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.
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)
products (oil versus gas), and
phases in their production chain (exploration, development, production,
transportation, processing/refinement, marketing and sales).
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.