realization of shares, and losses related to such realization are not tax deductible.

Net Wealth Taxation

The value of shares is included in the basis for computation of net wealth tax for Norwegian Individual Shareholders. The marginal net wealth tax rate for Norwegian Individual Shareholders is currently 1.1 per cent of the assessed value. For shares listed on the Main List of the Oslo Børs the value for assessment purposes is equal to 85 per cent of the listed value as of January 1 of the year of assessment.

Norwegian Corporate Shareholders are not subject to net wealth tax.

Inheritance Tax

Upon transfer of shares by way of inheritance or gift, the transfer may be subject to Norwegian inheritance or gift tax. However, such transfer is not subject to Norwegian tax if the donor/deceased was neither a national nor resident in Norway.

The basis for the computation of inheritance tax is the market value at the time the transfer takes place. The rate is progressive from 0 to 30 per cent. For inheritance and gifts from parents to children, the maximum rate is 20 per cent.


	*Tax Position of Shareholders Resident in Jurisdictions other than Norway*

Taxation of Dividends

(a) Foreign Individual Shareholders

Dividends distributed to shareholders who are individuals not resident in Norway for tax purposes (“Foreign Individual Shareholders”), are as a general rule subject to withholding tax at a rate of 25 per cent. This rate will often be reduced, normally to 15 per cent, by an applicable tax treaty between Norway and the relevant shareholder’s country of residence. The tax will be withheld by the distributing company at the time of distribution, and the non-resident shareholders will receive the dividends net of any withholding tax applicable.

Foreign Individual Shareholders resident within the EEA are subject to withholding tax, as described above, but may be entitled to a partial refund of the withholding tax. The refund may be granted on the basis of an application from the Foreign Individual Shareholder, and will, if granted, equal (in full or partially) the calculated allowance granted to Norwegian Individual Shareholders, see “Taxation of dividends — Norwegian Individual Shareholders” above.

If a Foreign Individual Shareholder is carrying on business activities in Norway and the relevant shares are effectively connected with such activities, the shareholder will be subject to the same taxation as a Norwegian Individual Shareholder, as described above.

(b) Foreign Corporate Shareholders

Dividends distributed to shareholders who are limited liability companies not resident in Norway for tax purposes (“Foreign Corporate Shareholders”), are as a general rule subject to withholding tax at a rate of 25 per cent. The withholding tax rate of 25 per cent is normally reduced through tax treaties between Norway and the country in which the shareholder is resident.

Dividends distributed to Foreign Corporate Shareholders resident within the EEA for tax purposes are exempt from Norwegian withholding tax, provided that the shareholder is the beneficial owner of the shares.

Foreign shareholders (both Foreign Individual Shareholders and Foreign Corporate Shareholders) who have been subject to withholding tax at a higher rate than that prescribed by the applicable tax treaty may apply to the Norwegian tax authorities for a refund of the excess tax withheld. The application must be filed with the Central Office — Foreign Tax Affairs (Sentralskattekontoret for utenlandssaker). The application must be signed by the applicant. If the application is signed by proxy, a copy of the letter of authorization must be enclosed.

Dividends distributed on nominee-registered shares will normally be subject to the standard 25 per cent rate of withholding tax, unless the nominee, by agreeing to provide certain information about the beneficial owners, has obtained approval to be registered in VPS with a reduced treaty rate from the Central Office — Foreign Tax Affairs.

Dividends paid to a depositary for redistribution to shareholders holding ADSs will be subject at the outset to a withholding tax of 25 per cent. It is expected that the financial institution acting as the Statoil ADR Depositary has acquired or will acquire the necessary approvals in order to be able to receive and redistribute dividends to U.S. resident holders of Statoil shares and ADSs at the treaty withholding rate of 15 per cent, provided such holders have furnished the Statoil ADR Depositary with appropriate certification to establish such holders’ eligibility for the benefits under an applicable tax treaty with Norway.

Capital Gains Tax

Foreign shareholders (both Foreign Individual Shareholders and Foreign Corporate Shareholders) are normally not subject to capital gains tax in Norway on the sale of shares. A tax liability in Norway may nevertheless arise for Foreign Individual Shareholders who (i) hold the shares in connection with a business which is carried out in Norway or (ii) have previously been resident in Norway for tax purposes and the shares are sold within five years after the expiration of the calendar year when residency for tax purposes in Norway ceased. In both cases, the Norwegian tax liability may be limited by a tax treaty. The rate of tax on capital gains is 28 per cent.

Net Wealth Taxation

Foreign shareholders (both Foreign Individual Shareholders and Foreign Corporate Shareholders) are normally not obliged to pay net wealth tax on shares in Norwegian limited liability companies.

Inheritance Tax

United States Tax Consequences of Owning Merged Company Ordinary shares or ADSs

This section describes the material United States federal income tax consequences of the ownership and disposition of the merged company shares or ADSs that you will receive pursuant to the merger. The following discussion assumes that Norsk Hydro’s shareholders will hold their merged company shares or ADSs as capital assets for tax purposes. Further, the discussion does not address all aspects of U.S. federal income taxation that may be relevant to a particular shareholder in light of his, her or its personal investment circumstances or to shareholders subject to special treatment under the U.S. federal income tax taws such as:


	•	dealers in securities;

	•	traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;

	•	tax-exempt organizations;

	•	life insurance companies;

	•	persons liable for alternative minimum tax;

	•	persons that actually or constructively own 10 per cent or more of the voting stock of Statoil;

	•	persons that hold merged company shares or ADSs as part of a straddle or a hedging or conversion transaction; or

	•	U.S. holders (as defined below) whose functional currency is not the U.S. dollar.

This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations, published rulings and court decisions, and the Convention between the United States of America and the Kingdom of Norway for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Property (the “Treaty”). These laws are subject to change, possibly on a retroactive basis. In addition, this section is based in part upon the representations of the depositary and the assumption that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms. For United States federal income tax purposes, a holder of ADRs evidencing ADSs will generally be treated as the owner of the ordinary shares represented by those ADRs. Exchanges of shares for ADRs, and ADRs for shares generally will not be subject to United States federal income tax.

Norsk Hydro shareholders are urged to consult their own tax advisors regarding the United States federal, state and local and other tax consequences of owning and disposing of merged company shares and ADSs in light of their particular circumstances.

U.S. Holders. For purposes of this discussion, “U.S. holder” means any person that is a beneficial owner of merged company’s shares or ADSs and is for United States federal income tax purposes:


	•	an individual who is a citizen or resident of the United States;

	•	a United States domestic corporation;

	•	an estate whose income is subject to United States federal income tax regardless of its source; or

	•	a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust.

Taxation of Dividends. For U.S. holders, the gross amount of any dividend paid by Statoil out of its current or accumulated earnings and profits (as determined for United States federal income tax purposes) is subject to United States federal income taxation. Dividends paid to non-corporate U.S. holders in taxable years beginning before January 1, 2011 that constitute qualified dividend income will be taxable to non-corporate U.S. holders at a maximum tax rate of 15 per cent if they hold the merged company shares or ADSs for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and meet other holding-period requirements. Dividends the merged company pays with respect to merged company shares or ADSs generally will be qualified dividend income.

U.S. holders must include any Norwegian tax withheld from the dividend payment in this gross amount even though they do not in fact receive the amount withheld as tax. The dividend is taxable to U.S. holders when they, in the case of shares, or the depositary, in the case of ADSs, receive the dividend, actually or constructively. The dividend will not be eligible for the dividends-received deduction generally allowed to United States corporations in respect of dividends received from other United States corporations.

The amount of the dividend distribution that U.S. holders must include in their income will be the U.S. dollar value of the Norwegian kroner payments made, determined at the spot Norwegian kroner/ U.S. dollar rate on the date the dividend distribution is included in their income, regardless of whether the payment is in fact converted into U.S. dollars. Distributions in excess of current and accumulated earnings and profits, as determined for United States federal income tax purposes, will be treated as a non-taxable return of capital to the extent of their tax basis in the merged company shares or ADSs and, to the extent in excess of their tax basis, will be treated as capital gain.

Subject to certain limitations, the 15 per cent Norwegian tax withheld in accordance with the Treaty and paid over to Norway will be creditable against the United States federal income tax liability of U.S. holders. Special rules apply in determining the foreign tax credit with respect to dividends that are subject to the maximum 15 per cent rate. Dividends will be income from sources outside the United States. Dividends paid in taxable years beginning before January 1, 2007 generally will be “passive income” or “financial services income”, and dividends paid in taxable years beginning after December 31, 2006 will, depending on your circumstances, be ”passive” or ”general” income, which, in either case, is treated separately from other types of income for purposes of computing the foreign tax credit allowable to U.S. holders.

Any gain or loss resulting from currency exchange fluctuations during the period from the date U.S. holders include the dividend payment in income to the date they convert the payment into U.S. dollars generally will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income. Such gain or loss generally will be income or loss from sources within the United States for foreign tax credit limitation purposes.

Taxation of Capital Gains. U.S. holders who sell or otherwise dispose of their merged company shares or ADSs, will generally recognize capital gain or loss for United States federal income tax purposes equal to the difference between the U.S. dollar value of the amount that they realize and their tax basis, determined in U.S. dollars, in their merged company shares or ADSs. The tax basis of U.S. holders should generally equal the fair market value of their merged company shares or ADSs on the date they receive them. Capital gain of a non-corporate U.S. holder that is recognized before January 1, 2011 is generally taxed at a maximum rate of 15 per cent where the holder has a holding period greater than one year. The gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes.

U.S. holders that receive any foreign currency on the sale of merged company shares or ADSs may recognize ordinary income or loss from sources within the United States as a result of currency fluctuations between the date of the sale of the merged company shares or ADSs and the date the sales proceeds are converted into U.S. dollars.

Non-U.S. Holders. “Non-U.S. holder” means any person that is a beneficial owner of the merged company’s shares or ADSs and is not a United States person for United States federal income tax purposes.

For non-U.S. holders, dividends paid in respect of Statoil Shares or ADSs will not be subject to United States federal income tax unless the dividends are “effectively connected” with their conduct of a trade or business within the United States, and the dividends are attributable to a permanent establishment that they maintain in the United States if that is required by an applicable income tax treaty as a condition for subjecting you to United States taxation on a net income basis. In such cases, non-U.S. holders generally will be taxed in the same manner as U.S. holders. For corporate non-U.S. holders, “effectively connected” dividends may, under certain circumstances, be subject to an additional “branch profits tax” at a 30 per cent rate or at a lower rate if they are eligible for the benefits of an income tax treaty that provides for a lower rate.

Non-U.S. holders will not be subject to United States federal income tax on gain recognized on the sale or other disposition of their Statoil Shares or ADSs unless (i) the gain is “effectively connected” with their conduct

of a trade or business in the United States, and the gain is attributable to a permanent establishment that they maintain in the United States if that is required by an applicable income tax treaty as a condition for subjecting you to United States taxation on a net income basis, or (ii) in the case of individual non-U.S. holders, they are present in the United States for 183 or more days in the taxable year of the sale and certain other conditions exist. In addition, “effectively connected” gains that are recognized by corporate non-U.S. holders may also, under certain circumstances, be subject to an additional “branch profits tax” at a 30 per cent rate or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate.

Backup Withholding and Information Reporting. For non-corporate U.S. holders, information reporting requirements, on Internal Revenue Service Form 1099, generally will apply to:


	•	dividend payments or other taxable distributions made to them within the United States, and

	•	the payment of proceeds from the sale of shares or ADSs effected at a United States office of a broker.

Additionally, backup withholding may apply to such payments if a non-corporate U.S. holder:


	•	fails to provide an accurate taxpayer identification number,

	•	is notified by the Internal Revenue Service that you have failed to report all interest and dividends required to be shown on your federal income tax returns, or

	•	in certain circumstances, fails to comply with applicable certification requirements.

Non-U.S. holders are generally exempt from backup withholding and information reporting requirements with respect to:


	•	dividend payments made to them outside the United States by us or another non-United States payor, and

	•	other dividend payments and the payment of the proceeds from the sale of shares or ADSs effected at a United States office of a broker, as long as the income associated with such payments is otherwise exempt from United States federal income tax, and:


	•	the payor or broker does not have actual knowledge or reason to know that a non-U.S. holder is a United States person and the non-U.S. holder has furnished the payor or broker:


	•	an Internal Revenue Service Form W-8BEN or an acceptable substitute form upon which it certifies, under penalties of perjury, that it is a non-United States person, or

	•	other documentation upon which it may rely to treat the payments as made to a non-United States person in accordance with U.S. Treasury regulations, or


	•	they otherwise establish an exemption.

Payment of the proceeds from the sale of shares or ADSs effected at a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, a sale of shares or ADSs that is effected at a foreign office of a broker will be subject to information reporting and backup withholding if:


	•	the proceeds are transferred to an account maintained by non-U.S. holders in the United States,

	•	the payment of proceeds or the confirmation of the sale is mailed to them at a United States address, or

	•	the sale has some other specified connection with the United States as provided in U.S. Treasury regulations,

In addition, a sale of shares or ADSs effected at a foreign office of a broker will be subject to information reporting if the broker is:


	•	a United States person,

	•	a controlled foreign corporation for United States tax purposes,

	•	a foreign person 50 per cent or more of whose gross income is effectively connected with the conduct of a United States trade or business for a specified three-year period, or

	•	a foreign partnership, if at any time during its tax year:


	•	one or more of its partners are “U.S. persons”, as defined in U.S. Treasury regulations, who in the aggregate hold more than 50 per cent of the income or capital interest in the partnership, or

	•	such foreign partnership is engaged in the conduct of a United States trade or business,

unless the broker does not have actual knowledge or reason to know that a non-U.S. holder is a United States person and the documentation requirements described above are met or a non-U.S. holder otherwise establishes an exemption. Backup withholding will apply if the sale is subject to information reporting and the broker has actual knowledge that such non-U.S. holder is a United States person.

Non-U.S. holders generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed their income tax liability by filing a refund claim with the United States Internal Revenue Service.

THE MERGER PLAN

This section of the circular/prospectus summarizes the material provisions of the merger plan entered into by the boards of directors of Norsk Hydro and Statoil on March 12 and March 13, 2007, respectively. The merger plan replaces the integration agreement between Norsk Hydro and Statoil, dated December 18, 2006, which set the principles and formed the basis for the negotiation of the merger plan. The integration agreement has no further legal effect. The following summary of the merger plan is qualified in all respects by reference to the complete text of the merger plan, which is incorporated by reference herein in its entirety and is attached to this circular/prospectus as Appendix A.

Structure of the Merger

The activities of Norsk Hydro and its subsidiaries (the “Norsk Hydro Group”) are currently comprised of the two core business areas Aluminium and Oil & Energy, as well as the business areas Hydro Other Businesses and Industriforsikring AS. The merger plan contemplates the separation of the petroleum activities of Norsk Hydro, along with Norsk Hydro’s wind power business and interests in a power generation company and an information technology subsidiary, from the remaining activities of Norsk Hydro and their combination with Statoil. The Norsk Hydro activities being separated are referred to in this circular/prospectus as “Hydro Petroleum”. As part of the merger, Norsk Hydro Group’s ownership interests in a number of companies (the “Petroleum Companies”) will be transferred. An overview of the Petroleum Companies is included in Annex 1 to the merger plan.

Implementation of the Merger

The merger will be implemented by means of a demerger transaction effected in accordance with Norwegian law whereby the assets and liabilities, rights and obligations of Hydro Petroleum will be transferred to the merged company for consideration in the form of shares of Statoil issued to the shareholders of Norsk Hydro. Consideration in the form of shares will not be issued with respect to Norsk Hydro’s treasury shares.

A number of related transactions will be effected in connection with and prior to completion of the merger in order to reorganize the ownership of Norsk Hydro’s subsidiaries and other entities that comprise Hydro Petroleum and facilitate the separation of these subsidiaries from Norsk Hydro. Specifically, Norsk Hydro has agreed to carry out the following related transactions before implementation of the merger:


	•	a demerger of Norsk Hydro Produksjon AS resulting in the transfer of assets and liabilities, rights and obligations related to Hydro Petroleum and representing 80 per cent of the current net asset value of Norsk Hydro Produksjon AS to a newly established limited company to be named Norsk Hydro Petroleum AS wholly owned by Norsk Hydro; and

	•	intra-group transfers of assets (including shares) and liabilities, rights and obligations to the extent necessary in order for Hydro Petroleum and Norsk Hydro’s remaining activities to be organized in companies that (a) hold assets and liabilities, rights and obligations belonging to either Hydro Petroleum or Norsk Hydro’s remaining activities, and (b) are held through a chain of ownership consisting solely of companies included either in Hydro Petroleum or Norsk Hydro’s remaining activities.

Upon completion of the merger, all assets and liabilities, rights and obligations of Hydro Petroleum, including the new company (Norsk Hydro Petroleum AS) arising through the demerger of Norsk Hydro Produksjon AS, will be transferred to the merged company.

The ratio between the net value of the assets of Norsk Hydro after the demerger and the net value of the assets to be transferred to the merged company in connection with the merger is referred to as the “Allocation Ratio”. The Allocation Ratio of the Norsk Hydro demerger is 70:30 (i.e., Hydro Petroleum constitutes 70 per cent of the current net asset value of Norsk Hydro).

Timing of Execution

If the merger plan is approved by the shareholders of Statoil and Norsk Hydro, completion of the merger by registration in the Register of Business Enterprises will occur on the first business day of the month that follows the month in which the period for creditor’s objections under Norwegian law has elapsed and all other necessary conditions to completion set forth in the merger plan have been satisfied.

Merger Consideration

Upon completion of the merger, shareholders of Norsk Hydro will receive 0.8622 shares of Statoil for each Norsk Hydro share that they own and 0.8622 ADSs of Statoil for each Norsk Hydro ADS that they own and they will also continue to own the Norsk Hydro shares or ADSs that they currently own. Only whole shares of the merged company will be issued. Fractional shares or ADSs will be aggregated into whole shares and sold in the market. The net proceeds of such sales will be distributed proportionately to those Norsk Hydro shareholders or ADS holders entitled thereto. The merger ratio is based on the following financial conditions:


	•	an inter-company demerger balance representing a loan or a claim of such size that the net interest-bearing debt of Hydro Petroleum is NOK 1 billion as of January 1, 2007 shall be established between Norsk Hydro’s remaining activities and Hydro Petroleum;

	•	before the merger is completed, Statoil shall distribute an ordinary dividend of NOK 9.12 per share;

	•	before the merger is completed, Norsk Hydro shall distribute an ordinary dividend of NOK 5.00 per share, which shall be charged to Hydro Petroleum; and

	•	neither Statoil nor Norsk Hydro shall distribute any other dividend before completion of the merger.

Allocation of Assets and Liabilities, Rights and Obligations Pursuant to the Merger Plan

Under the merger plan, if the merger occurs, the business carried out by Hydro Petroleum will be treated as having been carried out for the account and risk of the merged company from and including January 1, 2007, the financial effective date of the merger. Hydro Petroleum comprises all assets and liabilities, rights and obligations that solely or primarily relate to the Norsk Hydro Group’s activities in the areas of exploration, production, transport, processing, marketing and sale of oil and gas, as well as the research and development functions related to such activities and all shares and assets that Norsk Hydro owns in companies carrying out such activities. In accordance with the terms of the merger plan, Norsk Hydro’s wind power business, Norsk Hydro’s interests in Naturkraft AS and Hydro IS Partner, and Norsk Hydro’s ownership interests in Norsk Hydro Canada Inc. will also be included in Hydro Petroleum and transferred in the merger.

Together with its aluminium business, Norsk Hydro’s hydroelectric power business and associated trading activities, its solar energy business, CO₂ quotas and Norsk Hydro’s captive insurance company, Industriforsikring AS, will remain within the Norsk Hydro Group structure when the merger is completed. After completion of the merger, Industriforsikring AS shall be demerged. The rights and obligations related to Hydro Petroleum’s insurance and a corresponding share of the assets of Industriforsikring AS will be transferred to a newly established company that will be then sold to the merged company for an amount equal to its value adjusted equity (fair market value).

Pursuant to the terms of the merger plan, the Norsk Hydro Group will transfer to the merged company upon completion of the merger all its payment obligations relating to all the outstanding bonds of the Group, including ten series of bonds issued under an indenture and [ ] series of bonds issued under a trust deed both issued by Norsk Hydro, the aggregate principal amounts of which totalled NOK 16,319,498,691 and NOK 2,491,394,874, respectively, as of January 1, 2007 and a series of bonds issued by Norsk Hydro Produksjon AS under an indenture, the principal amount of which was NOK 100,775,592 as of January 1, 2007. The holders of those bonds will be requested to consent to amendments to the terms of those bonds in respect of the assumption by Statoil.

Statoil and Norsk Hydro have also agreed that Hydro Petroleum’s guarantee portfolio will be transferred to the merged company. This comprises parent company guarantees and rights and obligations related to certain

bank guarantees. As of January 1, 2007, Hydro Petroleum’s guarantee portfolio includes a guarantee liability of approximately NOK 20 billion.

Under the merger plan, Statoil and Norsk Hydro agree that any rights, assets and obligations related to activities that will no longer be part of the Norsk Hydro Group (including environmental and pension liabilities related to the fertilizer and magnesium activities), shall be distributed between Hydro Petroleum and Norsk Hydro’s other activities in accordance with the Allocation Ratio described above. Moreover, if the merger is completed, the merged company will be deemed to have assumed as of the financial effective date of the merger all rights and obligations relating to the financial debt that exists between Norsk Hydro and the Petroleum Companies.

Inter-Company Demerger Balance Account Between Hydro Petroleum and Hydro’s Other Activities

The merger plan contains provisions regarding the establishment of an inter-company balance account between Norsk Hydro’s remaining activities and Hydro Petroleum that, as of January 1, 2007, showed a net interest-bearing debt of NOK 1 billion owed by Hydro Petroleum to Norsk Hydro’s other activities. The inter-company balance account will be subject to adjustments over time in order to reflect cash flows of Hydro Petroleum, including cash flows in connection with the related transaction described above, in the period between the financial effective date of the merger and its completion, and other factors in accordance with the merger plan. The inter-company balance account will bear interest at a rate corresponding to one months’ NIBOR, calculated daily and capitalized in arrears on the last business day of each calendar month. At completion of the merger, the inter-company balance amount will be settled through a cash payment in accordance with certain procedures set forth in the merger plan.

Employees

Under the merger plan, Norsk Hydro and Statoil have agreed that all employees of Norsk Hydro whose primary relationship as of the financial effective date of the merger relates to Hydro Petroleum will become employees of the merged company. In addition, approximately 120 employees of Norsk Hydro’s Corporate Centre in Norway, including approximately 50 employees from the Facility Management unit, will also become employees of the merged company. Finally, approximately 15 corporate employees working outside of Norway will be transferred to the merged company. The transfer of employment of the affected employees will be effected in accordance with the rules and regulations of the Working Environment Act and other relevant labor legislations.

Pensions

As of and from the financial effective date, the merged company will assume Norsk Hydro Group’s pension obligations under both the Group’s pension schemes and unfunded pension obligations relating to active employees of the Norsk Hydro Group whose employment will be transferred to the merged company, and to pensioners and former employees of the Norsk Hydro Group whose primary relationship as of the date of termination of employment related to Hydro Petroleum. In addition, as of the effective date of the merger, the merged company will assume 36 per cent of Norsk Hydro’s pension liabilities towards retired employees and former employees whose work related to both Hydro Petroleum and Norsk Hydro’s other activities. Finally, the merged company will assume responsibility for a share equal to the Allocation Ratio of Norsk Hydro’s pension liabilities towards retired employees and former employees, whose tasks at the time of termination of employment related to certain operations and business activities which are no longer part of the Norsk Hydro Group.

Following the merger, Norsk Hydro’s pension scheme shall be split in accordance with applicable Norwegian regulations. A proportion of Norsk Hydro’s pension fund assets will be transferred to the merged company’s pension scheme, which will assume the pension liabilities of Hydro Petroleum in accordance with certain agreed procedures.

Merger-Related Business Agreements Between Norsk Hydro and the Merged Company

As part of the merger, Hydro IS Partner will be transferred to the merged company. Statoil and Norsk Hydro agree that Hydro IS Partner will continue to provide information technology/information systems services to Norsk Hydro following the merger under the terms and conditions of certain frame, delivery and project agreements that are currently in effect between Hydro IS Partner and Norsk Hydro’s other activities. In addition, as part of the merger, the Petroleum Companies and certain companies within Norsk Hydro’s other activities will enter into a number of commercial agreements with a view to continuing established business relations between Hydro Petroleum and Norsk Hydro’s other activities for a transitional period following the merger.

Taxation

From the financial effective date, the merged company will assume all historical and future rights and obligations with respect to taxation issues related to Hydro Petroleum. Consequently, any rights related to tax payments made and any liabilities for possible changes in taxation from previous years will be allocated to the merged company if the basis for taxation is related to Hydro Petroleum. The merger plan sets out certain procedures to implement this general principle and certain adjustment and compensation mechanisms. In addition, the merged company will indemnify companies within the Norsk Hydro Group for any tax liabilities or other charges arising out of or connected to the merger in accordance with the terms and provisions of the merger plan.

Founders and Subscription Certificates

Norsk Hydro has issued “founder certificates” and “subscription certificates” which have preferential subscription rights in the event of an increase in Norsk Hydro’s share capital, provided that the Norwegian law in effect at the time of the share increase so permits. These preferential rights do not apply if the share capital increase is effected to allot shares to third parties as compensation for their transfer of assets to Norsk Hydro.

The holders of such certificates will keep their preferential subscription rights in Norsk Hydro after completion of the merger. With respect to the merged company, the rights of the holders of such certificates will be redeemed by the merged company in accordance with Norwegian law by paying a redemption consideration based on the actual value of the certificates upon submission of a claim by the holders.

Conduct of Business Pending the Merger

During the period from the date of the integration agreement until completion of the merger, Statoil and Norsk Hydro have and will continue to carry out their day-to-day business independently of each other as required under applicable competition law.

However, the parties have agreed that Statoil, Norsk Hydro and their respective subsidiaries will refrain from taking any action that would violate the terms and conditions of the merger plan and Statoil and Hydro Petroleum will not undertake any major investments, divestments or any changes to their respective businesses or capital structures without the prior consent of the other party and will not perform or permit any other acts or omissions that are of major importance to the merger or that fall outside the ordinary course of business. In addition, Statoil and Norsk Hydro have agreed that they will refrain from soliciting third party offers or proposals which will be detrimental to the execution of the merger or will reduce the probability of the merger being approved by their respective general meetings.

Conditions to Completion of the Merger

The obligations of Norsk Hydro and Statoil to complete the merger are subject to the satisfaction of the following conditions:


	•	Approval of the merger plan by the extraordinary general meetings of both Statoil and Norsk Hydro.

	•	Non-occurrence of any incidents, changes, occurrences or developments with regard to Statoil and Norsk Hydro prior to the approval of the merger plan by the extraordinary general meetings of the two companies that would materially alter the basis for the merger.

	•	Adequate documentation shall have been produced to evidence that the estimated inter-company balance account between Hydro Petroleum and Norsk Hydro’s other activities has been settled.

	•	All regulatory consents and approvals necessary to complete the merger have been obtained, and such approvals shall not impose conditions that will have a material adverse effect on the merged company. However, this condition shall not apply if, in the opinion of the Norsk Hydro and Statoil boards, neither the failure to obtain consents nor the potential conditions imposed by regulatory approvals would have a material adverse effect, taking into account any compensation which may be agreed upon in connection therewith.

	•	All third party approvals necessary for the completion of the merger shall have been granted. However, this condition shall not apply if, in the opinion of Norsk Hydro’s and Statoil’s boards, the failure to obtain such consents would not have a material adverse effect, taking into account any compensation that may be agreed upon in connection therewith.

	•	The deadline for objections from Norsk Hydro’s and Statoil’s creditors shall have expired and the relationship with any creditors that have raised objections shall have been settled, or the District Court shall have decided that the demerger may nevertheless be completed.

	•	All conditions for Statoil’s continued listing on the Oslo Stock Exchange and the New York Stock Exchange shall have been, or with a reasonable degree of certainty will be, fulfilled.

	•	Statoil’s obligation to complete the merger is also contingent upon all necessary related transactions having been carried out in accordance with the merger plan.

Corporate Name and Logo

The name of the merged company, effective upon the completion of the merger, will be StatoilHydro ASA. However, the board of directors of the merged company will develop a new name and a new logo which will symbolize the company’s business strategy, values and vision, and which will be different from the present companies’ names. A proposal for a new name will be presented at the first ordinary general meeting after the completion. The change of name and logo will not prevent the use of Statoil’s present name and logo in connection with the merged company’s energy and retail business area.

Registered Office and Location

The registered office of the merged company will be in Stavanger. The corporate functions of the merged company will be located in both Oslo and Stavanger, and the Chief Executive Officer of the merged company will have offices in both locations.

Expenses

All external costs incurred or to be incurred by the Norsk Hydro Group in connection with the planning, negotiation and execution of the merger and the related separation of the Norsk Hydro Group will be attributed to Hydro Petroleum to be transferred to the merged company.

THE MERGED COMPANY

Group Structure

Statoil is the ultimate parent company of the Statoil Group. For a list of Statoil’s significant subsidiaries owned directly by the parent company see “Item 4 — Information on the Company — Organizational Structure” in the Statoil 2006 Form 20-F incorporated herein by reference. Upon completion of the merger, Statoil will acquire a number of companies that are currently part of the Norsk Hydro Group. The following table sets forth the significant subsidiaries Statoil will acquire in the merger, equity interest and the subsidiaries’ country of incorporation.


Subsidiary	Equity Interest		Country

Norsk Hydro Petroleum AS		100		Norway
Hydro IS Partner AS		100		Norway
Hydro Hydrogen Technologies AS		100		Norway
Norsk Hydro Russland AS		100		Norway

Dividends and Share Buy-Backs

The merged company is expected to maintain Statoil’s current dividend policy of returning to shareholders, through a combination of cash dividends and share repurchases, an amount in the range of 45 to 50 per cent of consolidated net income as determined in accordance with U.S. GAAP with the goal of growing the ordinary cash dividend measured in NOK per share. In any one year, however, the aggregate amount of cash dividends paid to shareholders and share repurchases may be higher or lower than 45 to 50 per cent of net income, depending on the merged company’s evaluation of expected cash flow development, capital expenditure plans, financing requirements and appropriate financial flexibility.

Statoil’s board of directors has proposed a share repurchase authorization for the 2007-2008 period, which is subject to approval by the annual general meeting of Statoil on May 15, 2007. Statoil has agreed not to acquire further shares in the market pursuant to the share repurchase authorization until completion of the merger. An agreement will be negotiated with the Norwegian State which will regulate the redemption and cancellation of a proportional share of the Norwegian State’s shares, ensuring that the Norwegian State’s ownership interest remains unchanged when these share repurchases are effected. See “Item 7-Major Shareholders and Related Party Transactions of Statoil” included in the Statoil 2006 Form 20-F. Share repurchases by the merged company will depend on the authorization of its shareholders, as well as a number of factors prevailing at the time its board of directors considers any share repurchase. See “The Statoil Extraordinary General Meeting”.

Directors and Management of the Merged Company

After the merger, the merged company’s management will be vested in the merged company’s board of directors and its President and Chief Executive Officer. The President and Chief Executive Officer, which is a formal corporate position under Norwegian corporate law, is responsible for the day-to-day management of the merged company in accordance with the instructions, policies and operating guidelines set out by the merged company’s board of directors.


	*Board of Directors*

The board of directors of the merged company will be composed of 10 directors. Pursuant to the merger plan, Eivind Reiten, current President and Chief Executive of Norsk Hydro, shall be elected as Chairman of the board of directors of the merged company. In addition, Statoil’s election committee shall nominate four directors and Norsk Hydro’s election committee shall nominate two directors. The merged company will arrange for the election of three employee representatives for the merged company’s board of directors as soon as possible after completion of the merger, with the aim of having employee representatives in these corporate bodies with experience within Hydro Petroleum and Statoil reflecting the principle of a merger of equals.

The proposed members of the board shall be elected for the period up until the annual general meeting of the merged company in the spring of 2010. The proposed members of the board of directors, their place of residence and age are identified below.


Name	Place of Residence		Year of Birth

Eivind Reiten		Oslo, Norway		1953
[Names of other directors to come]

Eivind Reiten was appointed President and Chief Executive Officer of Norsk Hydro effective May 2, 2001. From 1999 to the date of his appointment as President and CEO, Mr. Reiten served as Executive Vice President for Hydro’s Light Metals business area. From 1996 to 1998, he served as President of Hydro Aluminium Metal Products. From 1992 to 1996, he served as President of Norsk Hydro’s Refining and Marketing Division. From 1991 to 1992, he served as Senior Vice President, Special Projects. From 1988 to 1990, he served as President of the Energy Division, following a two-year period as manager, and later Vice President for Hydro Agri. From 1990 to 1991, he had the position of Minister of Petroleum and Energy in the Norwegian government. During the seven-year period from 1979 to 1986, Mr. Reiten held several governmental posts including Junior Executive Officer in the Ministry of Fisheries and Secretary to the Center Party’s Parliamentary Group and State Secretary, Ministry of Finance and Minister of Fisheries. Mr. Reiten graduated from the University of Oslo in 1978 with a degree in economics.

[Biographies of other directors to come]


	*Audit Committee*

The audit committee is a committee of the board of directors and its objective is to perform more thorough assessments of specific matters within the merged company and report to the board of directors. The audit committee is instructed to assist the board’s oversight of issues such as (1) the quality and integrity of the company’s financial statements and related disclosure, (2) the external auditor’s qualifications and independence, (3) the performance of the external auditor subject to the requirements of Norwegian law, (4) the performance of the company’s internal audit function, internal controls and risk management and risk audit function, (5) the company’s compliance with legal and regulatory requirements, including the requirements related to the listing on stock exchanges, and (6) compliance with the group’s ethical rules, including the group’s compliance activities relating to corruption.

The internal audit function reports directly to the board of directors and to the Chief Executive Officer. The audit committee assists the board in overseeing this function. The audit committee also receives regular briefings and reports on internal control and ethical issues.

Under Norwegian law, the external auditor is elected by shareholders at the Annual General Meeting. The audit committee makes a recommendation to the board of directors in respect of the appointment of the external auditor based upon its evaluation of the qualifications and independence of the auditor to be proposed for election or re-election. The audit committee meets at least six times a year, and meets separately with the internal auditor and the external auditor on a regular basis.

The audit committee is also charged with reviewing the scope of the audit and the nature of any non-audit services provided by external auditors. The external auditors report directly to the audit committee on a regular basis. The audit committee also maintains procedures for the receipt, retention and treatment of complaints received by the company regarding accounting, internal controls or auditing matters and for the confidential, anonymous submission by employees of the company of concerns regarding accounting or auditing matters. The audit committee has the authority to engage independent advisors to assist it in carrying out its duties. The board elects up to four of its members to serve on the audit committee.


	*Compensation Committee*

The compensation committee is a committee of the board of directors and its objective is to assist the board in (1) the further development of the merged company’s reward philosophy and strategy generally, and more

specifically with regard to compensation of the CEO, (2) devising internally consistent and externally competitive total compensation programs in order to attract, retain and reward the CEO and key executives for performance related to achievements of financial goals, values and leadership approach, and (3) providing guidance, direction and monitoring of the merged company’s compensation programs with respect to the long-term interest of the shareholders. The board elects three of its members to serve on the compensation committee.


	*Executive Committee*

An executive committee is not required under Norwegian corporate law, but the committee was established by Statoil as part of the overall organization of the company. Each member of the executive committee supervises separate business areas or staff units. Although the CEO is responsible for making decisions on important matters not requiring the decision of the board of directors, as well as all matters referred to him by the board, the executive committee has an advisory role. The board of directors has granted Mr. Lund, Mr. Sætre and Mr. Jacobsen the power of procurement, which under Norwegian law essentially empowers each of them to act on behalf of the merged company in all matters relating to the normal operations of the merged company.

The members of the merged company’s executive committee following completion of the merger, their place of residence, age and position are identified below.


Name	Place of Residence	Year of Birth		Position

Helge Lund	Bærum, Norway		1962	President and Chief Executive Officer
Eldar Sætre	Sandnes, Norway		1956	Chief Financial Officer
Tore Torvund	Bergen, Norway		1952	Executive Vice President, Exploration & Production Norway
Peter Mellbye	Stavanger, Norway		1949	Executive Vice President, International Exploration & Production
Jon Arnt Jacobsen	Stavanger, Norway		1957	Executive Vice President, Manufacturing & Marketing
Morten Ruud	Bærum, Norway		1952	Executive Vice President, Projects
Rune Bjørnson	Sandnes, Norway		1958	Executive Vice President, Natural Gas
Margareth Øvrum	Bergen, Norway		1958	Executive Vice President, Technology and New Energy
Hilde Merete Aasheim	Oslo, Norway		1958	Executive Vice President, Group Services

Helge Lund was appointed President and Chief Executive Officer of Statoil on March 7, 2004 and assumed his position on August 15, 2004. Mr. Lund came from the position of Chief Executive of Aker Kværner, and from 1999 until he joined Statoil, he held a number of positions in the Aker RGI system, among them Deputy Chief Executive and Chief Operating Officer, before becoming Chief Executive Officer of Aker Kværner in 2002. For a period he was also appointed to the board of directors of Kværner. Mr. Lund joined the Hafslund Nycomed industrial company in 1993, and from 1997, he was deputy managing director of Nycomed Pharma for a period of two years. Before then, Mr. Lund was a political advisor in the Conservative Party’s parliamentary group and a consultant at McKinsey & Co. Mr. Lund graduated as a business economist from the Norwegian School of Economics and Business Administration (NHH) in Bergen. He also has a master of business administration (MBA) from the Insead business school in France.

Eldar Sætre became Chief Financial Officer and Executive Vice President of Statoil on September 1, 2004 after he had been acting in this position since September 30, 2003. Previously, Mr. Sætre had been senior vice president for corporate control, planning and accounting since 1998 and senior vice president for corporate planning and control in the period from 1995 to 1998. Before then, his positions included controller for Gullfaks (1985-1989), commercial manager for Bergen Operations (1989-1992) and controller in E&P Norway (1992-1995). Mr. Sætre joined the group in 1980. He graduated with a Masters of Science degree in Business from the Norwegian School of Economics and Business Administration (NHH) in 1980.

Tore Torvund has served as Executive Vice President for Norsk Hydro’s Oil and Energy area since January 2000. From 1996 to the date of his appointment as Executive Vice President, Mr. Torvund served as Senior Vice President with responsibility for all exploration and production activities in Norway, and from 1992 to 1996, he had responsibility for Norsk Hydro’s operations on the Norwegian Continental Shelf. Between 1990 and 1992, he served as Vice President for drilling operations, and from 1982-1990 he held different management positions within the Exploration & Production Division related to a North Sea field development project. From 1977 to 1982, Mr. Torvund worked for the French oil company Elf Aquitaine, where he was involved with oil and gas projects. Mr. Torvund received a masters degree in petroleum engineering from the Norwegian Institute of Technology in 1976.

Peter Mellbye took over as Statoil’s Executive Vice President, International Exploration & Production on September 1, 2004, after he had served as Executive Vice President of Natural Gas since 1992. Employed at Statoil since 1982, Mr. Mellbye has held numerous positions. Most recently, Mr. Mellbye served as President of the Natural Gas business segment from 1990 to 1992 and as Vice President of Natural Gas Marketing from 1982 to 1990. Currently, Mr. Mellbye is a member of the board of the Energy Policy Foundation of Norway, and was previously a member of the boards of Siemens AS and Institut Français du Pétrole in France. Mr. Mellbye graduated from the Universities of Oslo and Bergen with a degree in political science in 1977.

Jon Arnt Jacobsen has been Statoil’s Executive Vice President, Manufacturing & Marketing since September 1, 2004. He came from the position of Senior Vice President for group finance in Statoil, which he had held since 1998. He previously held the position of General Manager and head of the Singapore branch at Den Norske Bank ASA (DnBNor). From 1992 to 1995, Mr. Jacobsen headed the industrial section of DnBNor’s corporate customer division, having previously held a number of different positions in DnBNor’s banking organization for the oil and gas industry over a seven-year period. He worked from 1983 to 1985 as a downstream market analyst for Esso Norge. Mr. Jacobsen was a member of the board of Mesta AS from 2002 to 2004. He has a business degree from the Norwegian School of Management and an MBA from the University of Wisconsin.

Morten Ruud was appointed Norsk Hydro’s Senior Vice President, Projects on January 1, 2004. He has served as Senior Vice President within Norsk Hydro’s Oil & Energy area since 1993. Employed at Norsk Hydro since 1980, Mr. Ruud has held numerous positions. From 1997 to 2004, Mr. Ruud headed the Exploration & Production division of Norsk Hydro. Between 1996 and 1997, Mr. Ruud had responsibility for Norsk Hydro’s operations on the Norwegian Continental Shelf. Mr. Ruud was the project director for Troll Oil Project, from 1992 to 1996, and for the Brage Project from 1989 to 1992. From 1982 to 1989, Mr. Ruud held different management positions within the Oseberg Development Project. Mr. Ruud serves as the Deputy Chairman of the Intsok Foundation. He received a masters degree in mechanical engineering from the Norwegian Institute of Technology in 1975.

Rune Bjørnson was appointed Statoil’s Executive Vice President, Natural Gas on September 1, 2004. Mr. Bjørnson came from the position of Senior Vice President for Supply and Transport in Statoil’s Natural Gas business area. Mr. Bjørnson was managing director of Statoil’s operations in the UK from 2001 to 2003. Since 1990, he has held a number of executive positions in the natural gas area, and he also performed market analysis work for the group when he joined Statoil in 1985. From 1999 to 2001, Mr. Bjørnson was chair of the Gas Negotiating Committee (GFU). He has an MSc in Economics from the University of Bergen.

Margareth Øvrum was appointed Statoil’s Executive Vice President, Technology & Projects on March 30, 2005. She previously held the position of Executive Vice President for Health, Safety and the Environment since September 1, 2004. Before then, she was Senior Vice President for operations support in Exploration & Production Norway and head of Statoil’s Bergen office. Before taking up her appointment in Bergen in 2000, Ms. Øvrum held a number of supervisory posts offshore on Gullfaks and Veslefrikk over a 10-year period, and was the group’s first female platform manager. From 1987 to 1991, Ms. Øvrum held various managerial posts onshore linked to the start-up, operation and maintenance of Statoil’s operations in the Tampen area. She joined Statoil in 1982, working on strategic analysis. Ms. Øvrum is a member of the board of Elkem, and a member of the committee of shareholders’ representatives at Storebrand ASA. She was previously the chair of the board of directors of Helse Bergen and a member of the boards of the University of Bergen and of Siemens. She has a

degree in engineering from The Norwegian University of Science and Technology (NTNU), specializing in technical physics.

Hilde Merete Aasheim joined Norsk Hydro on October 3, 2005, as Executive Vice President for Leadership & Culture (Human Resources, Health, Security, Safety and Environment and Corporate Social Responsibility). Before she came to Norsk Hydro, Ms. Aasheim had worked at the Norwegian industrial Company Elkem AS for almost 20 years. She had several senior positions in the company, both as line manager and manager for functions such as finance, human resources, health, environment and safety. Since 2002, she had been head of the Silicon Division and also member of Elkem’s Corporate Management Board. Ms. Aasheim has a masters degree from the Norwegian School of Economics and Business Administration, Bergen, in 1982 and is also a chartered accountant. Ms. Aasheim has also work experience with Arthur Andersen & Co.


	*Corporate Assembly*

The corporate assembly has a duty to oversee the board of directors and the Chief Executive Officer in their management of the merged company. Norwegian companies law imposes a fiduciary duty on the corporate assembly to its shareholders. The corporate assembly communicates its recommendations concerning the board of directors’ proposals about the annual accounts, balance sheets, allocation of profits and coverage of losses of the company to the general meeting. The corporate assembly renders decisions, based on the board’s proposals, in matters related to substantial investments, measured in terms of the total resources of the company, and matters regarding rationalizations or restructurings of the operations of the company that will result in a major change or reorganization of the workforce. The corporate assembly is also responsible for electing and removing the board of directors. The term of office of the corporate assembly members is normally two years and the current term of office expires in May 2008.

The corporate assembly of the merged company shall be composed of 18 representatives, of which six shall be elected by and among the employees of the merged company and 12 shall be elected by Statoil’s extraordinary general meeting. Norsk Hydro’s election committee shall nominate five, and Statoil’s election committee shall nominate seven, of the members to be elected by the extraordinary general meeting. Such election will be conditional upon, and be effective from, completion of the merger. The members of the corporate assembly shall be elected for the period up until the general meeting of the merged company in the spring of 2010.


	*Election Committee*

The merged company shall have an election committee composed of four representatives, for which the election committees of Norsk Hydro and Statoil shall each nominate two. The election at Statoil’s extraordinary general meeting of the election committee of the merged company will be conditional upon, and be effective from, completion of the merger. The members of the election committee shall be elected for the period up until the general meeting of the merged company in the spring of 2010.


	*Compensation of the Members of Corporate Assembly, Board of Directors and Executive Committee*

In 2006, total remuneration of NOK 515,000 was paid to the members of Statoil’s corporate assembly, NOK 2,525,000 to the members of its board of directors and NOK 35,033,000 to members of the executive committee, excluding compensation paid to the Chief Executive.

Chief Executive Officer Helge Lund received in 2006 NOK 9,852,000 in salary and other remuneration (including pension premium paid). According to his contract, Mr. Lund is entitled to severance pay equivalent to two annual salaries, excluding term of notice of six months, when the resignation is a request from the board. In addition, Mr. Lund is entitled, under specific terms, to a pension amounting to 66 per cent of pensionable salary after reaching the age of 62. The full service period is 15 years and the benefits are independent of any future changes in Norwegian National Insurance (Folketrygden). Based on performance, the board will assess an annual performance payment for Mr. Lund. This payment may amount to a maximum of 50 per cent of base salary.

A performance pay system has also been established for the other members of the corporate executive committee, senior vice presidents and vice presidents. This entails a variable remuneration based on pre-

determined goals. The scheme allows for a bonus of 20 per cent of base salary on achieving set goals, with a ceiling of 40 per cent for results that clearly exceed these goals.

If resigning at the request of the company, members of the corporate executive committee, other than the CEO, are generally entitled to severance pay equivalent to 12 months salary, including a six month term of notice. The pension rights follow the general system in Statoil. Executive Vice President Peter Mellbye is entitled to severance pay including term of notice equivalent to 24 months salary, if resigning at the request of the company. Mr. Mellbye is entitled, under specific terms, to a pension after reaching the age of 60. The pension will amount to 66 per cent of pensionable salary.


	*Share Ownership*

The number of Statoil and Norsk Hydro shares owned by the members of the board of directors, the executive committee, and the corporate assembly as of March 12, 2007 is shown below. Board members and members of the executive committee, including closely related parties, who own Statoil or Norsk Hydro shares are set forth below. Each owns less than one per cent of the Statoil or Norsk Hydro shares outstanding.


Board of directors	Number of Norsk Hydro Shares*		Number of Statoil Shares

Eivind Reiten		[13,664]		[ ]

[Shareholdings of other directors to come]


*	Upon consummation of the merger, Norsk Hydro shareholders will receive 0.8622 Statoil shares for each Norsk Hydro share.


Executive committee	Number of Norsk Hydro Shares*		Number of Statoil Shares

Helge Lund (Chief Executive Officer)		[ ]		[4,583]
Margareth Øvrum		[ ]		[3,311]
Eldar Sætre		[ ]		[1,836]
Rune Bjørnson		[ ]		[724]
Tore Torvund⁽¹⁾		[38,580]		[ ]
Peter Mellbye		[ ]		[3,538]
Jon Arnt Jacobsen		[ ]		[2,344]
Morten Ruud		[ ]		[ ]
Hilde Merete Aasheim⁽¹⁾		[75]		[ ]


*	Upon consummation of the merger, Norsk Hydro shareholders will receive 0.8622 Statoil shares for each Norsk Hydro share.


(1)	The number of Norsk Hydro Shares owned by Tore Torvund and Hilde Merete Aasheim is accurate as of December 31, 2006.

Members of Statoil’s corporate assembly owned as of March 12, 2007 a total of 2,260 Statoil shares and [ ] Norsk Hydro shares.

Statement on Corporate Governance

Statoil complies with the Norwegian Code of Practice for Corporate Governance, as published on November 28, 2006.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

For the year ended December 31, 2006

The following pro forma condensed combined financial information shows the pro forma effect of the merger of the oil and gas activities of Norsk Hydro (Hydro Petroleum) and Statoil ASA and subsidiaries (Statoil) as set out in the terms of the merger plan as if the transaction had occurred on January 1, 2006, for the income statement and at December 31, 2006, for the balance sheet. This financial information is derived from, and should be read in conjunction with, the historical consolidated financial statements of Statoil for the year ended December 31, 2006, which is incorporated by reference in this document, and the historical carve-out combined financial statements included herein of Hydro Petroleum. Financial statements of Statoil and Hydro Petroleum and the pro forma financial information have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).

Statoil and Norsk Hydro entered into a merger plan which sets out the terms for the implementation of the merger. The merger will be implemented by means of a demerger transaction in accordance with Norwegian law whereby the assets and liabilities, rights and obligations related to Hydro Petroleum will be transferred to the merged company for consideration in the form of shares of Statoil to be issued to the shareholders of Norsk Hydro. Upon completion of the merger, the pre-merger shareholders of Statoil will own approximately 67.3% of the merged company and the pre-merger shareholders of Hydro will own approximately 32.7%. In accordance with the terms of the merger plan, in addition to assuming substantially all of Norsk Hydro’s former Oil and Energy segment and certain other activities (see “Basis of presentation”), the merged company will assume the following rights and obligations:


	•	Obligations of net interest bearing debt of NOK 1 billion which is comprised of:


	•	All payment obligations related to outstanding bonds of the Norsk Hydro group

	•	Settlement by cash payment of an inter-company balance that adjusts the net of outstanding bonds less the cash of Hydro Petroleum to reach to the agreed upon balance of NOK 1 billion


	•	Guarantee obligations related to Norsk Hydro assets transferred to the merged company

	•	Certain environmental and pension obligations determined in accordance with the merger plan

	•	Employees of Hydro Petroleum and certain corporate and other activities

	•	Future rights and obligations with respect to taxation issues

The unaudited pro forma condensed combined financial statements have been prepared using the purchase method of accounting. However, prior to the issuance of shares at the anticipated completion, the Norwegian State will control Statoil through its approximately 72.1% interest in Statoil (including shares held by the State Pension Fund) and will own an estimated 49.2% of Hydro (including shares held by the State Pension Fund and excluding shares held in treasury). As such, the 49.2% of the net assets of Hydro Petroleum owned by the State are recorded at the State’s historical carryover basis and the 50.8% of net assets attributable to the equity interest not owned by the State is recorded at fair value by Statoil. The final common ownership basis will be determined at the completion of the transaction.

The unaudited condensed combined pro forma financial information is presented for illustrative purposes only and, therefore, does not purport to represent what the actual results of operations or the merged company’s financial position would have been if the merger occurred on the dates assumed and it is not necessarily indicative of the merged company’s future operating results or combined financial position. As such the pro forma financial information addresses a hypothetical situation. In this regard, the reader should note that the unaudited condensed combined pro forma financial information does not give effect to (i) any integration costs that may be incurred as a result of the acquisition, (ii) synergies, operating efficiencies and cost savings that are expected to result from the acquisition, (iii) benefits expected to be derived from the merged company’s growth projects or expansions, (iv) changes in commodities prices subsequent to the dates of such unaudited condensed combined pro forma financial information or (v) restructuring charges that may be incurred to fully integrate and operate the combined

organization more efficiently, or (vi) the effect of asset dispositions, if any, that may be required by the regulatory authorities.

The pro forma adjustments reflect estimates made by Statoil management and assumptions that it believes to be reasonable. The allocation of the purchase price to acquired assets and liabilities in the unaudited pro forma condensed combined financial information is based on management’s preliminary internal valuation based upon information currently available. Such allocations will be finalized based on valuation and other studies to be performed by management which may include the services of outside valuation specialists after the closing of the business combination. Accordingly, the purchase price allocation adjustments and related impacts on the unaudited pro forma condensed combined financial information are preliminary and are subject to revision, which may be material, after the closing of the business combination.

Solely for the convenience of the reader, the financial data for the unaudited pro forma condensed combined balance sheet and statement of income has been translated into U.S. dollars at the rate of NOK 6.2287 to USD 1.00, the noon buying rate on December 29, 2006.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF DECEMBER 31, 2006

(in million)

Historical

Pro Forma

Hydro

Merger Plan

Notes to

Statoil

Petroleum

Contribution by

Pro Forma

Pro

Consolidated

Combined*

Hydro (note a)

Adjustments

Forma

(NOK)

(NO