A    Overview of the Statoil Corporation

For the reader without any prior acquaintance with the Statoil corporation, a brief summary of their background, objectives, organization, main products and work processes is provided.

A.1    Background

Statoil Den norske stats oljeselskap a.s was established as a company wholly owned by the Norwegian state in 1972. One of the intentions was to develop Norwegian expertise in oil exploration and production, another was to ensure national control with the vast resources on the Norwegian continental shelf (Sørensen, 1996:32ff).

Today, Statoil is Norway's largest company. Operation profit before tax reached 18.2 billion Norwegian kroner in 1996, resulting in a net profit of 5.3 billion Norwegian kroner. This makes Statoil the most profitable company in Norway (in absolute terms). Total operating revenues reached 107 billion Norwegian kroner (Statoil, 1997a).

The Statoil group had 15,171 employees in 25 countries world-wide on December 31, 1996 (ibid.).

A.2    Objectives of the Statoil corporation

The overall objective of the Statoil corporation is value creation and growth to the best of the owner and the society. Statoil are currently moving from being a petroleum company to becoming more of an energy company (Norvik, 1997). The aim is to produce one million barrels of oil equivalents in 2005 as a mix of oil, gas and electricity.

The main area of operation is still the Norwegian continental shelf, but internationalization is sought. A main strategy for internationalization is through alliances and joint ventures, both with other petroleum companies and with suppliers (ibid.).

A.3    Statoil's organization

Statoil is organized as 14 business units reporting to a corporate leader group. Business units are roughly divided according to In addition, there are units doing research and development, corporate staff, and economy and finance departments. An outline of the organizational units is provided in figure A.1. The various business units are geographically dispersed all over Norway. Main centers onshore are Stavanger, Bergen, Oslo, and Trondheim, but Statoil has several additional centers distributed along the coast. Statoil representatives are also working abroad, and of course offshore in production of petroleum.
Figure A.1: Organization chart of Statoil (Statoil, 1997b)

A.4    Statoil's Products and Services

Statoil was until recently a so-called integrated petroleum company in the sense that the corporation was engaged in all phases of oil and gas business from exploration of petroleum resources to sales of products to end users (e.g., gas stations). As pointed out above, Statoil are now moving to be a more universal energy provider, also trading electricity.

The product assortment includes crude oil, sales gas, natural gas liquids, naphtha, methanol, petrochemicals and a number of other refined products. The number of products is large, and dependencies between various intermediate products are complex. Almost all intermediate products have their own markets and can be sold without further refinement.

In addition, the various products have different qualities, making them more or less valuable (e.g., the price of some product qualities of North Sea oil is one USD higher than for other qualities). Mixing different product qualities is also possible in order to match specific and shifting market requirements. The result is a large number of possibilities for production of a sellable product.

Statoil also sell services. Norwegian oil and gas production is organized according to licenses, in the sense that petroleum resources in reservoirs are allotted to a consortium by the Norwegian government, but produced by a single company on behalf of the consortium. Hence, if a company both is the operator of a production platform or processing plant and has a stake in the license, they become their own customer.

Statoil operate platforms, gas processing plants, a methanol plant, refineries, gas stations, and gas transportation pipelines. They are also a large actor in the oil trade business. Hence, Statoil subsidiaries do a lot of business with other Statoil subsidiaries.

A.5    Statoil's Processes

To describe all perceivable work processes and physical processes in the Statoil corporation would be an overwhelming task, and few, if any, can be said to be knowledgeable of all of them (including Statoil employees). However, the main activities can be found in enterprise model M7 in figure 6.10.

The physical flow of products go from reservoirs to markets. Activities related to handling of products and services include field operation, transportation, and processing/refinement at various stages.

The processes that mainly handle information include exploration (e.g., analysis of seismic data), design of plants and production platforms, marketing, sales, etc. In addition, there are corporate planning, information systems development and maintenance, research and development, etc. Trading is also mainly an information based activity.

In addition, activities are conducted differently depending on geographical areas. Required operations in Venezuela or China are different from the required operations in Norway, as the products, organization and cultures are very different.

A.6    Concluding Remarks

A striking characteristic of Statoil is the complexity of the organization and their activities (unless considered on a very high level of abstraction). Very few, if any, have a detailed understanding of all aspects of Statoil's business. This is not because Statoil employees are not knowledgeable. A main reason might be that due to both diversification and specialization in operations, it is not practically possible for one single person to know more than a few areas intimately. This may also be considerd a good argument for team-based enterprise modeling.