Good day and welcome to the StatoilHydro Q2 2008 earnings release conference call. For your information, today’s call conference is being recorded. At this time, I would like to turn the conference over to your host Lars Sorensen today. Please go ahead, sir.

Thank you very much. Ladies and gentlemen, welcome to this StatoilHydro second quarter earnings conference call. My name as it was said is Lars Sorensen and I am the Head of Investor Relations. This morning at 8:00 am Central European Time we announced our results for the second quarter 2008 and sent the release through wires and to the Oslo Stock Exchange. The report can be downloaded from our website statoilhydro.com together with presentation slides used in this conference call. I will ask you please to take special note of our use of forward-looking statements, which is described on Page 48 in presentation with supplementary. Today’s call is slightly different from our usual setup. We have chosen to use a more simplified setup of slides and a teleconference, and the changed setup is to accommodate the fact that two of our peers also have their results out today and many of our investors and analysts would like to follow all the three companies. For the next quarter we will back on our usual format with a webcast and Internet based question handling. In a minute StatoilHydro’s CFO will take us through the highlights from the second quarter. After the presentation, we will open for questions, and the operator on this call will give you a short instruction as to how you should operate your phone in order to ask questions. And now it’s my privilege to welcome our CFO Eldar Saetre who will take us through the second quarter presentation.

Thank you, Lars. Ladies and gentlemen, thank you for joining us on this Friday afternoon. It’s a pleasure for me to present StatoilHydro’s results for the second quarter of this year. And the results are in general very satisfactory. We are delivering record earnings and high production in a strong commodity market environment. However, I would like to emphasize that the most important results for us at the management are not the ones created by the high prices, but the ones created by the strong performance in our organization. Our focus continues to be on delivering on the short term and longer term ambitions. Today, we are showing that we are on the right track to achieve what we have set out to do. Our focus areas are, first of all on productions, as the capital markets stay in general, as you might recall we estimated our equity production for 2008 to 1.9 million barrels per day for 2008. Strong production and high gas offtake during the first half of this year have made this estimate more robust. Then it is about synergies. We are progressing according to our plan with respect to realizing the annual 6 million in synergies from the merger. This process also includes the ongoing process to structure our offshore organization into a more flexible and efficient operating model. We also have strong focus on continuous business development, launching new projects as planned, and continuing with a high exploration activity, and securing new acreage. And finally, we have to secure safe, reliable, and efficient operations where the trend so far this year has been positive, but we still acknowledge that there are too many unfortunate incidents like the gas leak on the Statfjord [ph] from this quarter. Just I would like to move to the highlights…

Thank you very much Eldar. We will start the Q&A session shortly. But in addition to Eldar Saetre and myself we are not joined in the studio by the head of corporate accounting Mr. Thompson [ph] and the head of (inaudible) management and control Mr. (inaudible). Before I leave the wire [ph] to the operator I would like you – I would like to appeal to you not to bundle your questions but try to ask one question at time with possible follow-up questions in connection to the answer. Operator, could you please take us through the procedure for asking questions?

Thank you very much. The question-and-answer session will be conducted electronically. (Operator instructions) Our first question comes from Jason Kenney, ING. Please go ahead. Jason Kenney – ING: Hi there, it’s Jason from ING. I just had a question on your sensitivity guidance. I notice in your supplementary slides updated guidance on sensitivities for 2008. It does appear that since the first quarter going into the second quarter you are likely to be less sensitive to the oil price, more sensitive to the gas price change, and more sensitive to FX. I just wondered if you could explain the moving parts there. Is it the face assumptions, the starting levels, or is it just better modeling?

I think this is basically related to the modeling. This is now not statistically comparable relations. So this is really a pan-U.S. dollar practical number on the oil price. It’s the gas price of 60 ore or NOK 0.5 per standard cubic meter and also $50 per unit sold – I am sorry 50 – practical numbers. So generally speaking, obviously I mean we are very sensitive to the oil price. So I would definitely say the oil price is (inaudible) where we have the higher sensitivity due to the – that is the most important part of our portfolio and the commercial portfolio and so that’s (inaudible). Jason Kenney – ING: I notice for instance if the exchange rate moves 0.5 there I mean you used to look for a net operating income effect of NOK 13 billion but that’s now NOK 19 billion. That’s quite a significant change quarter-over-quarter to have that on a sensitivity shift.

Well, that you know has to do with the production volume and the level of oil price that this is not (inaudible) so that’s (inaudible) impact on those factors. Jason Kenney – ING: I mean was that not in the last quarter?

I haven’t got the numbers for last quarter actually in front of me. I don’t think we can answer that more closely here (inaudible). Let us try to come back to that (inaudible) there are any better answers for that here probably we – three are no big changes to the way that we have modeled it before. But it may actually have a different impact with the level of exchange rate and oil prices we are in now. That’s the best answer we can give right now. Jason Kenney – ING: Okay. Many thanks.

We have now our next question from Edward Westlake from Credit Suisse. Please go ahead. Edward Westlake – Credit Suisse: Yes, good afternoon. You have had quite a number of discoveries this year. You mentioned quite a lot in Norway were close to existing infrastructure. Is it possible at this stage to give us a feeling for the rough scale of the total resource base that you have captured? Other companies such as Shell and Eni are starting to do this at the half year stage as well. And could you give us some guidance to which are the key wells that you are most excited about in the second half. Thank you.

Well, when it comes to your request, which I can understand for providing the resource base coming from exploration. We are not in a position to give any numbers on that. Obviously we are following that internally but we are not ready to announce it. That’s something we will have to come back to on a – in connection with the capital market day type of event. So we are not prepared to talk about that but generally speaking I can say that the additions to our resource base from exploration so far is very much in line with our expectation. When it comes to sort of individual wells, what I can say on the Norwegian Continental Shelf is that there is a lot of discoveries, 14 discoveries so far. And really the (inaudible) what you see on the Norwegian Continental Shelf that we are – we see many before – more (inaudible) discoveries and medium size discoveries and there are now sort of new big discoveries turning out and that’s a fact also for this quarter. So this consist (inaudible) lot of discoveries (inaudible) really now significant discoveries that I am prepared to give any numbers on at this stage. So that’s something that we would have to come back.

We have our next question from Iain Reid, Macquarie. Please go ahead. Iain Reid – Macquarie Securities: Hi there, Eldar, it’s Iain Reid from Macquarie.

Hi. Iain Reid – Macquarie Securities: Could I – (inaudible) two questions. Firstly, international operating cost have gone up pretty significantly in this quarter. I understand there has been startup, et cetera. But could you perhaps point us to where do you think the kind of run rate of international operating cost is going, maybe by reference to previous quarters. And secondly, you are selling gas now in Europe, U.K., and the U.S. I wonder whether you can give some sort of rough breakdown as to the various percentages and quantities going in each direction. Thanks.

Well on the international side, I don’t think any – there is an increase compared to the same quarter of – on the operating cost in the range of 500 million and that is – can fully be explained actually by the change from the underlift and overlift position. So what we do in the account is actually to provide – to make cost provisions for the total cost, the total unit cost of both the underlift if you are in that position, it’s a negative and if there is an overlift, we have total cost for the overlift now. That (inaudible) volatility in the account related to any given underlift and overlift situation. In this case we have an overlift situation and it explains actually (inaudible) in the operating cost. So on the international side there was – new activities but not significant activities and there is also a slight currency impact, which is positive taking the U.S. dollar and the Norwegian krone. But overall there isn’t any significant change in the operating cost on the international side. When it comes to gas, I (inaudible) quite get your question, Iain, but maybe you could sort of ask me a little bit. Iain Reid – Macquarie Securities: Yeah, the total amount of gas sales you are reporting this quarter, I just wondered whether you can give us some rough idea how much you are selling into continental Europe versus the U.K. versus the U.S. for LNG.

Well, as you know, most of the LNG is not (inaudible) significant portion of it due to the situation we have to cover a month shutdown now on (inaudible) LNG in the portfolio. On the (inaudible) between the different markets and what I could say is that basically you know we have 9.2 billion – 9 billion coming from the Norwegian side and then there was a (inaudible) and so this – the main part of this going into the continental market. If you look at this on a short term versus longer term basis, longer term contracts, I think long term contracts represent more than 90% of the overall portfolio but – and that probably that we should expect to see also going forward and short term contract obviously lower – much lower share. The more specific split between the U.K. and the continental volumes. I haven’t got those volumes. I am not prepared to talk about that today. Iain Reid – Macquarie Securities: Okay. Thanks a lot.

We have our next question from John Olaisen from Carnegie. Please go ahead. John Olaisen – Carnegie: Hi there. And thanks for taking the time to take a telephone conference. I wish you could have a presentation like you used to actually you know. It’s so difficult to hear you on the conference call. Anyway, my question goes to the – it relates to the production guidance for 2008. In the first half of the year your production was 7.6% of year-over-year and you are sticking to 1.9 million barrels for 2008, which implies that your production for the second half of this year is going to actually fall compared to the second half of last year. So, either there is a huge drop in production in the second half of the year or your guidance seems very conservative. Do you want to comment on that I haven’t missed out on anything?

Well, your number – your count are right. So what I can say is this is a repeat the statements that we have given. Of course number one, we have a very strong gas off-take, both in the first quarter and in the second quarter, stronger than we have been used, actually. Quite (inaudible) and we do not expect that situation to be maintained going into the second quarter at least. That’s something we take into account when we guide you on this. Then there is quite a comprehensive maintenance activities both actually on the international side and in Norway. So that’s the more specific factors. We have the (inaudible) issues (inaudible) issues. It was mentioned that the – on the (inaudible) we are now more firm that there will be a 30 days shutdown in the first quarter compared to have sort of (inaudible) so that’s now more (inaudible) than we have seen before. Then adding all of these up what we have said is that the – even though the number just to say is a more robust number and we are more comfortable – a little more comfortable with 1.9 than we were previously but we are not ready to give any new numbers or give later a more comfortable number, more comfortable perspective but we are not ready to give any number. John Olaisen – Carnegie: And maybe you could comment or give a comment also to the gas takes which was very – which were very high in the first half of the year. Any reason to expect that to be different in the second half of the year? And also maybe related to the fact that you are postponing the repairment of the Kvitebjørn pipeline and is the high gas take in the first half of the year have anything to do with that? And did you need the gas from Kvitebjørn for the second half of this year or anything – any thoughts like that behind the decision to delay the repair of the Kvitebjørn pipeline? Two questions really. Any reason to expect gas off-take or gas take to be lower in the second half or – and secondly in Kvitebjørn is related to that.

Okay. When it comes to sort of our perspective on what the customers would do that’s simply based on typically what we see. So – and I have seen in previous years – there is a seasonal pattern. And so you have to know in second and the third quarter it’s typically much lower than the third and the – first and the fourth quarter. And the second quarter has been slightly higher offtake actually than we have typically seen. Then there is a gap here which ends in the third quarter. So together (inaudible) and the fact that we have seen closing in the third quarter and the fact that we have seen higher offtake so far that’s excess in direction of lower offtake in the third quarter but seems to have left that. When it comes to the Kvitebjørn, I mentioned there the main implication should be expected to be on the liquid side. You should not expect us to simply – I mean what – our main concern is to create values in this and we are looking into the future and have sort of perspective as to how markets would develop. And we also have flexibility as you know on the Troll and on the Oseberg. So you shouldn’t expect us to sort of – the fact that they did not come into production that gives us more flexibility to put it that way. But it’s not necessarily a consequence that we will pull this volume into the market at this time. So it gives us more flexibility but to conclude that this will come into market in this year, that’s not something that we can sort of advise you on. But it gives us more flexibility. What was the reason behind the Kvitebjørn decision that was definitely not sort of market perspective. That was pure safety, the technical aspect of that into that conclusion for sure. John Olaisen – Carnegie: Okay. Thank you. And my final question is related to the explorations expenditure in Q2 in Norway. In Norway we had very high success rates in your drilling in the second quarter of the year. Still you expensed 1.5 billion out of 1.7 billion spend on exploration in Norway in the second quarter and I would have thought that the exploration expenses were going to be somewhat lower due to the high success rate. Any reason why they expensed so much of the exploration costs in the quarter?

Well, first of all there is lot of factors going to the exploration cost and some of it is not – quite a bit actually is not related to exploration success (inaudible) expense continuously. But a lot of cost (inaudible) in any case expensed. This quarter what happened is typically slightly higher exploration expenses than we have seen both compared to the same quarter last year and the previous quarter. That’s what you see on the Norwegian Continental Shelf. Mainly it comes from two factors. It’s higher exploration activity (inaudible) higher cost and higher seismic cost in particular. And it also is related to the fact that we have expensed slightly more from what has been capitalized in previous quarters this year – this quarter compared to earlier quarters. So close to 500 million is actually expensed and there is a lot of wells going into that from a consideration of (inaudible) of wells that have been capitalized previously. So it has to do with the activity level and the expensing of previously capitalized – and if you look at what is being capitalized that’s pretty much of around 50% as it has been of course in the same quarter, now the capitalization portion. So overall there will be rise (inaudible) quarter to quarter but if you look at this on a more aggregate basis we had also overall at (inaudible) level at more than 70 levels, less than NOK 18 billion and you have high success rate, so I think you should (inaudible) on a quarter-to-quarter basis than any (inaudible) indication or any sort of higher (inaudible). John Olaisen – Carnegie: Okay. Thank you.

Our next question comes from James Hubbard from Morgan Stanley. Please go ahead. James Hubbard – Morgan Stanley: Hi good afternoon. Just one question. You highlighted upfront of your press release that you see prices for natural gas to be increasingly determined by the power industry – coal, nuclear, renewables, to set the price. I am wondering given that you have put this near the front of your press release, what are you trying to tell us here? Are you – how do you see your portfolio of current gas sales contracts which are predominantly oil linked if I understand correctly evolving given that outlook and what do you think impact on (inaudible) averaged European realized gas price will be in that – given that outlook.

I am not prepared to go into sort of the more consequences then I would have to extend my outlook here. But I think that’s carefully prepared in the statement. This is what we can say. What you do see is that the power segment is gradually increasingly representing – be more and more important for the growth within the gas segment and energy – demand for gas. So this is simply reflecting that and in that the comments – comment – given that is the case the alternatives into the power sector to gas that is also very actually important in terms of determining the gas price (inaudible) increasingly so that goes back to coal obviously and the cost of getting coal into this. And also with more emphasis on the climate issues and the alternatives so the impact of the various alternatives on the relation of the (inaudible) these kind of perspective and I will not be prepared to take this any further into consequences for the gas – the gas price. James Hubbard – Morgan Stanley: Okay. Could I ask a separate question then please? And that is the – the restructuring costs are clearly having a large effect on your current reported OpEx – when can we expect to see an end to these restructuring costs? Are we near the end of the program now?

You are at the end of the program. There is no additional restructuring cost now this quarter. So this goes back to the one-off that we had in the fourth quarter as I mentioned and there has been no additional restructuring costs in the first quarter or in this quarter. The only restructuring cost that we talked about is related to the Swedish weakness and that is (inaudible) that’s something we would have taken in any case.

And the other reason why we talk about restructuring cost in all this is because the production cost per barrel are calculated on a 12-year – on a 12 months average basis. So, in that sense the fourth quarter in the restructuring cost distorting the picture a little bit. That’s what we tried to (inaudible) but there are not restructuring costs as a result of merger coming in now. James Hubbard – Morgan Stanley: Okay. Thank you.

We have the next question from Colin Smith from Dresdner. Please go ahead. Colin Smith – Dresdner Kleinwort: Good afternoon, gentlemen. I have got a request rather than a question. You provide quite helpful breakdown of equity production per field for international E&P on Page 34 of your presentation but it would be most helpful still if you could provide the entitlement production as that’s obviously what drives the results in international. So that would be my request that you produce that in future.

Well, thank you, Colin. The only problem is of course that we cannot talk about the individual (inaudible) and if we talk entitlement production and equity production per field you will be given the PSA secrecy, which we can't talk about because of the agreements we have. So it’s little bit of a problem if (inaudible) Colin Smith – Dresdner Kleinwort: Well maybe best thing to do would be not to publish the equity and to publish the entitlement then if you can't publish both together.

Could be a possibility but then we wouldn’t really be able to focus on what we are controlling, i.e., the equity production. And also there are protocols with both and this is one of calls with strong equity production, but we have to try to focus on what we can do something about, i.e., the equity production. Colin Smith – Dresdner Kleinwort: Unfortunately that’s not what drives your results. So, from any analyst research point of view it’s the entitlement numbers that matter.

I totally agree. And that’s what we try to give as comprehensive regarding on the PSA as possible. But anyway we take your comments and take them into consideration. Colin Smith – Dresdner Kleinwort: Thank you.

The next question comes from Christine Tiscareno from Standard & Poor's. Please go ahead. Christine Tiscareno – Standard & Poor's: Thank you. I just wanted to find out if you have any plans for upgrading your refineries and if you don’t, why? Wouldn’t it be advantageous to have them being able to process heavy crude oil in this environment?

Well, you know, we are continuously working on modernizing and updating our refineries and we just (inaudible) investment process now in Kalundborg to increase the capacity to take on heavier – or heavier crude and into refinery. And so the upgrading capacity on that refinery has been increased. Currently, there are no specific plans for doing that at the Mongstad refinery but that’s something that we would continuously evaluate but we are always looking and we have lot of – more (inaudible) investment projects at all our refineries and then – now mainly at Mongstad has decided the increase the yield and the efficiency of the refineries. Christine Tiscareno – Standard & Poor's: Thank you. If I may just ask one final small question. Do you have any derivatives in place that are fixed that might affect you in the second half of this year?

Derivatives that might affect us, yes, all derivatives basically might affect us. We have derivatives but there is lot of smaller stuff as well but the main thing is derivatives that we have on the E&P Norway side. I mentioned it – and I mentioned specifically the (inaudible) agreement which is defined as a derivative. And that really impacts us quite significantly and that will be depending very much on the (inaudible) practice for the next five years (inaudible) practice at any given time would have an impact. And then on the gas side, the development in the UK gas market would have an impact (inaudible) difference from the development in the underlying (inaudible) into the other long-term contracts like oil products. On the dark side [ph] again we would have derivative effects continuously related to our credit activities and also impacts on the storage. So, I think this is a component that is there to stay, let’s put it that way, and we will have to put a lot more effort into sort of making this a high quality and (inaudible) value considerations in every quarter. We will continue to report this separately so that you can if you like (inaudible) these numbers in the course of the year’s announcements. But yes, we would definitely see this (inaudible) in the third and fourth quarter. Christine Tiscareno – Standard & Poor's: Thank you very much.

Our next question comes from Neil McMahon from Sanford Bernstein. Please go ahead. Neil McMahon – Sanford Bernstein: Hi, I have got a few questions. Maybe just going back on the natural gas price side look and maybe leading price to one side and focusing in on your comments on supply and demand, you seem to indicate that the supply situation will be rather tight as a number of new supply schemes are delayed, are you talking there from the power side of the market in terms of coal or gas-fired power plants or indeed renewables, or new gas supplies coming into Europe that you see are being delayed?

Well, we have definitely seeing the use of (inaudible) coming into Europe (inaudible) that has been going on for some time. We expect that situation to be sustainable for the rest of this year but then we should have said that this new capacity eventually will come into the European market but (inaudible) before the European market. So, we think that it would still overall be a tight situation beyond the very short term or the medium term but it is not as tight medium term as it has been over the last couple of years, let me put it that way. On the demand side, generally we see a strong growing demand for energy and we believe that gas is going to extend a significant part of this levitation [ph] going forward for various reasons somewhat related to the climate issue (inaudible) for instance related to energy efficiency and inward shift going forward and I think this is for gas going forward. Neil McMahon – Sanford Bernstein:

This is a complex issue and I cannot – I mean there are – suppose you also contain a link to oil for quite a long time, and so I think you should not expect any sort of rapid or any dramatic change in this balance sheet at least in the years ahead of us. So, to speculate more precisely over this, I would not do that. Neil McMahon – Sanford Bernstein: Maybe just a very quick last one, Given where we are at in the current commodity prices and the fact that even your CapEx has come down a bit due to currency admittedly, where are you in terms of giving us guidance on any potential special dividends for the year or indeed even discussing buybacks again?

Neil McMahon – Sanford Bernstein: But you must admit that you did not plan your budget on an average price for $115 oil price this year. So, I am just wondering at what point do you run out of near term investment opportunities and start looking towards the special dividend? Is that something that you have got the opportunity to do with the Board over the next six months?

I would not speculate any more on this. On the investment opportunities, we see definitely that to get access to new opportunities is something that you will have to do at a higher cost and we are in that game even though if you see that our investment program is down due to the currency we have a plan to recruit investments program going forward and we also see that going into 2009. So, I think that is our priority, but to speculate anything about how this picture is going to look like forward, I am not prepared to do that. Neil McMahon – Sanford Bernstein: Okay thanks.

We have a question from Iain Armstrong at Brewin Dolphin. Please go ahead. Iain Armstrong – Brewin Dolphin: Good afternoon gentleman. I am sorry I have a very, very bad line here, I hope you can hear me because I didn’t catch a lot of the stuff that was said, so if the question has been answered already, I do apologize. In the E&P Norway this comment about the change in fair value of some earn-out agreement which accounted for NOK 7 billion quite a big change, is that a one-off, the use of taking over of that that has been just building up or are we going to have that on a basis quarter by quarter because of the very sharp increase in the oil and gas prices over the last 12 months.

Well it is in that they made the way through the one-off. This is based on the future commodity prices after this is seen by the core markets and our own assumption is beyond that. So, depending on how the forward market is developing and how our own assumptions are developing that might change the value of these derivatives from quarter to quarter. So, values will be quite significant as you have seen this quarter (inaudible) both positive and negative from quarter to quarter on this. This derivative specifically is something that we were carrying in the quarter for quite a long time and this isn’t the case. So, yes it is a one-off but not more one-off than that you would probably see the effects of this in most quarters going forward because they will move up and down as I said reflecting the current commodity environment. Iain Armstrong – Brewin Dolphin: So as long as the future price is above the spot price, there is going to be a little of an impact each quarterly report, is that what you are trying to say?

If the forward price is higher than it was in the previous quarter – Iain Armstrong – Brewin Dolphin: In the previous quarter, yes, I understand that. And it is just because the change has been so much larger in this quarter that NOK 7 billion is as high, normally it would be not even worth talking about, a little bit like what Shelf said yesterday, there is just something that has come out because it sort of mucks up the numbers a bit? Hello?

Sorry, I didn’t get your question. Iain Armstrong – Brewin Dolphin: I am just saying that is this something that it’s because – you had a 47% increase in the oil price in quarter two, just the two in the first quarter and the second quarter, it’s because that increase has been so large, for example, if the prices are flat as you said, then there will not be an adjustment at all, is that right?

You have two effects here. One is to realize the effect and one is the future effect. This is the derivative, so it is reflecting the future potential earn out from this contract. If you wanted to have an effect in this which is realized every quarter and that is depending on the oil prices in any given quarter. But the derivative, that is related to the future of a quarter only. This has nothing to do with today’s oil price but it is the future oil price, in fact the future value of this derivative, of this contract. This earn out agreement, I have changed it in the future value as defined by the power market really. Iain Armstrong – Brewin Dolphin: Okay and then in your operating, general & administrative expenses up 18%, again it might be asked to forward this up 18%, in the first quarter that number was only up 5%, was there any extraordinary items in there that apart from maybe exchange rate or something which would have affected the number so much, I think you made the point that the adjustments for the Hydro [ph] merger are virtually now coming out with the numbers, is that the last effects of it?

The merger has nothing to do with these changes. The lease [ph] which is slightly higher this time is related mainly to three factors. One is the higher (inaudible) higher volumes keep coming into production like the (inaudible) but they are also delivering volume. So we don’t see that in the unit cost but we see it on the actual cost, actual cost levels. The second one had to do with the cost provision that – and I mentioned that previously, you maybe didn’t hear that, but it had to do with the way we made cost provisions for all our lifting. So this time we had a very significant switch from underlift to overlift. That is we took out more volumes, sold more volumes than our relative share of the production. And for this difference we accrued to make cost provisions for the full unit cost. There has been significant volatility and that volatility was much bigger this time than it was in the previous quarter. Actually for E&P Norway it was almost NOK 500 million explained simply by the change in accruals, cost accruals. And the last element I would mention had to do with the slightly higher cost related to the purchase of gas for (inaudible) injection, gas injection. That is the reason. Unit cost is pretty much stable although (inaudible) this has nothing to do with that. Iain Armstrong – Brewin Dolphin: Right. Although the number you gave, yes, the unit cost of barrel was virtually, it’s only about a krona higher. If you look on page 4 of the press release, it says that production cost barrel of oil equivalent at a flat exchange rate is actually up 51% in the year?

Well that includes the crude cost that includes oil for the restructuring cost that was accrued, was a one-off in the fourth quarter last year. That was a one-off. So, that sort of goes into (inaudible) like we have a few additional restructuring cost of oil in the first and second quarter and we don’t expect any further restructuring costs. That was a one-off which explains the steps of the initial cost increase that you referred to. Iain Armstrong – Brewin Dolphin: I am sorry the line is very, very poor, I didn’t catch – was that one-off in the fourth quarter, that’s what you said?

Yes a significant one-off in the fourth quarter.

Remember the production unit cost is calculated on a 12-month basis. So when you compare the two numbers you have to compare the last 12 months and you have to compare the last 12 months a year ago basically.

That is nothing to do with the one-off restructuring cost. Iain Armstrong – Brewin Dolphin: Okay just a final question again, do you expect a third quarter overlift of gas as well as you had in the second quarter or is it that – I think you said something along the lines of because the said [ph] quarter near the end of the gas year that you are not likely to see that. Again, I am sorry the line has been so poor and I am afraid – your webcast has been always very good but this has been very difficult today.

Okay we will have to do something about that. When it comes to gas, basically we don’t have the issue of overlift versus underlift. This has to do with oil when you have shipments, you take ships from the shore, producing shore which are now sort of on a quarterly basis equivalent with your ideal percentage of the production. So, this has to do with oil guiding under or over that is possible. What I can’t say in general is that if you have overlift in one quarter it is more likely that you will have an underlift in the next quarter but it is not necessarily like that. It is very hard to be precise on guiding overlift versus underlift. But over time it will level out, you will lift what you are entitled to. Iain Armstrong – Brewin Dolphin: Yes I got that. Okay, thank you very much.

Our next question is from Neill Morton from MF Global. Please go ahead. Neill Morton – MF Global: Hi there, just the one question. Just intrigued that the movement or assumption from NOK 6 to NOK 525 is the same in percentage terms as the move in your CapEx budget from NOK 75 billion to NOK 65 billion, I guess one could infer that all your CapEx is therefore in dollars, I am sure that is too simplistic, but could you tell us how much of your CapEx is in dollars and are there any other moving parts to that reduction phase in for example?

Neill Morton – MF Global: And any other moving parts?

In the national program I think it is worthwhile to mention that this investment guidance is organic investments as we call it, I mean it is from the development we have accessed in addition to that number we have acquired 50% of the Peregrino field from Anadarko earlier this year as that could also be part of the investment that is most part of this 65. So, any acquisitions and so on will come in addition to this 65 and that is of course a moving part. Neill Morton – MF Global: Okay, fine. And if we assume $5.25 next year in 2010 what CapEx number should we type into our models?

I think we can come back on our non-future investment guidance while we are at the year end with the capital markets. Neill Morton – MF Global: Okay, great, thank you very much.

Our next question comes from Gudmund Halle Isfeldt from DnB Nor. Please go ahead. Gudmund Halle Isfeldt – DnB Nor: Hello, I have three questions for you. The first one is on your NGLO [ph] realizations, they seem to be decoupled from the oil prices? Is this going to continue?

Well that’s a good question and I wish I could give you an answer, a good answer. Generally speaking, we have been with the NGL now in general hike is likely it is over (inaudible) so to the extent that you see (inaudible) it is our accrued stake at the same level, you should not see for that reason any relative changes in NGL but if you see movements you would see more movements, upwards on NGL compared to cruise portfolio. That leaves them because there is lower energy in these products. Then the other component that we are most depending on, on sort of the demand for these products which is typically (inaudible) in our case, there are typically seasonal variations in this and then it is attending very much on the capital markets and the rate is now – and the required rates would (inaudible) so there could be arguments that the Japanese market would expand a little bit going forward. Within the (inaudible) I suppose the area that goes [ph] into the chemical industry and there obviously the competing source would very much be bigger. Again, I would not speculate too much what you all know is that there are not additional chemical [ph] capacity coming into the market (inaudible) and that could sort of support these products. Now, what I am saying it is makes it very difficult to be very specific on this, there is the deposition which (inaudible) but there are also some other forces that could take it up , so how this is going to end going forward I couldn’t say but what I would say is that even if we have this spread for the time being, it is actually with the highest (inaudible) and we are telling people – this comes from (inaudible) I am telling people that it be sort of leave it and that would sort of create (inaudible) than taking it out and making it into a liquid. So, I think this is the best way to create values for our shareholders and that is where it will take us going forward. Gudmund Halle Isfeldt – DnB Nor: Okay and a question on the start-up of Victoria in the Norwegian Sea, I guess it is going to be in 2012. If so, will you need a new pipeline and will it then take into account (inaudible) potential new fields?

I think the oldest issue of pipeline capacity from this area of the Norwegian Continental Shelf will have to sort of be looked into very carefully and include obviously over potential than other fields in the area so this will have to be looked upon in a holistic way and (inaudible) Victoria will help you operate her and I would be – definitely there are no specific conclusions here such that they will have to require additional capacity and not carried on also in our expanding the current capacity in the existing pipeline. So, (inaudible) but obviously oil development potential is in this region, what happens (inaudible) is a question. Gudmund Halle Isfeldt – DnB Nor: Okay, and the last question will have to do with (inaudible) when are you going to start injecting gas into Troll [ph] in order to increase the recovery factor?

Well, I mentioned the Troll project that is our main project and gas injection is one of them. To develop that, I roughly take out of the impact of the ejection project but that is something that I will have to reverse for now because I have got the (inaudible) for that, but this has already been approved going forward. Gudmund Halle Isfeldt – DnB Nor: Okay, thank you.

We have got a follow-up question from John Olaisen from Carnegie, please go ahead. John Olaisen – Carnegie: Thanks a lot. It’s regarding the international production. In Q2 this year the net entitlement production in percentage terms of the equity production was only 59% down from 67% in Q1. When shall we expect this to go forward? Will it continue to see per cap increasing and is there any chance that it will be reverted or it is only likely to be increased?

Thank you, John. When it comes to the (inaudible), we have given you a new guidance form on 2008 production towards 2012 (inaudible) . In January, we are generally peaking yet, PSA effect all increasing and no one else is pure consequence of the commodity market that we see, that we earn a lot of only money from these (inaudible) all related to the agreements that we have. But what we see is the large yield specially in (inaudible) come through a lot of tranches [ph] so you see a diminishing (inaudible) but when you are ask particularly on the (inaudible), I think we have many compared [ph] percentages we should take into account that we have sold or shelved production in the U.S. (inaudible) and the production from Angola is very good and Angola is one of the areas still high with PSA effect currently. So I think that explains half of the change that you are aspiring. John Olaisen – Carnegie: Yes. So for the second half assuming oil prices stay the way they are now, and expect that ratio to be flattish for the second half or net compartment being even lower in potential of the equity productions for the second half, even flat oil prices.

John Olaisen – Carnegie:

Scott Darling – Lehman Brothers: Hi, it’s Scott Darling here from Lehman Brothers. I have got two quick questions. I think in the past if you use the forward curve to partly justify acquisitions in the near term, obviously it would seem the curve coming off recently, would you still be using that methodology if you looked at any further asset acquisitions? And the second question is you have been very kind enough to give PSA sensitive G408 [ph],forgive me if I have missed this but is there any chance of giving updates up to $150 for your production outlook to 2012 [ph]. Thanks a lot.

I will take the last one. I think when it comes to 2012 issue, that is something that we would have to add up as a whole when we get to the next, more (inaudible) and then shortly would be there to guide you on 2010. So in any case I am not protected on that kind of oil prices for the next four years. Your first question on acquisitions, NOI, I don’t think we have any specifics on assumptions related to any acquisitions of that sort of – it took longer term prices in a couple of occasions and breakeven prices on a couple of occasions. So, what we do see is that there are definitely (inaudible) made up there where presumably that kind of forward curve was not probably used otherwise you could not get to that capital evaluation. But in our case, I kind of confirmed that we have used the forward curve in our transactions and obviously that is the most important for us to make sure that we actually (inaudible) on top of this and that we have a prudent perspective of oil prices and adequate [ph] opportunities. That’s really what I can say. Scott Darling – Lehman Brothers: Thank you.

As we have no further questions, I would like to turn the call back over to your host for any additional or closing remarks.

Well, thank you very much. Today’s conference call could be replayed from our Web site, statoilhydro.com and we will have a transcript available on today’s call including the Q&A session in due course. For those of you who are (inaudible), thank you for listening in and good bye.

This concludes today’s conference call. Thank you for your participation ladies and gentlemen, you may disconnect now.