Annual Review 2016...20 22 24 26 28 30 32 37 40 52 53 54 57 4 | Svenska Annual Review 2016 | Company...

Liquis et ped mod qui vollabo. Hendi bea natiur | Svenska Annual Review 2015 | 1

Annual Review 2016Svenska Petroleum Exploration

2 | Svenska Annual Review 2015 | Liquis et ped mod qui vollabo. Hendi bea natiur


Company OverviewBusiness StrategyCEO’s CommentExplorationProductionOperational Update: NigeriaOperational Update: Guinea-BissauOperational Update: Ivory CoastSupporting the OrganizationCSRHSEQOur HistoryBusiness ReviewFinancial ReportBoard of DirectorsExecutive ManagementTerms and DefinitionsAddressesC

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4 | Svenska Annual Review 2016 | Company Overview

The Year in Review Svenska Petroleum Exploration AB (Svenska) is a

privately held Swedish company engaged in finding and producing oil and gas. Our exploration activities

take place in the hydrocarbon-rich basins of West Africa. Our production in 2016 came from Ivory Coast. Svenska is wholly owned by Petroswede AB, which in turn is indirectly owned by Sheikh Mohammed H. Al-Amoudi.

MAIN EVENTS IN 2016The first well of the Phase 4 redevelopment of Baobab was drilled and completed at the start of the year. The remaining Phase 4 wells are expected to be drilled in 2018.

Further analysis has made the Atum and Anchova prospects in Guinea-Bissau look even more promising. Drill decision is expected during 2017. During 2016 Svenska intensified its efforts to find and invest in new ventures for both exploration and for production. The main focus is West Africa and countries such as the Republic of the Congo, Gabon and Cameroon, as well as selected parts of North Africa and the Middle East.

Company Overview | Svenska Annual Review 2016 | 5

SVENSKA’S SHARE OF RESOURCES AND RESERVESDISCOVERIES AND PRODUCING ASSETS

Svenska’s WI

Oil (mmbo)

Gas (bcf)

Total (mmboe)

DISCOVERIES

Guinea-Bissau

Sinapa East* 55% 5.9 6.6 7.1

Ivory Coast

Kossipo South* 27.39% 7.6 5.1 8.5

Baobab (Phase 5)** 27.39% 14.9 4.4 15.7

Baobab (Future Potential)**

27.39% 28.9 8.7 30.4

Nigeria

Uge* 21.05% 58.7 51.6 67.9

Total Discoveries 116.0 76.4 129.6

PRODUCING FIELDS

Ivory Coast

Baobab*** 27.39% 34.7 15.8 37.5

Total Reserves 34.7 15.8 37.5

OIL PRODUCTION BY FIELD OIL RESOURCES AND RESERVES

Totals mmboe calculated by Svenska using a conversion factor of 5,615 mscf/boe.* Operator ** Svenska *** Petroleum Development Consultants Ltd

5.1% Kossipo South

4.2% Sinapa East

40.7% Uge

50.0% Baobab incl future Potential

100% Baobab

6 | Svenska Annual Review 2016 | Financial Overview

SVENSKA IN BRIEF | LEGAL STRUCTURE

SVENSKA IN BRIEF | EXECUTIVE MANAGEMENT

AVERAGE OIL PRICE DEVELOPMENT (USD/BBL) NET SALES, EBITDAX & OPERATING INCOME (USD THOUSANDS)

DUNCAN RUSHWORTHManages and develops Svenska’s licence portfolio while developing and maintaining Svenska’s industry network.

VP BUSINESS

DEVELOPMENT

LARS SCHENNINGSManages Business Support, Accounts, Corporate Finance, Corporate Planning, Insurance, Investment and IT strategy.

CFO & VP BUSINESS SUPPORT

JAN HAGEN Manages the developmentand production of Svenska’s assets while leading theReservoir & FacilitiesEngineeringteam.

EVP DEVELOPMENT & PRODUCTION

TORGNY BERGLUNDManages the Company’s exploration activities. Provides licence managers, project teams and Business Developmentwith geologicaland geophysicssupport.

VP EXPLORATION

PRESIDENT AND CEO FREDRIK ÖHRN

SVENSKA PETROLEUM EXPLORATION AB

100%

120.0

100.0

80.0

60.0

40.0

20.0

0.0

See full list of Group companies on page 51

2012 2013 2014 2015 2016

Total net sales EBITDAX Operating income

2012 2013 2014 2015 2016

300.000250.000200.000150.000100.000

50.0000

-50.000-100.000-150.000-200.000-250.000

SPE Ventures AB

SPE Nigeria AB

SPE Guinea

Bissau AB

Svenska Petroleum Exploration

UK Ltd(Dormant)

Petroswede Insurance

Company DAC

Oljeprospek-tering AB (OPAB)

SPE CI Holding AB

SPE CI AB

SPE CI Finance AB

2012

2.0

4.0

1.0

3.0

2012 2013 2014 2015

100

200

250

50

150

2013 2014 2015

Sinapa

Uge

Orso, Uge North, Nza

Kossipo

Baobab

Divested and expired licences

2016 2016

Financial Overview | Svenska Annual Review 2016 | 7

FIVE-YEAR OVERVIEW

PRODUCTION (mmboe) RESOURCES DEVELOPMENT (mmboe)

Baobab

Divested and expired licences

(USD thousands) 2012 2013 2014 2015 2016

Total net sales 226,652 162,340 100,315 103,164 171,206

EBITDAX 112,629 70,094 46,588 81,002 78,570

Operating income 84,428 -25,762 -184,977 22,655 29,848

Net income 61,575 -30,432 -186,786 11,352 -9,648

2012 2013 2014 2015 2016

Operating cash flow 58,829 79,890 19,940 24,098 48,356

Investments -103,864 -82,476 -151,627 -138,952 2,736

2012 2013 2014 2015 2016

Operating margin* 37.3% -15.9% -184.4% 22.0% 17.4%

Net margin* 27.2% -18.7% -186.2% 11.0% -5.6%

Net debt/equity ratio -0.01 0.00 0.20 0.26 0.22

Equity/assets ratio 0.70 0.67 0.52 0.58 0.66

2012 2013 2014 2015 2016

Return on equity 9.3% -4.6% -32.1% 2.2% -1.9%

Return of average capital employed 11.5% -3.2% -23.2% 2.8% 3.9%

2012 2013 2014 2015 2016

Oil production (mmbo) 2.0 1.5 1.0 1.5 3.0

Average production (mbopd) 5.6 4.1 2.7 4.2 8.2

Resources/production ratio 98.7 175.3 194.5 93.0 55.7

EBITDAX/bbl 56.3 46.7 46.6 54.0 26.2

Definitions used in five-year overview

* Recalculated due to adjusted definition

EBITDAX: Earnings Before Interest, Taxes, Depreciation, Depletion, Amortisation and Exploration Expenses

Operating margin: Operating income/ Total net sales

Net debt/ Equity ratio: Interest-bearing senior debt less cash & cash equivalents/equity

Equity/Asset ratio: Equity/Total assets

Return on equity: Net income/Average equity for the year

Return on capital employed: EBIT/Capital Employed

Resources/production ratio: The remaining lifespan of known resources (net resourses + reserves) given current production


LATVIA: 229 (3%)

GUINEA-BISSAU: 5,725 (77%)

NIGERIA: 1,300 (18%)

IVORY COAST: 170 (2%)

LICENCE ACREAGE AT YEAR END 2016(SQUARE KM)

LICENCES GUINEA-BISSAU

55% interest in Block 2 (Sinapa)

55% interest in Blocks 4A and 5A (Esperanca)


LICENCES IVORY COAST

27.39% interest in Block CI-40

LICENCES NIGERIA

21.05% interest in OML 145

LICENCES LATVIA

90% interest in licence E-24 (Dalders)

Office

10 | Svenska Annual Review 2016 | Business Strategy

Following the sale of our Norwegian assets and the redevelopment of our

Baobab field in Ivory Coast, Svenska is shifting its focus to West Africa and the MENA (Middle East and North Africa) area. The ambition going forward is to broaden our production base with increasing production and additional producing assets. We continue to be an exploration company and are looking for attractive oil exploration assets in our core areas of interest. Svenska continues to have a strong focus on capital discipline. Host governments experience more efficient utilization of their resource base when partners participate on an

Svenska’s Business StrategyBy being an active operator and partner in West Africa, Svenska strives to add value for all stakeholders. Our ambition is to use our expertise to go in-depth on technical matters, adding our knowledge and experience to that of our stakeholders & partners.

equal footing to enhance the value of the respective licences. Our goal is to achieve a balance between exploration and production. We believe value is created through the right and timely conversion of our resource portfolio into producing assets. We are continuing our efforts to transform the Company into a modern exploration and production company with material discoveries heading for development. Our past exploration and appraisal successes confirm that our approach is working. As a hard-working and respected partner, Svenska is well-positioned to build value organically or by acquisition. We believe our reputation

as a partner adds value to our assets and helps the Company grow. A dynamic and flat corporate structure efficiently connects expertise in London and Stockholm via modern communication systems, frequent dialogue and up-to-date tools. A management group providing decades of international experience guides our teams working in several of the world’s richest petroleum basins. Consolidating our existing offshore portfolio and entering new onshore regions is a priority for Svenska. The quest to find high-value licence stakes has become a recruiting advantage, as talented staff find rewards overseeing licences and assimilating experience from international projects.

STRATEGY

Svenska’s vision is to become a leading international black oil exploration and production company with a strong presence in West Africa and the MENA area. The Company will secure growth via a balance of E&P assets, play types and geographic spreads.

Vision

Svenska’s short-term objective is to diversify our producing base while securing new proven reserves. In the medium and long term, managing assets and securing new resources by acquisitions, farm-ins and licence rounds aim to complement investments in low-risk exploration, discoveries and early stage developments.

Tactics

Svenska is delivering growth and value for our owner, employees and partners. We strive to maintain the highest standards of safety and working conditions while committing to minimize the environmental impact of our operations. Svenska’s ambition is to establish ourselves as partner of choice for our host countries, licence partners and employees.

Mission

Svenska markets its production to a wide range of major oil companies on an arm’s length basis.

Marketing

Svenska will focus on finding and developing high-value assets where our local knowledge, commercial strength and technical expertise can add and protect value.

Strategy

Svenska’s staff have largely geoscientific backgrounds. In a deliberate pattern of support across the Company, operations and management personnel in our international offices interact to provide instantly accessible expertise.

Organization

Svenska’s Business Strategy

12 | Svenska Annual Review 2016 | CEO’s Comment

Time to Grow the Portfolio2016 was a year of low activity in the oil and gas business. The prevailing low oil prices have kept investment activity sluggish throughout the industry. This includes many of Svenska’s planned activities, which were held back by the slow market. Positive events included an increase in profitable oil production in Ivory Coast and intensified scanning of the market to identify new ventures.

At the start of the year we continued our investments in the Baobab field in Ivory

Coast, with the completion of the first well of the Phase 4 redevelopment. The Shilpa well came in ahead of plan and below budget, but the operator, CNR, decided at this point to postpone the Phase 4 drilling programme due to a general corporate CapEx cut-back programme within their organization. Naturally this was a disappointment for Svenska. We were well prepared financially and would have preferred to finish the remaining wells. We expect, however, that drilling will resume in 2018. Oil production from Baobab has averaged 27 kbbl/day and continued to show a healthy profitability even at 2016 oil price levels. Financially, Svenska is in a good position and, with the low investment levels we are anticipating currently, Svenska could be debt-free in 2017. This is a positive position to be in, but not

necessarily desirable. I would rather see that we can use our balance sheet to find investments that will allow the company to grow and our profitability to increase. OPPORTUNITY TO GROWDuring 2016 we therefore intensified our efforts to find and invest in interesting new ventures for exploration and/or production. New venture activities have been the main focus for a large part of Svenska’s staff during the past year. Our main focus continues to be in West Africa with a special push into the Republic of the Congo, Gabon and Cameroon, as well as selected areas of North Africa and the Middle East. There have been surprisingly few quality assets on the market over the past year, but we do expect that we will see some more interesting packages coming into the market in the near future. Svenska is, however, in no rush to

expand. We have a patient owner with a long-term focus, and time is on our side as we look for prospects that are geologically interesting with a focus on oil rather than gas. In addition to the West African countries we have been focusing on Oman, which is an interesting and well-functioning oil country that would fit well into our portfolio. We are currently evaluating a number of promising opportunities there.

GUINEA-BISSAU IS GETTING CLOSER TO DRILLINGWe continue to be very enthusiastic about the potential of our acreage in Guinea-Bissau. With the current focus on the MSGBC basin, following discoveries in Mauretania and in Senegal, we believe that we have some of the more interesting undrilled prospects available along the margin. The Atum and Anchova prospects identified along the shelf break in our licences in Guinea-Bissau prospects

CEO’S COMMENT

will soon be ready for a drill decision. With the recent restructuring of the Guinea-Bissau government we feel there should be no reason not to expect the licence extensions we have applied for to fall into place. The OML-145 licence in Nigeria containing the Uge discovery is still waiting for a resolution to the outstanding issue of the new petroleum code in Nigeria. The partnership in the licence continues to evaluate alternative development scenarios given the current reduction in overall development costs.

WE WILL GROWSvenska’s focus is growth. We are working hard to increase production from the Baobab field, to develop our discoveries and prospects into producing fields. And we are intensifying the search for new, high-quality assets to complement our current portfolio. Coming through the longest decline in oil prices since the 1980s we believe that this will be a good opportunity for a profitable company to grow our portfolio in coming years. Finally I wish to direct a heartfelt thank you to our professional and dedicated staff for their hard work and inspiring ideas on how we can become an even better company in the future!

Stockholm, March 2017

FREDRIK ÖHRNCEO

Time to Grow the Portfolio

16 | Svenska Annual Review 2016 | Exploration

In 2016, following the sale of the Norway portfolio, more resources have been invested in chasing new opportunities in West Africa and the Middle East. At the same time our exploration activity in Guinea-Bissau was slowed down by the delayed approval of the licence extension.

A high standard of geological and geophysical work based on good data and followed by exploration

drilling on high-grade opportunities is crucial to Svenska’s success,” says Torgny Berglund, head of Svenska’s team of exploration geologists and geophysicists. “Before we make a costly drilling decision or decide to apply for a licence or bid for a farm-in, all relevant geological and geophysical data is analysed to assess the hydrocarbon potential and the chance of success. Expected volumes, geological risk, and production and cost profiles are all necessary inputs into an economic model that calculates the NPV (Net Present Value), IRR (Internal Rate of Return) and EMV (Expected Monetary Value) for a particular prospect or a portfolio of prospects.”

DRILLING DECISION REQUIRES A MORE STABLE OIL PRICEThe lower oil-price since mid-2014 has frozen many planned investments in the upstream oil and gas industry. For Svenska this has had an effect on our readiness to drill exploration wells in Guinea-Bissau and elsewhere. In order to take on new exploration drilling the oil price needs to stabilize at a higher level than seen in 2016. At the same time the low oil price has opened up opportunities for farm-ins and acquisitions that were not there before.

INTENSIFIED SEARCH FOR NEW OPPORTUNITIES “In order to diversify our portfolio, we are interested in extending our West African footprint as well as

establishing a presence in the Middle East. Throughout the year we have continued our Exploration New Ventures work in these regions. Based on previous years’ regional screening work, we have been focusing on specific countries this year. We have attended several data rooms in Oman and in the Republic of the Congo in order to evaluate farm-in possibilities. We have taken part in a licensing round in Oman and will hopefully see the result of that in the second half of 2017. If everything goes well, we could have a new licence by the end of 2017. We are also looking to increase the number of opportunity sets in West Africa and for this reason we are currently extending the screening work to countries such as Gabon and Cameroon. This work will continue into next year and hopefully put us in a position to evaluate farm-in projects and participate in licensing rounds in those areas in the near future.”

NO SOLUTION IN SIGHT FOR THE LATVIAN-LITHUANIAN BORDER DISPUTESvenska’s activities in licence E-24 offshore Latvia are on hold, awaiting a solution of the border dispute. There are ongoing meetings between Latvia and Lithuania to find common ground for cooperation in various projects, including the border dispute. “The licence is definitely an asset,” says Torgny. “Once the border dispute has been resolved and oil prices pick up, drilling is likely to take place.”

Exploration

EXPLORATION

18 | Svenska Annual Review 2015 | Production

Jan Hagen, EVP Production & Development

We are intensively scanning the market to increase our production portfolio in the future ‹‹

››

Production | Svenska Annual Review 2016 | 19

ProductionOil production from the Baobab field offshore Ivory Coast averaged 27,000 bbl/day in 2016, nearly doubling from the 2015 production level of 14,000 bbl/day.

The Phase 3 drilling campaign was completed at New Year 2016, and five new

production wells were brought into production. The joint venture partners agreed to advance the next stage of expansion plans for the Baobab field and extended the drilling rig contract in order to advance the next planned drilling campaign, Phase 4. The Phase 4 drilling campaign kicked off with batch drilling of the top section of the four production wells and one injector comprising Phase 4. This part of the programme was completed at record speed and was followed by the drilling to TD (Target depth) and completing of the the first Phase 4 well (P-20). However, the operator decided to postpone the completion of the other four wells for financial reasons upon completion of this well. The operator’s decision to postpone further drilling was based on a combination of the low oil price environment in the early part of the year and their commitment to investments elsewhere. The result of postponing the drilling campaign led to production coming in at 600,000 bbl below budgeted production in 2016. In spite of

lower than expected production and lower than expected oil prices, oil production from the Baobab field is extremely profitable. The first new Phase 4 well is up and running, producing nearly 5,000 bbl/day. There is no capital allocated to recommence the Phase 4 drilling campaign in 2017, but we expect to finish the three remaining production wells and the water injector in 2018 assuming that the economic climate remains relatively stable and the operator is in a position to restart the project. These remaining new wells are expected to raise production figures to beyond 30 000 bbl/day.

LOOKING FOR NEW PRODUCTION VENTURESAt the time of writing Baobab is Svenska’s single source of oil production. We expect that Svenska’s production level will grow substantially in coming years, initially through the increased well count in Baobab. In the longer term, the goal is to participate in at least three producing licences. To achieve this we are putting a lot of effort into the search for new acquisition projects or farm-ins to assets at the development stage or which are already producing.

Jan Hagen

PRODUCTION

2016 was again a year of low activity in all

Nigerian oil sector. The reasons are twofold: investments are hampered by low oil prices and political unrest in Nigeria. This in turn makes it difficult for the authorities to finalize the long-needed new Petroleum Industry Governance Bill.

OML 145, UGEThe Uge Main discovery is located in the northwestern part of the block in water depth of approximately 1,200 metres. It is 50 kilometres southeast of the large Shell-operated Bonga field complex in OML 118. The OML 145 operator, Exxon Mobil, has undertaken detailed value enhancement development studies to refine and optimize the development plan in order to increase recovery at lower cost. A recent estimate for an Uge field development base case has EUR (estimated ultimate recoverable reserves) of approximately 322 mmboe. The licence also contains three potential tieback candidates in Uge North, Nza and Orso discoveries.

UGE FIELD DEVELOPMENTEfforts to enhance the probability of development are being investigated 1. 21.05% interest in OPL 214

1

Patiently Waiting for Conditions to ImproveThe long wait for decisions on Nigeria’s new Petroleum Industry Governance Bill continues. Most of the planned development activities for Offshore Mining Licence OML 145 are on hold. Reprocessing of 2010 seismic data may however confirm additional reserves in deeper prospects.

by the licence partners. A joint development with the adjacent oil field Nsiko and a shared Floating Production Storage and Offloading facility (FPSO) was investigated with emphasis on the basis of design and cost estimates. Uge is located in OML 145 and operated by Esso Exploration & Production Nigeria (Deepwater West) Ltd while Nsiko is located in an adjacent undeveloped block (OML 140) operated by Star Ultra Deep Petroleum Ltd (a Chevron company) about 50 kilometres away; both with a resource size of approximately 300 mmboe. Another factor affecting the development of Uge Main is further delays in anticipation of the new Petroleum Industry Governance Bill (PIGB), which may impact on technical solutions as well as affect the project economics. The prevailing low oil price and subsequent reduction in cost of equipment and services may trigger a review of the development concept and the drilling and drainage strategy to benefit from the general market conditions. The seismic data reprocessed in 2010 will be reprocessed again in 2017 using new and improved technology that hopefully will

confirm expectations of additional oil reserves in other parts of the licensed area. Svenska believe there is potential to the south of the Uge Main discovery as well as in deeper formations in the block. If the reprocessing could identify further potential and reduce the uncertainty associated with this potential, the Uge resource could grow substantially and meet the volumetric requirements to justify development of the field.

20 | Svenska Annual Review 2016 | Nigeria

OPERATIONAL UPDATE | NIGERIA

LICENCES | NIGERIA

Nigeria | Svenska Annual Review 2014 | 21


An oil field holding 300–450 million barrels will be developed sooner or later. When things are back to normal in Nigeria, we will be ready ‹‹

››

Operator ExxonMobil and partners Chevron, Oando and Svenska each hold a 21.0526 per cent interest in the OML 145 licence. The Nigerian Petroleum Development Company (NPDC) holds the remaining 15.7896 per cent.


Svenska holds a 55 per cent equity interest in our operated Sinapa Block 2 and Esperanca Blocks 4A and 5A licences. Our licence partner Petroguin, Guinea-Bissau’s national energy company, holds 30 per cent, while FAR Ltd holds the remaining 15 per cent.

Activity in Guinea-Bissau was hampered by the fact that a decision to grant Svenska

an extension to the current licence period was delayed. To have enough time to prepare for and execute exploration drilling, Svenska has applied for a three-year extension to the licence period, stretching from November 2017 until November 2020.

SENEGAL DISCOVERIES FUELLED INTERESTSvenska’s activities in Guinea-Bissau reached a new phase following the significant oil discoveries made by Cairn in Senegal, some 220 kilometres due north of Svenska’s licences. Two oil and gas discovery wells were drilled there in 2014. Three appraisal wells have since been drilled on the SNE discovery, which is located in fairly deep waters on the Senegal shelf margin. This discovery has significantly increased the interest in Svenska’s acreage and in Guinea-Bissau in general. The geological setting in the western part of Svenska’s blocks in Guinea-Bissau is similar to that of the SNE discovery in Senegal.

NEW SEISMIC SURVEY“We saw the similarities back in late 2014 and decided to acquire a 3D seismic survey to cover the western part of our blocks,” says Torgny Berglund, Vice President responsible for exploration. “The acquisition was completed in late February 2015. The processing was taken through pre-

stack depth-migration, which took most of 2015. The new seismic data was merged with the old data and it confirmed the presence of a large structural high extending through the blocks where we have our two main prospects.”

EXTENSION OF LICENCE PERIODThe previous licence period in Guinea-Bissau expired in November 2015. Svenska had already applied for a two-year extension in 2014. Confirmation of a new licence period ending November 2017 was received in August 2016, meaning that a large part of the new licence period was spent waiting for the decision. Svenska then applied for yet another extension, this time for three years. If approved, it will stretch into November 2020.

TWO VIABLE EXPLORATION TARGETS“In the summer of 2016 we completed the latest technical and economic evaluations. The conclusion was that we have two viable exploration targets in the deep waters of the western part of the licensed area, the Atum and Anchova prospects.” Additional technical studies have since been initiated to further de-risk the prospects. If further evaluations reinforce the results, and if we receive a positive decision on the application for an extended licence period, it will be possible to make a drilling decision. Actual drilling could commence

Guinea-Bissau | Svenska Annual Review 2016 | 23

1. 55% interest in Block 2 (Sinapa) 2. 55% interest in Blocks 4A and 5A

(Esperanca)

12

LICENCES | GUINEA-BISSAU

Exploration Targets IdentifiedThe 2016 evaluations of Svenska’s assets in Guinea-Bissau identified two viable exploration targets in the deep-water western part of the licensed area: the Atum and Anchova prospects.

earliest in the third quarter of 2018.

OPERATED BY SVENSKASvenska farmed into the Guinea-Bissau licences in 2007. When the previous operator, Premier Oil, decided to withdraw from the licences, Svenska assumed the operator’s role with increased equity. The operator’s role involves responsibility for licence management, drilling activities and other technical work, as well as continuous liaison with the Guinea-Bissau authorities. Despite the unstable political situation, long-term Swedish support for this country has facilitated Svenska’s discussions with the authorities. The present, as well as previous, the government has shown serious commitment to this project.

OPERATIONAL UPDATE | GUINEA-BISSAU

Alaska in 1989, single-hull tankers like “Tina” were no longer allowed to enter US ports or terminals. In 2004, she was converted to an FPSO by Modec International Inc. and contracted by the Baobab partnership. She left the Keppel shipyard in Singapore on 26 December 2004. The FPSO arrived in the field offshore of Ivory Coast in January 2005. Oil production started in August 2005. The FPSO is equipped to process hydrocarbons, separating crude oil, water and gas. The gas is partly used for power generation on board the vessel, partly piped via the Espoir export gas system to shore at the Adjue gas terminal and transported to the Azito power generation plant near Abidjan, where it is used as feed stock for generating electricity.

24 | Svenska Annual Review 2016 | Ivory Coast

T he five new Phase 3 production wells helped increase Baobab’s

production to a daily average of approximately 27,000 bbl in 2016. This was still below budget, since the partnership had agreed to drill another four Phase 4 production wells in 2016. One of these wells was completed before the operator, CNR, decided to postpone investments in the Baobab field due to the low oil price and because of financial commitments in Canada. The remaining wells are scheduled to be drilled in 2018.

SVENSKA JOINED THE LICENCE IN 1997Ivory Coast is the world’s largest exporter of cocoa beans and is also a big exporter of coffee. Petroleum has become another important export product since oil was discovered on the continental shelf of Ivory Coast in the 1970s. In 1997, Svenska farmed into the Espoir Field, Block CI-26, located north of the Baobab field, entering a partnership with Addax Petroleum, Ranger Oil, Tullow and the national oil company Petroci. When oil prices plummeted in 1998, Svenska left the licence for financial reasons, but stayed with the partnership in the newly formed exploration licence CI-40, covering the Baobab prospect. Tullow

Increased Production Hampered by Postponed DrillingThe Phase 3 drilling campaign doubled production levels from the Baobab field in 2016. The first of four new Phase 4 wells also came on stream. Three more Phase 4 production wells and one water injector are expected to be drilled in 2018.

lost interest in the early stages and left the partnership. So did Addax, as they expected a potential discovery to contain gas rather than oil. Ranger was acquired by, and incorporated into, Canadian National Resources (CNR).

DRILLING FOR OILInterpretation of the seismic data was completed by the operator, CNR, Svenska and Petroci. The first well was drilled in 2001 and the theory of oil migration paths into the reservoir was confirmed. An appraisal well was drilled in 2002 and only three years later, production from the Baobab field commenced. At the time this was the fastest oil development project ever performed in West Africa. The reservoir is located in water depths of 1,500 metres. Production from the field commenced in August 2005 from ten horizontal wells aided by three water injectors. The produced fluids were co-mingled and transported via flow lines to an FPSO (floating production storage and offloading vessel) moored in 900 metres water depth.

A NEW JOB FOR NINAThe vessel used for conversion to an FPSO was a VLCC (very large crude carrier) of 350,000 DWT (deadweight tonnage) called “Nina” and built at Kockums shipyard in Sweden in 1976. After the Exxon Valdez accident in

OPERATIONAL UPDATE | IVORY COAST

1. 27.39% interest in Block CI-40

1

LICENCES | IVORY COAST

Ivory Coast | Svenska Annual Review 2016 | 25

Crude oil is stored in cargo tanks on board. The storage capacity is a generous 2.4 mmbbls. The FPSO is owned and operated by Modec International Inc., a Japanese international supplier and operator of FPSOs, and is contracted by the Baobab partnership until 2022 with further options to prolong the contract until 2038.

HEAVY OIL WITH A COOL ADVANTAGECrude oil from the Baobab reservoir is comparatively heavy, but still attractive on the world market. It stays in liquid form down to -40°C, which is a big handling advantage for refineries in the northern hemisphere during winter conditions. Baobab crude is marketed and sold worldwide by BP, the world’s second largest crude oil trading company, trading about 600,000 bbl/day of West African crude oil. Traded oil is transferred from the FPSO to shuttle tankers for further shipment to refineries. Shuttle tankers are normally designed to fit either the Panama Canal or the Suez Canal. A Suez tanker has a capacity of one million barrels. “The FPSO’s large storage capacity is an advantage in price negotiations, since we can almost always guarantee that the cargo is available when the buyer’s tanker is approaching,” says Jan Hagen, Executive Vice President responsible for development and production.

NEW COMPLETION SOLUTION“When we started production, we used a borehole completion technology

called Expandable Sand Screens (ESS), to prolong well life by controlling the intrusion of fine-grained sand,” says Jan. “400 wells had previously been successfully drilled using this technique, but to us the fine Baobab sand still presented a problem. We lost five out of ten wells during the first year, when the expandable sand screens collapsed.” The solution was another completion technology, the tried and trusted Open Hole Gravel Packing (OHGP). It was introduced in Baobab in 2009, when four new wells were drilled as replacements for the failed Phase 1 wells. Three of these four wells are still in service. Of the original 10 ESS wells, only one remains.

FURTHER DEVELOPMENT AND EXPLORATION OF ADJACENT PROSPECTBaobab will undergo further development, and new draining philosophies and technologies will be applied to exploit this resource to its maximum extent. Even with the new Phase 3 and 4 wells in production, we are only targeting around 25 per cent of the oil in place. Future development phases are being considered, and a conceptual scenario for Phase 5 is taking shape. Assuming this will be a six-well campaign we believe that the Estimated Ultimate Recoverable Reserves (EUR) will be increased by another 50+ mmboe to reach a recovery factor of more than 30 per cent. We further believe that there is still room for increase and the partnership is working towards a target in excess of 40 per cent by the time the licence reaches relinquishment. “We are currently also doing

Licence/BlockCI-40

OperatorCNR International

Svenska’s interest27.39%

Obtained by Svenska1998

Production start2005

Remaining reserves128.6 mmbo

Total 2C contingent resources160.0 mmbo

Production 20169.81 mmbo

Company numbers

STATISTICS | BAOBAB FIELDS


Low oil prices have slowed down Baobab development. Production is still very profitable. ‹‹

››Increased Production Hampered by Postponed Drilling

Svenska, with a 27.39 per cent interest, is joined by operator Canadian Natural Resources International (CNR), with 57.61 per cent and the national oil company Petroci with 15 per cent interest.

exploration work on the Kossipo prospect, located within the Baobab licence area to the east of the main field. A recently acquired 3D seismic survey indicates larger oil volumes than previously expected. If the expected consolidated volume of 250 mmbbl is proven right after exploration drilling, the Kossipo prospect could be developed and tied in with Baobab.” The Baobab production licence expires in 2028, but can be extended. “If production is still profitable by that time, we can opt for a 10-year extension,” says Jan.

26 | Svenska Annual Review 2016 | Supporting the Organization

BUSINESS SUPPORTIn addition to the traditional finance function of Svenska’s shared centre for accounting, treasury and financial reporting located in Stockholm, the Business Support function also includes specialist sub-functions for Legal, Insurance, Treasury and IT. The day-to-day finance operation is the heart of the support organization, providing timely operative and statutory reporting to the relevant stakeholders. Equally important, prudent financial management and planning are a key objective for the finance function, given the capital-intensive nature of the business. “Selling the Norwegian business reduced the administrative work volumes in 2016,” says Lars Schennings, CFO. “The ongoing work of adding new licences in new countries will, however, dramatically change the need for administrative support. Compliance with country-specific rules and legislation is critical and we need to have a fully functional organization in place right after a new contract is signed. IT security was another strong focus in 2016. Firewalls, access rights and net surveillance have all been further enhanced to meet the increased exposure to cyber-related threats.” Svenska is organized with staff in three different locations: Stockholm, London and Bissau. Business Support has the key role of providing the infrastructure needed

Supporting the OrganizationIt is vital that Svenska has efficient support for its daily operations as well as active business development.

for Svenska to operate as one company, regardless of the staff’s location. This includes an integrated, safe and reliable IT infrastructure and a user-friendly work environment for all Svenska staff.

BUSINESS DEVELOPMENTThe business development function has two objectives: firstly, to ensure that the Company’s growth objectives are met through acquisition and exploration of new venture activity and, secondly, to manage the existing portfolio through asset divestments and farmdowns of exploration licences. In order to support these efforts, the department maintains an extensive network of investment banks, brokers and other exploration and production companies. “The screening work in 2016 has led us to pursue new opportunities, especially in Oman, the Republic of the Congo and Gabon,” says Duncan Rushworth, VP Business Development. “It was a busy year during which we matured a number of projects to the point where we can start increasing our activity levels in respect of exploration drilling next year. We are also in discussions with interested partners about our Guinea-Bissau licence. There is a good chance that we can bring an additional investor into that joint venture sometime in 2017.”

Lars SchenningsCFO

Duncan RushworthVP Business Development

BUSINESS SUPPORT

TREASURY LEGAL INSURANCE ITFINANCE

ACCOUNTING & CLOSING

CONTROLLING

GROUP CONSOLI-DATION & TAX


Supporting the Organization

28 | Svenska Annual Review 2016 | CSR

In addition to the social commitments that are part of our licence obligations, Svenska wants to support the local communities where we are present.

“Svenska engages in aid projects that allow us to remain politically and religiously independent and that have a real impact on people’s lives,” says Térèse Steén, Manager Corporate Projects. “Projects that focus on children’s healthcare and maternity welfare are also close to our hearts, as are projects to provide clean water.”

CONTINUED SUPPORT TO SOS CHILDREN’S VILLAGESSvenska has continued its cooperation with SOS Children’s Villages in the African countries where we have operations in 2016. The organization provides safety and stability for children who are not always able to grow up with their biological families. SOS Mothers – strong family-first women – are at the heart of close-knit groups of children in the villages, which come complete with schools and clinics. The SOS Children’s Village Abobo-Gare in Ivory Coast provided home to 102 children and youths in 11 families during 2016. In addition to the family programme there are close to 100 children enrolled in the village’s pre-school and another 238 families engaged in SOS’s family-strengthening programme. The SOS Hermann Gmeiner Primary & Secondary School in Bissau, Guinea-Bissau, provides regular education and vocational training to children from SOS Villages as well as from the local community. The SOS Children’s Village has a total of 90 children in 12 families and an additional 50 young people living in the youth centre. The latest SOS facility to become a recipient of Svenska’s support is the SOS Children’s Village Owu-Ijebu in Nigeria. Here, Svenska gives financial support for necessities such as salaries, food, school supplies, medical care, electricity and water to enable educational and family-strengthening activities.

Svenska strives to be a partner in the development of our host countries, not only through the discovery and development of the oil industry but as an agent for change in local communities.

TOSTANDuring the past year Svenska has established a partnership with Tostan. Tostan is an organization based in Dakar, Senegal, that provides a human-rights based community development programme for rural communities in six countries in West Africa, including Senegal and Guinea-Bissau. The organization has shown remarkable success in creating progress in areas such as women’s empowerment, health and the abolition of child marriages and female genital mutilation a community-by-community basis.

ACTIVE SUPPORT FOR SOCIAL PROJECTS IN GUINEA-BISSAUApart from the direct support to organizations such as SOS Children’s Villages and Tostan, Svenska continues to work closely with its licence partners to support different social projects relating to education, healthcare and sustainable growth. Currently we are building a school for disabled children in the outskirts of Bissau. Over the past year we have had the opportunity to inaugurate both of the schools that were refurbished as well as the new recreation/cafeteria hall for the pediatric ward and the sanitation facilities in Simão Mendes hospital.

SPECIAL CONTRIBUTION TO HUMAN RIGHTS WORK IN WEST AFRICAIn 2016 Svenska made a contribution to the non-profit organization Action Against Hunger for their work to alleviate the hunger disaster that is ongoing in the northeastern parts of Nigeria.

Supporting Communities for Sustainable Growth

Térèse Steén, Manager Corporate Projects

CORPORATE SOCIAL RESPONSIBILITY

CSR | Svenska Annual Review 2016 | 29

Svenska is well-qualified and ready for future undertakings. The Company has a strong

HSEQ track record, and issues concerning our responsibility for people and the environments where we operate will continue to be a top priority. To sustain the organization’s success, Svenska’s management must constantly meet the needs and expectations of all interested parties.

UPHOLDING A SOUND BUSINESS CULTUREEnsuring a sound organizational culture, processes and management systems are the foundation of our long-term business strategy. Svenska actively engages in dialogue with industry networks, with the guiding principle of applying recognized HSEQ practises within our operations.

Protecting People, Environment and AssetsPreventing harm to life, assets and the environment is a core value for Svenska’s business. Consequently, HSEQ matters are always taken into consideration and form an integrated part of Svenska’s way of working.

The overall aim is to create value through strong financial performance based on profitability and competitiveness while safeguarding people’s health and safety, minimizing risks to the environment, and contributing to continual growth of local communities.

AN INTEGRATED PART OF OUR ACTIVITIESHSEQ are integrated in all our business activities and processes. Their implementation is a line management responsibility.In our work we comply with relevant statutory and regulatory requirements and aim to exceed them. As a responsible partner in licences, Svenska uses its competence to assist the operator to improve project execution and secure operations, even when the latter are not under our direct responsibility.

IN ALL LICENCES, SVENSKA, AS A MINIMUM:

• Participates in risk assessments and monitors identified risk mitigation actions.

• Contributes with its own operational experience in activities, such as ready-to-drill audits and peer reviews.

• Encourages the operator to share information with its partners.

• Ensures that the operator follows appropriate HSEQ standards.

30 | Svenska Annual Review 2016 | HSEQ

HEALTH, SAFETY, ENVIRONMENT AND QUALITY

Svenska’s Priorities and Objectives• Prevent loss of human life and

avoid injury (highest priority).

• Strive to minimize the environmental impact from our licensed operations.

• Possess well-developed environmental awareness when making technical and economic decisions.

• Try to influence partners and vendors to exceed the minimum legal requirement when environmentally called for. The objective is to be ahead of even the most stringent anticipated requirements.

• Be perceived by other companies, authorities, environmental organizations and the public as environmentally aware and responsible.


1969The 50/50 joint venture OPAB is founded in April by the Swedish government and a consortium of Swedish enterprises (AGA, Boliden, Gränges and Sydkraft). Their objective is to explore for oil and gas in Sweden.

1973Petroswede AB is formed in July through another 50/50 joint venture between the Swedish state and the companies LKAB, the Sahlén Group, the Axel Johnson Group and KemaNord. E&P outside Sweden is the new company’s mission.

1974OPAB discovers oil on the Swedish island of Gotland.

1979In February, state-owned refining and marketing company Svenska Petroleum buys part of Petroswede and changes its name to Svenska Petroleum Exploration. OPAB becomes a subsidiary of Svenska.

1983Svenska acquires interest in BP’s Ula discovery on the Norwegian Continental Shelf from Conoco.

1986Svenska and Oljekonsumenternas Förbund (OK Union) merge to create OK Petroleum (OKP). KF (the Cooperative Union) is the largest shareholder, while the Swedish state and Finnish Neste Petroleum hold the remaining shares. All upstream activities are concentrated in Svenska.

1991The Swedish Parliament approves selling the government’s stake in Svenska to OKP making the latter the sole owner. Svenska acquires an interest in the Nelson field in UK

1993Svenska becomes operator of the Genciai oil field in Lithuania. Production activity begins at the Cobo field in Angola.

1994Sheikh Mohammed H. Al-Amoudi acquires OKP through his investment company Moroncha Holdings. First oil from the Nelson field.

1995First oil is produced from the Pambi field in Angola. Svenska acquires an interest in the Janice field in UK

1996OKP becomes Preem Petroleum and divests its shares in Svenska to a newly established holding company which inherited the name Petroswede (through Moroncha Holdings). OPAB becomes a wholly-owned subsidiary of Svenska after acquiring Sydkraft’s shares.

1997First oil is produced from the Oombo field in Angola.

1998Svenska acquires an interest in the promising Block CI-40 offshore Ivory Coast. First oil in the Genciai oil field.

1999First oil from the Janice field.

2001Oil was discovered in the Baobab field, the largest oil discovery in the West African Transform Margin to date, and a turning point for the Company.

2005First oil is produced from Ivory Coast oil field Baobab.

2006Svenska divests its 50 per cent interest in the joint venture UAB Genciu Nafta.

Our HistoryThe Svenska Group dates back to 1969 and the founding of Oljeprospektering AB (OPAB). OPAB was an initiative

of the Swedish government and Swedish private enterprises to harness some of the vast potential offered by a growing energy market. The state’s 50 per cent ownership stake confirmed that OPAB’s mission to find and

produce oil and gas in Sweden was in the national interest. In 1973, as the first energy crisis crippled economic growth, the quest for hydrocarbons beyond Sweden became the mission of Petroswede, another private-public partnership. In 1979, the state-owned company Svenska Petroleum acquired parts of Petroswede and launched a new company named Svenska Petroleum Exploration. Svenska would later enter into an agreement with OPAB to operate all of its fields and take over staff and premises.

32 | Svenska Annual Review 2016 | Our History

2007Svenska acquires Occidental Petroleum Corp’s West African licence portfolio with an array of exploration assets in Angola, Guinea-Bissau and Nigeria.

2008Svenska divests its interests in the Ula field off Norway and the Janice and Nelson fields offshore UK Continental Shelf.

2009Svenska celebrates 40 years of operations. The Company acquires an interest in the Republic of the Congo’s Marine Block IV and Cote d’Ivoire. The Fulla and Frigg Delta discoveries are made in Norway.

2010Operator Svenska completes a 3D seismic survey of the Sinapa and Esperanca licences offshore Guinea-Bissau.

2011The Azul 1 well in Angola finds oil in the pre-salt petroleum system.

2012Oil is struck in five out of six wells in Angola, the Republic of the Congo, Nigeria and Norway.

2013The interest in the Republic of the Congo’s Marine Block IV is dropped after drilling a dry well. The Askja field in Norway is discovered.

2014Withdrawal from Angolan licences. Incremental discoveries in Krafla and Garantiana. Svenska is prequalified as operator on the Norwegian shelf.

2015The development of Baobab Phase 3 is successfully accomplished. The Norwegian operations are sold by the end of the year.

2016Completion of the first well of the Phase 4 redevelopment in Baobab. Reached averaged 27,000 bbl/day production in the Baobab Field.

Our History | Svenska Annual Review 2016 | 33

Business Review | Svenska Annual Review 2016 | 37

INTRODUCTIONThrough participation in joint operation projects, Svenska is actively engaged in all aspects of the exploration and production of oil and gas as well as associated activities. Today, business operations are conducted in Ivory Coast, Nigeria, Guinea-Bissau, Latvia, the UK, Ireland and Sweden. Produced oil is sold to refineries worldwide, mostly in Europe and North America. The Group is presently not involved in direct gas sales.

GROUP ORGANIZATIONSvenska is an international upstream oil company. Business is conducted through subsidiaries, directly or indirectly. The business is supported by offices in Stockholm, London and Bissau where the staff are based. Knowledge and competence are spread across the offices, so that a project team for a particular asset often consists of staff from more than one office in order to best utilize the full set of competences. Insurance is managed through the wholly owned subsidiary Petroswede Insurance Company DAC (Ireland). Svenska has seven wholly owned subsidiaries in Sweden, the UK and Ireland. Some of these subsidiaries have their own subsidiaries, foreign branches or representative offices.

OWNERSHIP AND GROUP STRUCTURESvenska is wholly owned by Petroswede AB, which is ultimately held by Moroncha Holdings Ltd, Cyprus.

EVENTS DURING THE FINANCIAL YEAR During the year, Svenska’s share of production from the Baobab field in Ivory Coast increased compared to 2015. Svenska’s entitlement share of average production in the field was almost doubled to 8,172 (4,157) bbl/day. The production increase of 96 per cent is thanks to the significant reinvestments in the field made over the last two years with the last of six new infill wells being successfully completed and brought on stream at the beginning of the year. The Cajun Express drilling rig that was under contract in the Baobab field from January 2015 completed the drilling campaign in January and left the field. The operator CNR opted not to extend the drilling contract further and defer the remaining planned wells until later. Since some of the costs for the remaining wells have already been accounted

for there is a good opportunity to add more producing wells when market conditions allow. Baobab field production was shut down during the first three weeks of January to repair a failed riser. The integrity of the complete riser infrastructure was tested by a third party before putting the field back on stream at full capacity. It has been decided to replace two risers and this work is planned to take place during the second half of 2017. New seismic 3D data for the Baobab reservoir was interpreted, providing an improved understanding of the field. The result suggests an improved STOOIP and the data also provides a better basis for optimizing drainage of new production wells as well as water injection for pressure support. In Nigeria the licence group in OML 145 agreed to spend minimal expenses due to the continuing uncertainties regarding the impact the so-called PIGB (Petroleum Industry Governance Bill) may have on the fiscal terms in existing production sharing contracts such as OML 145. Given the challenges in country on the back of the drop in oil price there seems to be very little momentum to reform the industry as intended in the PIGB. Notwithstanding these uncertainties it is clear the OML 145 licence holds a material oil accumulation of up to 300 million barrels. The cost deflation that is evident in the oil service sector also supports lower development costs and profitable future production even in a lower oil price environment. In Guinea-Bissau, where Svenska is operating Block 2, 4A and 5A, the technical team has been focusing its interpretation work on the deep-water shelf-break part of the licences. The business has been very active in the neighbouring countries in the recent period, with significant oil discoveries in Senegal as well as farm-ins in Guinea, Senegal and AGR, all in similar geological settings. Due to market conditions, with low oil prices and unrest in the country, the licence group decided to defer exploration drilling until 2018, subject to licence extension. During the year Svenska has devoted significant internal man-hours to screening out prioritized geographic focus areas in both Sub-Saharan West Africa and MENA where the sub-surface conditions are attractive and the “above-ground risks” are manageable. Svenska plans to re-build its licence portfolio and expects to engage in new business in the prioritized countries. The average annual price for Brent crude oil fell from

Business ReviewSvenska Petroleum Exploration AB (Svenska) in 2016.

USD 53.8 in 2015 to USD 43.6 per barrel. However the price/barrel rose from USD 37 at the beginning of 2016 to USD 53.6 at year-end. As of 26 January 2017, the price was USD 54.5 per barrel. In 2016, the US dollar strengthened against the Swedish krona, with an average annual rate of USD/SEK 8.56, a two-per-cent increase.

OPERATING INCOME AND COSTSConsolidated total net sales during the year were USD 171 (103) million. The increase was due to a significantly higher production that offset a lower oil price. Svenska has also benefited from a successful oil price hedging program during the year contributing USD 32 million to net sales. Last year s revenue also included a gain of 25 million from the sale of the Norwegian asset portfolio. Production was 3.0 million barrels of crude oil in 2016, compared with 1.5 million barrels the previous year. The average production was 8,172 (4,157) bbl/day. The increase in production was due to the full-year impact of the five production wells in Baobab that were brought into production during the second half of 2015 and one well put on stream in January this year. Operation and exploration costs totaled USD 37 (37) million in 2016. The total figure is broken down into the following cost items: operating expenses USD 28 (30) million, royalty costs USD 1 (1) million, exploration and project expenses USD 2 (3) million and oil tax operational (the host government’s tax share in Production Sharing Contracts) of USD 6 (3) million. Consolidated depreciation and impairment of oil and gas assets for 2016 amounted to USD 47 (56) million. Last year included a write down of a licence in Nigeria USD 35 million, however ordinary depreciation was higher this year due to a higher production rate. Employee payroll costs for 2015 were USD 8 (12) million. The number of employees was 27 (28) as of December 2016. Net financial items for 2016 were USD -10 (-30) million. Revaluation of financial receivables and payables was USD 4 (-9) million and interest expense was USD -15. Other financial income was USD 1 (-21) million. Interest expenses includes an interest expense reversal of USD 3 million referring to an interest accrual adjustment on profit oil in Angola and other interest expenses of USD -17 million. Last year’s financial costs included the revolving credit facility for financing exploration costs in Norway of USD 2 million. Tax cost for the Group was USD -30 (19) million, corresponding to an effective tax rate of 148.0 (245.3) per cent. Svenska has accrued for additional corporate income taxes in Sweden for certain past fiscal years following a ruling in Administrative Court to allow Svenska to deduct only a portion of the amount of foreign corporate income tax against Swedish corporate income tax (see note 4 for futher information). Svenska has requested permission to appeal the decision to the Supreme Administrative Court.

EARNINGS AND CASH FLOWThe Group’s operating profit for the 2016 financial year was USD 30 (23) million. Cash flow from operations before changes in working capital was USD 86 (-9) million.

INVESTMENTS AND FINANCIAL POSITIONIntangible and tangible fixed assets at year-end were USD 648 (712) million. Investments in intangible assets were USD 2 (16) million. Investments in tangible assets were USD 32 (175) million. Cash and cash equivalents were USD 30 (40) million as of 31 December 2016. At year-end, Svenska had drawn USD 84 (137) million on the Reserves-Based Lending Facility and had an outstanding debt to affiliated companies of USD 28 (39) million.

HEALTH, SAFETY AND ENVIRONMENTSvenska takes great care to prevent accidents that could impact negatively on people’s health and the environment. Continuous improvement of our culture and processes is the foundation of our long-term business strategy. The application of common recognized Health, Safety and Environmental practices is a guiding principle in our operations, and Svenska actively participates in knowledge-sharing industry networks. Svenska’s priorities and objectives are to: • Prevent loss of human life and avoid injury (highest priority). • Strive for environmentally improved techniques to beused in all licences in which the Company participates, taking into account technical and economic conditions in different areas. • Possess a well-developed environmental awarenesswhen making technical and economic decisions. • Try to influence partners and vendors to exceed theminimum legal requirement when environmentally called for. The objective is to be ahead of even the most stringent anticipated requirements.• Be perceived by other companies, regulatory authorities,environmental organizations and the general public as environmentally aware and responsible.

CORPORATE SOCIAL RESPONSIBILITYSvenska also works actively within the CSR area and engages in several projects. Svenska continued its cooperation with SOS Children’s Villages in 2016 and the support covers the SOS Children’s Village in Abobo-Gare in Ivory Coast, the SOS Hermann Gmeiner Primary & Secondary School in Guinea-Bissau and the SOS Children’s Village in Owu-Ijebu, Nigeria. During the year Svenska has provided support to Tostan, an Africa-based charity focused on sustainable development and positive social transformation in West African countries as well as Action Against Hunger in Nigeria.

PERSONNELA vital factor in implementing Svenska’s expansion strategy and in carrying out our operating activities is Svenska’s skilled and dedicated personnel. Access to skilled personnel is ensured through consciously working towards the development of a project-oriented organization. The Group’s ambition is to unite different cultures and establish a common approach within the Group.

38 | Svenska Annual Review 2016 | Business Review

RISKS AND UNCERTAINTIES Risks in the oil & gas businessSvenska’s operations are completely focused on exploration and production of oil and gas. This is a business with high operational and financial risk. Regardless of experience and knowledge, discovery of commercial volumes of oil and gas cannot be guaranteed.

Political risksSvenska operates in a global market. Changes in laws and regulations concerning for example foreign ownership, state control, taxes, royalties, environmental rules and/or customs duties may have a negative effect on the financial result. Risk factors such as civil unrest, war, terror, border disputes and uprisings can also affect Svenska’s operations. By the end of 2016, there was no political risk insurance taken for any country where the Group is active. The need for such insurances is continuously evaluated. When needed, and if available, such insurance will be taken.

Environmental risksExploration and production of oil and gas can cause environmental damage. National laws and production agreements with partners can make Svenska financially responsible for such damages. All activities are conducted according to national laws and regulations, and in line with Svenska’s environmental policy.

Reserve estimationsAll oil reserve estimations involve uncertainties that for the most part are beyond Svenska’s control. Estimations are mainly based on available geological, geophysical and technical data with varying reliability. If present estimations should be proven smaller, it would have a negative impact on Svenska’s financial position and result.

FUTURE EXPECTATIONS How the oil price will develop in 2017 is very uncertain, considering the continued drop in oil price since the last quarter of 2014. The decision by OPEC to cut their member state’s oil supply (their first coordinated production cut since 2008) has helped to stabilize the oil price and support a global oil market coming into balance. Svenska has small capital expenditure commitments in 2017 leading to positive free cash flows. The balance sheet remains strong with excellent debt to capital ratios compared to peer companies.

THE WORK OF THE BOARD The Board of Directors, which had four members at the end of the year, held four meetings during the past year.

40 | Svenska Annual Review 2016 | Financial Report

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(USD THOUSANDS)

Note 31 Dec. 2016 31 Dec. 2015

Net sales 161,302 78,445

Sale of Svenska Petroleum Exploration AS - 24,641

Other operating income 9,904 78

Total net sales 1 171,206 103,164

Operational and exploration costs 2 -37,335 -37,028

Effect from oil price derivatives -41,866 31,454

Other external costs -7,275 -6,436

Personnel expenses -7,899 -11,732

Depreciation & write-down 1, 3, 5 -46,897 -55,837

Other operating expenses -85 -930

Operating profit 1 29,849 22,655

Financial income 5,185 235

Financial costs -14,915 -30,705

Net financial items -9,730 -30,470

Profit before tax 20,119 -7,815

Tax on profit for the year 4 -29,767 19,167

NET PROFIT FOR THE YEAR -9,648 11,352

Other comprehensive income

Exchange differences for the year 2,895 -14,028

Remeasurements of defined benefit obligation -258 361

Total other comprehensive income 2,637 -13,667

Total comprehensive income -7,011 -2,315

Financial Report | Svenska Annual Review 2016 | 41

CONSOLIDATED STATEMENT OF FINANCIAL POSITION(USD THOUSANDS)

Note 31 Dec. 2016 31 Dec. 2015

ASSETS

Non-current assets

Intangible assets 5 245,212 242,872

Tangible assets 5 402,813 468,869

Other non-current receivables 612 897

Deferred tax assets 5 28,339 31,348

Total non-current assets 676,976 743,986

Current assets

Materials for drilling and operations 28,346 3,482

Trade receivables 11,436 -

Prepayments and accrued income 28,894 39,168

Other receivables 3,167 3,971

Other receivables, group 5,527 6,020

Prepaid tax 125 136

Short-term investments 1,288 73,610

Cash and bank balances 29,637 40,010

Total current assets 108,420 166,397

TOTAL ASSETS 785,396 910,383


Note 31 Dec. 2016 31 Dec. 2015

EQUITY

Share capital 7,350 7,350

Reserves 33,670 31,033

Retained earnings including net profit/loss for the year 475,881 485,529

Total equity 516,901 523,912

LIABILITIES

Deferred tax liabilities 5 60,442 58,608

Other provisions 30,076 50,413

Long-term interest bearing liability 84,000 137,000

Shareholder related loan 28,141 38,986

Total non-current liabilities 202,659 285,007

Trade payables 713 1,217

Other liabilities 2,716 2,689

Accruals and deferred income 51,867 97,543

Current tax liabilities 10,540 15

Total current liabilities 65,836 101,464

Total liabilities 286,495 386,471

TOTAL EQUITY AND LIABILITIES 785,396 910,383

Information regarding group contingencies and pledged assets, see Note 6

EQUITY AND LIABILITIES(USD THOUSANDS)


Share capital

Revaluation Pension

ObligationTranslation

reserve 1)Retained earnings

including net profit/loss Total equity

Equity, opening balance 1 Jan, 2015 7,350 649 44,051 474,474 526,524

Net profit for the year - - - 11,352 11,352

Group contribution, net of tax - - - -297 -297

Other comprehensive income - 361 -14,028 - -13,667

Equity, closing balance 31 Dec, 2015 7,350 1,010 30,023 485,529 523,912

Net profit for the year - - - -9,648 -9,648

Other comprehensive income - -258 2,895 - 2,637

Equity, closing balance 31 Dec, 2016 7,350 752 32,918 475,881 516,901

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(USD THOUSANDS)

1. The translation reserve comprises all exchange differences arising from the translation of financial statements of foreign operations that have prepared their own financial statements in a currency other than the Group’s presentation currency, SEK, including this Annual Review in USD. Closing reserve includes USD 51 million attributable to the Group’s presentation in SEK, while USD -18 million is attributable to currency effects in fixed assets and provisions (monetary non-monetary method).


CONSOLIDATED STATEMENT OF CASH FLOWS (USD THOUSANDS)

31 Dec. 2016 31 Dec. 2015

Indirect method

Operating activities

Profit before taxes 20,119 -7,815

Reversal for non cash items 70,866 -1,109

Sub-total, cash flow from operating activities 90,985 -8,924

Taxes paid -4,887 -448

Total 86,098 -9,372

Decrease(+)/increase(-) in inventories 5,088 22,023

Decrease(+)/increase(-) in current receivables -702 68,387

Decrease(-)/increase(+) in current liabilities -42,128 -56,940

Cash flow from operating activities 48,356 24,098

Cash flow from investing activities

Acquisition of intangible assets 5 -2,381 -16,320

Acquisition of tangible assets 5 -32,350 -175,090

Sale of subsidiaries, net cash flow effect - 77,599

Increase in financial assets -1,550 -42,063

Decrease in financial assets 39,017 16,922

Cash flow from capital investing activities 2,736 -138,952

Long Term Loans - 75,168

Repayment of borrowings -53 337 -

Shareholder related loan - 36,052

Shareholder related loan repayment -8,128 -

Cash flow from financing activities -61,465 111,220

Cash flow of the year -10,373 -3,634

Cash & cash equivalents at the beginning of year 40,010 43,644

Cash & cash equivalents at the end of year 29,637 40,010

Notes to non-cash flow items:

Current oil tax -6,582 -3,919

Reversal of depreciation and write-downs (2015 figures includes a reversal of write downs of 35,545 referring to Nigeria OML 145 UGE)

46,897 55,837

Provisions Abandonment reserves and other reserves 2,151 1,898

Unrealized value change put option 33,712 -55,185

Currency effects 2,706 18,627

Other -418 -1,076

Interest costs, not paid - 2,710

Reversed capital gain sale of subsidiaries - -20,001

Reversal of licence reserve Nigeria -7,600 -

Total non-cash flow items: 70,866 -1,109


Amounts are in USD thousands unless otherwise specified.

STATEMENT OF COMPLIANCEThe year-end report for the financial year that ended 31st December 2016 has been prepared in accordance with IAS 34 and the Swedish Annual Accounts Act. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IAS B) and interpretations from International Reporting Interpretations Committee (IFRIC) that have been endorsed by the European Commission for application within EU. In addition the Swedish Financial Reporting Board standard RFR 1 Supplementary Accounting Regulations for Groups has been adopted.

Essential Accounting Policies

The accounting policies applied for the year are the same as those applied for the 2015 financial year and as described in the 2016 Annual Report. New or revised standards, interpretations and changes adopted by the European Union (EU) that are to be applied from 1st January 2016 have had no impact on the Group. Consequently, the application of the relevant IFRS has not been disclosed as a change in accounting policy. The year-end report does not contain all the information and disclosures provided in the annual report; the year-end report should therefore be read together with the annual report for 2016.

BASIS OF PREPARATIONThe Financial Statements are presented in US dollars, rounded to the nearest thousand. Assets and liabilities are stated at historical cost basis except for certain financial

instruments, which are stated at their fair value. Financial instruments which are stated at fair value comprise financial assets classified as at fair value through profit or loss.

ANNUAL REVIEWThis year-end report has not been subject to a review by the Company’s auditors. The audited annual report of Svenska Petroleum Exploration AB with consolidated financial statements is available on the Company’s website svenska.com or can be ordered from the Company’s head office, P.O. Box 27823, SE-115 93 Stockholm, Sweden.


The Group’s operations are divided into operating segments based on the components that Svenska’s chief operating decision maker reviews regularly. The Group has identified Group Management as its chief operating decision maker. The Svenska Group’s operations are organized in such a way as to allow Group Management to monitor and review operating profit (EBIT), investments, assets and liabilities for the Group’s different geographical areas. As Group Management reviews financial performance and decides on resource allocation based on geographical areas (countries), these represent the operating segments. The Svenska Group’s internal reporting is therefore structured in such a way as to allow Group Management to review the performance and results of the geographical areas. It is on the basis of this reporting that the Group’s segments have been identified. Inter-segment pricing or transfer is determined on an arm’s length basis. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly interest income, exchange gains, interest expenses, exchange losses, tax expenses and administration costs. Allocated fixed assets and deferred taxes can be found in note 5.

Note 1Segment Reporting

1. Net sales includes a reversal of licence reserve (Nigeria)

2016 Ivory Coast Nigeria Guinea-Bissau Other/Group adjustments Total

Total Net sales1 161,318 7,6002 16 2,272 171,206

Operating result before depreciation

79,423 7,410 -577 -9,510 76,746

Depreciation & write-down

-46,740 0 0 -157 -46,897

Operating result 32,683 7,410 -577 -9,667 29,849

(USD THOUSANDS)

2015 Ivory Coast Angola Norway Nigeria Guinea-Bissau Other/Group adjustments Total

Total Net sales1 78,256 6 24,798 0 11 93 103,164

Operating result before depreciation

71,409 -3,118 8,750 -257 -757 2,465 78,492

Depreciation & write-down

-21,002 0 820 -35,545 0 -110 -55,837

Operating result 50,407 -3,118 9,570 -35,802 -757 2,355 22,655

1. Total Net sales includes a gain on sale of subsidiaries (SPE Congo AB and SPE AS)2. Total Net sales includes a reversal of a licence reserve.


31 Dec. 2016 31 Dec. 2015

Depreciation -46,897 -55,837

Whereof:

Intangible write-down and depreciation -45 -34,703

Tangible depreciation -46,852 -21,134

Note 3Depreciation and Write-Down

31 Dec. 2016 31 Dec. 2015

Operational and exploration costs -37,335 -37,028

Whereof:

Royalty -1,395 -831

Operating expenses -28,328 -30,240

Oil tax, operational -5,787 -3,447

Exploration & Project expenses -1,825 -2,510

Note 2Operational and Exploration Costs(USD THOUSANDS)

(USD THOUSANDS)


31 Dec. 2016 31 Dec. 2015

Specification of tax expense

Tax expense (-)/income for the period (+) -6,615 14,446

Adjustment for prior years -15,063 967

Current tax expense/income -21,678 15,413

Deferred taxes relating to temporary differences -8,089 3,754

Deferred tax income/expense -8,089 3,754

Total tax expense (-)/income for the Group (+) -29,767 19,167

Reconciliation of effective tax rate

Profit before taxes 20,119 -7,815

Tax at Swedish enacted tax rate 22% (22%) -4,426 1,719

Non-deductible expenses -17 87

Non-taxable income 482 0

Tax effect, petroleum tax Ivory Coast -11,030 -547

Tax effect, petroleum tax Norway - 7,010

Effect of different tax rates for foreign subsidiaries -180 -57

Tax effect sale of subsidiaries 432 5,501

Other items 35 4,487

Tax attributable to prior years -15,063 967

Tax expense (-)/income (+) -29,767 19,167

Effective tax rate 148.0% 245.2%

Note 4 Taxes

“Tax effect sale of subsidiaries” refers to the capital gain reported by the parent company concerning the sale of Svenska Petroleum Exploration AS and SPE Congo AB. At the end of 2013 the Swedish tax authority issued a decision to SPE CI AB in respect of financial year 2011 and the method of calculating foreign taxes paid. The company appealed the decision to the Administrative Court and received a respite to pay the additional tax. The Administrative Court ruled in favour of the company but the tax authority appealed to the Administrative Court of Appeal and a ruling came in November 2016, basically in line with the appeal from the tax authority. The ruling has affected the tax calculation for all years from 2011 onwards as it introduces a new way of calculating the foreign tax paid as well as treating parts of the revenue and operational costs as non-taxable and non-deductible, respectively. The company has chosen to apply for permission to appeal to the Supreme Administrative Court on the grounds, among other things, that this ruling will have a great impact on Swedish companies that enter into this type of agreement abroad. The total amount for years 2011–2015 is 14.1 MUSD (120,8 MSEK). The amount have been provided for in full and is included in tax attributable to prior years below. The amount is paid in batches, one fiscal year at a time, and the last year will be settled 13th of March 2017.

(USD THOUSANDS)


Ivory Coast NigeriaGuinea-

BissauOther/Group

adjustments 4 Total

Intangible assets

Exploration costs

Capex

Opening balances 24,110 265,976 53,491 5,764 349,341

Investments - 68 2,247 67 2,382

Disposals 1 -15,807 - - -5,725 -21,532

Closing balances 8,303 266,044 55,738 106 330,191

Write-downs

Opening balances -15,807 -68,074 -16,941 -5,647 -106,469

Write-downs for the year - - - -45 -45

Re-classifications - - - - -

Disposals 15,807 - - 5,728 21,535

Closing balances 0 -68,074 -16,941 36 -84,979

Residual value for each field 2016 8,303 197,970 38,797 142 245,212

Residual value for each field 2015 8,303 197,902 36,550 117 242,872

Tangible assets

Oil/gas and machinery/equipment

Capex

Opening balances 689,817 - - 3,783 693,600

Investments 1 32,114 - - 236 32,350

Disposals 2 -27,327 - - -426 -27,753

Reclassification 3 -30,023 - - - -30,023

Closing balances 664,581 - - 3,593 668,174

Depreciations and write-downs

Opening balances -222,450 - - -2,281 -224,731

Depreciations and write-downs for the year -46,740 - - -112 -46,852

Disposals 5,790 - - 432 6,222

Closing balances -263,400 - - -1,961 -265,361

Residual value for each field 2016 401,181 - - 1,632 402,813

Residual value for each field 2015 467,367 - - 1,502 468,869

Fixed assets in total

Residual value for each field 2016 409,484 197,970 38,797 1,774 648,025

Residual value for each field 2015 475,670 197,902 36,550 1,619 711,741

Deferred tax per field

Deferred tax liability, net 2016 17,282 25,676 134 -10,989 32,103

Deferred tax liability net, 2015 13,463 25,676 134 -12,013 27,260

Note 5 Intangible and Tangible Assets

1. Investments in tangible assets relates to Baobab, Ivory Coast.2. Disposals is mainly due to changes in the forecast for abandoment (-21 537 TUSD) and disposals of equipment referring to phase 3 and earlier phases (-5 790 TUSD)3. Reclassification to inventory, due to discontinuous drilling of Phase 4 4. The column mainly refers to tools and office equipment

(USD THOUSANDS)

Pledged assets 2016 2015

Shares in subsidiaries 312,729 362,792

Contingencies 35 38

Total 312,764 362,830

Contingencies at 31 December compromise just one contingent liability with the Swedish pension plan (pension guarantee).

According to the loan agreement (reserves based lending facility) shares in subsidiaries are pledged.

(USD THOUSANDS)

Note 6Pledged Assets and Contingencies


Directly and indirectly owned as at 31st December 2016 Corporate reg. number Registered office

Svenska Petroleum Exploration AB 556093-2583 Sweden

Oljeprospektering AB 556126-4671 Sweden

Petroswede Insurance Company DAC 266707 Ireland

Svenska Petroleum Exploration U.K. Ltd (dormant) 1191501 United Kingdom

SPE Nigeria AB 556594-2512 Sweden

Svenska Nigerian Holdings Ltd 36352 Bermuda

Svenska Nigerian Investment LLC 6790 Nevis

Svenska Nigeria Exploration & Production Ltd 618208 Nigeria

Svenska Nigeria (Deepwater) Limited 639349 Nigeria

SPE Guinea-Bissau AB 556710-9458 Sweden

Svenska of Guinea-Bissau Ltd 37097 Bermuda

Svenska of Guinea-Bissau LLC 5938 Nevis

SPE West Africa BV NL 807556506 The Netherlands

SPE CI Holding AB 556688-3541 Sweden

SPE CI AB 556665-4884 Sweden

SPE CI Finance AB 556635-2935 Sweden

SPE Ventures AB 556996-8117 Sweden

List of Group Companies

Indirectly owned subsidiaries in italics. All subsidiaries are wholly-owned.


52 | Svenska Annual Review 2016 | Board of Directors

Board of Directors

Sheikh Mohammed H. Al-AmoudiBorn 1946

Chairman of Petroswede since 2008 and member of the Board of Petroswede 1997. Chairman and Member of the Board of Svenska Petroleum Exploration since August 2009.

Sheikh Mohammed H. Al-Amoudi is a large investor mainly in Europe, the Middle East and Africa. His business activities are conducted through a number of business groups, the Corral Group, Midroc Europe, Midroc Ethiopia and ABV Rock Group. In total his businesses have a turnover of approximately 15 billion USD and employ over 70,000 people.

Sheikh Mohammed H. Al-Amoudi is one of the largest private investors in Sweden. In addition to Svenska, Sheikh Mohammed H. Al-Amoudi owns Preem AB and Midroc AB.

Jason MilazzoBorn 1962

Member of the Board of Svenska Petroleum Exploration and Petroswede since August 17, 2009. Vice Chairman of Svenska Petroleum Exploration and Petroswede since August 17, 2009.

Jamal Ba-AmerBorn 1961

Member of the Board of Svenska Petroleum Exploration since September 2014.

Richard ÖhmanBorn 1951

Member of the Board of Svenska Petroleum Exploration and Petroswede since 1996. Chairman of Petroswede 2003-2007.

Duncan RushworthBorn 1966

Vice President, Business Development.Employed since 2007.

B.Sc. in Geology and M.Sc. in Sedimentology, University of London. LL.M Petroleum Law and Policy, Dundee University. More than 25 years of international experience in the E&P sector including LASMO, Waterous and Co. Deloitte and Touche and Anadarko Energy Corporation.

Executive Management | Svenska Annual Review 2016 | 53

Fredrik Öhrn Born 1962

President and CEO, Petroswede AB and Svenska Petroleum Exploration AB. Employed since 2006.

B.Sc. in Geology, Uppsala University, Sweden (1986), MBA, University of Massachusetts, Amherst (1988). Boliden Group 1988–1997, ABB Financial Consulting 1997–1999. CFO Steelscreen 1999–2001, CFO Personal Chemistry 2001–2003 and CFO Carmeda 2003–2005. CFO Svenska Petroleum Exploration AB 2006–2007, CEO Svenska Petroleum Exploration AB 2008- .

Executive Management

Jan HagenBorn 1952

Executive Vice President, Development & Production. Employed since 1989.

B.Sc. in Naval Architecture and Shipbuilding (1978), University of Newcastle, UK. More than 30 years of experience in the oil industry. Nine years in offshore construction and installation with McDermott International and Aker, three years in engineering and more than 25 years with Svenska as Exploration and Development Manager in Oslo and as Managing Director of SPE UK.

Lars SchenningsBorn 1961

CFO and Vice President Business Support. Employed since 2008.

B.Sc. in Business Administration, Umeå University, Sweden 1988. Ernst & Whinney (now Ernst & Young) 1988–1989, NCC AB (Construction and Real Estate) 1989–2000, Veolia Transport Northern & Eastern Europe 2001–2004, DHL Express Nordic 2004–2008.

Torgny BerglundBorn 1953

Vice President, Exploration.Employed since 2000.

M.Sc. in Petroleum Prospecting at the Technical University of Trondheim (1977). Mobil Exploration 1978–1979, Norsk Hydro E&P 1979–2000 (Norway and internationally), altogether 38 years of experience.

54 | Svenska Annual Review 2016 | Terms and Definitions

Abandon: To stop work on, or plug, non-productive well, or close down and remove facilities.

Appraisal well: Well drilled closeto a discovery well to determine the extent of the find.

Barrel: Unit for crude oil measurement (= 159 litres).

Brent: Reference oil for the North Sea.

Cap rock: An impermeable rock layer capping the oil or gas reservoir and preventing the escape of fluids.

Condensate: Hydrocarbons which are in the gaseous state under reservoir conditions and which become liquid either during passage up the borehole or at the surface due to reduced temperature and pressure.

Crude oil: Includes condensate and natural gas liquids.

Cuttings: Rock fragments or chippings brought to the surface in the drilling fluid.Decision Gate (DG): Decision gates

Terms and Definitionsare a governance structure to evaluate, authorize, and monitor projects as they pass through the project lifecycle.

Field: An area defined by one or more wells which are capable of producing hydrocarbons in commercial quantities.

FPSO: Floating production, storage and offloading vessel.

Gas injection: Injection of gas into a reservoir to maintain reservoir pressure.

Hydrocarbon: An organic hydrogen/carbon compound.

Infill well: Well drilled into previously unswept areas of a defined field.

Injection well: Used to inject gas, oil or water into the reservoir for various purposes: maintaining pressure, flushing out oil, etc.

LNG: Liquefied natural gas, means lean gas, i.e. primarily methane – converted to liquid form through refrigeration to -163°C under

atmospheric pressures.

Natural gas: Comprises mainly methane, although heavier gases are also usually present.

NGL: Natural gas liquids, light hydrocarbons consisting mainly of ethane, propane and butane which are liquid under pressure at normal temperature.

Oil equivalents: See “Conversion table”.

Petroleum: A collective term for hydrocarbons, whether solid, liquid or gaseous. Gas is a light hydrocarbon and oil is a heavier hydrocarbon.

Probable reserves: The amount which geophysical and engineering data indicates to be in place or recoverable but with a greater element of risk than in “Proven”. For the purpose of this definition, there is a 50% chance that the actual quantity will be more than the amount estimated as “Proven and probable” and a 50% chance it will be less.

Terms and Definitions| Svenska Annual Review 2016 | 55

Proven reserves: The amount which geophysical and engineering data indicates to be in place or recoverable to a high degree of certainty. For the purpose of this definition, there is a 90% chance that the actual quantity will be more than the amount estimated as “Proven” and a 10% chance it will be less.

Recovery factor: The percentage of oil or gas recoverable from a reservoir.

Reservoir: The underground formation where oil or gas has accumulated. It consists of porous rock to hold the oil or gas and a cap rock that prevents its escape.

Royalty: The cash or physical liquid/mineral paid to the ultimate owner, in most cases the host country’s government.

Seismic survey: Exploration method in which reflected shock waves, recorded by seismometers, map underground formations.

Sidetrack: A new section of wellbore drilled from an existing well.

STOOIP: Abbreviation for stock-tank orginal oil in place, the volume of oil in a reservoir prior to production.

Structure: A discrete area of deformed sedimentary rocks, where the resultant bed configuration is such as to form a potential trap for migrating hydrocarbons.

Tie back: To connect something such as a subsea well by flowline to a production platform.

MEASURESbbl: Barrelmbbls: Thousand barrelsmmbbls: Million barrelsmbo: Thousand barrels of oilmmbo: Million barrels of oilbopd: Barrels of oil per daymmbopd: Million barrels of oil per dayboe: Barrels of oil equivalentsmboe: Thousand barrels of oil equivalentsmmboe: Million barrels of oil equivalentsboepd: Barrels of oil equivalent per daymmcf: Million cubic feetbcf: Billion cubic feet

mcm: Thousand cubic metresmmcm: Million cubic metresbcm: Billion cubic metresmmbngl: Million barrels of NGLsqm: Square metre

CONVERSION TABLE1 barrel = 159 litres (at 15 degrees Celsius)1 barrel of oil equivalent = approximately 6 thousand cubic feet gas1 barrel of oil equivalent = approximately 1.6 barrels NGL1 m³ gas = 35.3 cubic feet gas1 tonne oil = 7.49 barrels oil

56 | Svenska Annual Review 2013 | Addresses

Head OfficeSVENSKA PETROLEUM EXPLORATION ABMail address:P.O. Box 27823SE-115 93 Stockholm, Sweden

Visiting address:Biblioteksgatan 29, Stockholm

Telephone: +46 8 410 545 50Telefax: +46 8 667 24 32Email: [email protected]

SubsidiariesSVENSKA PETROLEUM EXPLORATION AB LONDON BRANCHMail and visiting address:25 Park LaneLondon W1K 1RA, United Kingdom

Telephone: +44 207 647 2500Telefax: +44 207 647 2501Email: [email protected]

SVENSKA PETROLEUM EXPLORATION GUINEA-BISSAU ABMail and visiting address:Avenida das Nacoes Unidas 7 Bissau, Guinea-Bissau

Telephone: +245 666 33 50Telefax: +245 590 68 70 Email: [email protected]

SPE CI ABABIDJAN BRANCHMail and visiting address:Abidjan, Cocody7 Boulevard Latrille25 BP 945 Abidjan 25Côte d’Ivoire

Telephone: +44 207 647 2500Telefax: +44 207 647 2501Email: [email protected]

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