Statoil ASA

Statoil support the heros of tomorrow

Monday 12 June 2017, by Alexander Ag

2 inspired

A. The main facts about the activities of the company.

The Norwegian company Statoil was founded in 1972 and has since that time explored, developed and produced oil and gas on the Norwegian continental shelf. Two thirds of the company is owned by the government as well as the nature resources that was discovered in 1969 in the North sea. The oil and gas sector has been vital for economic growth and standard of living Norway has today. Today 20% of EU’s gas consumption and 30% of crude oil consumption is imported from Norway.
Now, Statoil invests and looks for new energy solutions as a long term strategy. Offshore wind is seen as the main alternative energy product for Statoil, because the technology developed for offshore oil platforms can be used to produce windmills in the same challenging environment. Through their analysis they claim 18% of the world’s electricity can be supplied by wind power and by 2025 offshore wind will be cost competitive with other new forms of power generation. Also, they predict the demand for renewable energy to grow by 11% annually until 2040. These are the main reasons why they see offshore wind as a potential market and revenue source for the future. In 2011, Sheringham Shoal (UK) wind park started production of wind electricity that now powers 220.000 British homes and this year, the production in Dudgeon (UK) started that powers another 410.000 British homes. In 2019 400.000 German homes in Arkona can expect to consume electricity received by wind power.
Not only does Statoil invest in renewable energy solutions, but they also innovate within the sector. Hywind Pilot Pilot park in Scotland will start production which is the first floating wind park in the world that will provide electricity to 20.000 homes. This is a smaller project compared to the previous parks, because the new technology based on oil platform technology is being tested.

B. The Ethical challenges this company is addressing.

The Ethical challenges Statoil is addressing are mostly focused on sustainability and viable long term operations, which are ethical combinable with climate change and reduction of carbon emissions. The company is challenging the fossil fuel industry to transition from the current status quo towards sustainable energy production. However, the biggest challenge for the company in the future is going to be to remain honest towards its customers and shareholders. It would like to set an example, but the company also expects the need for fossil fuels even beyond the year 2040, with a reduction of fossil fuels of only 50 % within the next 23 years.Therefore, the challenge the company must successfully achieve, is to either be on the move to be fully sustainable or not. Right now the company is still heavily investing in oil drilling sides, because it expects the demand for oil to peak in 2020. In the recent past Statoil has received fines for unethical corruptive operations. That being said it is ethically questionable if the company explores offshore wind park technology because they want to set an example, or just because they are threatened by future losses in profits. Recently the Statoil has divested a majority of its portfolio holdings in other fossil fuel companies, presumably with the expectation of respective shares to decrease in value due to the unwillingness to make a transition. With country like Norway, Sweden, Germany and Finland completely transitioning to renewable, sustainable power generation, Statoil could potentially miss out on great opportunities of market leadership, because they feared of taking the risk to completely commit itself to reusable energy.

C. What makes you believe this company is really ethical and why you trust it?

Holding in consideration that Statoil is an extraction company and its main goal is for profit in a field that devastates the Earth’s natural cycles, we believe that Statoil is a leader in ethics within its industry because it is setting a precedent in transparency for other oil companies and moving towards using renewable energy resources.
Statoil is the first major oil company to issue a detailed public report on its earnings and payment distributions to 18 different companies. This publishing is very important because it has spurred an irreversible, positive in momentum, push in its industry toward transparency. Historically, the oil industry has been opaque and untrustworthy in its operations, and becoming more transparent shows a positive future for the industry. This move for Statoil came after a Norwegian transparency law that will be reflected across Europe in the 2013 EU Accounting and Transparency directives. Hopefully, this push towards transparency in the company will have further benefits of inspiring the oil industry to shift towards more ethical practices with support from shareholders and the public.
Over all, Statoil is an innovator in ethics within an industry that is historically corrupt and secretive in its operations. This is a brave push and raises stakes for the oil industry. We hope that Statoil will remain on this positive path and inspire other companies in its industry to truly start making a difference in such an important yet complex field.

D.The possible challenges facing the company in the future and how you think this company may improve.

Potential challenges for the company are besides and ethical standpoint the economic challenges the company is going to face by transitioning to reusable and sustainable energy. At the moment their core business activities are powered by fossil fuels and the transition is slow since the initial cost of using suitable wind plants is higher than the revenues of selling the generated energy. The company expects offshore wind power to be competitive by the year 2025. Until then is is crucial for the company to gain a strong position in the market to stay ahead of competition and ensure long term profits. In our opinion, it is important that the company transitions into being fully ethical. Although it does better than most fossil fuel energy providers, its main activity is still oil and gas and, for an educated scholar, the current projects seem to be more of a CSR initiative rather than a future plan to make a complete transition. We think that there is a lot more potential for the company in terms of earnings if they start to shift its core business activity, rather than wait until offshore wind power becomes competitive in 2025. By being the one of the first movers the company can expect long term ethical growth in the future, with shifting core activities.


Location: Stavanger (Norway)

Sector: Electricity, gas, steam and air conditioning supply

Official website:

Key figures:

Annual revenue: 45 873 000 000 USD
Annual Profit: 80 000 000 USD
Employees: 20500
Countries in operation: 30

Nbr. visits: 1803

Nbr. inspires: 2