2014

Oil Sands Report

Statoil Canada
Who We Are
In Canada
Statoil Canada Ltd. (Statoil) is developing assets in the
oil sands region of northeastern Alberta and offshore
Newfoundland and Labrador. We have 100 per cent
ownership of the Leismer and Corner oil sands lease
areas, and are producing bitumen from Leismer. Offshore
Newfoundland, Statoil is a partner in the Hibernia and
Terra Nova fields as well as the Hebron and Hibernia
South Extension developments. We also have made three
discoveries in the Flemish Pass. Statoil employs about 500
people and is headquartered in Calgary, Alberta.
Cover: The Leismer Project’s Central Processing Facility.
Around the World
Statoil ASA is an international energy company with
operations in over 30 countries. Building on more than
40 years of experience from oil and gas production on
the Norwegian continental shelf, we are committed to
accommodating the world’s energy needs in a responsible
manner, applying technology and creating innovative
business solutions. We are headquartered in Stavanger,
Norway, with approximately 23,000 employees worldwide,
and are listed on the New York and Oslo stock exchanges.
2014 Oil Sands Report 2
 This Report
This is Statoil’s fifth Oil Sands Report. In it we provide
information about our oil sands operations in northeastern
Alberta that is relevant to our business objectives and
the interests of our stakeholders and the communities in
which we operate. We are aware of the need for open and
transparent communication and work with various third
party groups to achieve year-over-year improvement in the
information provided.

Boundaries
This report is focused on the environmental, health and
safety performance of the Leismer Demonstration Project’s
(Leismer Project) production operations, from January 1 to
December 31, 2014. We also provide relevant information
about community programs and other activities related to
Statoil’s oil sands activities, projects, the Calgary office, and
exploration and drilling on our Leismer and Corner lease
areas. Information about Statoil’s other Canadian operations
can be found in the Statoil ASA 2014 Sustainability Report
at www.statoil.com.

All Key Performance Indicators (KPIs), with the exception of

Health, Safety and Security, refer to production, consumption
and emissions related to the production operations of the
Leismer Project. This does not include exploration and
drilling, and imported products and services (electricity,
accommodation and transportation), and is aligned with
regulatory reporting requirements. Natural gas consumption
includes purchased pipeline gas as well as produced gas,
which is combusted on-site. Under Health, Safety and
Security (pg 13), the Total Canada Oil Sands KPIs refer to
all oil sands–related activities, including drilling operations,
projects, operations of the Leismer Project and the Calgary
office. For an overview of scope and definition of terms,
please visit www.statoil.com.

It is important to note that since the Statoil Oil Sands

Report has always covered 100 per cent of production and
emissions related to the Kai Kos Dehseh (KKD) Oil Sands
Partnership, the swap of KKD assets with PTT Exploration
and Production (PTTEP) of Thailand in 2014 does not
affect reporting in this document. A third party, KPMG, has
independently assured selected KPIs appearing in this report.
The KPMG Letter of Assurance can be found on pg 26.
Financial information is beyond the scope of this document
but can be found in the Statoil ASA 2014 Annual Report.

For more information about how content was selected for

this report please see pg 25.

Water treatment operator completes process checks.

2014 Oil Sands Report 3

 Contents
From Our President.....................................................5

Sustainability.................................................................6

Summary of Our 2014 Performance.....................7

Our Oil Sands Operations.........................................8

Operations Update...................................................11

Health, Safety and Security...................................13

Innovation...................................................................14

Environmental Performance...................................16

Social Performance..................................................22

Report Content..........................................................25

Letter of Assurance .................................................26

Well Pad 5 piping structures at the Leismer Project.

2014 Oil Sands Report 4

 From Our President
Our oil sands business underwent a number of changes in
2014, beginning with an asset exchange that gave Statoil
100 per cent ownership of the Leismer and Corner lease
areas in the Athabasca oil sands region. This allows us to
continue developing the Leismer and Corner leases in a
manner that is aligned with Statoil ASA’s sustainability
strategy and business objectives.

In keeping with our step-wise approach to oil sands

development, in 2014 we focused our efforts on improving
the economics of oil sands recovery and achieving lower
carbon intensity while reducing our impacts on the
environment.

While undertaking this work, the Leismer Project reached

record bitumen production levels, averaging more than
20,000 barrels per day in the last two months of 2014.
These levels were achieved due to the optimization of
existing wells and the addition of Well Pad 5 with seven well
pairs, which went into production near the end of 2014.

At the same time, Statoil achieved a significant reduction

in our Total Recordable Injury Frequency rates in 2014
due to less drilling activity, greater accountability from
leaders, increased co-ordination and rollout of safety
programs. These activities were supported by an increase in
communication through safety meetings and bulletins.

Ståle Tungesvik While progressing bitumen production and technology

President development at the Leismer Project, in September we made
Statoil Canada Ltd. the decision to postpone our Corner development for at
least three years. We made great strides in improving the
business case for Corner, however, Statoil ASA has a highly
competitive global portfolio of projects. This decision is
in line with Statoil ASA’s company-wide priority to further
balance returns and growth moving into 2015.

Although our business has changed, our commitment to

local communities and stakeholders remains strong. As part
of our outreach, Statoil is sharing information about our
2014 performance and activities in this, our fifth annual
Oil Sands Report.

2014 Oil Sands Report 5

Sustainability
As the world’s population continues to grow, so will demand
for the energy required to support fundamental human
needs for clean water, heat and transportation. Canada will
play a role in meeting increased global oil demand, which
is expected to rise by 14 million barrels per day (mb/d) to
reach 104 mb/d in 2040.* Growth in the Americas, led
The challenge for oil sands operators like Statoil is to by U.S. tight oil, Canadian
develop Canada’s oil sands reserves — the third largest
proven crude oil reserves in the world — in a manner that oil sands and Brazilian
is aligned with our sustainability objectives. This means
focusing on carbon efficiency to address climate change,
deepwater output, pushes
reducing our impact on air, land and water, creating value for non-OPEC production higher
local communities and being transparent and accountable in
order to establish long-term relationships with communities, until the early-2020s. As
stakeholders and Aboriginal groups near our operations.
U.S. tight oil output flattens
These sustainability objectives work hand in hand with
our business goals — to realize cost efficiencies, establish and then starts to fall back,
a long-term social licence to operate, and adopt new Canadian oil sands emerge
technologies to secure future business opportunities. Our
sustainability approach is based on Statoil ASA’s values, as the engine of North
policies and management system, which incorporate
sustainability into all aspects of how we work. For general American supply.
information about Statoil ASA and sustainability, please
go to the Sustainability section of www.statoil.com. (Source: World Energy Outlook 2014, pg 95.)
Detailed information can be found in the Statoil ASA 2014
Sustainability Report also at www.statoil.com.
(*Source: World Energy Outlook 2014, pg 95.)

Main entrance to the Central Processing Facility.

2014 Oil Sands Report 6

Summary of Our • In 2014, we used less fresh water at our operations, due
to negative reservoir retention as well as the addition of
a saline water well to our water source wells. Negative
2014 Performance reservoir retention means that more water is produced
from the reservoir than is injected as steam. The decrease
in our freshwater use, combined with an increase in
• In 2014, Statoil gained 100 per cent ownership of the
bitumen production, reduced our 2014 freshwater
Leismer and Corner lease areas and projects following
intensity rate. This means that we were withdrawing
a swap of its KKD oil sands leases with PTTEP. PTTEP
less fresh water to produce a barrel of bitumen than in
now has 100 per cent ownership of the Thornbury,
previous years.
Hangingstone and South Leismer lease areas.
• The negative reservoir retention also had an impact on
• Development of Statoil’s Corner project was delayed for
our produced water recycle rate, which decreased in
a minimum of three years, resulting in a staff reduction
2014 from 2013. Since there is a limit as to how much
of about 60 employees. While the business case
produced water can be recycled by the facility, excess
for Corner has improved significantly, Statoil ASA is
volumes must be removed from the system and disposed
prioritizing capital to the most economic projects in its
of to maintain the overall water balance. Produced water
global portfolio to increase profitability and reduce costs
is treated before being recycled for use in bitumen
throughout the organization.
recovery.
• The Leismer Project reached record bitumen production
• In 2014, we strengthened a Local Content Plan for the
levels of more than 20,000 barrels per day (bpd) at the
fabrication and construction of Well Pad 6. The project
end of 2014. This pushed our average daily bitumen
team identified contracting needs and local businesses
production levels to more than 16,109 bpd in 2014, up
that could potentially fill these needs. Where gaps in
from 14,847 bpd in the previous year.
local capacity existed, plans were developed to help
• The carbon dioxide (CO2) emissions per barrel (intensity) contractors become eligible to work on the project.
decreased to 67.0 in 2014 from 69.7 in 2013. Total
CO2 emissions rose due to increased demand for steam
used at the Leismer Project’s new wells. Steam is
produced by generators fuelled by the combustion of
natural gas, which releases CO2 emissions.

• With the delay of our Corner development, we will be

reviewing our Environmental Improvement Ambitions
for CO2 intensity. As our initial ambitions were based on
Canadian production growth
full field development, our short-term CO2 intensity is relies heavily on output from
expected to remain mainly unchanged or reduced slightly
due to the implementation of various technologies and oil sands to achieve the
development options designed to increase production
while reducing steam requirements at the Leismer anticipated increase from
Project. Technologies being considered include infill 4 mb/d in 2013 to 7.4 mb/d
wells, solvent co-injection and flow control devices.
Longer-term, we aim to achieve significant reductions in in 2040, the second largest
CO2 intensity.
rise among non-OPEC
• Well Pad 5 with seven well pairs was added to the
Leismer Project in 2014, with bitumen production countries, after Brazil.
beginning in the third quarter. The addition means the
Leismer Project now has five well pads with 28 operating (Source: World Energy Outlook 2014, pg 122.)
Steam Assisted Gravity Drainage (SAGD) well pairs, up
from four well pads and 21 operating well pairs in 2013.

• Statoil achieved a significant reduction in our Total

Recordable Injury Frequency rates in 2014. There were
no serious health, safety and environment incidents and
no lost-time injuries.

2014 Oil Sands Report 7

Our Oil Sands
Operations
Statoil has 100 per cent ownership The Leismer Project is the first oil sands development on
the KKD leases. It is an active bitumen production operation
of and operates the Leismer and that tests technologies and processes on a small scale before
Corner lease areas. successful ones are moved to full-scale operation.

Bitumen on Statoil’s Leismer and Corner lease areas is buried

In 2014, Statoil conducted a swap of its KKD oil sands
leases with PTTEP. This gives Statoil 100 per cent ownership
of the Leismer and Corner lease areas and projects while
PTTEP has 100 per cent ownership of the Thornbury,
Hangingstone and South Leismer lease areas. Prior to the
change, Statoil had a 60 per cent interest while PTTEP had a
40 per cent interest in the KKD Oil Sands Partnership, which
was operated by Statoil on behalf of both companies.
more than 400 metres beneath the earth’s surface and
can only be developed in situ, meaning in place. To recover
bitumen, the Leismer Project uses SAGD, the most common
in situ recovery method used in the Athabasca oil sands
region. SAGD relies on steam, which is generated by burning
natural gas to heat water. That steam is injected into the
reservoir and warms the bitumen until it flows and can be
moved to the surface.

SAGD Technology
Bitumen/water emulsion Well pad Production well Steam injection well Central Processing Facility
and steam pipelines

2014 Oil Sands Report 8

How SAGD Works
• Wells are drilled parallel to each other in pairs,
vertically to reach the reservoir and then horizontally
across the reservoir.

• The top well is an injector that carries steam to the

reservoir, to heat the bitumen until it is warm enough to
flow.

• Warm bitumen flows into the lower producer well and is

moved to the surface as an emulsion stream along with
water, vapour and produced gas.

• The streams are separated, cleaned and the water is

treated so it can be reused to produce steam.

• Bitumen is diluted with a light hydrocarbon so it can be

transported to market by pipeline or rail.

Leismer Project
• Well Pads 1 to 5 have a total of 28 operating well pairs.

• The Central Processing Facility (CPF) separates the

bitumen, water, gas and other impurities, cleaning the
bitumen and treating the water so it can be recycled to
produce steam.

• At the Cheecham Terminal, which consists of two storage

tanks, a pipeline from the Leismer CPF delivers product
to a larger oil transmission line or railcars for transport to
market.

The Leismer Project consists of five operating well pads,

the Central Processing Facility and the Cheecham Terminal.

2014 Oil Sands Report 9

Kai Kos Dehseh Leases
The Leismer and Corner lease areas are located
within the KKD leases in the Athabasca region of
Alberta. Leismer and Corner cover a 510-square-
kilometre area and contain about 970 million !
barrels of estimated recoverable resources.
!

Fort
McMurray

Anzac

Cheecham
Terminal
63

Statoil Lease

Municipal District
881
or County Limits

Water Bodies

Watercourse

Leismer to Cheecham Pipeline

Waddell Road

Road
Leism
er
Road
Leismer CPF
Leismer Lodge

Leismer
Aerodrome Conklin

0 4.5 9 18 27 36 45

Kilometres

2014 Oil Sands Report 10

Operations Update As expected, the volume of gas flared in 2014 was less than
in 2013 when a turnaround resulted in a major planned
flaring event. However, there were two flaring events in
2014, one due to an electrical pump issue and the other due
to an electrical outage caused by wildlife interference in our
Bitumen production increased at the electricity supplier’s substation.
Leismer Project during 2014 due
to well optimization work and the 2014 Activities
addition of new wells. By the end of 2014, the Leismer Project had five well pads
with 28 operating SAGD well pairs. Steam injection was also
occurring at one new well pair and one infill producer well.
Key Performance This is up from four well pads and 21 operating well pairs
Indicators 2014 2013 2012 in the previous year. Each well pair is made up of a steam
injector and a bitumen producer.
Bitumen Production
barrels (bbl) 5 879 692 5 419 156 5 977 817 The increase in wells resulted from the addition of Well
Pad 5 with seven well pairs, which began producing in third
barrels per day (bpd) 16 109 14 847 16 333
quarter 2014. Steam injection began at a previously drilled
bbl steam/bbl bitumen well pair in Well Pad 2 at the end of November 2014, which
(steam-oil ratio or SOR) 3.1 3.2 2.5
will be operational in 2015. Two infill wells were drilled at
cumulative SOR (CSOR) 2.9 2.9 2.7 Well Pad 2 to produce bitumen from the heated section of
the reservoir between existing well pairs. Steam injection
Energy Consumption began at one of the infill wells at the end of 2014, with
Natural gas consumption production expected from both infill wells in 2015.
1,000 cubic metres (m3) 198 006 192 716 168 653
In early January, there was an incident at Well Pad 3, which
Electricity consumption
affected cables that had to be repaired, resulting in several
gigawatt hour (GWh) 66 63 56
weeks of production losses.
Flared gas
1,000 m3 162 198 37
Future Production Increases
To maintain and increase production, the site for Well Pad 6
Our Operations KPIs was also prepared in 2014 and five well pairs were drilled.
The surface facility construction will begin in 2015, with
In the last two months of 2014, the Leismer Project
production anticipated for second quarter 2016. We also
achieved record bitumen production levels of more than
received regulatory approval to drill another seven infill wells
20,000 bpd. This increased our average daily bitumen
at Well Pad 1 in 2015.
production over 2013 levels. The production increase
resulted from the optimization of existing wells and the The Leismer Project is designed to produce 20,000 bpd but
addition of Well Pad 5 with seven new well pairs. has regulatory approval to produce 40,000 bpd. The Leismer
Project’s CPF can process increased volumes by optimizing
As a SAGD well ages, the steam chamber enlarges and
equipment performance and debottlenecking. Statoil has
requires more steam to maintain the same production
also received approval from the Alberta Energy Regulator
levels. More steam was also required in 2014 to start up
(AER) and Alberta Environment and Sustainable Resource
Well Pad 5. Even though the steam demand increased, the
Development (AESRD) for the construction, operation and
volume of steam required to produce a barrel of bitumen,
environmental plans of Leismer Acceleration Phase 2 (LAP2).
called the steam-oil ratio (SOR) was slightly reduced due to
the increase in production. However, our cumulative steam-
oil ratio (CSOR) remained steady in 2014.

Natural gas consumption refers to the gas combusted on-site

and includes both purchased pipeline gas and produced gas
from the reservoir. More gas and electricity were consumed
in 2014 as we added a fifth well pad and produced more
steam overall, which required more fuel gas and electricity to
power the equipment.

2014 Oil Sands Report 11

At the Well Pad 6 construction site, coconut matting is used for erosion control and to promote vegetation growth.

Winter Activities Corner

Due to the information collected from previous drilling
activities, in 2014/2015 Statoil did not require further
drilling of delineation wells at the Leismer and Corner lease
areas. Our efforts in winter 2013/2014 were focused on
seismic work to improve our understanding of steam flow
and reservoir conditions in areas currently under production
in Well Pads 3 and 4. Seismic involves the use of sound
waves emitted from transmitters and receivers to gather
information about underground formations that can be
interpreted by geoscientists.
Statoil’s Corner development was postponed in 2014 for a
minimum of three years, which resulted in a staff reduction
of about 60 employees.
While significant cost efficiencies have been achieved for
Corner, the project was not as competitive as others in
Statoil ASA’s global portfolio. Under the Statoil Technical
Efficiency Program (STEP) rolled out in 2014, Statoil ASA is
prioritizing capital to its most economic projects to increase
profitability and reduce costs throughout the organization.

We also drilled five new wells, four of which were drilled in

Corner to further delineate the area, and one well in Leismer
as per a regulatory requirement.

Wells 2014/2015 2013/2014 2012/2013

Drilled
Leismer 0 1 43

Corner 0 4 21

Wells Drilled includes delineation and observation wells;

SAGD wells are not included.

Pipelines carry steam and bitumen at the Leismer Project.

2014 Oil Sands Report 12

Health, Safety and
Security
The health, safety and security
of our people are top priorities
for Statoil.
Key Performance
Indicators 2014 2013 2012
Total Canada Oil Sands
Serious Incidents Frequency (SIF) 0 0
Total Recordable Injury
Frequency (TRIF) 1.19 8.3
Leismer Operations
SIF 0 0
TRIF 1.30 5.0
Total Canada Oil Sands includes: drilling operations, projects,
Leismer Operations and the Calgary office. Rates are calculated
based on one million work hours.
SIF: Number of serious Health, Safety and Environment incidents
(including conditions and near misses, but excluding all instances
of ethical misconduct) categorized with a potential degree of
seriousness of levels 1 and 2 based on one million work hours.
TRIF: Number of fatal accidents, lost-time injuries, injuries
involving substitute work and medical treatment injuries.
Our Safety KPIs
In 2014, Statoil achieved a significant reduction in our
TRIF rates due to a reduction in drilling activity as well
as a number of safety initiatives. These included greater
accountability from leaders, increased co-ordination and
rollout of safety programs in three key areas: drilling and
wells, operations, and projects. Our efforts focused on
identifying risks and taking action to mitigate those risks.
Greater emphasis was placed on communication through
safety meetings, bulletins and stand-downs.
Statoil revised and updated the Site Emergency Response
Plan, issuing new manuals and conducting exercises. We
continued to implement leadership and training courses for
project personnel and contractors working on field execution
projects, as well as for Statoil supervisors on drilling and
well projects. In addition, driving infractions on-site were
significantly reduced in 2014 due to the emphasis on our
safe driving program.
Worker Health and Safety
Good health and safety practices begin with a comprehensive
management approach to risk. Under this approach, Statoil
works with our employees and contractors in the field to
identify and develop solutions to health and safety risks. This
collaboration allows Statoil to develop specific programs
and procedures designed to eliminate and mitigate the
consequences of incidents and accidents.
Risk assessment is also critical to the development of our
emergency preparedness plans, which are regularly tested
to determine their effectiveness. In 2014, Statoil conducted
regular exercises to test our emergency preparedness plans.
Field and head office personnel responded to a simulated
scenario involving an individual who was seriously injured at
the Leismer Project site.
1.5
Healthy Living Environment
8.7
For employees and contractors living at the Leismer Lodge
accommodation camp, maintaining a healthy lifestyle is
important when working 12-hour shifts. The lodge offers
0 healthy eating options, fitness activities and relaxation areas.
Alcohol and drug use are prohibited at the lodge and on all
5.1
Statoil work sites. This policy is strictly enforced through
training sessions, site access control and with-cause alcohol
and drug tests.
Road Safety
The main highway to the Leismer Project is Highway 881,
which runs from Lac La Biche to Fort McMurray. This highway
is known for high traffic flow and serious vehicle accidents.
To reduce the use of this corridor by Statoil personnel, many
employees and contractors are bused in from major centres
or flown into the Statoil-managed Leismer Aerodrome. The
Aerodrome is a partnership between Statoil and other area
companies.
To reduce vehicle use on-site, Statoil uses shuttle buses and
vans to transfer personnel from Leismer Lodge to their work
sites. We conduct workshops to promote safe driving habits
and use radar speed patrols to enforce speed limits on roads
within our operating area.
Process Safety
Safety is a key consideration in the design and construction
of all Statoil facilities. Preventive maintenance work is
regularly conducted and operating procedures are well-
defined to ensure our facilities are operated in a safe and
efficient manner. Combined with regular inspections, this
allows Statoil to identify potential mechanical issues before
they occur. Following a third party audit, Statoil made
improvements where appropriate.
2014 Oil Sands Report 13
Security
Our oil sands operations place a high priority on security,
which is preventive and proactive to manage risks. Plant
protection efforts at the Leismer Project provide a secure
work environment for our employees and community.
Security evaluations are conducted at regular intervals on
our operating facilities and new additions or projects to
identify security risks at the earliest possible stages.
Innovation
We are testing and implementing
technologies that will improve
profitability and decrease our use of
water, land and energy.
As part of the Statoil Technical Efficiency Program, Statoil
ASA reorganized technology development within its global
operations to focus on reducing costs, increasing profitability
and improving efficiency. This involved disassembling our
Heavy Oil Technology Centre to better align our approach to
technical innovation with our business objectives.
At Statoil Canada, the Technology Excellence Team focuses
on testing and implementing the best technologies the oil
sands industry has available. We will be a fast follower of
new and existing technologies that are aligned with our
current ambitions and future growth in the oil sands.
Since our five-year technology strategy was completed in
2014, we are developing a new strategy that will have a
sharpened focus on technology integration at our operations.
We believe testing and implementing these technologies
over the next 10 years will improve water, land and energy
efficiency, which will increase the profitability of our SAGD
development.
Reducing SAGD Warm-Up Time
In 2014, Statoil tested a number of methods designed
to reduce the time and steam used in the SAGD warm-
up phase. This phase — the time between when steam is
initially injected to heat the reservoir and when the bitumen
between the well pairs is warm enough to flow — is the
most steam-intensive phase of SAGD operations; however, it
results in low bitumen production rates.
One method uses vacuum-insulated tubing to transport
steam into the reservoir. This reduces the amount of heat
lost from the well to the earth between the surface and the
reservoir, and concentrates heat delivery into the reservoir.
Vacuum-insulated tubing was installed on five injector wells
in 2014 and results are being evaluated to determine if the
benefits will offset the additional costs.
Another method, called solvent-facilitated startup, is
looking at the benefits of pumping solvent into the reservoir
some time before starting steam injection. With time, the
solvent could diffuse and increase the mobility of bitumen,
potentially reducing warm-up time. This process was used on
one well in 2014, with results currently being reviewed.
Statoil has also implemented a development strategy that
consists of placing the injector and producer wells closer
together than the current industry standard of five metres,
which would also contribute to reducing the warm-up time
without adversely affecting the SAGD operation.
Multi-Phase Flow Meters
At Well Pad 3, Statoil tested the ability of multi-phase
measurement technology to measure the emulsion stream
produced from SAGD wells before it is sent to the CPF.
Measuring this emulsion is challenging because it contains
three different phases— bitumen, water and produced gas,
which have varying flow rates and high temperatures. The
multi-phase flow meters are able to measure each of the
three phases before they are separated. This differs from
the test separators currently being used that require large
vessels to separate the emulsion into phases before each
phase is measured. As a result, the multi-phase flow meters
are much smaller than test separators. Statoil is seeking
approval from the AER to use multi-phase flow meters, which
would reduce the land footprint and capital costs associated
with the installation of the larger test separators.
Flow Control Devices
Flow control devices are being tested at the Leismer Project’s
Well Pad 5 to optimize the performance of horizontal
wells used to inject steam and produce bitumen from the
reservoir. The flow control devices are placed into horizontal
wells and serve as the conduit for steam injection into, or
emulsion production out of, the reservoir. The devices create
a pressure drop that passively controls the flow rate of each
fluid. For the production well, the tool will manage “hot
spots” or imbalances in the volume of emulsion at different
points in the well bore. This will result in a more uniform
flow of bitumen along the horizontal well, which optimizes
performance.
2014 Oil Sands Report 14
The Well Pad 5 test targeted different configurations and
combinations of flow control devices, both in terms of
the number of devices deployed and type of well targeted
(injector and/or producer). This will provide Statoil with
a matrix of configurations to quantify benefits. The flow
control devices were deployed along with the well liner and
installed at the time of drilling.

Solvent Co-Injection
Results from Statoil’s solvent co-injection pilot will be
analyzed throughout 2015 to determine the project’s
success. Solvent co-injection began in November 2013
and was completed at the end of 2014. The pilot involved
co-injecting solvent with steam in three well pairs at
Well Pad 3. Solvent is believed to penetrate the bitumen,
reducing its in situ viscosity and allowing it to flow more
readily. This means less steam is needed to mobilize the
bitumen, which decreases the volume of water and natural
gas required. Co-injecting solvent also has the potential
to increase the amount of bitumen that can be “swept” or
recovered from the reservoir.

Industry Collaboration
Collaboration is becoming the norm rather than the
exception among oil sands companies due to the simple fact
that we share many common challenges. Statoil recognizes
that by working together we can leverage the experience and
expertise of others without compromising our competitive
position. In fact, working together often leads to more timely
results and greater cost efficiencies.

Statoil is a member of the Canadian Association of

Petroleum Producers (CAPP) and one of the founding
members of Canada’s Oil Sands Innovation Alliance
(COSIA). COSIA, which represents 13 oil sands companies
that are collectively responsible for almost 90 per cent of
Canadian oil sands production, is focused on developing
solutions to the environmental issues facing both in situ
and mining oil sands developments. For information about
initiatives undertaken by these two organizations, please see
www.capp.ca and www.cosia.ca.

Technologies are implemented at our operations to increase

production and reduce Statoil’s environmental impact.

2014 Oil Sands Report 15

Environmental CO2 Intensity Ambitions
With the delay in our Corner development, we will be

Performance reviewing previously stated Environmental Improvement

Ambitions for the CO2 intensity of our oil sands operations.
As our initial ambitions were based on full field development,
our short-term CO2 intensity is expected to remain mainly
unchanged or reduced slightly due to the implementation of
Statoil is working to manage our various technologies and development options designed to
greenhouse gas emissions and increase production while reducing steam requirements at
the Leismer Project.
environmental impacts.

GHG Emissions and Climate Change

Key Performance
Indicators 2014 2013 2012
CO2 Emissions

tonnes 393 729 377 612 332 163

kilograms per barrel (kg/bbl)
bitumen 67.0 69.7 55.6

Our Carbon Dioxide KPIs

Greenhouse gas (GHG) emissions include CO2, methane
(CH4) and nitrous oxide (N2O) and are often reported in
common units known as CO2 equivalent. Since CH4 and N2O
emissions from Statoil’s oil sands operations are insignificant,
accounting for a fraction of a per cent of our total GHG
emissions, we are reporting only CO2 emissions.

The increase in CO2 emissions is mainly attributed to

increased steam injection, particularly for the new well pairs,
which required more fuel gas. Overall our CO2 intensity
decreased due to increased bitumen production in 2014.

Carbon Efficiency and Climate Change

Statoil is testing and implementing the most promising
technologies the oil sands industry has to offer to reduce our
impact on the environment. This includes technologies that
will improve fuel efficiency and reduce the volume of GHG
emissions released to the atmosphere by our activities.

Our carbon efficiency work is aligned with Statoil ASA’s

corporate climate change ambition and sustainability
strategy. This position acknowledges the scientific
consensus on the link between higher levels of GHG
emissions in the atmosphere from human activities and
climate change, and endorses key advocacy positions
on climate change. More information can be found at
www.statoil.com/sustainability.

Aerial view of the Leismer Project and surrounding Athabasca

oil sands region.
2014 Oil Sands Report 16
Air Air Monitoring
The annual three-month continuous air monitoring
program, required under our Environmental Protection and
Key Performance
Enhancement Act (EPEA) approval, was conducted at the
Indicators 2014 2013 2012
Leismer Project from July to September. The Wood Buffalo
Environmental Association (WBEA) conducted the program
SO2 Emissions
on our behalf.
tonnes 115 125 100
kg/bbl bitumen 0.02 0.02 0.02 One of WBEA’s continuous air monitoring stations was
moved to the Leismer Project’s CPF at a location previously
approved by Alberta Environment. The station monitors SO2,
NOx Emissions
NOx, as well as wind direction and speed. SO2 and NOx are
tonnes 252 249 207 byproducts of the combustion of fossil fuels used on-site.
kg/bbl bitumen 0.04 0.05 0.03
Our passive air monitoring program involves five monitoring
stations located around the perimeter fence of Leismer’s
SO2 – sulphur dioxide CPF. Each station has dedicated filters for collecting SO2 and
NOx – nitrogen oxides
H2S, which are changed monthly and sent to an accredited
laboratory for analysis. H2S is present in the reservoir
and comes to the surface in the gas produced along with
bitumen. All data is submitted monthly and annually to the
Our Air KPIs AER and Statoil has been consistently below the Alberta
The change in sulphur dioxide (SO2) emissions in 2014 Ambient Air Quality Objectives (AAAQOs) for both the
is attributed to a decrease in the volume of produced gas passive and continuous monitoring.
from the reservoir, which is consumed on-site. Produced To conduct source monitoring, one of the once-through
gas contains hydrogen sulphide (H2S), which produces SO2 steam generators (OTSGs) at the Leismer Project is fitted
emissions when combusted. The H2S content in the produced with a Continuous Emissions Monitoring System (CEMS)
gas was also lower than 2013 levels. that continuously monitors NOx emissions from the stack.
The slight increase in nitrogen oxides (NOx) emissions A manual stack survey is undertaken every year on one
is largely attributed to an increase in overall natural gas of the three OTSGs without CEMS on a rotating basis. All
consumption. In addition, there was a reduction in the on- data is submitted monthly to the Alberta Energy Regulator
site combustion of utility gas, propane, and diesel. and Statoil has been consistently below the NOx limit as
outlined in our Environmental Protection and Enhancement
Act approval, except for two one-hour exceedances, one
during a malfunction of the air controller and one during
maintenance.

Four steam generators at the Central Processing Facility provide steam for the SAGD process.

2014 Oil Sands Report 17

Water
Water Definitions
Key Performance Saline groundwater has more than 4,000 milligrams per litre
Indicators 2014 2013 2012 (mg/L) total dissolved solids (TDS) and is often referred to
as brackish water.
Freshwater Use
m3 240 045 257 556 315 264
(Source: Water Conservation and Allocation Guidelines for the
Oilfield Industry, Government of Alberta, 2006.)
bbl fresh water/bbl bitumen 0.26 0.30 0.33
Fresh water, also called non-saline water, contains less than
Produced Water Recycle 4,000 mg/L TDS.
per cent 93.4 96.5 93.6 (Source: Glossary of Water Terms Related to Water and
Watershed Management in Alberta, Alberta Environment, 2008.)
Disposal Water
Potable water that is suitable for human consumption is
m3 203 193 96 651 149 697
defined by Health Canada as containing less than 500
bbl disposal water/bbl bitumen 0.22 0.11 0.16 mg/L TDS.
(Source: Health Canada Guidelines for Canadian Drinking Water
Our Water KPIs Summary Table, August 2012.)

Our freshwater use decreased in 2014 due to negative

reservoir retention as well as the addition of a saline water
well to our water source wells. Negative reservoir retention
means that more water is produced from the reservoir than
is injected as steam. In 2013, the reservoir retention was
positive.
The reduction in freshwater use coupled with an increase
in bitumen production reduced our freshwater intensity in
2014. This means that we were withdrawing less fresh water
to produce a barrel of bitumen than in previous years.
The produced water recycle rate calculation has been
updated based on regulatory requirements from the Alberta
Energy Regulator and therefore we have restated previous
years’ values to align with the updated formula. During
times of negative reservoir retention, there is a limit to how
much water can be recycled at the facility, which is why the
produced water recycle rate decreased from 2013 to 2014.
Produced water is treated before being recycled for use in
bitumen recovery.
Most noticeably, the volume of disposal water increased
significantly in 2014, which can be attributed to the
negative reservoir retention. This means that there was
too much water in the facility and we had to dispose of the
excess. Ideally, an even water balance is desired. However,
there are many factors that affect the water balance
including maintenance, the addition of new well pairs and
any upsets such as power outages, which may affect steam
injection or water production from any of the well pads. The
most significant activity that affected the water balance
in 2014 was the addition of Well Pad 5. The swing in the
water balance from a positive reservoir retention in 2013
to a negative reservoir retention in 2014 has resulted in an
overall increase in disposal water, which is also evident on a
per barrel of bitumen basis.
Groundwater
The SAGD process requires groundwater from deep
underground formations to produce high-temperature steam.
The steam is injected into the reservoir and reverts to water
when it cools. This produced water is then pumped to the
surface along with the bitumen and treated so it can be
continuously recycled. At the Leismer Project, more than
93 per cent of the produced water was recycled in 2014.
Of the produced water that is not recycled, some remains in
the reservoir while the rest becomes concentrated with salt
and minerals. It is disposed of in deep underground licensed
disposal facilities.
Statoil is licensed to draw groundwater from the Lower
Grand Rapids Formation, which is considered a non-saline
or freshwater aquifer. This deep underground formation
contains water that has a high enough total dissolved solids
concentration (1,250 – 1,550 mg/L) that it would require
treatment to be fit for human consumption.
To reduce our use of this fresh groundwater source, Statoil
has received approval to draw brackish/saline groundwater
from the Clearwater B aquifer. The first brackish water was
used at the Leismer Project in June 2014. Our brackish water
use will offset our fresh groundwater use.
While the vast majority of water from the Lower Grand
Rapids Formation is used to produce steam, historically
smaller amounts have been used in surface applications such
as dust control and building ice roads. In response to local
concerns about the effects of using this water with high
salinity for surface applications, Statoil drilled two wells into
shallower Quaternary-aged formations to find fresher water
with lower salinity and pH. We received approval to use

2014 Oil Sands Report 18

water from these wells for dust control and to build winter
access roads. Currently Statoil is in the process of obtaining
long-term licenses to use these wells.
As part of the requirements of our groundwater licences,
Statoil monitors the water levels, volumes and chemistry
from each licensed diversion location. In addition, pressure
information is collected from four Lower Grand Rapids
monitoring wells and one Quaternary monitoring well.
Water Intensity Ambition
Our ambition to reduce water intensity by 45 per cent
by 2020 was achieved in 2013 and 2014 based on our
freshwater use per barrel of bitumen. In 2014 it took
0.26 barrels of fresh water to produce a barrel of bitumen
(bbl/bbl) and in 2013 it took 0.30 bbl/bbl. This amounts to
a reduction of more than 45 per cent compared to our first
full year of operation in 2011 when our freshwater intensity
was 0.61 bbl/bbl. Statoil will continue work to maintain this
reduced water intensity in the years ahead.
Groundwater Monitoring
In 2014, Statoil hired a third party consultancy to update
our groundwater monitoring program to include all of the
KKD leases, in alignment with the Lower Athabasca Regional
Groundwater Management Framework developed in 2013 by
Alberta Environment and Sustainable Resource Development.
Our existing Groundwater Monitoring Program meets the
requirements of our EPEA approval, which includes semi-
annual monitoring of 16 shallow monitoring wells at the
Leismer Project’s CPF, as well as semi-monthly monitoring
of shallow groundwater, the Muriel Lake Formation,
the Bonnyville Formation and the Empress Aquifer at
Well Pad 1. In addition, we have four existing monitoring
wells that address regional monitoring approval
requirements.
Our updated Groundwater Monitoring Program Proposal,
submitted for regulatory approval in 2014, expands our
groundwater testing to include phenols, naphthenic acids
and polycyclic aromatic hydrocarbons. It also includes
a groundwater response plan that outlines a series of
escalating actions that we would undertake if monitoring
results exceed specific levels. Potential actions include
conducting confirmatory sampling, notifying the AER on
confirmation of any impact, and investigating the source
of the impact. Changes in groundwater temperature
and geochemistry were observed in 2014, and Statoil
is expanding our groundwater monitoring program at
Well Pad 1 in accordance with our EPEA approval.
Surface Water
Historically, lake water was used for exploration drilling and
winter freeze-down, largely to build ice roads. However, there
were no plans to use surface water in winter 2014/2015.
For all sources of surface water, Statoil monitors diversion
volumes and chemistry. The amount of surface water Statoil
uses is so small we have never reached our licence limits for
water volume.
As part of our surface water licence, we conducted a
three-year monitoring program on a series of chain lakes
located in the Thornbury, Leismer and Corner areas. The
data will determine if there were any cumulative effects from
historical withdrawals from these surface sources. The field
portion of the program was finished in October 2014, and a
final report will be completed in 2015.
Surface Water and Wetlands Monitoring Programs
The Athabasca River basin provides a vital ecosystem
for the plants, animals and people in the region. Statoil
conducts wetland and surface water monitoring programs to
measure the quality and quantity of water at select locations
throughout the KKD leases. In May 2014, the Alberta
Energy Regulator approved our Wetland Monitoring Program
(WMP). The WMP now includes the majority of activities
we voluntarily began in 2012 under our Surface Water
Monitoring Program (SWMP) in response to stakeholder
concerns about surface water bodies.
In 2014, Statoil used only three per cent of the surface
water allocated by AER/AESRD. There is no indication that
development of the KKD leases is having an effect on the
natural water cycle, based on the surface water quantity
results (stream flows and lake levels) gathered to date.
Water quality at the Leismer Project is similar to the baseline
contained in our Environmental Impact Assessment, and is
similar to natural conditions that existed before operations
began in 2010. Snow quality results also indicate that since
startup the Leismer Project has not released detectable
amounts of hydrocarbons through air emissions.
When water quality becomes poor, the number of different
benthic invertebrates, diatoms and wetland vegetation
species in an area decreases. Statoil’s WMP found that
wetland vegetation species in bogs were more diverse in
2014 than in the previous three years.
Industrial Runoff
All rain and snowmelt within the Leismer Project’s process
area is collected into a stormwater pond to control industrial
runoff. In 2014, Statoil obtained water diversion licences to
draw water from the stormwater ponds within the Leismer
Project’s CPF, six well pads and one disposal well site. This
water is used primarily for dust control during the summer
and is only used once the water is tested and meets the
discharge requirements of our EPEA approval.
2014 Oil Sands Report 19
Land
Key Performance
Indicators 2014 2013 2012
Total Land Disturbed (%) 4.7 4.7 4.7
Total Land Reclaimed (%) 16.3 12.2 12.2
Total Land Disturbed (%): The land disturbed for Leismer
Operations as a percentage of the planned full build-out footprint
for Leismer Operations. Land disturbed does not include previously
disturbed land that has been successfully reclaimed, and is defined
as areas where at a minimum, soil has been removed and soil may
be
required for land reclamation purposes.
Total Land Reclaimed (%): The cumulative land reclaimed for
Leismer Operations as a percentage of the cumulative land
disturbed. Cumulative land disturbed includes all the land
disturbed to date, including land that is now reclaimed.
Our Land KPIs
Since construction started at the Leismer Project, Statoil has
had a slow pace of development, with no significant changes
to land disturbance in 2014 over 2013 levels. This is due
to the development of Well Pad 6 and the expansion of
Well Pad 2, combined with progressive reclamation activities.
In 2013, no new land was disturbed or reclaimed beyond the
2012 area. This slower pace of development has resulted in
reduced effects on land, wildlife, and, ultimately, biodiversity,
relative to the predictions of the Environmental Impact
Assessment. Statoil is committed to progressive reclamation,
reclaiming as disturbances become available. In 2014, total
land reclaimed increased from previous years because we
started reclamation activities on several borrow sites.
Awards
Statoil’s Understanding Caribou Initiatives earned a 2014
Emerald Award in the Large Business category. The Emerald
Awards celebrate and showcase environmental leadership
in Alberta. The initiatives included studies on lichen
propagation, winter snow track counts, and remote camera
monitoring to estimate herd and predator numbers. Statoil’s
most well-known program, the Scat Dog Study, used dogs
to find wildlife scat (feces), which were studied to learn
more about caribou and their predators. Our efforts are now
focused on predator access control, where logs are spread
over paths cut through the brush to deter wolves and other
predators.
Statoil was involved in a COSIA collaborative initiative to
reclaim woodland caribou habitat in the Algar Region of
northern Alberta. It also received a 2014 Emerald Award
in the Shared Footprints category. Six oil sands companies,
the Government of Alberta and the local forestry industry
have worked together since 2009 to reclaim caribou habitat
in the Algar Region southwest of Fort McMurray, along the
Athabasca River. None of the companies involved in this
effort has developed or has leases in the Algar area; however,
the restoration work is part of a larger regional effort to
restore caribou habitat to maintain the area’s biodiversity.
After three years of funding, Statoil is now redirecting its
resources to other land-based projects.

Caribou Mitigation and Monitoring Program

Statoil is implementing a Caribou Mitigation and Monitoring
Program to reduce the effects of our activities on local
woodland caribou habitat. The program sets objectives,
metrics and performance targets for caribou habitat
availability and connectivity as well as animal mortality.
Approved in October 2014 by the AER, the program is an
addition to historical activities we have undertaken to learn
more about caribou behaviour and how we can reduce our
impacts on habitat and herds.

Woodland caribou are under pressure in the northern boreal

©iStock.com/SoopySue

forest regions of all nine provinces where they make their

home. Those in the oil sands region are designated as “at
risk” under Alberta’s Wildlife Act and “threatened” under
Canada’s Species at Risk Act. Statoil’s leases are within the
East Side Athabasca Range, home to the Egg Pony herd.

Statoil works to limit our impact on woodland caribou habitat.

2014 Oil Sands Report 20

Statoil seeks to protect biodiversity near our operations through research, environmental monitoring programs, and risk and
impact management.
Wildlife Monitoring
Statoil also has an approved (2012) Wildlife Mitigation
Monitoring Program, designed to reduce the impacts of
our activities on wildlife, including caribou and bears, birds
and fish. Most Leismer site staff underwent bear awareness
training in 2014 to improve individual knowledge of bear
behaviour and bear safety. Wildife sighting cards are filled
out when employees or contractors on the job site see
wildlife. The cards are filed with Statoil environment staff
and the information is provided to the provincial government.
Soil Monitoring
Statoil conducted its first soil monitoring program in
2014, which must be carried out every five years. A drill
rig was used to take shallow well samples at 39 locations
at the Leismer Project’s CPF and well pads where spills
potentially could or did occur. Statoil will now submit a Soil
Management Program Proposal, with sampling scheduled for
summer 2015.
Conservation and Reclamation Plan
As part of our Conservation and Reclamation Plan and
in accordance with provincial regulations, soil from
construction sites is stored in segregated piles so the area
can be reclaimed to its preconstruction state. Soil handling,
placement, separation and stockpiling were supervised
by third party environmental monitors for construction of
Well Pad 6, as well as for other smaller clearing and
reclamation activities.
Land Footprint
Statoil is reviewing ways we can reduce the land footprint of
our operations. While footprint size affects the environment
and wildlife, a larger footprint also leads to higher
maintenance, weed control, and ultimately, reclamation
costs. We plan to continue to seek opportunities to carry
out interim and progressive reclamation, such as reducing
the width of corridors cleared through the brush for our
activities.
2014 Oil Sands Report 21
Social Performance
With the long life cycle of oil
sands projects, Statoil recognizes
the importance of establishing
and maintaining sustainable
relationships with Aboriginal
communities and stakeholders
near our operations.
Consulting with Aboriginal Groups
An estimated 23,000 Aboriginal people live in Alberta’s oil
sands region, including 18 First Nations reserves and six
Métis communities.* Thousands more live outside reserves
and communities. First Nations Aboriginal and treaty rights
are protected under the Canadian constitution. As a result,
specific consultation requirements must be fulfilled before
any potential impact on these rights, and the issuing of a
permit by the regulator.
Statoil meets, and often exceeds, regulations that require
oil sands developers to consult with Aboriginal groups about
projects that could impact their treaty and Aboriginal rights.
We engage early in the development process and ensure
Aboriginal groups and local communities have capacity to
complete the work necessary to understand our projects and
potential impacts.
Fort Chipewyan youth at the opening ceremony of an Experiential Learning Initiative gathering.
This engagement may include activities such as meetings,
presentations and site visits. Statoil considers input received
during these consultations in our project planning and
implementation.
In October 2014, we conducted a tour of the Leismer
Project’s CPF for elders and industry relations representatives
from Beaver Lake Cree Nation and Heart Lake First Nation.
A Statoil presentation provided information about our
Surface Water Monitoring Program, which was undertaken in
response to community concerns about impacts on local
lakes and streams.
(*Source: http://www.oilsands.alberta.ca/FactSheets/Aboriginal_
Fact_Sheet.pdf.)
Communicating Change
In 2014, Statoil made a number of significant business
decisions related to both our asset swap with PTTEP
and postponement of our Corner development. Statoil
recognized the need to be transparent and proactive in
communicating these decisions to our local communities.
We developed community outreach plans that were rolled
out simultaneously with our public announcements to
immediately provide information to Aboriginal groups and
communities near our oil sands leases. Statoil then followed
up with more detailed communication about these changes
and potential impacts on communities, such as reduced
contracting opportunities.
2014 Oil Sands Report 22
Local Content and Capacity Building Local Lending Report
As part of our ongoing efforts to support local economic
Oil Sands Local Content Strategy development, Statoil funded a report that assessed the
ability of Aboriginal entrepreneurs to access capital in
In 2014, Statoil strengthened our Oil Sands Local Content order to start a business. The report, developed by an
Strategy to better align our local content ambitions with independent third party and entitled Assessing the Potential
our business plans. The strategy assists us in identifying and of Developmental Lending Along Alberta Highway 881,
addressing gaps between our business requirements and looks at ways to increase access to capital for those who
local capabilities. live on reserves and therefore do not have private property
for collateral. Statoil is currently reviewing a number of
We used this process to develop our 2014 Local Content
recommendations made in the report to increase local
Plan for the fabrication and construction of Well Pad 6,
content.
intended to increase bitumen production at the Leismer
Project. The Well Pad 6 project team identified contracting
needs associated with building a well pad with five well pairs,
and identified local businesses that could potentially fill
these needs. Where gaps in local capacity existed, such as
safety protocols, plans were developed to help contractors
address these gaps so they were eligible to work on the
project. In 2014, local contractors completed earthwork
services, which involved clearing shrub and moving earth
before wells were drilled.

Local Hire Program

As part of the Oil Sands Local Content Strategy, Statoil
established the Local Hire Program to increase the hiring
of individuals from local communities near our operations.
Statoil worked with a number of internal and external
stakeholders to establish a career path for up to eight
individuals, ensuring they were supported through the steps
required to achieve journeyman status in a variety of trades.
Statoil has provided social investments to the Northeast
Alberta Apprenticeship Initiative, which supports Albertans
working toward their journeyman status.

Connecting Local Contractors with

the Oil Sands
In 2014, local contractors and employment seekers
continued to connect with oil sands developers at the Local
Opportunity Centre (LOC), located near Conklin, Alberta.
Statoil and government are partners in the LOC, which
houses the federally and provincially funded Business Link.

The 881 Business Incubation Centre, another partnership

between Statoil, industry and government launched in 2011,
was unable to fully meet its mandate and the partners
mutually agreed to close it in June 2014. The partners are
now considering alternative delivery methods to provide
services where they are most needed.

Statoil-sponsored Ski Fit North Alberta has integrated a Para

Nordic component to accommodate all physical abilities.

2014 Oil Sands Report 23

Corporate Community Investment
Statoil invests in a wide range of community programs that
meet the needs identified by our stakeholders, while also
aligning with our values and business objectives. Through
consultation with community stakeholders, we have
identified the following areas of priority, which are defined in
our glossary on www.statoil.com.
Contractual Obligations
C$1.1 million
Community
Investment
Chart
Social Investment
C$800,000
Donations
C$153,000
Our Community Investment Data
While Statoil experienced many changes in our oil
sands business in 2014, we remain committed to local
communities near our operations. Our investment dollars
are focused on education, health and wellness, local culture
and building local capacity. Investing in local communities
provides mutual benefits. Members of local communities
develop skills and work experience to participate in
opportunities provided by the oil sands industry, while
Statoil benefits from the development of a skilled labour
pool. Training and hiring locally contributes to community
sustainability and builds long-term success for individuals,
communities and industry.
Oil Sands Community Alliance
Statoil is a member of the Oil Sands Community Alliance
(OSCA), which is committed to working collaboratively
with Aboriginal groups and local stakeholders to support
thriving communities and responsible oil sands development.
Through OSCA, which replaces the Oil Sands Developers
Group, resource developers such as Statoil partner with local,
provincial or federal government agencies, communities
and other oil sands operators to address common issues.
OSCA’s four core focus groups are: Aboriginal, Community
Well-Being, Infrastructure and Workforce. Statoil sits on the
Aboriginal Focus Group and co-chairs the Aboriginal Business
Development Task Force.
Sustainable Communities Initiative
One of OSCA’s piority working areas is the Sustainable
Communities Initiative (SCI), which is focused on the
development of lasting relationships and collaboration
between local communities and industry. SCI is made up of
the communities of Janvier and Fort Chipewyan, sponsoring
oil sands companies including Statoil, as well as partners
such as the Royal Canadian Mounted Police and the Regional
Municipality of Wood Buffalo. Under the auspices of SCI,
the Sekweha youth group was formed in Janvier and the
Lake Athabasca Youth Council in Fort Chipewyan to provide
activities and resources to local youth.
Experiential Learning Initiative
In 2014, SCI focused on progressing the Experiential
Learning Initiative (ELI), which integrates traditional
Aboriginal culture, language, values and traditions with
lessons taught in school. Approximately 100 people
gathered on the north shore of Winefred Lake for two
days in August to discuss how experiential learning can
be incorporated into area schools. Participants came
from surrounding communities, the Northlands School
Division, the Yukon Territory, the neighbouring province
of Saskatchewan and industry partners. SCI continues to
work with the Northlands School Division to incorporate
experiential learning into area schools. For more information
on SCI, please go to www.sciconnect.ca.
Ski Fit North Alberta
Statoil entered its sixth year of sponsorship of the Ski Fit
North Alberta (SFNA) program, with record participation
levels by students and community members in the Athabasca
oil sands region.
During Statoil’s partnership with Cross Country Canada and
Cross Country Alberta, SFNA has grown to include more than
4,250 participants, expanded the number of schools that
have cross-country ski programs to 14, added Para Nordic
equipment to accommodate all physical abilities, and trained
and certified 17 new coaches. In 2014, Statoil donated 43
sets of ski equipment to participating communities.
2014 Oil Sands Report 24
Report Content
Materiality
The preparation of this report is guided by Statoil Canada’s In response to stakeholder input, we have included a section
internal sustainability reporting guidelines, which can be on Greenhouse Gas Emissions and Climate Change and
found at www.statoil.com. These guidelines are aligned developed new metrics to measure our Total Land Disturbed
with the principles and framework of the Global Reporting and Total Land Reclaimed.
Initiative (GRI) G3.1, an international body that has
developed a framework for comprehensive sustainability An internal Content Board made up of Statoil managers who
reporting. directly interact with our many stakeholders weighed all
information. The Content Board then plotted the issues on
As recommended by the GRI G3.1 reporting framework, the materiality map included below.
content for this report was selected using a materiality
analysis. This involves identifying issues that significantly
affect our business performance and matter most to our
key stakeholders and communities. To provide input into
this process, Statoil considered: a stakeholder review we
commissioned from the Pembina Institute; results of KPMG’s
assurance activities over our 2013 report; peer reports; and
a media scan of 2014 issues.

Materiality Map
High

GHG emissions
Aboriginal and and climate change
community engagement
Increasing Importance to Stakeholders

Employee safety
Water and security

Land
Air quality

Innovation

Energy efficiency
Low

Low Increasing Importance to Statoil High

2014 Oil Sands Report 25

Letter of Assurance Water
• Fresh water use (m3)
• Freshwater use (bbl fresh water/bbl bitumen)
Independent Limited Assurance • Produced water recycle (%)
• Disposal water (m3)
Report to the Management of
• Disposal water (bbl fresh water/bbl bitumen)
Statoil Canada Ltd.
Safety
We have been engaged by the management of Statoil
Canada Ltd. (Statoil) to undertake a limited assurance • Total Canada Oil Sands (Serious Incidents Frequency
engagement, in respect of the year ended December 31, – SIF)
2014, on certain quantitative performance information • Total Canada Oil Sands (Total Recordable Injury
disclosed in the 2014 Oil Sands Report (the Report) as Frequency – TRIF)
described below.
• Leismer Operations (Serious Incidents Frequency – SIF)
• Leismer Operations (Total Recordable Injury Frequency
Selected Indicators – TRIF)

The scope of our limited assurance engagement, as agreed Community Investment

with management, comprises the following selected Key
Performance Indicators (the Selected Indicators):
• Social investment (C$)
• Donations (C$)
Bitumen Production • Contractual obligations (C$)
• Barrels (bbl) The Selected Indicators, contained within the Report, have
• Barrels per day (bpd) been determined by management on the basis of Statoil’s
assessment of the material issues that contribute to Statoil’s
• Bbl steam/bbl bitumen (steam-oil ratio or SOR) sustainability performance and that are most relevant to
• Cumulative SOR (CSOR) their stakeholders.

There are no mandatory requirements for the preparation,

Energy Consumption
publication or review of sustainability performance
• Natural gas consumption (1,000 m3) information. As such, Statoil applies its own internal
• Electricity consumption (GWh) reporting guidelines and definitions of sustainability
reporting in preparing the Selected Indicators, which can
• Flared gas (1,000 m3) be found in the Glossary of Terms on Statoil’s website.

Air Emissions
• CO2 emissions (tonnes) Management’s Responsibilities
• CO2 emissions (kg/bbl bitumen) Management is responsible for the appropriateness of the
• SO2 emissions (tonnes) internal reporting guidelines and definitions for sustainability
• SO2 emissions (kg/bbl bitumen) reporting (the Reporting Guidelines) for the Selected
Indicators as well as the preparation and presentation of
• NOX emissions (tonnes) the Report in accordance with the Reporting Guidelines,
• NOX emissions (kg/bbl bitumen) current as at the date of our report. Management is also
responsible for the identification of stakeholders and
Land material issues, for determining Statoil’s objectives in
respect of sustainability performance and reporting, and
• Total land disturbed (%) for establishing and maintaining appropriate performance
• Total land reclaimed (%) management and internal control systems from which the
reported performance information is derived.

2014 Oil Sands Report 26

Our Responsibility
Our responsibility in relation to the Selected Indicators is
to perform a limited assurance engagement and to express
a conclusion based on the work performed. We conducted
our engagement in accordance with International Standard
on Assurance Engagements 3000 Assurance Engagements
other than Audits or Reviews of Historical Financial
Information (ISAE 3000) and International Standard on
Assurance Engagements 3410 Assurance Engagements on
Greenhouse Gas Statements (ISAE 3410), issued by the
International Auditing and Assurance Standards Board. ISAE
3000 and ISAE 3410 require that we comply with applicable
ethical requirements, including independence requirements.
We have not been engaged in respect to and our conclusion
does not cover any periods prior to the year ended December
31, 2013.
Assurance Approach
We planned and performed our work to obtain all the
evidence, information and explanations we considered
necessary in order to form our conclusions as set out
above. A limited assurance engagement consists of making
inquiries, primarily of persons responsible for the preparation
of the Selected Indicators, and applying analytical and other
evidence gathering procedures to the Selected Indicators, as
appropriate. Our procedures included:
• Inquiries of management to gain an understanding of
Statoil’s processes for determining the material issues for
Statoil’s key stakeholder groups;
• Inquiries with relevant staff at the corporate and business
unit level to understand the data collection and reporting
processes for the Selected Indicators;
• Where relevant, performing walkthroughs to test the
design of internal controls relating to data collection and
reporting of the Selected Indicators;
• Comparing the reported data for the Selected Indicators
to underlying data sources;
• Inquiries of management regarding key assumptions
and where relevant, sample based re-performance of
calculations; and,
• Reviewing the Selected Indicators presented in the Report
to determine whether they are consistent with our overall
knowledge of, and experience with, the sustainability
performance of Statoil.
The extent of evidence gathering procedures performed
in a limited assurance engagement is less than that for a
reasonable assurance engagement, and therefore a lower
level of assurance is obtained. Our assurance report is
provided solely to Statoil in accordance with the terms of
our engagement. Our work has been undertaken so that
we might report to Statoil on those matters we have been
engaged to report upon in this assurance report, and for no
other purpose. We do not accept or assume responsibility
to anyone other than Statoil for our work, for this assurance
report, or for the conclusions we have reached.
Inherent Limitations
Non-financial information, such as that included in the
Report, is subject to more inherent limitations than financial
information given the characteristics of significant elements
of the subject matter and the availability and relative
precision of methods used for determining both qualitative
and quantitative information. The absence of a significant
body of established practice on which to draw, allows for
the selection of different but acceptable measurement
techniques that can result in materially different
measurements and can impact comparability. The nature and
methods used to determine such information, as described
in the Glossary of Terms and management’s internally
developed criteria may change over time, and the scope of
our work did not include the appropriateness of such criteria.
Independence and Competence
In conducting our engagement we have complied with
the independence and other ethical requirements of the
IFAC Code of Ethics for Professional Accountants. The
engagement was conducted by a multidisciplinary team
that included professionals with suitable experience in both
assurance and in the applicable subject matter including
environmental, greenhouse gas, social, governance and
financial aspects.
Our Conclusion
Based on the procedures performed, as described above,
nothing has come to our attention that causes us to believe
that the Selected Indicators for the year ended December
31, 2014 as identified above and disclosed in the 2014
Oil Sands Report have not been prepared and presented, in
all material respects, in accordance with Statoil’s internal
reporting guidelines and definitions for sustainability
reporting, as at the date of our report.
March 12, 2015
Vancouver, Canada
2014 Oil Sands Report 27
 COM - 150038. Photos: Lawrence Sauter, Todd Korol, Lionel Giant, Helge Hansen, Tori D’Avella, Michael Neary.

Statoil Your Comments Please

3600, 308-4th Ave SW
Calgary, AB Canada We value your ideas and views on how we can improve our oil sands
T2P 0H7 business and Oil Sands Report. Please send all comments to us by
www.statoil.com email at oilsands@statoil.com.