Accounts SDFI

As of the end of 2025, the portfolio consisted of 187 production licences, four more than at the beginning of the year. Twelve production licences were relinquished in 2025. In January 2025, the Ministry of Energy completed its awards in pre-defined areas (APA 2024), where an additional 13 production licences were awarded to the SDFI. One licence was also carved out of an existing licence, as well as a net increase on two additional licences in connection with a swap agreement with Equinor. In January 2026, the Ministry of Energy completed its awards in pre-defined areas (APA 2025), where an additional 20 production licences were awarded with SDFI participation.

On 1 January 2025, Petoro and Equinor completed an agreement to swap ownership interests in the Haltenbanken area. The purpose of this transaction was to fine-tune the ownership interests in the licences to maximise resource utilisation. Pursuant to this agreement, Petoro received participating interests of 22.5 per cent in Tyrihans, 3.7 per cent in Johan Castberg, 9.3 per cent in the Carmen discovery and 10 per cent in the Beta discovery, and simultaneously traded ownership interests of 21.4 per cent in Heidrun and 7.5 per cent in Noatun to Equinor. Transferred assets and incurred obligations have been recognised in the accounts in accordance with the Norwegian Accounting Act and generally accepted accounting principles (NGAAP), primarily as an increase of NOK 25 billion in tangible fixed assets. The swap resulted in gains on NOK 23 billion, reported as other revenue in the income statement.

This segment note shows a consolidated net income table where revenue and expenses are distributed across the three main areas in the SDFI’s activities. License covers the upstream activity and includes all revenue and expenses from the field portfolio. Gas infrastructure shows net income associated with the state’s ownership in key gas infrastructure, including Gassled, Polarled and Nyhamna. Market and others include activities related to following up the Marketing and Sale Instructions, including revenue and expenses associated with marketing and sale of the state’s petroleum. Elimination covers the removal of tariff revenues from fields where the SDFI is also the owner, thus preventing internal transactions from affecting the overall result.

All oil, NGL, condensate and LNG from the SDFI is sold to Equinor. All dry gas is sold by Equinor through the Marketing and Sale Instructions issued to Equinor at SDFI’s expense and risk. Virtually all gas is sold to customers in Europe under bilateral contracts, or over the “trading desk”. Under gas revenues in 2025, the company allocated NOK 0.7 billion in net unrealised losses on outstanding financial derivatives associated with gas volumes. An unrealised loss of NOK 1.1 billion was reversed in 2024. This was allocated the year before. For more information about financial derivatives, please refer to Note 18 on financial instruments.

Production costs amounted to NOK 31 billion, 7 billion higher than the previous year. The increase was mainly caused by increased ownership in key gas infrastructure. Excluding gas infrastructure, production expenses were on par with the same period the year before. Over/under-lift is included in the figure for Licence under production expenses.

Transport costs amounted to NOK 7 billion, NOK 4 billion lower than the year before. The primary reason for this is that the acquisition of key infrastructure eliminated a significant share of transport costs for fields in the SDFI portfolio.

Costs for purchasing third-party gas amounted to NOK 7 billion, NOK 2 billion higher than the previous year. This increase was primarily caused by higher gas prices in combination with increased volumes.

Petoro contributes to research and development (R&D) through the SDFI meeting its share of the operator’s costs for general research and development pursuant to the Accounting Agreement. NOK 807 million was expensed by the SDFI for R&D in 2025 as regards charges from the operators during the accounting year.

The SDFI is subject to the Appropriations Regulations, as well as the Regulations and Provisions on Financial Management in Central Government. In accordance with the Act relating to the Office of the Auditor General (OAG) of 13 December 2024, the OAG is the external auditor for the SDFI. The audit took place during the period from 1 May 2025 – 30 April 2026, and the result of the audit will be reported in the form of an auditor’s report by 1 May 2026.

PricewaterhouseCoopers AS (PwC) has also been engaged by Petoro’s board of directors to perform a financial audit of the SDFI as part of the internal audit function. As internal auditor, PwC submits its audit report to the Board in accordance with international auditing standards. PwC’s fee is charged to the accounts of Petoro AS.

Interest on the state’s fixed capital is incorporated in the accounts on a cash basis. Interest amounts are calculated in accordance with the requirements in the 2025 letter of assignment to Petoro from the Ministry of Trade, Industry and Fisheries.

Interest on the state’s fixed capital is charged to operations in order to take account of capital costs and to provide a more accurate picture of the use of resources. This is a calculated expense without cash effect.

The accounts on a cash basis include an open account with the state which represents the difference between the recorded amount in the chapter/item in the appropriation accounts and ingoing and outgoing payments in the settlement accounts in Norges Bank.

Interest on the open account with the state is calculated in accordance with the 2025 letter of assignment to Petoro from the Ministry of Trade, Industry and Fisheries. The interest rate applied is linked to the interest rate on short-term government securities and corresponds to the interest rate applied to short-term loans to the Treasury, calculated on the basis of the average monthly balance in the open account with the government.

Not relevant to the accounts based on the Accounting Act (NGAAP).

Additions in 2025 for operating fields include accounting effects of the swap agreement with Equinor. For additional information about these transactions, please refer to Note 1.

An impairment was undertaken on the Martin Linge field totalling NOK 451 million, primarily as a result of updated cost estimates.

Impairment tests are based on Petoro’s best estimate of cash flows (market prices, production, investments, costs and exchange rate assumptions). The real discount rate in the calculation of utility value is 7-8 per cent. Inflation is estimated at 2 per cent annually. When the utility value is assessed to be lower than the book value, the assets are written down to their utility value.

The following price assumptions have been used to calculate impairment for 2025:

Multiple different scenarios are taken into account in the preparation of price forecasts, including scenarios developed by the International Energy Agency (IEA) in the World Energy Outlook report.

However, the risk of periods with lower and higher prices is significant, and volatility can be expected.

Sensitivity analysis
The table below shows alternative calculations of reversal (+)/impairment (-) in 2025 under different assumptions for the entire SDFI portfolio, given that all other assumptions remain constant. A price reduction of 10% on all products would have yielded an additional impairment of NOK 4,498 million for the SDFI portfolio.

The SDFI portfolio has also been tested for loss in value based on scenarios from the IEA. Prices from these scenarios are stated in actual 2025 terms for 2035 and 2050. Future expected prices have been applied for 2026, and they have been linearly interpolated from the price for 2025 to the IEA’s scenario prices for 2035 and 2050. The figures on the left represent alternative calculations of reversals of historical impairment, and the figures on the right reflect changes from reported impairment for 2025 totalling NOK 451 million.

Only the “net zero” scenario will result in impairment compared with the current base scenario for the SDFI portfolio. The analysis indicates that the risk of potential stranded assets in the SDFI portfolio is limited under current market assumptions.

Financial assets totalling NOK 1,911 million include capacity rights for regasification of LNG at the Cove Point terminal in the US with an associated agreement regarding the sale of LNG from Snøhvit to Equinor Natural Gas LLC (ENG) in the US, as well as SDFI’s share of Equinor’s investment in Danske Commodities (DC), Global Financial Trading (GFT) and Norsea Gas Gmbh. These activities are assessed as investments in associated companies and recorded according to the equity method (see also Note 10).

As of 1 January 2009, the SDFI’s participation in Equinor Natural Gas LLC (ENG) in the US has been treated as an investment in an associate, which is recognised in accordance with the equity method. At the time it was established in 2003, the investment was recorded at the original acquisition cost of NOK 798 million.

The company’s business office is located in Stamford in the US and it is formally owned 56.5 per cent by Equinor Norsk LNG AS, which reflects the SDFI’s ownership interest under the marketing and sale instruction. The remaining 43.5 per cent is owned by Equinor North America Inc. As a result of the merger of former Statoil and Hydro’s petroleum activities in 2007, the profit/loss is allocated in accordance with a disproportionate distribution model which gives 48.4 per cent to the SDFI.

The SDFI participates in ENG under the marketing and sale instruction with regard to activities related to the marketing and sale of the state’s LNG from Snøhvit. Cash flows from ENG are settled continuously on a monthly basis in connection with the purchase and sale of LNG.

As of 2023, the SDFI has recognised an investment associated with Equinor’s financial gas trading activity, including Global Financial Trading (GFT). GFT is operated from the United Kingdom and is formally owned by Equinor, but the SDFI participates in the investment through the Marketing and Sale Instructions for a share of the activities which affects the European gas market. The SDFI’s participation in GFT is assessed as an investment in an associated company and is recorded in accordance with the equity method.

The SDFI recognised an investment associated with Equinor’s acquisition of Danske Commodities (DC) under the marketing and sale instruction in 2019. DC is one of Europe’s largest companies within short-term electricity trading. The company’s activities also include gas trading. The company is headquartered in Aarhus, Denmark. The company is formally owned by Equinor, but the SDFI participates in the investment through the marketing and sale instruction for the part of the enterprise related to gas activities. The SDFI’s participation in DC is assessed as an investment in an associated company and is recorded in accordance with the equity method. After the transaction date, the SDFI is entitled to a share of the result from gas activities that fall under the Marketing and Sale Instructions. Cash flows associated with the investment are settled in arrears per quarter. At the time of acquisition 2019, the investment was recorded at the original acquisition cost of NOK 1,190 million. The SDFI’s share of investments in gas activities in DC is recognised as increased net capital injection or withdrawal.

The state owns 67 per cent of Equinor through the Ministry of Trade, Industry and Fisheries, and 100 per cent of Gassco through the Ministry of Energy. These companies are classified as close associates of the SDFI. Petoro, as licensee for SDFI, has significant participating interests in pipelines and terminals operated by Gassco.

Equinor is the buyer of the state’s oil, condensate and NGL. Sales of oil, condensate and NGL from the SDFI to Equinor totalled NOK 90 billion (corresponding to 132 million boe) for 2025, compared with NOK 107 billion (131 million boe) for 2024. As of January 2024, Equinor also started purchasing LNG from the SDFI. Overall sales of LNG volumes amounted to NOK 5.6 billion.

Equinor markets and sells the state’s natural gas at the state’s expense and risk, but in Equinor’s name and along with its own production. The state receives the market value for these sales. The state sold dry gas directly to Equinor at a value of NOK 748 million in 2025, compared with NOK 218 million in 2024. Equinor is reimbursed by the state for its relative share of costs associated with the transport, storage and processing of dry gas, the purchase of dry gas for resale and administrative expenses relating to gas sales. These reimbursements amounted to NOK 14.5 billion in 2025, compared with NOK 16.9 billion in 2024. Open accounts with Equinor totalled NOK 8.2 billion in favour of the SDFI, converted at the exchange rate on the balance sheet date, compared with NOK 13.4 billion in 2024.

Pursuant to the Marketing and Sale Instructions, the SDFI participates with a financial interest in Equinor Natural Gas LLC (ENG) in the US. Cash flows from ENG are settled continuously on a monthly basis in connection with the purchase and sale of LNG. The SDFI is also a participant in Equinor’s investment in Danske Commodities (DC) and Global Financial Trading (GFT) under the Marketing and Sale Instructions for the part assigned to gas activities. This participating interest entitles Petoro to a share of future results. The investments are addressed in more detail in Note 10.

Open accounts and transactions relating to activities in the production licences and joint ventures in infrastructure are not included in the above-mentioned amounts. Hence, no information has been included with regard to open accounts and transactions relating to licence activities with Equinor or Gassco. The SDFI participates as a partner in production licences on the NCS. These are accounted for in accordance with the proportionate consolidation method.

This liability comprises future abandonment and decommissioning of oil and gas installations. Norwegian regulatory requirements and the Oslo-Paris (OSPAR) Convention for the Protection of the Marine Environment of the North-East Atlantic provide the basis for determining the extent of the decommissioning liability.

The liability is calculated on the basis of estimates from the respective operators. A number of factors underlying the decommissioning estimate are associated with significant uncertainty, including assumptions for decommissioning and estimating methods, as well as technology and the removal date. The latter is expected largely to occur one or two years after cessation of production. See Note 24.

Interest expense on the liability is classified as a financial expense in the income statement. The discount rate is based on the discount rate for corporate bonds (OMF) as stated in NRS6. In 2025, the discount rate was 3.9%, unchanged from 2024.
The estimate for decommissioning expenses has been increased by a net of NOK 4.5 billion as the result of a change in future estimated expenses from operators, changes in when decommissioning will take place, as well as the interest rate effect of removal being one year closer.

NOK 1.3 billion has been accrued for shutdown and decommissioning in 2025, and is included in the accounts on a cash basis under operating expenses. The SDFI’s share of estimated expenses for 2026 associated with shutdown and removal amounts to NOK 2.8 billion.

Other long-term liabilities primarily consisting of liabilities to reimburse previously paid-up profit shares in licences with net profit agreements linked to decommissioning are included in long-term liabilities and amount to NOK 2,006 million.

Other long-term liabilities amount to NOK 576 million.

Not relevant to the accounts on a cash basis.

The following other current liabilities fall due in 2026:

• Provisions for accrued unpaid costs, adjusted for cash calls in December, amounting to NOK 15,744 million as of year-end 2025, compared with NOK 16,366 in 2024.
• Outstanding debt vis-à-vis Equinor related to financial instruments under the Marketing and Sale Instructions amounting to NOK 656 million as of year-end 2025, compared with NOK 0 million in 2024.
• Other provisions for accrued unpaid costs not included in the accounts received from operators amounted to NOK 3,535 million in 2025, compared with NOK 3,515 million in 2024.

Accounts receivable vis-à-vis licence operators are classified as current assets in the report.

Not relevant to the accounts on a cash basis.

The Marketing and Sale Instructions issued to Equinor utilise derived financial instruments (derivatives) to manage risk in the SDFI portfolio. The SDFI does not have significant interest-bearing debt, and primarily sells oil, gas and NGL at current prices. Instruments used to manage price risk for sales at fixed prices or for deferred gas production are linked to forwards and futures.

At 31 December 2025, the market value of the derivatives was NOK 1,076 million in assets and NOK 1,732 million in liabilities. The comparable figures at the end of 2024 were NOK 2,205 million in assets and NOK 1,280 million in liabilities. These figures include the market value of listed “futures”, unlisted instruments and embedded derivatives. The market value of embedded derivatives is linked to contracts entered into with end-user customers in continental Europe. This amounted to NOK 186 million in assets and NOK 0 million in liabilities in 2025. The respective comparable figures in 2024 were NOK 113 million in assets and NOK 415 million in liabilities. Net unrealised loss on outstanding positions at 31 December 2025 amounted to NOK 656 million, and this has been allocated in the accounts, pursuant to the Norwegian Accounting Act and generally accepted accounting principles (NGAAP).

Price risk
The SDFI’s most considerable price risk is related to future market prices on oil and natural gas. The SDFI is also exposed to both positive and negative price developments through the marketing and sale instruction issued to Equinor. In an effort to manage price risk associated with natural gas, Equinor enters into raw materials-based derivatives contracts on behalf of the joint portfolio. These contracts include futures, unlisted (over-the-counter – OTC) forwards and various types of swap agreements. The contracts entered into normally have a maturity of less than three years. The bilateral gas sales portfolio is exposed to various price indices and to a combination of long and short-term price points. Equinor purchases all oil, NGL, condensate and LNG from the SDFI at market-based prices.

Currency risk
The majority of the company’s revenue from the sale of oil and gas is invoiced in USD, EUR or GBP. Parts of its operating expenses and investments are also billed in equivalent currencies. When converting to NOK, currency fluctuations will affect the SDFI’s income statement and balance sheet. Petoro does not utilise currency hedging in relation to future sales of the SDFI’s petroleum, and its exposure in the balance sheet at 31 December 2025 was largely related to a single month’s outstanding revenue.

Interest risk
The SDFI is primarily exposed to interest risk through removal obligations. These are recognised in the SDFI accounts in accordance with the Norwegian Accounting Act and generally accepted accounting principles (NGAAP). The SDFI has no other interest-bearing debt exposed to interest rate fluctuations.

Credit risk
SDFI’s sales take place vis-à-vis a limited number of counterparties which are considered to have high creditworthiness, and all oil, NGL, condensate and LNG is sold to Equinor. In accordance with the Marketing and Sale Instructions, financial instruments for the SDFI’s operations are purchased from buyers with sound credit ratings. Financial instruments are only established with large banks or financial institutions within pre-approved exposure levels and margin requirements. The SDFI’s credit risk in current transactions is accordingly regarded as limited.

Liquidity risk
The SDFI generates a significant positive cash flow from its operations. Internal guidelines have been established to manage the flow of liquidity.

Leases represent operations-related contractual liabilities for the chartering/leasing of rigs, supply ships, production ships, helicopters, standby vessels, bases and so forth as specified by the individual operator.

Transport capacity and other liabilities are associated with gas sales activities and mainly consist of transport and storage obligations in the United Kingdom and continental Europe. The SDFI’s share of installations and pipelines on the NCS is generally higher than or equal to the transport share. Hence, no liabilities are calculated for these systems.

Other liabilities
In connection with the award of licences to explore for and produce petroleum, licensees may be required to commit to drill a certain number of wells. Licensees are also committed to undertake exploration activities through approved budgets and work programmes. At year-end, the SDFI was committed to participate in 9 wells with an expected cost to the SDFI in 2026 of NOK 0.8 billion.

The SDFI has also accepted contractual liabilities relating to investments in new and existing fields. Overall, this amounts to NOK 10 billion for 2026 and NOK 5 billion for subsequent periods, totalling NOK 15 billion. The SDFI also committed itself to operating and investment expenses for 2026 through approved budgets and work programmes. The mentioned liabilities are included in work programmes and budgets for 2026.

In connection with the sale of the SDFI’s oil and gas, Equinor has issued guarantees to suppliers and owners of transport infrastructure, as well as in connection with operations in the US, the UK and continental Europe. Guarantees issued in connection with trading activities are provided as security for lack of financial settlement. In total, the guarantees amount to NOK 886 million for the SDFI’s share.

The SDFI and Equinor deliver gas to customers under joint gas sale agreements. SDFI gas reserves will be utilised in accordance with the SDFI’s share of production from the fields selected to deliver the gas at any given time.

Not relevant to the accounts on a cash basis.

The SDFI could be affected by possible ongoing legal actions or unresolved disputes and claims as a participant in production licences, pipelines and onshore facilities, and in the joint sale of the SDFI’s gas together with Equinor. The final scope of the SDFI’s liabilities or assets associated with such disputes and claims cannot be reliably estimated at this time. The SDFI’s financial standing is not expected to be significantly impacted by the outcome of such disputes. Provisions are made in the accounts for issues where a negative outcome for the SDFI portfolio is thought to be more likely than not, or when a judgement has been pronounced and SDFI is on the losing side, regardless of whether the judgement is appealed and the dispute will advance through the legal system. No provisions have been made for such issues in the annual accounts for 2025.

Some long-term gas sales agreements contain price review clauses that may lead to claims that become the subject of arbitration. The SDFI’s exposure associated with ongoing price reviews is not considered to have a significant effect on the SDFI’s net income or financial position. Based on the SDFI’s assessments, no substantial provisions have been made for price reviews in the annual accounts for 2025.

Not relevant to the accounts on a cash basis.

The SDFI accounts are presented in accordance with the Norwegian Accounting Act and Norwegian generally accepted accounting principles (NGAAP), which means that the management makes assessments and exercises judgement in a number of areas. Changes in the underlying assumptions could have a significant effect on the accounts. Where the SDFI portfolio is concerned, it is presumed that assessments of the book values of tangible fixed assets, reserves, shutdown and decommissioning of installations, exploration expenses and financial instruments could have the greatest significance.

Substantial investments in tangible fixed assets have been made in the SDFI portfolio. Each time the accounts are prepared, these investments are reviewed for indications of a decline in value. The assessment of whether an asset must be impaired is primarily based on judgements and assumptions about future market prices. The valuation is inherently uncertain due to the discretionary nature of the underlying estimates. In recent years, this risk has increased as a result of the current market conditions with rapid fluctuations in supply and demand for oil and gas, which causes more volatility in prices.

Recoverable reserves include volumes of crude oil, NGL (including condensate) and dry gas as reported in resource classes 1-3 in the classification system used by the Norwegian Petroleum Directorate (NPD). Only reserves for which the licensees’ plan for development and operation (PDO) has been approved in the management committee and submitted to the authorities are included in the portfolio’s expected reserves. A share of the field’s remaining reserves in production (resource class 1) is used as a basis for depreciation. A share of oil and gas, respectively, is calculated annually for the portfolio to represent the relationship between low (P90) and expected reserves (P50) in production. This joint share is used to calculate the depreciation basis for each field. The reduced expected reserves forming the basis for the depreciation expenses are of great significance for net income, and adjustments to the reserve base can cause major changes to the SDFI’s profit.

As regards shutdown and removal obligations, there will be significant estimate uncertainty linked to multiple factors in the removal estimates, including assumptions for removal and the method of estimation, as well as technology and the time of removal. Changes in the discount rate and the currency exchange rates used may also have a substantial impact on the estimates, and the subsequent adjustment of the obligation thus involves significant discretionary assessment.

Drilling expenses are capitalised temporarily until an assessment has been made of whether oil or gas reserves have been found. Assessments of the extent to which these expenses should remain capitalised or be written down in the period will affect results for the period.

Reference is otherwise made to the description of the company’s accounting principles and to Notes 15 and 18, which describe the company’s treatment of exploration expenses, uncertainties related to decommissioning and financial instruments.

Not relevant to the accounts on a cash basis.

The portfolio’s estimated remaining reserves totalled 3951 million boe at the end of the year, down by 178 million boe compared with the end of 2024. Reserve growth amounted to 205 million boe, mainly from Troll, Oseberg and Snøhvit. With a production of 383 million boe, this yielded a reserve replacement rate of 54 per cent, compared with 11 per cent in 2024 and 16 per cent in 2023.

The SDFI also holds intangible property concerning storage capacity in gas inventories in the UK and Germany and financial assets in associated companies. See Notes 9 and 10 for more information.

* Production licences where the SDFI is not a licensee, but is entitled to a share of any profit
** Gassled has multiple transport licenses with various licence periods