BlueNord Annual Report and Accounts 2022
BlueNord Annual Report and Accounts 2022
BlueNord
Annual Report and Accounts 2022
Delivering
progress
Introduction
Providing
energy for
Europe today,
tomorrow
and for our
net zero future
Welcome to the BlueNord
*
Annual Report for 2022. BlueNord
is the proposed new name for
Norwegian Energy Company ASA,
also known as Noreco, (“BlueNord”).
We are a strategically important
European oil and gas company
that specialises in producing and
developing resources, and in
activities which support the energy
transition. BlueNord helps deliver
the energy security that millions of
people rely on, while creating value
for all of our stakeholders.
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BlueNord
Annual Report and Accounts 2022
Strategic Report
Revenue
$967m
+71%
EBITDA
$611m
+145%
Operating cash flow 2021 adjusted
VAT 2020, paid 2021
$561m
+172%
Total liquidity
(cash and undrawn facilities)
$468m
+110%
Operational highlight
BlueNord delivered strong production in
2022 with a yearly average of 26.7 mboepd
compared with 26.9 mboepd in 2021. Natural
reservoir decline was mitigated by well
interventions, well stimulations and
restoration of inactive wells. Operational
efficiency was 90 percent (excluding
third-party shutdown) compared with
84 percent in 2021. This was achieved
through focus on maintenance and
robust operational procedures.
Find out more on page 30
Investing in vital assets
During 2022, our assets helped to provide
Europe with energy for heating, electricity
generation and for powering industry. By
focusing our investment on further growing
gas production, we will continue to meet
consumer needs during 2023 and beyond.
We will also support the energy transition by
helping to offset higher carbon intensive
sources of energy (e.g. coal), and by
participating in carbon capture and storage
(CCS) projects that will support the global
journey to net zero.
Find out more on page 18
Highlights of the Year
* The Company’s formal, legal name is “Norwegian Energy Company ASA” – often referred to as “NORECO” or “Noreco”.
The Board of Directors has proposed that the name is changed to “BlueNord”. The change of name will become effective
following, and subject to, approval by the Annual General Meeting in the Company, expected to be held on or about 25 April
2023. In anticipation of the aforementioned approval, the Company has used “BlueNord” for the purposes of this document.
Strategic Report
02-65
At a Glance 04
Timeline 06
Our Differentiators 08
Letter from the
Executive Chair 10
Letter from the Chief
Executive Officer 12
Business Model and Strategy 16
Overview of Assets 18
Operational Review 30
Financial Review 32
Sustainability Report 34
Risk Management 56
Principal Risks and
Uncertainties 57
Governance Report
66-87
Chair’s introduction 68
Leadership 70
Corporate Governance Report 72
Board activities 77
Audit Committee Report 78
Remuneration Committee Report 79
ESG Committee Report 80
Nomination Committee Report 81
Director’s Report 82
Reporting of payments
to governments 87
Financial Statements
88-145
Contents for Consolidated
Statements 90
Consolidated Statement
of Comprehensive Income 91
Consolidated Statement
of Financial Position 92
Consolidated Statement
of Change in Equity 93
Consolidated Statement
of Cash Flows 94
Notes 95
Contents for Statutory Accounts 126
Income Statement 127
Balance Sheet 128
Cash Flow Statement 129
Notes 130
Independent Auditor’s Report 138
Statement of Compliance 142
Alternative Performance
Measures 144
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BlueNord
Annual Report and Accounts 2022
At a Glance 04
Timeline 06
Our Differentiators 08
Letter from the Executive Chair 10
Letter from the Chief Executive Officer 12
Business Model and Strategy 16
Overview of Assets 18
Operational Review 30
Financial Review 32
Sustainability Report 34
Risk Management 56
Principal Risks and Uncertainties 57
01
We are well placed to
deliver on our plans for
2023 and drive value for
all stakeholders in the
short, medium and
longer-term.
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BlueNord
Annual Report and Accounts 2022
Strategic Report
Strategic
Report
4
BlueNord
Annual Report and Accounts 2022
At a Glance
2019
BlueNord completes the acquisition of Shell’s Danish upstream
assets, establishing us as the second largest oil and gas producer
inDenmark
36.8%
Size of the interest held by BlueNord in DUC, the DUC is
a key contributor to EU energy security with direct export
routes to continental Europe
20+ yrs
Lifespan of production from the
Tyra field when redevelopment
is complete in winter 2023-24
and constrained only by
concession expiry
BNOR
The company is currently trading
under the ticker “NOR” and will,
subject to, and shortly following a
shareholder approval in the
Annual General Meeting, be
trading under the ticker “BNOR”
220 million
BlueNord has 2P reserves and near-term 2C contingent resources of
220 million barrels of oil equivalent (mmboe) as of 31 December 2022
~90%
Expected increase of net
production with redeveloped Tyra
30%
Expected reduction in field
emissions intensity with
redeveloped Tyra
Ownership of vital assets
BlueNord is currently listed on the Oslo Stock
Exchange. We operate in the Danish North Sea with
a 36.8 percent interest in the Danish Underground
Consortium (DUC), producing oil and gas from three
operational hubs. A fourth, Tyra, is being redeveloped
and is set to start production in winter 2023-24.
Our strategy and purpose
At our core, our objective is to balance energy security
and the demands of the energy transition. From a
corporate perspective, we believe doing this best
enables us to deliver long-term value for our
shareholders and maximise BlueNord’s contribution
to our broader set of stakeholders.
BlueNord will produce oil and gas within Europe while
it is required. We will make the investments in supply
required to help ensure energy prices are affordable
to consumers, both residential and industrial. We will
invest in the near-term acceleration of gas to help
balance supply and demand. We will seek to lower
overall emissions by producing more gas which will
offset higher carbon intensive sources of energy like
coal, investing in emissions reduction initiatives for
existing producing assets, and investing in activities
that support a net zero society.
Ultimately, our purpose is to provide Europe with the
energy it needs today, tomorrow, and in the net zero
future to come.
Balancing energy security
with the energy transition
BlueNord
Annual Report and Accounts 2022
Strategic Report
5
TYRA
GORM
DAN
HALFDAN
Denmark
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BlueNord
Annual Report and Accounts 2022
Year End net production (boe)
5.5 million
from acquisition 1 August 2019
Year End 2P reserves (boe)
209 million
Year End 2P reserves (boe)
201 million
Year End net production (boe)
10.4 million
• Successful completion of acquisition of
Shell’s Danish upstream assets which
makes BlueNord the second largest
oil- and gas producer in the Danish
North Sea, raised gross proceeds of
c. USD 550 million in a private placement,
convertible bond issue (NOR13) and a
subsequent offering.
• Temporary shut-in of Tyra.
• Issuance of senior unsecured
NOR14 bonds.
• Share buyback of 438,161 own shares.
• Safe removal of the old Tyra platforms.
• Installation of new Tyra II jackets.
2019
2020
Timeline
Focused
on delivery
Since 2019, we have been working to maximise returns on our
investment in the DUC and today our Company is going from
strength to strength.
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BlueNord
Annual Report and Accounts 2022
Strategic Report
Year End 2P reserves (boe)
200 million
Year End 2P reserves and near-term
2C resources (boe)
220 million
Year End net production (boe)
9.8 million
• Successful closing of USD 1.1 billion
RBL with ESG-linked KPIs.
• Sail away and offshore installation
of three Tyra East platforms.
• Enters into CCS partnership
Project Bifrost.
• Successful grant of EUDP funding
for Project Bifrost.
• Completion of offshore installation
campaign of the four Tyra West- and
accommodation- and utility platforms.
• Successful offshore lift and installation of
the Tyra II TEG, bridges and flare tower
– all eight platforms in place.
• Tyra II HUC milestone: Safe access and
temporary power.
• Amendment and improvement of NOR13
with a successful voluntary exchange
offer into USD 208 million NOR15
convertible bonds.
• Entered into CarbonCuts.
2021
2022
Year End net production (boe)
9.8 million
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BlueNord
Annual Report and Accounts 2022
Our Differentiators
BlueNord has built a strategically
important portfolio of energy assets and
today, as part of the DUC, this includes
four hubs and 15 fields on the Danish
continental shelf with over 50 years
history of oil and gas production.
BlueNord has a differentiated business
model, being entirely non-operated with
a clear focus on maximising shareholder
returns through a meaningful and
sustainable distribution profile,
which makes it an excellent platform
for creating future value.
A robust
business with
strong long-
term growth
potential
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BlueNord
Annual Report and Accounts 2022
Strategic Report
Cash flow
– Significant cash flow is expected once Tyra is onstream,
and we are fully committed to meaningful shareholder
distributions. This will also further augment our robust
balance sheet with significant liquidity, and long-term
visibility will remain through commodity price hedging.
Experience
– Our senior team is highly experienced and has a proven
operational track record throughout our organisation.
As an engaged DUC partner, we play a meaningful role in
DUC direction and activity, ensuring a well-managed
portfolio (operated by TotalEnergies) with high uptime, and
with significant potential for further near-term optimisation.
Growth
– The near-complete Tyra redevelopment, which will
more than double our net production, means material
growth is embedded in our portfolio. Our substantial
reserve and resource base supports our long-term
production profile to at least 2042 and there exists highly
attractive short-cycle infill drilling opportunities to develop
resources, and ample long-term growth potential.
Energy transition
– BlueNord has a balanced commitment to energy
security and the energy transition. We continue to focus
on reducing emissions intensity through investments,
while producing the gas required by the current
supply-demand landscape, and supporting the
journey to net zero with fit-for-purpose investments.
2nd
Largest oil and gas producer
in Denmark
33
Highly skilled employees
$468m
Total liquidity
(cash and undrawn facilities)
BlueNord’s
growth oriented
business model
and strategy
Find out more
on page 16
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BlueNord
Annual Report and Accounts 2022
Since the acquisition of Shell’s upstream assets in Denmark in 2019,
BlueNord has transformed into a business with solid foundations supporting
near and longer-term returns for shareholders. This has been achieved by a
consistent focus on capital discipline and maximising long-term capital
returns, reflecting the dedication, commitment, and ability of the team in place.
Riulf Rustad
Executive Chair
Solid foundations for
shareholder value creation
Letter from the Executive Chair
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BlueNord
Annual Report and Accounts 2022
Strategic Report
As BlueNord we are in pole position
to become a leading European
independent gas producer and to
continue to create value for the
Company’s stakeholders.
Volatility in commodity prices continued into 2022,
particularly in gas, with European economies seeking to
shore up supplies, following the Russian invasion of
Ukraine early in the year. Prices dropped from their peak
later in 2022, as the effects of a milder autumn across
Europe resulted in higher than anticipated stocking levels.
However, while writing this, we are still facing high prices
in a historical context due to the fundamental
underinvestment in supplies during the past ten years
and a continued strong demand-side.
A year of challenge and growth
2022 was characterised by deglobalisation, the continued
effect of COVID-19, and the invasion of Ukraine, resulting
in countries scrambling to secure supplies of key
resources, including energy. As geopolitical tensions
remain, the focus on shorter and more secure supply lines
is expected to continue in 2023. This only serves to
emphasise the importance of projects such as our
infill drilling campaigns and Tyra II, which will make
meaningful contributions to energy security in
Denmark and Europe more widely.
Against the background of these global events, BlueNord
will continue to assess its options for growth. Based on a
strong performance in 2022, operationally and financially,
BlueNord is in a strong position, giving the Company
flexibility, and helping to ensure it can continue to
maximise the return on capital employed.
The growing strength of BlueNord is supported by a
diverse and cash generative asset base. Whereas the
focus has been on maximising output from the existing
producing assets, BlueNord is heading towards
becoming a dividend-paying company with a more
balanced exposure to both gas and liquids.
This has already been recognised in the Company’s
financial performance, with record revenues and EBITDA
in 2022, that enabled the Company to voluntarily repay
USD 100 million of its debt facility in Q3. It also means
the Company is fully funded for Tyra despite the
shift in schedule with increased headroom and lower
leverage, which increases our options to maximise
shareholder value.
Significant reductions in emissions
BlueNord continually evaluates how to appropriately
manage its responsibilities towards the environment
and other stakeholders. The CCS projects Bifrost and
CarbonCuts are investments with potential for both
medium and long-term tangible contributions to just
that. Alongside other measures to minimise emissions,
and as production pivots towards gas over the next 12
months, the Company will see emissions intensity
reduce significantly.
While the world is rightly heading towards net zero, gas
is expected to remain a key transition fuel, supporting
energy security and quality of life. With Tyra II on
stream, the BlueNord contribution towards keeping
people warm and the economic wheels turning will be
material. We will also support wider regional emissions
reduction, by replacing emissions heavy LNG imports
and coal with locally produced gas, in line with Danish
and EU ambitions.
In conclusion
I, along with the rest of the Board, would like to take this
opportunity to thank the management team for all their
hard work in guiding BlueNord to where it is today. I
would also like to congratulate Euan on his permanent
appointment as CEO of the Company, during what has
been a very good year for the business.
With a clear line of sight to production more than
doubling and an increasingly strong financial position,
the options open to us for further value creation are
greater now than they have ever been. Following
several transformational years, the Board and I have
high expectations and ambitions for the future of the
Company. As we step into the future, we would like to
do so in a way that is reflective of our overall strong
position, and the upcoming step-change in gas
production we will see with Tyra II. While we will always
treasure yesterday, we are today facing the future as a
forward-leaning and exciting company, which will be
named BlueNord. As BlueNord, we are in pole position
to become a leading European independent gas
producer and to continue to create value for the
Company’s stakeholders.
Riulf Rustad
Executive Chair
Voluntary debt
repayment in
2022 made
possible by
record revenues
(USD)
$100m
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Annual Report and Accounts 2022
Delivering across
the portfolio
Letter from the Chief Executive Officer
BlueNord had an exceptionally strong 2022, successfully delivering
both operationally and financially. The Company is well positioned
for 2023 and beyond.
Euan Shirlaw
Chief Executive Officer
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BlueNord
Annual Report and Accounts 2022
Strategic Report
Revenue
increase in 2022
71%
EBITDA increase
in 2022
145%
Production
Production in 2022 was at the top end of expectations,
resulting in guidance being increased on five separate
occasions during the year. For 2022 overall, production
was 26.7mboepd, which represents a one percent
decline when compared with 2021 (26.9mboepd).
Comparison with our initial guidance of 23.5 to
25.5mboepd at the start of 2022 demonstrates the extent
to which the assets outperformed during the period.
This performance was the result of our concerted
focus, along with the operator, to drive higher
production levels. In addition to specific activities that
added volumes, the operator also delivered high
operational efficiency by significantly reducing the
maintenance backlog.
Production levels were supported by work that began
in H2 2021, including the successful completion of
workovers, well scale squeezes, wells being brought
back into production and the material success of the
HCA restimulation campaign, which took place in Q3
and saw production from those wells increase by
approximately three times and led to a reweighting
of our overall production towards high value gas.
Broadly flat production year-on-year was achieved
despite the planned shutdown of the NOGAT pipeline
in Q3, for its ten-year maintenance.
The production performance and work undertaken
over the last 12 months further reaffirms the opportunity
presented by the Company’s existing producing assets.
In the near to medium-term, seven infill well
opportunities have been identified. Final Investment
Decision (FID) was taken on two of these wells in
December 2022, with the first well to be drilled, by Shelf
Drilling Winner, in spring. These wells are expected to
increase gas production from the Halfdan field, with
initial production of 3mboepd and plateau production
in the autumn. These are short-cycle investment
opportunities with attractive economics, that benefit
from the existing infrastructure we have within the DUC.
Workover and well optimisation and management
programmes will continue in 2023, supporting ongoing
production volumes.
When I joined Noreco in 2019, immediately following the
acquisition of Shell’s upstream assets in Denmark, we
knew we had a very strong base however were naturally
still finding our feet as a revived company. Now, with
significant progress made, we confidently know who we
are, what we represent, our purpose and what values are
important to us.
It is against that backdrop that we introduce to you today
BlueNord, the new name for Noreco. BlueNord is
reflective of our values; bold, purposeful and dependable,
while it also represents our purpose to maximise gas
production for as long as required – an act balancing both
the needs for Energy Security and the Energy Transition.
It is also my pleasure to report that BlueNord begins its life
in an excellent position, following a year of consistent
delivery and with a clear plan that will enable a continued
strong performance.
During 2022, we delivered strong operational
performance across our three currently producing hubs,
showcasing the strength of our assets and the substantial
de-risking of Tyra with all eight modules now successfully
and safely installed offshore. Today, BlueNord is a
multi-asset platform that offers attractive exposure to a
profitable and growing production base.
On the back of strong production performance and a
supportive commodity price environment, BlueNord
delivered a record financial performance in 2022.
Revenue increased by 71 percent and EBITDA increased
145 percent. BlueNord also generated free cash flow of
USD 246 million during the year and was able to use part
of this to repay USD 100 million of its Reserve based
lending (RBL) facility, resulting in year-end total liquidity
of USD 468 million.
BlueNord exits the year with a strengthened financial
position and a robust balance sheet that, in turn, increases
flexibility as we move into 2023. Going forward, we will
continue to act based on our disciplined approach to
capital allocation, prioritising returns to shareholders
through a meaningful and sustainable distribution profile.
Future opportunities for organic investment will be viewed
through this lens, and considered on the basis of how they
contribute to our overall objective of maximising both
shareholder value and capital returns.
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Annual Report and Accounts 2022
Letter from the Chief Executive Officer continued
Shortly thereafter, with the installation of the two
remaining bridges and a flare stack, Tyra II was in final
form, with all eight platforms installed. This is a significant
achievement and reflects the hard work and dedication of
the people involved.
Strategically, Tyra II is a key asset to European energy
security with net 2P reserves of 74.4mmboe to 2042, it will
provide enough gas to power the equivalent of 1.5 million
homes and allow Denmark to become a net gas exporter.
Gas is forecast to remain a key transition fuel across many
markets for some considerable time, resulting in
continued strong demand in Europe and further afield.
Carbon Capture and Storage
BlueNord is actively assessing the long-term potential for
CCS, both within its existing asset base in the DUC and
beyond. Through Project Bifrost, where we are partner
alongside TotalEnergies and the NSF, we are undertaking
early-stage studies to determine the feasibility of CO
2
transport and storage using existing infrastructure at the
Harald reservoir.
During 2022, BlueNord also made a strategic investment
in CarbonCuts, a start-up company focused on assessing
the potential for onshore CCS in Denmark. Combined
with Bifrost, BlueNord has a portfolio of opportunities that
will allow us, in the future, to progress those that best fit our
profile at the time.
Reserves
At the end of 2022, BlueNord has audited 2P reserves and
near-term 2C contingent resources of 220mmboe,
compared to our 2P reserves of 200mmboe at the end of
2021. Our reserve and resource base as audited by RISC
now reflects the planned development activities for the
DUC, with four infill wells and two projects (HCA gas lift
and Valdemar Bo South) included in 2P reserves and a
further two infill wells and two projects (Adda and Halfdan
North) included in near-term contingent resources. The
inclusion of near-term contingent resources in RISC’s
evaluation for 2022 with a committed operator and
attractive, identified investment opportunities driving
significant volume additions.
HSE and Sustainability
HSE and sustainability are core themes to BlueNord.
The Company aims to undertake its activities and to
support the operation of the DUC assets to the highest of
industry standards and to conduct business with integrity
at all levels.
Tyra gas production will
make a material contribution
to energy security in
Denmark and the wider
region... providing enough
energy to power the
equivalent of 1.5m homes.
There is also the opportunity to support our medium-
term production profile with the Adda, Valdemar Bo
South and Halfdan North development projects. Adda
is a gas-weighted opportunity, with net 2C resources of
19mmboe, while Valdemar Bo South and Halfdan
North are oil weighted, net 2P reserves of 11mmboe
and net 2C resources of 14mmboe respectively.
Tyra II
2022 saw the significant de-risking of the Tyra asset
and clear line of sight to first gas in winter 2023/24, with
a P50 estimate of December. Tyra II at plateau will
contribute to a more than doubling of the Company’s
production to c. 55,000boepd. It will also substantially
reweight production to gas, reduce lifting cost by more
than 40 percent to USD 13 per barrel of oil equivalent,
and reduce the Company’s emissions intensity by
30 percent in line with our sustainability objectives.
The inflection point for the project was the successful
installation of the Tyra East G (TEG) module in October.
The lift was undertaken by the world’s largest offshore
crane vessel, the Heerema Marine Contractors’ Sleipnir,
less than 24 hours from arrival, significantly ahead of
expectations. At 17,000 tonnes, it broke a world record
for the heaviest crane lift conducted at sea.
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BlueNord
Annual Report and Accounts 2022
Strategic Report
Health and safety form a core part of the Company’s
culture and is central to every decision. This is made
possible by the strength and depth of the BlueNord team,
allowing HSE to be properly considered at every level.
The Company is committed to reducing emissions from
the DUC operations by 400-500 thousand tonnes towards
2030. Emissions per barrel of oil equivalent are expected to
decrease by 30 percent once Tyra is onstream, while at the
same time the Company’s production will materially
reweight to the transition fuel of gas.
Tyra gas production will make a material contribution to
energy security in Denmark and the wider region. It will
keep consumers warm while powering industry and the
wider economy, supporting jobs and living standards.
While gas remains an important economic and social
enabler, it will drive the social value and sustainability of
our business.
Team
I would like to thank the entire BlueNord team for their
efforts over the last 12 months: across all of our
departments, they have consistently demonstrated the
value of their underlying technical, operational, financial
and wider corporate skills to deliver for us as a Company.
A strong 2022 that I look forward to being repeated in
2023 and beyond.
Financials
Revenue increased significantly during the year to
USD 967m (2021: USD 565m). The increase in revenue
reflected a strong production performance, combined
with a supportive commodity price environment an
increased production weighting to gas, post the HCA
restimulation campaign.
EBITDA for the year of USD 611m (2021: USD 250m).
The drivers for this higher outcome are in line with those
that impacted our revenue.
Despite the shift in first production for Tyra, the Company
has seen its balance sheet position improve during 2022,
with USD 100m of the RBL being repaid in Q3 on the back
of strong cash flows. With current liquidity of USD 468m,
BlueNord has more than sufficient headroom to deliver on
Tyra, and with continued strong cash flows and a year end
cash position of USD 268m, it is increasingly well placed
to deliver further and consider distributions in due course.
In order to simplify and enhance BlueNord’s capital
structure, in Q4 we amended the NOR13 bond. This
resulted in various changes including an increase in the
principal to reflect the change in value of NOR13 due to
the Company’s strong share price performance in
2022, a higher conversion price and also an extended
maturity to December 2025 from November 2023. Post
approval, this resulted in an exchange offer into a new
USD 208m subordinated convertible bond, NOR15.
The Company’s hedging policy has focused on
ensuring the necessary level of forward cash flow
visibility. During 2022, we successfully amended our
hedging requirements under our RBL facility, reducing
the levels that are required to be hedged and ensuring
we maximise our flexibility to put price hedge volumes
only where we believe it is in the best interest of all our
stakeholders. The gas price hedging we put in place in
H2 2022 at levels significantly above current spot
prices is a strong demonstration of this.
Outlook
Looking ahead to 2023, the focus will remain on
maximising the value from the existing producing
assets, while also ensuring first production from Tyra as
planned in winter 2023/24. To maximise the
opportunity from existing assets there is a clear plan in
place, consisting of infill wells, workovers and reservoir
optimisation. Rigs necessary to undertake this work
are on long-term contracts and the various work
programmes are progressing as planned.
BlueNord therefore remains well placed to continue to
deliver on its plans and guidance for this year and to
drive value for all stakeholders in the short, medium and
longer term. We will provide further reports as
additional progress is made throughout the year and
we look forward to the rest of 2023 and beyond with
confidence.
Euan Shirlaw
Chief Executive Officer
Assets
overview
Find out more
about our assets.
Find out more
on page 18
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Annual Report and Accounts 2022
Step 1: Maximise cash generated
by the BlueNord portfolio
We will utilise our technical expertise to optimise
production and make selective investment in short-
cycle development and drilling projects, leveraging
our existing infrastructure position in the DUC.
Step 2: Allocate capital according
to our disciplined framework
Maintaining a robust balance sheet on a through
cycle basis, we will prioritise capital returns to
shareholders. We will also make measured and
selective further investments in more material, longer-
term projects that provide organic growth and are in
line with our overall objective of maximising cash flow
and shareholder value.
Our approach to creating value for all of our stakeholders
BlueNord stakeholders include our partners, our shareholders, our
lenders, the communities in which we operate, and our outstanding
team of professional people. We bring these groups together to
provide Europe with the energy it needs, while in the process
delivering long-term value and cash-flow generation.
Our approach is founded on our vision: to become one of the
leading independent producers of gas in Europe.
In practice, this means that we have a very clear focus on maximising
the value and cash flow potential of our portfolio, combined with a
disciplined approach to allocating capital in order to ensure that we
best meet the objectives of all of our stakeholder groups.
BlueNord also has a clear commitment to prioritising returning capital to
shareholders once the Tyra II project is on stream and, going forward,
we will ensure that future investments are balanced and focused on our
goal of maximising the long-term cash generation of the business.
Business Model and Strategy
With over 50 years of oil and gas production
from the DUC and at least 20 years remaining,
BlueNord has a strategically important portfolio
of energy assets.
A robust business with strong
long-term growth potential
Our approach can be summarised as a two-step process:
Our approach is founded on
our vision: to become one of
the leading independent
producers of gas in Europe.
17
BlueNord
Annual Report and Accounts 2022
Strategic Report
A year of strong progress towards our strategic priorities
To achieve BlueNord’s strategic priorities we worked with the operator
to support optimisation of the three hubs currently operating in the
DUC. At the same time, redevelopment of Tyra continued, working
towards first gas in winter 2023-24.
We also invested to deliver further gas production and activities that
support the transition to net zero, recognising that these opportunities
must be fit for purpose and appropriate for the BlueNord balance
sheet. In summary, in 2022, we:
• delivered net production of 26.7mboe/d, above the top end of
expectations at the start of the year; as a result of the positive
commodity price environment during 2022, this production
also resulted in significant cash flow generation;
• successfully advanced and substantially de-risked the Tyra II
project, with all eight offshore modules installed by the end of
October 2022;
• strengthened our position in Denmark, in part a recognition of the
important role the business has to play in supporting energy
security;
• participated in Project Bifrost, the ongoing study of the potential for
CCS using the DUC infrastructure; and
• supported CarbonCuts, an onshore CCS opportunity which provides
BlueNord optionality with regards to future activities in this area.
Factors that supported our successful 2022
• Exercising BlueNord control and leveraging internal capabilities,
including our role and engagement within the DUC where we
continued to positively influence and support our stakeholders,
thanks to our active, capable and motivated team, and a supportive
capital structure.
• Progressing opportunities for creating value and maximising
cash-flow generation, accelerating short-cycle, gas-weighted
projects, and considering selective investment in longer-term,
larger-scale developments.
• Continued to enhance and strengthen our balance sheet
through proactive steps to simplify the capital structure, optimise
hedging requirements and reduce finance costs.
• Focused decision making based on a clear capital allocation
framework; always looking through the lens of prioritising value to
support distributions to shareholders and ensuring that we are
disciplined in allocating capital, today and tomorrow.
Find out more about our success factors on pages 8 and 9.
A year of strong progress has positioned BlueNord well for 2023 and
beyond. At the start of 2023, the Company is continuing to work with
the operator to optimise the Tyra II hook-up and commissioning
programme that is currently underway, and which will support first gas
in winter 2023-24.
Capital
Returns
Energy Transition
De-leveraging
Organic
Growth
BlueNord’s core
values are Bold,
Purposeful and
Dependable.
Find out more
on page 52
Disciplined Capital Allocation
BlueNord’s strategic priorities for 2022:
01
Deliver maximum contribution from
the base business
02
Deliver Tyra II
03
Deliver the long-term potential
of the portfolio, while also continuing
to balance the complementary
objectives of energy security and
energy transition
18
BlueNord
Annual Report and Accounts 2022
65% Oil
35% Gas
36.8%
20%
43.2%
2
C
R
e
s
o
u
r
c
e
s
2
P
R
e
s
e
r
v
e
s
Overview of Assets
Our asset portfolio includes four hubs and 15
producing fields. Three hubs are currently producing
and one hub is under redevelopment.
Information about the hubs
The Danish Underground Consortium (DUC), which started
production in 1972, are located in the Central Graben sector of the
North Sea. The DUC is comprised of 15 fields, four export pipelines
and significant infrastructure. Production is routed via four hubs:
Halfdan, Tyra, Dan and Gorm. The four export pipelines secure
exports from the hubs to the Danish mainland and the
international market.
The DUC accounts for nearly 90 percent of the oil and gas that is
produced in the Danish North Sea.
Information about the pipeline
The DUC is the owner of the Danish North Sea’s key infrastructure
points. The bulk of Denmark’s oil and gas production is transported
onshore via the Gorm and Tyra hubs.
The Tyra Gas pipeline runs between the Tyra platform and the F3/FB
platform in the Dutch part of the North Sea. From here the gas is fed
into the NOGAT pipeline, which carries it to the Netherlands and the
Dutch supply system.
TotalEnergies 43.2%
BlueNord 36.8%
Nordsøfonden 20%
87%
of Danish oil and gas production
26.7
Production mboepd (net)
220
2P reserves and near-term 2C
contingent resources mmboe (net)
2P Reserves 182.4
Tyra Hub (2P) 85.03
Halfdan Hub (2P) 46.28
Dan Hub (2P) 30.84
Gorm Hub (2P) 20.25
2C Resources 37.2
Adda Hub (2C) 18.56
Halfdan North Hub (2C) 13.76
Infills (2C) 4.84
Commodity mix of 2P reserves and near-term 2C contingent resources: total = 220mmboe
2P reserves by hub and near-term 2C
resources by project (total 220 mmboe)
DUC Partners and interest
19
BlueNord
Annual Report and Accounts 2022
Strategic Report
Denmark
TYRA
GORM
DAN
HALFDAN
Netherlands
Sweden
Germany
Belgium
Norway
1
Oil pipeline to Fredericia
2
Gas pipeline to Nybro
3
Gas pipeline to Den Helder
Gas cross-border points
1
2
3
20
BlueNord
Annual Report and Accounts 2022
DAN
KRAKA
REGNAR
ALMA
Overview of Assets continued
Dan Hub
The Dan Hub is a core asset on the Danish
continental shelf. Discovered in 1971 and brought
on production in 1972, Dan was the first field in
production in Denmark and close to 26 percent of
total Danish oil production has been extracted
from the Dan field.
Dan Hub
The Dan field is one of the largest North Sea chalk fields,
part of the Ekofisk and Tor formations, both with oil rims
overlying gas caps and with communication between the
two formations. The reservoirs are high porosity, low
permeability, with long transition zones. The Dan field has
been developed in several phases and now consists of a
total of 12 platforms, 38 active oil wells and 33 active water
injectors. Dan has two satellite fields, Kraka (brought on
stream in 1991) and Regnar (1993).
The Dan process centre consists of the Dan F complex,
the old Dan complex, and the satellites Kraka and Regnar.
Oil production from Dan is transported to Gorm, and gas
is transported to Tyra.
30.8
Net 2P reserves mmboe
7.7
Net production mboepd
93.4%
Net oil reserves
87.4%
Operational efficiency
Producing field
No production
Discovery
21
BlueNord
Annual Report and Accounts 2022
Strategic Report
Kraka
Kraka is a tie-back to the Dan field and is an oil field
located eight kilometres to the southeast of the Dan
field. The field produces oil and gas from the Ekofisk
chalk; ten wells have been drilled and currently
seven wells are producing. Well A-11C on Kraka has
been reinstated after being used as a swing
producer.
The Dan field is one
of the largest North
Sea chalk fields, part
of the Ekofisk and
Tor formations.
Net production
of the Kraka field
0.6
mboepd
Production
outlook 2023
You can find out
more about the
production outlook
for the Dan Hub in
our Operational
Review.
Find out more
on page 31
22
BlueNord
Annual Report and Accounts 2022
GORM
ROLF
DAGMAR
SKJOLD
Overview of Assets continued
Gorm Hub
Gorm Hub
The field produces oil and gas from the Ekofisk and Tor
chalk reservoirs. The field is a domal structure divided into
a deeper western A-block and the shallower eastern
B-block. In total, 46 wells have been drilled, with 17
producers currently active, and six active water injectors.
Gorm serves as the second stage processing centre for
Halfdan and as an oil transfer hub for Dan, Tyra and
Halfdan. The oil is transported ashore to Frederica via
pipeline from the riser platform Gorm E and gas is sent to
Tyra. While Tyra is not producing due to the ongoing
redevelopment, gas is exported through the NOGAT
pipeline to the Netherlands.
20.2
Net 2P reserves mmboe
4.8
Net production mboepd
100%
Oil reserves
82.4%
Operational efficiency
The Gorm Hub was discovered in 1971 and
brought on production in 1981, the second
Danish field in production after Dan. The Gorm
hub also includes the Skjold, Rolf and Dagmar
fields, and is the export hub for most of the oil
produced in Denmark.
Producing field
No production
23
BlueNord
Annual Report and Accounts 2022
Strategic Report
Skjold
The Skjold field is an oil satellite tie-back to Gorm,
which was discovered in 1977 and brought on
production in 1982. The field is a dome-shaped
structure with a relatively thin chalk reservoir on the
crest, which thickens towards the outer crest and
flank areas. In total, 30 wells have been drilled, with
16 oil producers currently active and eight active
water injectors.
Rolf
Rolf is an oil field which has been developed as a
satellite to Gorm. The field was discovered in 1981
and brought on production in 1985. The field
produces from the Ekofisk and Tor chalk reservoir
with intervals of good permeability with fracture
connected matrix porosity. Three wells have been
drilled, with currently one active oil producer.
In total 46 wells have
been drilled, with 17
producers currently
active, and six active
water injectors.
Net production
of the Skjold field
2.6
mboepd
Net production
of the Rolf field
0.3
mboepd
Production
outlook 2023
You can find out
more about the
production outlook
for the Gorm Hub in
our Operational
Review.
Find out more
on page 31
24
BlueNord
Annual Report and Accounts 2022
HALFDAN MAIN
HALFDAN NORTH EAST
HALFDAN NORTH
Halfdan Hub
Halfdan Hub
The Halfdan main field was discovered in 1998, brought
on stream in 1999 and Halfdan North East in 2004. There
are no distinct boundaries separating the Halfdan main
field and Halfdan North East area. Halfdan North East is a
development of the gas accumulation in the Ekofisk
formation to the North East of the Halfdan field. The main
field produces oil and gas from the Tor chalk reservoir.
The Halfdan main oil accumulation is contiguous with the
Dan accumulation. It has been developed in four phases,
and 71 wells have been drilled, with 35 oil producers
currently active and 26 active water injectors.
Halfdan North East has been developed in three phases
and 21 wells have been drilled, with 16 gas producers
currently active. Halfdan consists of two main groups of
platforms, Halfdan A and Halfdan B, in addition to an
unmanned wellhead platform, Halfdan CA (North East).
Oil is transported by pipeline to Gorm and gas is
transported to Tyra West. Gas can also be imported (for
injection) and exported to Dan. Injection water is supplied
from Dan.
Halfdan development projects
There are a number of projects and studies ongoing for
the greater Halfdan development. The most mature is
the Halfdan North project, which targets a reservoir
located between the producing Halfdan and Tyra SE
fields. More information on projects and studies on
page 28-29.
46.3
Net 2P reserves mmboe
14.2
Net production mboepd
79.3%
Oil reserves
90.6%
Operational efficiency
Producing field
Discovery
The Halfdan Hub includes Halfdan and Halfdan
North East. Halfdan is currently the largest
producing field in Denmark and the most important
DUC asset in terms of value and resources, both
technically and commercially.
Overview of Assets continued
25
BlueNord
Annual Report and Accounts 2022
Strategic Report
Halfdan North East has been
developed in three phases and 21
wells have been drilled, with 16 gas
producers currently active.
Production
outlook 2023
You can find out
more about the
production outlook
for the Halfdan Hub
in our Operational
Review.
Find out more
on page 31
26
BlueNord
Annual Report and Accounts 2022
HARALD EAST
HARALD WEST
LULITA
FREJA
SVEND
VALDEMAR
ROAR
TYRA
BOJE
ADDA
Overview of Assets continued
Tyra H ub
Tyra represents the largest redevelopment
project to be carried out on the Danish continental
shelf to date. As the largest gas field in the DUC,
the redevelopment will extend the field’s life
by 20 years.
Tyra Hub
The main Tyra field is the largest natural gas field in the
Danish sector of the North Sea. It was discovered in 1968
and production started in 1984. The Tyra field has been at
the heart of Denmark’s energy infrastructure for more
than 30 years, processing more than 90 percent of the
nation’s natural gas production.
The Tyra field consists of two main process centres,
Tyra East and Tyra West, which are linked to five
unmanned satellite fields: Tyra South East, Harald,
Valdemar, Svend and Roar. Gas is exported to shore
and oil is exported to Gorm E.
Tyra South East is an oil-dominated field, discovered
in 1991 and brought on in 2002, with first oil in 2015.
The field produces mainly from the Ekofisk and Tor chalk
reservoirs. A total of 93 wells have been drilled on Tyra
main and South East, with 47 oil and gas producers
currently active.
Due to subsidence, a decision was made to redevelop the
Tyra field and production was temporarily suspended in
September 2019.
All wells on Tyra and its satellites are safely suspended
and abandoned for the extended shutdown, and the
project made significant progress during 2022.
Producing field
Discovery
83.1
Net 2P reserves mmboe
~90%
Expected increase
of net production with
redeveloped Tyra
30%
Expected reduction
in emissions intensity
with redeveloped Tyra
27
BlueNord
Annual Report and Accounts 2022
Strategic Report
Valdemar
The Valdemar field is an oil and gas field discovered in
1977, further appraised in 1985 and brought on
production in 1993. The Lower Cretaceous chalk has
been the primary development target, and 26 wells
have been drilled on Valdemar, with 22 oil and gas
producers currently active.
Roar field
Roar is a gas field with an oil rim tie-back to Tyra East.
The field was discovered in 1968 and further appraised
in 1981. The field was brought on production in 1996.
The field produces gas and condensate from the
Ekofisk and Tor chalk reservoirs. Four gas producer
wells have been drilled, with all currently active.
Harald North
Harald is a gas/condensate field located in the
north-western part of the Danish sector. The Harald
field comprises two structures; Harald East discovered
in 1980 and Harald West discovered in 1983. The fields
were brought on production in 1997. The Harald West
reservoir consists of Middle Jurassic sandstones, and
Harald East is an elongated dome structure in the
Upper Cretaceous Ekofisk and Tor formations. Four
wells have been drilled, two on Harald West and two on
Harald East, and all four wells are currently active.
Lulita field
Lulita is an oil field with a gas cap discovered in 1991,
and brought on production in 1998. The reservoir
consists of Middle Jurassic sandstones. Two wells
have been drilled, of which one is currently producing.
DUC holds a 50 percent interest in the Lulita field
with Ineos (40 percent) and BlueNord (10 percent)
as partners.
The Tyra redevelopment project is,
to date, the largest project carried out
on the Danish continental shelf and is
expected to increase net production by
approximately 90 percent, unlocking
gross reserves in excess of 200mmboe.
Tyra redevelopment – Tyra II
A FID was made in 2017, following approval by the Danish
authorities, with plans to temporarily cease production
from the Tyra gas field by the end of 2019 and to redevelop
the field infrastructure. The Tyra hub required
redevelopment due to compaction of the chalk reservoir,
where the seabed had subsided by six metres over a
period of at least 30 years of production.
The redevelopment project was necessary to ensure
both crew and equipment safety, as well as to maintain an
optimal level of production.
The execution of the Tyra redevelopment project is both a
global and local effort. In addition to fabricating
installations in Europe and Asia, project efforts are being
executed locally in Esbjerg and offshore in the Danish
North Sea.
The scope of the project includes removing old facilities,
modifying existing ones and installing new features.
The two existing process and accommodation platforms
were replaced in 2022 by one new process platform and
one new accommodation platform. The four wellhead
platforms and two riser platforms will have had their
jackets extended by 13 metres, and the current
topsides replaced.
The Tyra redevelopment project is, to date, the largest
project carried out on the Danish continental shelf and
is expected to increase net production by approximately
90 percent, unlocking gross reserves in excess of
200mmboe. Tyra II will decrease opex significantly
and lower emissions intensity by 30 percent.
In addition, the completed project will extend field life by
at least 20 years and produce enough gas to power the
equivalent of 1.5 million homes.
Redeveloped
Tyra will extend
its production by
20 years
28
BlueNord
Annual Report and Accounts 2022
0
10
20
30
40
50
60
2023 2025 2026 2027 2028 2029 2030202420222021
Overview of Assets continued
Estimated Rig Activity Schedule
(subject to further technical studies and FID on the individual projects)
Expected Long-Term Plan production profile
(subject to further technical studies and FID on the individual projects)
Dan, Halfdan, Gorm
Tyra
In-Plan projects
Above plan
Drilling of new wells Workovers or plugging and abandonment Development projects
2022 2023 2024 2025
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
WO
Halfdan
TNE Infills
(2w)
HEmJ
(1w)
Halfdan
EKO. Infills
(2w)
TBD
(2w)
W
O
SVA
P&A
WO
DUC Long-Term Plan
A Long Term Plan has been developed in the DUC, with an outline of
development activities up to 2030. The Plan is based on the current
technical and economic landscape of the DUC, and projects will be
revised and optimised in light of any findings from technical studies,
production, or changing macroeconomic conditions.
Long-Term Plan (“the Plan”) will endeavour to have seven
infill wells drilled between 2023 and 2025. Of the seven
infill wells, four oil wells will be drilled from Halfdan, one gas
near-field exploration well from Harald, while the two last
well slots are still under consideration.
Execution of the major developments is planned to
commence when the work on the Tyra redevelopment is
complete. After delivery of the seven infill wells, the three
main developments will be executed. Subject to further
analysis and conclusions, we will be starting with five wells
on Valdemar Bo South in 2026, then moving on to Adda
with seven wells, and then finally the nine Halfdan North
wells to be drilled.
In addition to the projects outlined here, work is ongoing to
mature additional developments that could be executed
with an additional rig in parallel with these projects.
7 infill wells
to be drilled between 2023 and 2025
7 wells
on Adda
5 wells
on Valdemar Bo South
9 wells
on Halfdan North
Valdemar Bo
South (5w)
Adda (7w) Halfdan North (9w)
2030
29
BlueNord
Annual Report and Accounts 2022
Strategic Report
Tyra Hub
Harald East Middle Jurassic
Harald East Middle Jurassic is a gas well drilled from
the Harald platform into Jurassic reservoir which has
significantly better production properties than the chalk
reservoirs present in Dan, Halfdan and Gorm hubs.
The well is classified as a near field exploration well and
has a large range of subsurface outcomes. FID has not
been taken yet but is expected in first half of 2023 with
first gas in 2024.
Valdemar Bo South
The Valdemar Bo South Lower Cretaceous discovery
is a southern extension of the producing Valdemar field.
Valdemar Bo South has been confirmed by the Bo-3X
and Jude-1X exploration well and further by the VBA-6E
horizontal well drilled in 2012. The discovery will be tied
back to Tyra E via the Valdemar BA platform with a
2.5 km pipeline from a new built wellhead platform
with five horizontal wells. A Field Development Plan
was submitted to the Danish Energy Agency (DEA)
in 2020.
Halfdan Hub
Halfdan Infill
The Halfdan infill wells are planned as a continuation of
the Halfdan field development. A final investment decision
was made in 2022 for two infill wells, planned to be drilled
in the Halfdan Upper Cretaceous Tor formation and with
an expected first oil/gas in 2023. Further two wells are
planned. A field development plan was submitted to the
DEA in December 2022.
HCA Gas Lift
The HCA gas lift project is planned for 2024. The gas
lift is required to support well production and thereby
increase production potential. Project scope comprises
modifications to Halfdan B topside facilities as well as
a gas lift manifold to be installed at Halfdan C.
Halfdan North
The Halfdan North Upper Cretaceous discovery is a
northern extension of the producing Halfdan field.
Halfdan North was confirmed by the well HDN-2X
and later in 2016 by the Tyra SE, TSB-3A well. The
discovery will be tied back to the Halfdan HBD
processing platform with a 7 km pipeline from a new
built wellhead platform with 9 horizontal wells, 5
producers and 4 water injectors. A Field Development
Plan was submitted to the DEA in 2020.
Adda
The Adda discovery was made in 1977 by the Adda-1
well. The discovery well found gas condensate in the
lower Cretaceous Tuxen Formation and oil in the
overlying Upper Cretaceous Hod Formation. The
discovery will be tied back to Tyra East with a 11 km
pipeline from a new built wellhead platform with 7
horizontal producer wells. A Field Development Plan
was submitted to the DEA in 2021.
Svend
Production from the Svend field ceased in 2016 due
to well integrity issues. Due to dependencies on other
projects, Svend is currently categorised as a potential
addition to the Long-Term plan.
HCA gas lift
project is
planned for
2024
FID on Harald
East Middle
Jurrasic gas well
is expected in
first half of
2023
Key projects included the 2023 DUC Long-Term Plan
30
BlueNord
Annual Report and Accounts 2022
Operational Review
A highlight of the year was the HCA restimulation campaign
in summer 2022, which involved the restimulation of eight
Halfdan wells using technology that enabled new areas of
the reservoir to be reached, resulting in production from
those wells increasing by circa three times and a reweighting
in overall production to gas. The positive effect of this
stimulation is expected to last for 30 months.
Well reinstatement work on the Dan field saw an increase in
the well count and five wells delivered significantly higher
production than planned. Gorm also had a higher production
level than expected throughout 2022 due to the well
stimulations performed in late 2021, and again in
November 2022.
The BlueNord assumption for operational efficiency in 2022
was 86 percent and an operational efficiency of 90 percent
was delivered (excluding third party NOGAT shutdown) and
88 percent including third party shutdown. This exceptional
performance was achieved through systematic work on
operational efficiency by the operator, with detailed analysis
of unplanned shortfalls from the previous two years and
addressing the causes of the greatest shortfalls.
Production loss was also limited during the planned NOGAT
pipeline shutdown, carried out once a decade, by temporary
injection of gas into producing wells.
Tyra Outlook for 2023
The operator TotalEnergies reported in August 2022 that
the first gas date of the project has been revised from
June 2023 to winter 2023/24.
This delay is driven by global supply chain challenges
that have impacted the extent to which fabrication work
on the process module (TEG) was completed prior to sail
away from the McDermott yard in Indonesia, as well as a
revised plan for offshore hook-up and commissioning.
BlueNord’s production performance in 2022
was strong, at nine percent above forecast.
Production during the year benefitted from
from an increased level of well activity and
higher uptime, of the production facilities.
Marianne Eide
Chief Operating Officer
Tyra 2022 milestones
During 2022, numerous important milestones were reached,
moving the Tyra project closer towards what will be a state-of-the-
art North Sea production and export facility. During 2022, all yard
construction activity completed and all eight platform topsides
have been successfully installed.
10 January 2022
• The three Tyra West wellhead and riser topsides were
successfully delivered from the Sembcorp Marine Ltd yard
in Singapore.
16 March 2022
• Sail away of the new Tyra II utility and living quarters (the
“accommodation unit” or the “TEH”) from Ravenna in Italy; the unit
was fabricated at the Piomboni yard by EPC contractor Rosetti
Marino, and Heerema Marine Contractors Barge H-408 safely
sailed the 5,400 tonne unit to the Tyra field in the Danish North Sea.
• The utility and living quarters unit is 32.5m tall and has seven levels,
including a helideck, and an area of 3,500m
2
– in addition to housing
80 offshore crew, the unit has a state-of-the-art control room, and a
system that turns sea water into drinking water; all firefighting water
and emergency power for Tyra II will be run from the unit.
13 April 2022
• The accommodation unit and the three Tyra West topsides were
successfully installed by the world’s largest crane vessel, Sleipnir,
during a ten-day installation campaign.
Production Unit 2022 Guidance 2023
Q1 mboepd 28.5 25.0-26.5
Q2 mboepd 26.5 20.0-21.5
Q3 mboepd 25.1 22.5-24.0
Q4 mboepd 26.9 24.5-26.0
31
BlueNord
Annual Report and Accounts 2022
Strategic Report
PRODUCTION PERFORMANCE 2022 PRODUCTION OUTLOOK 2023
Dan Hub
Production performance was high in 2022, mainly based on:
• successful reinstatement of five producers (DFA-15, DFB-15,
DFB-16, DFB-17 and DFF-22A);
• increase of two percent in operational efficiency due to
reduction in unplanned shortfalls; and
• 10 well interventions completed with the rig
Maersk Reacher.
To keep production high in 2023 we will:
• carry out three reactive workovers with the
rig Shelf Drilling Winner, (previously called
Noble Sam Turner);
• maintain high operational efficiency; and
• carry out 20 well interventions with the rig Noble
Reacher (previously called Maersk Reacher).
Gorm Hub
Production performance was high in 2022, mainly based on:
• increase of two percent in operational efficiency due to
reduction in unplanned shortfalls;
• successful scale squeeze campaign on Gorm wells at end
2021 supporting production in 2022; and
• successful scale squeeze and restimulation campaign at
end October 2022.
To keep production high in 2023 we will:
• carry out scale squeeze and restimulation;
• maintain high operational efficiency; and
• enable gas export from Gorm to Halfdan.
Halfdan Hub
Production performance was high in 2022, mainly based on:
• successful restimulation of eight HCA wells resulting in a
significant increase in gas production, and an addition
to reserves;
• increase of three percent in operational efficiency due to
reduction in unplanned shortfalls; and
• successful proactive workovers and restimulations keeping
the well count high and stable.
To keep production high in 2023 we will:
• continue proactive workovers;
• maintain high operational efficiency;
• reroute stabilisation of Halfdan oil to Dan
instead of Gorm resulting in reduced flaring
and elimination of routine flaring ; and
• drill two infill wells in the Halfdan Tor North East,
expected to be in production from
September 2023.
The probabilistic range of first gas export is as follows:
• P10: October 2023
• P50: December 2023
• P90: March 2024
Progress on the offshore hook-up and commissioning phase (HUC)
work has started, with offshore installation completed, key milestones
for 2023 include start-up of the gas turbine generators and first gas
introduced to the process module.
Outlook for 2023
BlueNord has built a stable business that is underpinned by the
Company’s position in the DUC. BlueNord is well positioned going
forward to navigate remaining impacts of COVID-19, the ongoing war
in Ukraine and any future oil and gas price volatility through business
and IT continuity plans, price hedging arrangements and proactive
steps taken by the operator of the DUC. Once onstream, Tyra II will
significantly enhance BlueNord’s base production, and the Company
also expects direct field operating expenditure to decrease below
USD 13 per barrel. The Company expects reduced production driven
by high maintenance and activity levels in Q2 and Q3 2023.
31 August 2022
• The 80-bed TEH living quarter commenced its regular use.
1 September 2022
• The Tyra Process module (TEG) sails away from the Batam
yard in Indonesia with all leak-testing complete.
3 October 2022
• Arrival at the offshore location.
4 October 2022
• World record offshore lift of the 17,000 metric tonne process
module completed.
9 October 2022
• All lifts completed and offshore installation complete.
8 November 2022
• Safe access and temporary power in place enables efficient
start-up of offshore HUC campaign on TEG. Despite challenges
with cranes and offshore productivity, all milestones have been
met according to plan.
21 December 2022
• TEG permanent crane in operation.
Remaining activity on the Tyra redevelopment project in 2023 is
offshore hook-up and commissioning to achieve first gas and then
ramp up of production to achieve full design processing capacity.
32
BlueNord
Annual Report and Accounts 2022
Financial Review
The Company had revenues of USD 966.9 million in
2022 (2021: USD 565.3 million) mainly related to oil and
gas sales from the DUC fields. The increase is due to
higher realised commodity prices, with an increase of
30.6 percent on oil and 194.5 percent on gas respectively,
net of hedging effects.
Production expenses: of USD 308.5 million in 2022
(2021: 297.0 million) was directly attributable to the lifting
and transport of the Company’s oil and gas production,
which equates to USD 31.6 per boe (2021: USD 30.2 per
boe). Adjusted for insurance and changes in stock and
inventory, total production expenses amounted to
USD323.4 million in 2022 (2021: USD 292.7 million).
Current year is influenced by the start-up of the
production enhancing WROM and the IRP, in addition to
the Halfdan well restimulation campaign.
Personnel expenses were USD 12.5 million in 2022
(2021: USD 11.5 million). The increase is mainly related to
the long-term incentive plan (LTIP), which is valued and
accounted for according to IFRS 2. For more information
related to the LTIP, see page 80 in the Remuneration
Committee Report.
Other operating expenses amounted to
USD19.1million in 2022 (2021: USD 10.9 million). The
increase is related to higher consultant and legal fees.
Operating result (EBITDA) for 2022 was a profit of
USD 611.2 million (2021: USD 249.5 million). This increase
mainly relates to higher revenue.
Net financial items amounted to an expense of
USD 229.0 million in 2022 (2021: USD 132.3 million). This
was primarily driven by the negative fair value adjustment
on NOR13’s embedded derivative, the value of which is
influenced by the increase in BlueNord’s share price, and
an increase in the discount rate related to abandonment
provision. This was partially offset by the extinguishment
of the NOR13 bond loan, positive fair value adjustment on
the RBL interest swap and higher interest income related
to restricted cash.
Income Tax for the group amounted to a current tax cost
of USD 204.6 million and deferred tax movements
amounted to USD 74.5 million, which corresponds to a
statutory tax rate of 64 percent on result before tax on
hydrocarbon income, adjusted with the effects of
investment uplift, foreign exchange adjustment of tax
losses and the estimated repayment of the special tax
incentives implemented in 2017. This repayment is
triggered from 2022 and onwards if commodity prices
exceed certain thresholds. It constitutes a repayment
of tax benefits previously received from the incentive
scheme, in the case of market conditions significantly
improving compared to the assumptions in 2017,
where the incentive scheme was implemented.
Effective 0 percent tax on result before tax in Norway
and UK and effective 22 percent tax on result before tax
on ordinary income in Denmark.
We have had a strong year driven by excellent
underlying operating performance and the
benefit of a supportive commodity price
environment in 2022. With record revenues of
USD 967 million and EBITDA of USD 611 million
for the full year, this has resulted in significant
cash generation from operating activities of
USD 561 million, ending the year with total
liquidity of USD 468 million, comprising of
cash on balance sheet of USD 268 million and
undrawn RBL capacity of USD 200 million.
Our capital structure remains robust and fully funded to
deliver Tyra, as supported by our liquidity position and net
debt, with no principal maturities prior to Tyra first gas. The
significant cash generation in 2022 enabled a voluntary
repayment of USD 100 million of the RBL facility, which in
addition to our interest rate hedge, allows for significant
savings on borrowing costs.
Other highlights include a successful refinancing of the
NOR13 convertible bond that was exchanged into the
new USD 208 million NOR15 convertible bond, with
revised terms and a later, more flexible, conversion date in
2025. We also continue to maintain a hedging policy that
provides visibility over future cash flow, adding volumes
where it makes sense to do so, and in doing so, supporting
our balance sheet and capital structure through this
continued uncertain price environment.
Jacqueline Lindmark Boye
EVP Finance
33
BlueNord
Annual Report and Accounts 2022
Strategic Report
Reference is made to note 13 in the consolidated financial
statements for further details to the taxes this period.
The Group’s net result for the year is a loss of
USD30.5million (2021: loss of USD 53.2 million).
Total non-current assets amounted to USD 2.7 billion
at the end of 2022, of which USD 1.9 billion related to
property, plant and equipment, intangible assets of
USD160.4 million, deferred tax asset of USD 348.8 million,
derivatives related to the RBL interest swap and gas
hedges of USD 33.7 million and USD 203.7 million in
restricted cash, relating to security for DUC cash call
obligations pledged to TotalEnergies, and security against
Nini/Cecilie abandonment costs.
Total current assets amounted to USD 583.9 million at
the end of 2022. USD 94.4 million in trade receivables and
accrued revenue, mainly related to oil and gas revenue,
USD 24.2 million in prepayments primarily offshore and
non-payment insurance premiums, USD 268.4 million of
cash and USD 55.9 million of inventory.
Equity amounted to USD 602.5 million at the end of 2022.
Increase in equity mainly related to the positive fair value
adjustment of hedges and issuance of shares.
Interest-bearing debt amounted to USD 1.1 billion at the
end of 2022. The decrease relates to the repayment of
USD 100 million on the RBL facility, partly offset by the
NOR15 exchange offer, which had no cash effect. The
NOR13 convertible bond loan had a book value of
USD13.1million at the end of 2022, following the conversion
of USD 151.4 million to NOR15. The new NOR15 convertible
bond loan had a book value of USD 175.7 million at the end
of 2022, which includes compensation bonds of
USD56.2million. The bond loans are valued at amortised
cost and the embedded derivatives are accounted for as a
derivative liability at fair value through profit and loss.
BlueNord’s USD 1.1 billion RBL facility, drawn at
USD800.0million on 31 December 2022 and with
maximum cash drawing capacity of USD 1.0 billion, had a
book value of USD 764.0 million at the end of 2022. The
voluntary repayment of USD 100.0 million on the RBL
facilities occurred in Q3 2022. The senior unsecured bond
loan NOR14 had a book value of USD 166.9 million at the
end of 2022. The RBL facility and the unsecured bond loan
are valued at amortised cost. In addition, interest-bearing
debt includes deferred consideration with a book value of
USD 25 million.
Asset retirement obligations amounted to
USD955.8million at the end of 2022 (2021: USD 1,029
million). The decrease is driven primarily by updated
exchange rates and a 0.5 percent increase in the
discount rate. USD 890.8 million is related to the DUC
assets, USD 61.1 million to Nini/Cecilie, USD2.3 million
to Lulita and USD 1.6 million to the Tyra F-3 pipeline.
The Nini/Cecilie asset retirement obligation is secured
through an escrow account of USD 61.1 million.
Cash flow from operating activities amounted to
USD 561.0 million at the end of 2022 (2021:
USD49.8million). The increase is mainly related to
higher revenue from favourable oil and gas commodity
prices and strong operational performance in the
current year. In addition, 2021 was negatively
influenced by the payment of 2020 VAT liability of USD
156.7 million in 2021. Cash flow from operating activities
excluding changes in working capital amounted to
USD 600.8 million in 2022 (2021:USD 244.9 million).
Cash flow used in investing activities amounted to
an outflow of USD 258.2 million at the end of 2022
(2021: USD 246.5 million). The cash flow used in
investing activities were related to DUC investments of
USD 241.6 million, of which USD 228.3 million related to
the Tyra redevelopment, USD 14.4 million in
abandonment expenditure, and USD 2.4 million in
exploration and evaluation assets.
Cash flow from financing activities amounted to
an outflow of USD 157.1 million at the end of the year
(2021:USD 60 million). The cash outflow in current year
is mainly related to a USD 100 million voluntarily
repayment on the RBL facility, compared to a
drawdown of USD 148.8 million last year. In addition,
USD 61.6 million in paid interest and financing cost and
a positive cash flow of USD 5.4 million related to sale of
treasury shares.
Net change in cash and cash equivalents
amounted to positive cash flow of USD 145.8 million in
2022 (2021: outflow of USD 136.7 million). Cash and
cash equivalents were in total USD 268.4 million at the
end of 2022.
Total revenue
966.9
million
Total liquidity
468.4
million
EBITDA
611.2
million
Interest bearing
debt
1.1 billion
Effective oil price
$75.5
USD/bbl
Cash flow from
operating activity
561
million
Effective
gas price
101.9
EUR/Mwh
Cost per boe
$31.6
34
BlueNord
Annual Report and Accounts 2022
Sustainability Report
Ensuring energy
security
Climate change is one of the biggest threats the world faces.
At BlueNord we work to actively reduce our carbon footprint
while contributing to energy security.
Over the next seven years, global greenhouse gas (GHG)
emissions must be halved to succeed in mitigating global
climate change. At the same time, hydrocarbons are
expected to remain an important part of the energy mix
for the foreseeable future. BlueNord recognises that it has
a responsibility to be an active participant in the energy
transition. As part of the DUC, BlueNord is committed to
reducing emissions by 400-500 thousand tonnes by
2030, and thereby contributing to the delivery of the
Danish 70 percent CO
2
reduction target by 2030.
We believe that CCS is a key enabler to combat climate
change and are committed to two projects: Project Bifrost
offshore and CarbonCuts onshore. You can read more
about these on page 36.
BlueNord has continued to support its employees and
partners, through operating sustainably and safely while
also behaving in a way that recognises the importance of
diversity. You can read more about this on page 52.
During the year, BlueNord put several initiatives in place to
improve overall performance related to Environmental,
Social, & Governance (ESG) issues, and to increase the
transparency of the Company’s ESG activities. Following
the materiality assessment which was conducted in
October 2022, BlueNord is working on a sustainability
strategy in 2023.
Our commitments
30%
Reduction in emissions intensity by 2025
80%
Power from renewables by 2029
35
BlueNord
Annual Report and Accounts 2022
Strategic Report
1.1 Energy security
1.3 Health and safety
1.4 Safe and secure operations
1.6 Climate
1.7 Nature
1.2 Diversity and inclusion
1.5 Corporate governance
1.8 Human rights and decent
working conditions
1.10 Employee engagement
1.9 Employment
Stakeholder engagement and materiality
During 2022, BlueNord took measures to align
themselves with the Norwegian Transparency Act and
the Equality and Anti-Discrimination Act. The Company
developed a separate report from each committee (ESG,
remuneration, audit, and nomination), conducted a
materiality assessment, and established reporting against
the Taskforce for Climate-related Disclosures (TCFD).
BlueNord also established a risk register and has
requested monthly emissions data from the operator.
In 2022 the EU Council gave its final approval to the
Corporate Sustainability Reporting Directive (CSRD)
and according to CSRD, BlueNord is required to report
in accordance with the new European sustainability
standard (ESRS) from 2025. The company has therefore
taken steps to prepare for the ESRS.
As a preparation for ESRS, we have used elements from
the draft principles of ESRS to prepare this year’s
sustainability report. We have focused on conducting a
materiality assessment and from 2025 we will include the
full ESRS approach.
BlueNord engages both directly and indirectly with
internal and external stakeholders in a continuous
dialogue throughout the year to obtain their insights on
sustainability topics. Key stakeholders are employees,
investors, business partners, government agencies, local
communities, NGOs and suppliers.
In October 2022, the Company conducted a materiality
assessment with members of the management team.
The purpose was to identify and prioritise material topics
regarding ESG.
Several factors in the Company’s ESG approach have
been assessed. The Company’s core business, who the
Company’s most important stakeholders are, and what is
to be defined as sustainability in the Company was
examined. An assessment of the most relevant
megatrends within ESG and the industry’s concerns was
also carried out, in addition to a stakeholder assessment.
The material issues are shown in the chart below.
Degree of importance for stakeholders
LOW MEDIUM HIGH
LOW MEDIUM HIGH
Degree of importance for the business
36
BlueNord
Annual Report and Accounts 2022
Sustainability Report continued
Our sustainability commitments
BlueNord is committed to a balanced approach, where energy security and the energy transition are
both key themes.
1. Deliver Tyra
Energy Security: reliable, affordable and
politically stable gas
• Produces enough energy to power
equivalent of c. 1.5m homes
• Key gas producer in the EU
• Unlock additional low emissions,
high-value resources
BlueNord investment in delivering gas
redevelopment project
>$1bn
3. ESG-Linked RBL Facility
Funding cost linked to delivery against
ambitious objectives
• KPIs linked to emissions and power from
renewable sources
• Investigating potential to change to a KPI
more reflective of current strategy
Emissions to be reduced by 2027
50%
Power from renewables by 2029
80%
2. Reduce Emission Intensity
Emissions lowered with Tyra and end-of-
routine flaring
• Mainly driven by Tyra II’s modern, efficient
facilities
• Routine flaring in the DUC to end by
August 2023
• Improved efficiency and monitoring on
producing assets
Estimated emissions in 2025 reducing from
c.30kg/boe in 2022 to c.21kg/boe
30% reduction
4. Carbon Capture Storage
Assessing potential for CCS through Bifrost
and CarbonCuts
• Strategic involvement through the DUC
(Bifrost) and an exclusive CCS project
• Bifrost a larger scope outside of the DUC,
with potential for farm-in on Harald
• CarbonCuts is BlueNord-only backed with
a fit-for-purpose size and scope
Investment for feasibility study
c. USD 3 million
01
03
02
04
37
BlueNord
Annual Report and Accounts 2022
Strategic Report
Energy security
2022 increased the awareness and importance of energy
security. BlueNord is and will continue to be a considerable
European contributor of energy supply through our
existing and future business.
With hydrocarbons, and in particular natural gas, expected
to remain an important part of the energy mix for the
foreseeable future, BlueNord will play an important role for
energy security.
By delivering Tyra, BlueNord will both secure energy
supply for Denmark and materially reduce our emissions
intensity profile. Redeveloped Tyra will reduce emissions
intensity by 30 percent while at the same time supply gas
to power the equivalent of 1.5 million Danish homes.
Achievements and near-term focus: climate
Tyra on stream The 2023 reinstatement of the Tyra hub will reduce fuel consumption and provide a higher operating efficiency.
Redeveloped Tyra is expected to lower emissions intensity by 30 percent, and in addition lower the flaring by
90 percent.
Routine-flaring
reduction
The Company has planned a step-wise implementation of the Halfdan reroute for final oil stabilisation to remove
routine flaring. The first step was completed in February 2022, and reduced the flaring, corresponding to a
reduction in CO
2
emissions of 4.3 thousand tonnes CO
2
e/year. The second step to be completed in 2023
will remove the routine flaring and reduce the CO
2
emissions by a further 5.9 thousand tonnes CO
2
e/year.
Fuel reductions
12 CFR initiatives are planned to be implemented in the period 2022-2024 (HDA compressor bundling, new gas
turbine air filter on HD and Dan etc) which can result in an estimated emission reduction of more than 11.8 thousand
tonnes CO
2
e/year with approximately 4,8 thousand tonnes CO
2
e/year in 2022.
The use of onshore smart room monitoring of fuel consumption helps reduce the fuel consumption.
Emission
monitoring
Improvements are being made to emissions monitoring by initiating annual leak detection and repair campaigns
(LDAR) with focus on a comprehensive register of sources, measurement equipment and evaluation options for
better quantification of fugitive emissions. Additionally, transition towards new software additionally will improve
reporting efficiency and data analytics. Further, novel technique development will be supported with drone
imaging technology and LIDAR 3Ds.
Achievements and near-term focus: nature
Chemicals
Chemicals are being phased out and replaced by green chemicals in a continued dialogue with the Danish
Environmental Protection Agency.
38
BlueNord
Annual Report and Accounts 2022
The environment
As a non-operator, BlueNord will work to protect the environment where possible, both in its own operations,
and through the Company’s partnership with the DUC.
In 2022, BlueNord had improved operational efficiency and higher activity related to the ongoing HUC on Tyra II. As 2022
was a transitional year towards bringing Tyra II on stream, which will reduce emissions intensity by 30 percent, this resulted
in higher emissions than in 2021. However, with several measures, BlueNord reduced the routing flaring which will be
completely eliminated during 2023.
Performance status 2022: climate
TOPIC DESCRIPTION 2021 PERFORMANCE 2022 PERFORMANCE CHANGE
CO
2
emissions
The main source of CO
2
is the fuel gas
required for production. In addition, the figure
also includes the contribution from flaring and
other fuels. The increase from 2021 to 2022
stems from higher operational efficiency on
producing platforms, and higher activity
related to the ongoing HUC on Tyra.
Total CO
2
emissions
0.27 mill.
tonnes
Total CO
2
emissions
0.29 mill.
tonnes
Higher
Fuel
consumed in
production at
platforms
*
Fuel is consumed primarily by single cycle
gas turbine powering generators, gas
compressors, and pumps.The increase from
2021 to 2022 stems from higher operational
efficiency on producing platforms.
Gas fuel CO
2
emissions
76%
Diesel:
7%
Gas fuel CO
2
emissions
76%
Diesel:
10%
Unchanged
Higher
Flaring at
platforms
*
Flaring of natural gas is occurring on all hubs
when required to allow safe operation during
production upsets and non-routine
operation. The reduction from 2021 to 2022
is due to the measures initiated to reduce
and eventually stop routine flaring, including
the reroute of Halfdan.
Flaring CO
2
emissions
13%
Flaring CO
2
emissions
10%
Lower
Fugitive
emissions at
platforms
*
Venting of gas from production facilities is to
ensure safe operation. Venting is primarily
relevant for systems operating at
atmospheric pressure, but it also occurs
during facilities maintenance.
Venting CO
2
emissions
4%
Venting CO
2
emissions
4%
Unchanged
NOx and SOx
emissions
The operation of gas turbine drives and
diesel engines offshore causes emissions of
nitrogen oxides and sulphur oxides. The
increase from 2021 to 2022 stems from
higher operational efficiency on producing
platforms, and higher activity related to the
ongoing HUC on Tyra.
NOx
1.262 tonnes
SOx
14.4 tonnes
NOx
1.515 tonnes
SOx
16.9 tonnes
Higher
Higher
CH4
CH4 and nmVOC come directly from our gas.
They can originate from unburned parts of our
fuel gas or flare gas (they do not burn at 100
percent efficiency) or from releases, i.e.
process vents or tiny leaks that are below
threshold limits of our safety detection systems.
736 tonnes 669 tonnes
Lower
Sustainability Report continued
* figures relate to the percentage of emissions stemming from production at platforms.
39
BlueNord
Annual Report and Accounts 2022
Strategic Report
Performance status 2022: climate continued
TOPIC DESCRIPTION 2021 PERFORMANCE 2022 PERFORMANCE CHANGE
nmVOC
CH4 and nmVOC come directly from our
gas. They can originate from unburned parts
of our fuel gas or flare gas (they do not burn
at 100 percent efficiency) or from releases,
i.e. process vents or minor leaks that are
below threshold limits of our safety
detection systems.
590 tonnes 555 tonnes
Lower
GHG (CO
2
e)
GHG emissions consist of all the above-
mentioned emissions. The increase from
2021 to 2022 stems from higher operational
efficiency on producing platforms, and
higher activity related to the ongoing HUC
on Tyra.
0.30 mill.
tonnes
0.31 mill.
tonnes
Higher
GHG intensity
(CO
2
e/Mboe)
—
28.0 29.7
Higher
Performance status 2022: nature
Discharge
to Sea
Water is produced from the fields together
with the hydrocarbons. For the fields Dan
and Halfdan, the produced water is
discharged to the sea after separation.
In the fields Gorm and Skjold, the water is
reinjected. The water produced is partly
formation water and partly injected sea
water. In 2022, 26.3 percent of the produced
water was reinjected. Oil is discharged to
sea as part of the produced water and the
efficiency of oil/water separation is a key
factor for the oil in water concentration.
The increase in concentration of oil in water
from 2021 to 2022 is due to more separation
issues. The higher volume of oil discharged
has increased due to the concentration level
increase in addition to more discharged
produced water. The level of discharge is
within the legal limit.
Discharged
produced water
6.2 mm m3
Volume of oil discharged
33.8 tonnes
Oil concentration
in water
5.5 mg/L
Discharged
produced water
6.5 mm m3
Volume of oil discharged
45.0 tonnes
Oil concentration
in water
6.9 mg/L
Higher
Higher
Higher
Spills
Spills from closed systems and from
handling of various liquids are reported in
accordance with environmental regulation.
In 2022, 6 oil and diesel spills and 32
chemical spills were reported, compared
with 8 oil and diesel spills and 29 chemical
spills in 2021. Ongoing efforts are made
to minimise the number and level of spills
that occur.
Oil and diesel spills
0.33 tonnes
Chemical spills
0.98 tonnes
Oil and diesel spills
0.25 tonnes
Chemical spills
33.3 tonnes
Lower
Higher
KEY
Increased Unchanged Decreased
40
BlueNord
Annual Report and Accounts 2022
Sustainability Report continued
Carbon Capture Storage (CCS)
To support the Danish climate targets and
reduce carbon emissions globally, CCS
technologies need to be deployed on a
large scale.
CCS is a means of mitigating carbon emissions and
climate change while allowing energy consumption
from fossil fuels and biomass. It involves the separation,
treatment and transportation of CO
2
from industrial
sources to a long-term storage location. As noted in the
IEA report “Net Zero by 2050: A Roadmap for the
Global Energy Sector”, CCS can facilitate the transition
to net-zero CO
2
emissions by tackling emissions from
existing assets and providing a way to address
emissions from some of the most challenging sectors.
BlueNord is involved in two CCS projects.
The environment continued
Timeframe until the beginning of CCS operations in Harald reservoirs
2022
Preliminary
study
2024
Feed
2023
Concept
select
2025
FID
2026
Execution
2027
Operation
Project Bifrost
Project Bifrost is developing a concept for
storing CO
2
in a depleted reservoir in the
Harald field. This partnership is between the
DUC, Ørsted and the Technical University of
Denmark (DTU).
This project assesses the potential for
transporting and storing CO
2
underground
offshore in the Harald field – from the CO
2
being captured on land, to the transportation
offshore via specialised shipping or existing
pipelines, and finally injected into the empty
gas reservoirs at the Harald field.
The site was chosen because of the Danish
geology. Situated 3650 meters below the
surface, the depleted Harald-West sandstone
reservoir is suitable for permanently and
safely storing CO
2
due to its good
containment and strong shale seal. With a
storage capacity of several million tons per
year, the Harald-field was the perfect location
for the partnership to begin its development.
The project will also assess the potential
reuse of additional DUC infrastructure as
they become available, in addition to the
use of existing pipelines for transportation,
connecting the DUC fields to Denmark
as a national CO
2
transportation system
which can later connect to a future
European cost and climate-efficient CO
2
transportation system.
Project Bifrost has received public funding
from the Energy Technology Development
and Demonstration Programme (EUDP), a
subsidy granted as part of the Danish state’s
national climate strategy towards a zero-
emission society. CCS has been chosen for
this strategic public investment as the
technology is estimated to deliver a significant
part of the reductions Denmark needs to
meet the 70 percent reduction target. If the
development and demonstration program
proves successful, Project Bifrost will
be matured towards a final investment
decision (FID).
41
BlueNord
Annual Report and Accounts 2022
Strategic Report
Research to reduce environmental impact
Together with its partners in the DUC,
BlueNord invests in research and
development to support and grow its
exploration and production activities. The
DUC has a partnership with the Technical
University of Denmark and together have
established the Danish Offshore Technology
Centre (‘the Centre’).
The Centre conducts research to improve
future production of oil and gas from the
Danish North Sea and seeks to both improve
cost efficiency and reduce environmental
impact. An additional focus and overall
objective of the Centre is to secure qualified
researchers and potential employees
essential for sustaining and further increasing
the recovery of the Danish oil and gas
resources. One of BlueNord’s employees
carried out a PhD-study at the Centre,
including a four month internship at BlueNord
during spring 2022.
In 2022, the DUC contributed funding
amounting to DKK 95 million. The Centre has
the following areas of focus:
• Abandonment of offshore oil and gas
fields. Monitoring of abandoned
installations in reference to an
environmental baseline, for long-term
protection.
• CO
2
storage in old oil and gas fields.
No showstoppers have been identified
for storage in chalk.
• Produced water management.
Developing new technologies to optimise
the water treatment process (zero harmful
discharge vision).
• Operations and maintenance technology.
Modular architecture for planning
maintenance in a cost-effective way.
In addition to the Research and Development
studies conducted at DTU Offshore,
BlueNord is also participating in the Inno-
CCUS partnership which is developing and
maturing technology relating to capture,
storage and utilisation of CO
2
.
95m DKK
Funding contributed in 2022
CarbonCuts
CarbonCuts is a newly established early-
stage initiative with the goal of establishing an
onshore CO
2
storage location. CarbonCuts is
key to addressing Denmark’s ambitions for
onshore storage of CO
2
.
BlueNord provides financial, technical, and
commercial support. The Danish Energy
Agency has previously selected the relevant
areas with geological structures suitable for
CO
2
storage. There is currently a feasibility
study underway for a CO
2
storage facility
at the Rødby coastline, onshore Denmark
with the project name Ruby. BlueNord is
funding this phase with approximately
USD 3 million.
The first storage for CO
2
is expected in 2027.
The project has quickly received local
support and has attracted national and
international political interest.
Timeframe until the beginning of CCS operations for the Ruby project.
2022 20242023 2025 2026 2027 2028
Assessment of
environmental
impact
Seismic
Work
Award of
storage-licence
Drilling
first well
Fabrication CO
2
storage
BlueNord made a
strategic investment in
CarbonCuts, a start-up
company focused on
assessing the potential for
onshore CCS in Denmark.
42
BlueNord
Annual Report and Accounts 2022
Core Elements of Recommended Climate-Related Financial Disclosures
Sustainability Report continued
Introduction to framework
There is a growing demand for decision-useful, climate related information, and
creditors and investors are increasingly demanding access to risk information
that is consistent, comparable, and clear.
The Financial Stability Board created the Task Force on
Climate-related Financial Disclosures (TCFD) to improve
and increase reporting of climate-related financial
information. Additionally, TCFD encourages the
standardised reporting structure for financially material
climate-related risks and opportunities to give investors,
lenders, and insurers enhanced comparability when
assessing and pricing pertinent companies.
The TCFD framework is made up of 11 recommended
disclosures divided into four pillars that represent core
elements of how organisations operate. The four pillars
are: governance, strategy, risk management, and metrics
and targets. Moreover, the framework separates into
three main categories: risks related to the physical
impacts of climate change, risks related to the transition to
a lower-carbon economy, and climate-related
opportunities. TCFD has also incorporated financial
impact as an integral part of its disclosure
recommendations.
In line with the TCFD recommendations, a report in
accordance with TCFD is as of 2022 an integrated part
of BlueNord’s annual financial reporting, and the report
is reviewed annually by the audit committee, ESG
committee and the board.
Task Force on Climate-related Financial Disclosures (TCFD)
Governance
Strategy
Risk
Management
Metrics and
Targets
Governance
The organisation’s governance around climate-related
risks and opportunities.
Strategy
The actual and potential impacts of climate-related risks
and opportunities on the organisation’s business, strategy,
and financial planning.
Risk management
The processes used by the organisation to identify,
assess and manage climate-related risks.
Metrics and Targets
The metrics and targets used to assess and manage
relevant climate-related risks and opportunities.
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GOVERNANCE RECOMMENDED DISCLOSURES
Disclose the
organisation’s
governance around
climate-related risks and
opportunities.
a) Describe the board’s oversight
of climate related risks and
opportunities.
b) Describe the management’s
role in assessing and managing
climate-related risks and
opportunities.
STRATEGY RECOMMENDED DISCLOSURES
Disclose the actual and
potential impacts of
climate-related risks and
opportunities on the
organisation’s business,
strategy, and financial
planning where such
information is material.
a) Describe the climate-related
risks and opportunities the
organisation has identified over
the short, medium, and long-
term.
b) Describe the impact of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy, and financial planning.
c) Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower scenario.
RISK MANAGEMENT RECOMMENDED DISCLOSURES
Disclose how the
organisation identifies,
assesses, and manages
climate-related risks.
a) Describe the organisation’s
processes for identifying and
assessing climate-related risks.
b) Describe the organisation’s
processes for managing
climate-related risks.
c) Describe how processes for
identifying, assessing, and
managing climate related risks
are integrated into the
organisation’s overall risk
management.
METRICS & TARGETS RECOMMENDED DISCLOSURES
Disclose the metrics and
targets used to assess
and manage relevant
climate-related risks and
opportunities where
such information is
material.
a) Disclose the metrics used
by the organisation to assess
climate-related risks and
opportunities in line with its
strategy and risk management
process.
b) Disclose Scope 1, Scope 2,
and, if appropriate, Scope 3
greenhouse gas (GHG)
emissions, and the related risks.
c) Describe the targets used by
the organisation to manage
climate-related risks and
opportunities and performance
against targets.
In BlueNord we have
identified the most significant
climate-related risks and
opportunities we face.
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Task Force on Climate-related Financial Disclosures (TCFD) continued
Governance
Board level oversight
The board recognises the importance of steering the
impact of potential climate-related risks and opportunities
on BlueNord’s business and strategy. The board therefore
supports the recommendations of the Task Force on
Climate-related Financial Disclosures.
The board of directors has the ultimate responsibility
for the company management, including oversight
of climate-related strategic planning, and risk and
opportunity management. The chair of the board has the
overall responsibility for the management of climate-
related issues in BlueNord. The board has a responsibility
to ensure that BlueNord’s activities regarding climate
issues are included in the company’s strategy, and
climate-related targets are defined. The board will receive
regular updates from the ESG committee and the
management group in BlueNord. The board is
responsible for ensuring that the BlueNord’s risk
management and internal control systems are adequate
in relation to the regulations governing the business.
The board reviews the group’s main risk areas and internal
control systems annually, including the group’s values,
code of conduct and corporate responsibility. The board
reports yearly on climate impacts and risks that the
company faces, in the non-financial section of the board
of directors’ report.
Management level oversight
The executive management is responsible for risk and
opportunity identification and for ensuring effective
processes and mitigation efforts, including climate-
related issues, risks and opportunities within the
managers’ respective areas of responsibility. The EVP for
Investor Relations & ESG reports directly to the CEO.
In 2020, an ESG committee was established to support
BlueNord’s commitment to ESG and to evolve its
contribution in the energy transition. Read more about
the ESG committee’s work in the ESG committee report
on page 80.
Strategy
Identified climate-related risks and opportunities
In line with the recommendations laid out in the TCFD
framework, BlueNord has in February 2023 conducted a
process to assess how – and to what extent – the
company is exposed to climate risk. Management
representatives for Finance and Investor Relations & ESG
participated in a workshop to identify significant physical
risk, transition risk, and opportunities caused by climate
change. In the workshop, the identified risks and
opportunities were assessed in a strategic and financial
context, in three different time horizons and in four
different climate scenarios (more information about the
scenario analyses is disclosed in chapter 2c).
As climate-related risks and opportunities influence
BlueNord’s strategic and financial planning differently in
the short, medium, and long-term, BlueNord considered
these three time horizons in the workshops. The following
definitions of three time horizons are applied:
Time horizon Year
Short-Term 2023-2025
Medium-Term 2025-2030
Long-Term 2030-2050
For BlueNord, it is important to identify the most significant
climate-related risks and opportunities we face, as it can
help us to make informed decisions about how to mitigate
or take advantage of these factors.
To identify the most critical risk factors, the management
representatives assessed factors that could potentially
impact the operations negatively and the probability of
occurrence. To identify the opportunities with the highest
potential, the management representatives assessed
how the factors could potentially impact the company
positively and the degree of difficulty to take advantage of
the opportunity.
Risk factors defined as most critical:
• Increased/high CO
2
tax
Opportunity defined with highest potential:
• Resource efficiency
• Financial markets evolvement
• BlueNord has relatively flexible investments
• The sector is already strictly regulated and already
prepared for harsh weather conditions
01 02
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Acute physical risk
Through our acute physical risk identification process, we identified extreme weather due to increased frequency and intensity of strong wind,
storms, and hurricanes as most significant to BlueNord. Such events may impact BlueNord’s direct operations, or cause disruptions in the
supply chain. Any events delaying production have a financial implication.
Identified risk
Description
of risk Potential impacts
Potential
financial
impacts
Most relevant
scenario
Time
horizon
Mitigation
strategy
Increased
frequency and
intensity of
strong wind,
storms, and
hurricanes
interdependency
Climate change and
temperature increases may
lead to more extreme
weather. The wind speed is
expected to increase, and
the air will contain more
moisture. This will lead to
increased occurrences of
strong winds, storms, and
hurricanes in the future.
Inability to have people
safely offshore.
Inability to transport
people and equipment, as
this is done by helicopter
and supply ships.
Weakened production
capacities due to
shortage of supplies,
employees and
possible damage
to the equipment.
Reduced revenue
and increased costs
associated with
asset repair and
additional labour.
Potential impact on
production.
BlueNord sees the
greatest consequences in
STEPS, but the negative
effects may be more
relevant for the supply
chain at an earlier stage.
Long-term The sector is already
strictly regulated and,
prepared for risks
related to harsh
environment.
Furthermore, we
continuously assess
equipment for drilling
and supply to make
sure it stands
changes in climate.
Chronic physical risk
Chronic physical risks refer to longer-term shifts in climate patterns, such as sustained higher temperatures that may cause sea level rise or
chronic heat waves.
Identified risk
Description
of risk Potential impacts
Potential
financial
impacts
Most relevant
scenario
Time
horizon
Mitigation
strategy
Rising sea levels
Sea levels may rise due to
expanding ocean volumes
from temperature increases
and from melting glaciers
and ice sheets.
High waves which
hit the infrastructure
on the platform
causing damage.
Increased cost
due to adaption
of platforms in
order to handle
rising sea level.
Most relevant in STEPS Long-term The platforms have
already been
reconstructed or
assessed to meet the
risk of sinking
seabeds. This has
prepared them more
for extreme weather
events and rising
sea levels.
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Task Force on Climate-related Financial Disclosures (TCFD) continued
Transition risk – Policy and Legal
Transitioning to a lower-carbon economy may entail extensive policy and legal changes to address mitigation and adaptation requirements
related to climate change. We have identified the following policy actions and climate-related litigation claims as the most significant for
BlueNord:
Identified risk
Description
of risk Potential impacts
Potential
financial
impacts
Most relevant
scenario
Time
horizon
Mitigation
strategy
Uncertainty
related to the EU
Taxonomy and
how this will
impact BlueNord
Increasing need to
demonstrate that economic
activities are
environmentally
sustainable.
More difficult and more
expensive to raise
support from a capital
market perspective and
debts perspective.
Limited access
to capital.
Most relevant in NZE /SDS Medium,
and
long-term
Focus on having a
close dialogue with
investors.
Transparency is
crucial when it comes
to climate risk.
BlueNord focuses on
being as transparent
as possible towards
investors and other
stakeholders.
Increased
carbon pricing
and taxes
Carbon tax is an
instruments for cost-
effective cuts in
greenhouse gas emissions.
Other extraordinary taxes
or measures to affect the
operations of high emission
sectors could also be put in
place as solidarity
measures.
Low emissions and being
part of the energy
transition will play a bigger
part in the licence to
operate.
Increase cost
of the business
and shorten life
of assets.
Most relevant in NZE/SDS Short,
medium and
long-term
Reducing emissions
as much a as possible
on current and future
operations. Possible
offset through storing
CO
2
.
Transition risk – Technology
Technological improvements or innovations that support the transition to a lower-carbon, energy-efficient economic system can have a
significant impact on organisations.
Identified risk
Description
of risk Potential impacts
Potential
financial
impacts
Most relevant
scenario
Time
horizon
Mitigation
strategy
Transition to
lower emission
technology
Gas has a role and
opportunity in the transition.
In the long run, the need for
oil and gas will change/
decrease.
Technology also
represents an opportunity
in identifying, addressing,
and reducing risks.
Changes in demand
due to:
• declining cost on
renewables
• electrification of
industries and
transportation
• advanced
technology, which
makes it possible to
monitor and detect
possible spills and
reduce impact, and
consequently, identify
and reduce
emissions.
Decrease in revenue,
due to reduced oil
and gas demand.
Technology for
monitoring will
provide more
precise measures,
ability to respond
immediately and
potentially reduce
financial impact.
Most relevant in NZE Medium,
and
long-term
CCS projects, both on
shore and off shore.
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Transition risk – Market
While the ways in which markets could be affected by climate change are varied and complex, one of the major ways is through shifts in supply
and demand for certain commodities, products, and services as climate-related risks and opportunities are increasingly taken into account.
Identified risk
Description
of risk Potential impacts
Potential
financial
impacts
Most relevant
scenario
Time
horizon
Mitigation
strategy
Changes in gas
demand
The transition to a
zero-emissions society is
expected to decrease the
demand for gas in the long
run. It is uncertain how fast
the transition will go. At the
moment, it is going slower
than expected – all sectors
still depend on gas.
The current geopolitical
situation has increased the
focus on energy security
where gas plays a part, but
also where the transition to
renewables has increased
its pace.
Declining demand based
on new technology. For
instance, EVs, circular
economy and less use of
plastic.
Decreased
revenues
Most relevant in NZE Medium and
long-term
BlueNord focuses on
gas as transition fuel.
Transition risk – Reputation
Climate change has been identified as a potential source of reputational risk tied to changing customer or community perceptions of an
organisation’s contribution to or detraction from the transition to a lower-carbon economy.
Identified risk
Description
of risk Potential impacts
Potential
financial
impacts
Most relevant
scenario
Time
horizon
Mitigation
strategy
Reputation risk
in the era of ESG
Fossil fuel is not a
renewable energy source
and leaves a large carbon
footprint. Still, gas will play a
role in the future energy mix.
Abandonment of
infrastructure needs to be
done in a safe and
sustainable manner and
thus contributing to
circularity of these
materials.
Oil and gas producers
do not have a good
reputation in the field
of ESG. Will need to
demonstrate that one
takes the expected
responsibility.
Increased requirements
for abandonment and be
stricter going forward.
Reduced revenue
from decreased
demand for goods/
services.
Reduction in
capital availability
and higher cost
of capital.
Increased
cost related to
abandonment/
recycling.
Most relevant in NZE, SDS Medium and
long-term
Presenting a
balanced view of our
activities. As a
producer of natural
gas, we are part of the
transition by investing
in for example carbon
capture projects.
BlueNord is working
diligently to recycle
materials. The
company is also
assessing leave
equipment on seabed
vs removal based on
value for sealife, and
reuse of infrastructure
etc in order to
abandon
infrastructure in a
sustainable manner.
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Task Force on Climate-related Financial Disclosures (TCFD) continued
Resource efficiency
There is growing evidence that it is possible for organisations to reduce operating costs by improving efficiency across production and
distribution processes, buildings, machinery/appliances, and transport/mobility.
Identified risk
Description
of risk Potential impacts
Potential
financial impacts
Most relevant
scenario Time horizon
Mitigation
strategy
Efforts to
increase
resource
efficiency
More efficient
operations can lower
cost and be good
for both business
and environment.
Increased productivity
of production, which leads
to higher income and
lowering unit cost.
Increased interest
from investors.
Easier access
to capital.
Increased revenue.
All Short, medium, and
long-term
Reducing emissions
from our facilities in
collaboration with the
operator. We work
actively to reduce
flaring and optimising
our process to reduce
emissions and energy
use by for example
having facilities linked
more closely.
Energy sources
The trend toward decentralised clean energy sources, rapidly declining costs, improved storage capabilities, and subsequent global adoption
of these technologies are significant. Organisations that shift their energy usage toward low emission energy sources could potentially save on
annual energy costs.
Identified
opportunities
Description of
opportunity
Potential impacts
of exploring the
opportunity
Potential
financial
impacts
Most relevant
scenario Time horizon
Positioning
strategy
Use of alternative
energy in
operations
The world is switching
to renewable energy
and electrical
operating solutions
that reduce the
emission of CO
2
.
BlueNords platforms
are gas-fired or fired
by diesel generators.
There is a potential to
develop the approach
to alternative energy
sources.
Emissions reduction Easier access to
capital
Most relevant in NZE Medium and
long-term
Dialogue with
the operator on
alternative energy
sources. We have
made major
investments in
accordance with
the strategic project:
100 percent
electric solutions
(hydropower)
by 2025.
Products and Services
Organisations that innovate and develop new low-emission products and services may improve their competitive position and capitalise on
shifting consumer and producer preferences.
Identified
opportunities
Description of
opportunity
Potential impacts
of exploring the
opportunity
Potential
financial
impacts
Most relevant
scenario Time horizon
Positioning
strategy
New products
To reach the climate
targets and reduce
carbon emissions
internationally,
carbon capture
storage (CCS)
technologies need to
be deployed on a
large scale and will be
increasingly
important.
CCS represents a benefit
for the climate which does
not involve the sacrifice of
crucial energy sources.
Increased interest
from new investors
and easier access
to capital.
Most relevant in NZE Medium and
long-term
Two CCS projects:
Project Bifrost and
CarbonCuts.
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Markets
Organisations that pro-actively seek opportunities in new markets or types of assets may be able to diversify their activities and better position
themselves for the transition to a lower-carbon economy. In particular, opportunities exist for organisations to access new markets through
collaborating with governments, development banks, small-scale local entrepreneurs, and community groups in developed and developing
countries as they work to shift to a lower-carbon economy. BlueNord has addressed the following opportunity:
Identified
opportunities
Description of
opportunity
Potential impacts
of exploring the
opportunity
Potential
financial
impacts
Most relevant
scenario Time horizon
Positioning
strategy
Financial
markets
evolvement
ESG and climate risk
is increasingly seen
as an important risk in
the financial markets
Shift from the typical
funding sources to more
targeted structures.
For those not
addressing
this – higher risk
and costs.
Changed interest
rate market.
Relevant in all
scenarios
Short, medium and
long-term
Various measures
to be more suited
for a changed
financial market.
Resilience
The concept of climate resilience involves organisations developing adaptive capacity to respond to climate change to better manage the
associated risks and seize opportunities, including the ability to respond to transition risks and physical risks. Opportunities related to resilience
may be especially relevant for organisations with long-lived fixed assets or extensive supply or distribution networks; those that depend critically
on utility and infrastructure networks or natural resources in their value chain; and those that may require longer-term financing and investment.
Identified
opportunities
Description of
opportunity
Potential impacts of
exploring the
opportunity
Potential
financial
impacts
Most relevant
scenario Time horizon
Positioning
strategy
Strictly regulated
sector
The energy
transition will cause
stricter regulations.
Changes in regulations,
CO
2
taxes.
For those that are
already in line with the
regulations it can
decrease the
demand for mitigation
and adjustment of
strategy.
Most relevant in
STEPS
Short, medium and
long-term
BlueNord is already
part of a strictly
regulated sector that
operates in harsh
weather. Many
precautions and
adaptations are
therefore already
conducted and can
be a competitive
advantage.
Flexible future
investments
Future market
developments will
greatly effect the
return on investments
in fossil fuels.
Increase in future profits by
being dynamic and
adjusting investment
strategy.
Less risk of being
locked in outdated
solutions and
demand scenarios,
flexibility to diversify
and increase
profitability.
Most relevant in
STEPS
Short, medium and
long-term
BlueNord can choose
to invest in more
gas-weighted
projects or CCS
depending on how
the market Is evolving.
Currently, the market
for gas and the value
is increasing, and
that’s where
BlueNord is focusing
its business decisions
to take advantage of
those changes.
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Task Force on Climate-related Financial Disclosures (TCFD) continued
Scenario analysis
In line with the recommendations laid out by the TCFD, BlueNord conducted a qualitative scenario analysis in 2023 of all identified risks and
opportunities as part of the climate risk assessment.
The following scenarios were applied in the assessment:
Scenario
The Net Zero
Emission by 2050
Scenario (NZE)
Limiting the global temperature rise to 1.5°C without a temperature overshoot (with a 50 percent probability).
The NZE is a normative scenario, meaning it starts with a defined goal to achieve net zero CO
2
emissions
by 2050, and shows an example of a pathway that could get the world to that target.
In this scenario, demand for oil falls by more than 2 mb/d per year between 2020 and 2050. Demand for
natural gas grows to 2025, drops after 2025 and falls well below 2020 levels by 2030.
The Sustainable
Development
Scenario (SDS)
IEA’s Sustainable Development Scenario (SDS) is compatible with the Paris Agreement’s less ambitious
“well-below 2°C” goal. It assumes all energy-related SDGs and all current net-zero pledges are achieved, with
advanced economies reaching net zero emissions by 2050, China by 2060 and all others by 2070 at the latest.
It has a 50 percent probability of limiting global temperature rise to 1.65°C, assuming no extensive net
negative emissions. With some net negative emissions after 2070, temperature rise could be reduced to 1.5°C
by 2100.
The Announced
Pledges Scenario
(APS)
This scenario appears for the first time in the WEO -2021. It assumes that all climate commitments made
by governments around the world, including Nationally Determined Contributions and longer term
net zero targets as of mid-2021, will be met in full and on time.
In the APS, global oil demand peaks soon after 2025 and then falls by around 1 mb/d per year to 2050.
Demand for natural gas also reaches its maximum level soon after 2025 and then declines slowly.
The Stated Policies
Scenario (STEPS)
Rather than assuming that governments will reach all announced goals, this scenario reflects a sector-by-
sector assessment of the specific policies that have been put in place, as well as those that have
been announced by governments around the world.
This scenario provides a more conservative benchmark for the future. In the STEPS, global oil demand
exceeds 2019 levels by 2023 before peaking in the mid-2030s and then declining very gradually
to 2050. Demand for natural gas continues to rise after 2025 and is around 15 percent higher in 2030
than in 2020.
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03
Our commitment
to emissions
intensity
reductions
by 2025
30%
Our commitment
to using power
from renewables
by 2029
80%
Risk management
The identification, assessment, and management of
climate-related risks and opportunities is an integral part
of BlueNord’s multidisciplinary risk and opportunity
management. BlueNord’s board of directors, its ESG
committee and management will conduct regular reviews
of the group’s activities for identifying, assessing, and
responding to climate-related risks and opportunities.
The risk management process will also be reviewed
on an annual basis.
2023 was the first year of implementation of the climate-
risk management process recommended by TCFD, and
a material risk and opportunity matrix system developed
by Tavler AS was used as a foundation for this process.
The identification and assessment process were
conducted through a workshop with EVP Finance and
EVP Investor Relations & ESG representing different
organisational levels and functions (internally), thus
providing a balanced picture of the risks and opportunities
faced by BlueNord.
In the matrix, the impact (large, relatively large, relatively
easy, easy) and likelihood (high/low) of each risk and
opportunity are determined. Based on each risk’s
categorisation, BlueNord will develop, review, and
implement response plans to mitigate risks and maximise
opportunities.
Metrics and Targets
BlueNord works actively to reduce our carbon footprint
while contributing to energy security. Our commitments
are 30 percent reduction in emissions intensity by
2025 and 80 percent power from renewables by 2029.
BlueNord will also focus on investing in suitable and
earlier stage CCS projects.
As a non-operator, BlueNord will work to protect
the environment where possible, both in its own
operations, and through the company’s partnership
in the DUC. The data reported on climate and nature
have been supplied by the operator TotalEnergies
for the DUC. Going forward, BlueNord will monitor
and report on performance year-on-year as part of
our sustainability strategy which will be established
later this year.
BlueNord’s ambition is to report on scope 1 and 2
for 2023.
The following metrics are used by BlueNord to assess
climate-related risks and opportunities: CO
2
emissions,
Fuel consumed, Flaring, Fugitive emissions, NOx and
SOx emissions, GHG, CH4 emissions, nmVOC
emissions, GHG intensity. The company aims to add
further metrics and indicators to track mitigation on
transition risk and this will be added as part of the work
with the sustainability strategy in 2023.
04
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52%
48%
Sustainability Report continued
Social impact
Our values
Health and safety
We strive to create a safe and healthy work environment
which is embedded through our health, safety, and the
environment (HSE) Policy.
The Danish Offshore Safety Act (‘the Act’) is the legal
framework for health and safety offshore and enables
companies to solve offshore health and safety issues
themselves. The Act applies to all offshore activities
related to hydrocarbon facilities, infrastructure and
connected pipelines.
Licensees under the Danish Subsoil Act are required to
identify, assess, and reduce health and safety risks as
much as reasonably practicable, as well as be compliant
with the “as low as reasonably practicable principle”.
Furthermore, the licencee shall ensure that operators are
able to fulfil the safety and health obligations in
accordance with the Danish Offshore Safety Act.
In 2022 there were no recorded work-related accidents
or injuries. Safe and secure operations are the utmost priority
for BlueNord and we will continue to focus on this in 2023.
Diversity, equality, and inclusion
The requirement of the Norwegian Equality and Anti-
Discrimination Act stipulates that organisations must
identify and address challenges regarding equality and
diversity in the workplace before any incidents or
discrimination take place.
Following the Norwegian Equality and Anti-Discrimination
Act, BlueNord has undertaken a longer process related to
the activity requirement and has conducted extensive
work to investigate risks of discrimination and other
barriers to equality. Based on this risk analysis, BlueNord
has set goals, implemented measures, and established a
plan for work.
BlueNord is perceived to have satisfactory processes
related to recruitment, determination of wages and
benefits, career opportunities and corporate ladder,
workplace facilitation, work-life balance, and handling
findings identified through employee surveys and
interviews. Measures related to findings have been
identified and reviewed in collaboration with the EVP
People & Capability to ensure that the measures are
put into practice.
BlueNord’s core values have been reviewed and
revitalised, the parental leave schemes on all locations
have been reviewed. A new HR system was
implemented in 2022 with data gathering and specific
KPI dashboards for diversity, equity, and inclusion to be
further matured. Channels for handling any potential
discrimination issues, have been formalised in the
company’s harassment policy supplementing the
existing Whistleblowing procedure and its integrity
channel. In 2022 a culture programme that continues
throughout 2023 with key topics related to DE&I was
introduced as well.
BlueNord believes embracing and fostering diversity
and inclusion positively impacts employer
attractiveness, employee retention and drives
performance across the company.
On basis of the new results from the organisational
survey, relevant DE&I goals and further initiatives for
2023 will be set for BlueNord to be recognised as an
equal opportunity employer, committed to promoting
diversity and inclusion in the workplace. BlueNord aims
for an inclusive organisational culture with high
employee engagement and where all people find that
they are empowered, respected, and have a strong
sense of belonging.
BlueNord has introduced an internal DE&I index as part
of its active work to identify and counteract any
discrimination and promote diversity and equity in the
workplace. The index is based on 15 statements
extracted from the comprehensive annual employee
engagement survey. The index result, based on a
94 percent response rate, will be the benchmark for
coming surveys and an efficacy indicator when efforts
based on findings are implemented and to be evaluated.
Human rights and decent
working conditions
BlueNord is committed to respecting fundamental
human and labour rights, both in our own operations
and in our relations with business partners. Our
employees shall be treated with respect and given
orderly working conditions. BlueNord will continue to
champion issues such as non-discrimination, the right
to privacy, the right to collective bargaining,
employment contracts and protection against
harassment. Forced labour, child labour and all forms
of discrimination are strictly forbidden. See appendix 2,
Transparency Act Statement, for more details on
BlueNord’s work to safeguard human rights and
decent working conditions.
DE&I gender split
Male 48%
Female 52%
Bold
we are determined,
using our creativity
and technical
expertise to
challenge the status
quo, willing and
unafraid to explore
alternative paths
Purposeful
we are ambitious,
moving forward with
purpose and a focus
on value and results.
Our people are
connected,
contributing to the
bigger picture.
Dependable
we deliver on what
we promise, sharing
ideas and
possibilities. We are
in this together,
supporting each
other throughout.
DE&I Index
79%
Work-related
accidents
or injuries in 2022
0
53
BlueNord
Annual Report and Accounts 2022
Strategic Report
Governance
BlueNord believes that effective corporate governance
is critical in ensuring accountability, achieving strategic
goals and generating value for stakeholders. The
Company seeks high standards of performance and
professionalism based on honesty, integrity and fairness
in its business practices. BlueNord works together with
partners and contractors on the basis of the same
principles of integrity and fairness, with zero tolerance
for bribery and corruption.
BlueNord is committed to respecting fundamental human
and labour rights, both in operations and in relations with
business partners. At BlueNord, we comply with all
applicable laws and regulation.
Roles and responsibilities
The executive management is responsible for risk and
opportunity identification and for ensuring effective
processes and mitigation efforts, including ESG matters
within the managers’ respective areas of responsibility.
The EVP for Investor Relations and ESG reports directly
to the CEO. In 2020, an ESG Committee was established
to support BlueNord’s commitment to ESG and to evolve
its contribution in the energy transition.
Responsible business and code of conduct
BlueNord is committed to conducting our business in a
responsible, ethical and lawful manner. We want to be a
trusted partner – to our customers, shareholders,
colleagues, business partners, and neighbours.
BlueNord’s code of conduct forms the basis for the high
standards of integrity in our business. The code of
conduct applies to all Directors, officers, and employees,
including subsidiaries in which BlueNord holds (directly or
indirectly) a 50 percent ownership interest. The code of
conduct also applies to those acting for or on behalf of
BlueNord. BlueNord also expects our business partners,
such as suppliers, subcontractors, joint venture partners,
and other contracting parties, to adhere to standards
consistent with this code of conduct.
Corporate social responsibility
(CSR) policy
BlueNord shall respect human and labour rights,
establish good HSE standards, facilitate good dialogue
with stakeholders, and generally operate in accordance
with applicable regulatory frameworks and good
business practice.
At the core of the group’s CSR policy is the Group’s
five corporate values: bold, purposeful and dependable.
The values define who we are, how we act and what
employees of the Company and Group stand for.
Each Group Company has an independent
responsibility for exercising corporate social
responsibility in accordance with the Group’s
principles, but is free to design its own additional
activities and instruments. In addition, each Group
Company has adopted a compliance manual that
provides detailed information regarding the
professional and ethical standards and compliance
requirements of all Group companies.
The Group’s CSR policy is adopted by the Company’s
Board of Directors and shall be evaluated at least every
second year. The Managing Director of the Company
is responsible for ensuring the follow up of and
compliance with the content of the policy. All Group
subsidiaries are responsible for the day-to-day
practice of this policy. The Company’s corporate social
responsibility policy can be found on the Company’s
web site: www.BlueNord.com/csr.
Whistleblowing
The Company established a whistleblowing procedure
in 2019, which is handled by PriceWaterhouseCoopers
(PwC). The whistleblowing procedure applies to all
officers, Directors and employees of the Company,
whether temporary or permanent, full-time or part-time,
and regardless of their location. The Company has
made sure to communicate the whistleblowing process
to everyone in the organisation.
Anyone doing business for or on the Company’s behalf
must comply with the Group’s whistleblowing policy.
Further details about the whistleblowing policy can be
found in the Group’s compliance manuals
https://www.BlueNord.com/whistleblowing.
Anti-corruption and bribery
BlueNord has zero tolerance regarding corruption and
bribery. The Company expects that the local
management of each Group subsidiary promotes a
strong anti-corruption culture. Each Company shall
make active efforts to prevent undesirable conduct
and ensure that their employees are capable of dealing
with difficult situations.
ESG
Committee
Read our latest ESG
Committee Report.
Find out more on
page 80.
In 2020 an ESG
committee was
established to support
BlueNord’s contribution
to the energy transition.
CSR policy
You can find out
more in our
Corporate Social
Responsibility policy.
Find out more at
BlueNord.com/csr
54
BlueNord
Annual Report and Accounts 2022
Sustainability Report continued
Norwegian Transparency Act Statement
Account of the due diligence assessment
Norwegian Energy Company ASA (BlueNord) is
committed to respecting fundamental human and labour
rights, both in the operations and in relations with business
partners. At Norwegian Energy Company ASA
(BlueNord), we comply with all applicable laws and
regulations, including the Norwegian Transparency Act,
entered into force on 1 July 2022. The Act’s intention is to
promote companies’ respect for fundamental human
rights and decent working conditions.
Organisation
Norwegian Energy Company ASA (BlueNord) is a
material independent E&P company with a “see to it”
obligation, meaning an obligation to ensure that the
operator carries out its work in accordance with the
regulatory requirements while reducing risks and
environmental impact to a minimum.
The executive management is responsible for overall risk
management with the EVP Investor Relations & ESG
responsible for the work carried out regarding the
Transparency Act. This work is included in BlueNord’s
ESG work. In 2020, an ESG committee was established
to support BlueNord’s commitment to ESG and to evolve
its contribution in the energy transition.
Guidelines and routines
Norwegian Energy Company ASA (BlueNord) has
developed guidelines to prevent violations of human
rights, indecent working conditions, damage
to the environment, and involvement with corruption.
The relevant guidelines are described in the corporate
social responsibility guidelines, including the code of
conduct as well as the HSE policy, approved by the board
of directors. In October 2022, Norwegian Energy
Company ASA (BlueNord) conducted an overall due
diligence assessment in accordance with
the requirements of the Transparency Act based on a
methodology in accordance with ISO Standard 31000 for
managing risks. The company is committed to perform
annual due diligence assessments on these topics to
monitor and manage actual and potential adverse
impacts on human rights and working conditions.
Findings in 2022
Norwegian Energy Company ASA (BlueNord)
performed an overall strategic risk assessment
including risks associated with its operator. For the time
being, the company only holds interest in the Danish
Underground Consortium (DUC), which is operated by
TotalEnergies.
In the risk assessment, Norwegian Energy Company
ASA (BlueNord) focused on the following five
categories and related activities in its value chain:
exploration, appraisal, development, production, and
abandonment. Business partners who provide the
company with goods and services that are not direct
parts of the value chain were also part of the
assessment. These non-negligible expenditures are
mainly related to acquisition of seismic data, IT and
digitalisation services, office services such as
cleaning- and canteen services and professional
services such as insurance, accounting, legal and other
commercial or technical advisors and hire of in-house
technical specialists.
No negative consequences were discovered in the due
diligence assessment. This is not surprising, given that
Norwegian Energy Company ASA (BlueNord) has
limited activity in the various categories and operates
within strong sector regulations.
When prioritising risks while identifying uncertainties,
Norwegian Energy Company ASA (BlueNord)
highlighted yard activities, input factors used in
construction, and dismantling and managing steel and
waste disposal when brought to shore, as the most
severe risks that may occur.
CSR policy
You can find out
more in our
Corporate Social
Responsibility policy.
Find out more at
BlueNord.com/csr
Oslo
28 March 2023
Riulf Rustad Tone Kristin Omsted Marianne Lie Colette Cohen
Executive Chair Board member Board member Board member
Robert J. McGuire Jan Lernout Peter Coleman Euan Shirlaw
Board member Board member Board member Chief Executive Officer
55
BlueNord
Annual Report and Accounts 2022
Strategic Report
Measures
Concrete measures and initiatives have been identified
to manage the identified severe risks that may occur.
These measures involve that Norwegian Energy
Company ASA (BlueNord) will investigate and approve
contractors regarding human rights and working
conditions, request information from the operator
concerning processes on these topics, follow projects
closely, and visit the yards.
For the time being, Norwegian Energy Company ASA
(BlueNord) is not involved in abandonment and only
involved in redevelopment. In the case of new activities or
projects within one of these categories, there will be a
need for assessing risks of human rights and decent
working conditions.
Results
Norwegian Energy Company ASA (BlueNord) is
constantly working to strengthen our work on human
rights and decent working conditions. We aim to review
and revise our corporate social responsibility guidelines
in accordance with OECD’s guidelines and to clarify our
expectations to business partners. Furthermore, the
measures will help us establish governance documents,
routines, and instructions related to due diligence
processes and our supply chain to ensure that we align
to the highest professional and ethical standards in the
conduct of our business.
During the fabrication of the Tyra II
process module in Batam, Norwegian
Energy Company ASA (BlueNord)
provided donations to help establish
the Agape Orphanage
56
BlueNord
Annual Report and Accounts 2022
Risk Management
Risk Management
Framework
The internal control framework supports the
management and mitigation of risk. The process is
designed to manage, mitigate and communicate,
rather than eliminate, the risk of failure to achieve our
strategic priorities.
Risk management and internal control are given high
priority by the board of directors. The Board is responsible
for identifying principal risks and determining the nature
and extent of those risks the Company is willing to take.
The Board is also responsible for monitoring the
Company’s risk management framework and for
reviewing its effectiveness. The Audit Committee assists
the Board of Directors on an ongoing basis in monitoring
the Company’s system for risk management and
internal control.
Risk management process
The Company faces various risks which may impact the
Company and not all these risks are necessarily in the
Company’s control. For this reason, the Company has
established a risk management process to identify and
assess how to respond to risks. That response can
include acceptance, an action plan with mitigating factors
to reduce the risk, transfer to third parties, or terminating
the risk by ceasing certain activities. The cyclical process
works in practice as follows:
• Strategic objectives and risk appetite sets the context
at Board level.
• Risk assessment includes risk identification through
review meetings held with key personnel in the
organisation on a quarterly basis. This includes an
evaluation of likelihood and impact considering both
quantitative and qualitative factors. The collated risks
are maintained in the Company risk register and
matrix.
• Risk mitigation requires an assessment of mitigation
plans and controls based on risk appetite. Risk mitigation
plans are developed between risk owners and with
feedback from the Executive Team considering the risk
appetite and context set at Board level.
• Risk monitoring occurs on a quarterly basis
through an Executive Team evaluation, monitoring
and review of the risk register and matrix, this is to be
presented to the Audit Committee and Board along
with the quarterly financial statements.
• Status of the risk assessment is presented
annually and reviewed with the Board and updated
as required based on the current risk appetite and
context both internal and external.
The Executive Team sets the tone and is responsible
for monitoring and managing the most significant
risks and identified risk owners are responsible
for ensuring risks within their area are being
appropriately managed.
Internal control
The Company’s management is responsible for
establishing and maintaining sufficient internal control
over financial reporting. Company specific policies,
standards and accounting principles have been
developed for the annual and quarterly financial
reporting of the group. The Chief Executive Officer
and EVP Finance supervise and oversee the external
reporting and the internal reporting processes. This
includes assessing financial reporting risks and internal
controls over financial reporting within the group.
The consolidated external financial statements are
prepared in accordance with International Financial
Reporting Standards (IFRS) and International
Accounting Standards as adopted by the EU.
Effective risk management is essential to successfully delivering our strategy. The risk
management process needs to identify and determine the nature and extent of risk
the Company is exposed to and the extent to which mitigation is required and thus,
the level of risk that is acceptable.
Board of
Directors
Our Board is
responsible for the
Company’s risk
framework.
Meet our Board
on page 70
57
BlueNord
Annual Report and Accounts 2022
Strategic Report
Principal Risks and Uncertainties
The risks and uncertainties described in this section are the material known risks and uncertainties faced by
BlueNord at the time of publication.
Oil and gas production and reserves
Risk Impact Mitigation Movement
Geographical
concentration
and field
interdependency
Production of oil and gas is concentrated in a limited number
of offshore fields in a limited geographical area of the
Denmark continental shelf. Consequently, the concentration
of fields and infrastructure may result in incidents or events on
one location affecting a significant part of BlueNord business.
Material influencing factors
• Currently four production hubs, of which three hubs are in
production, that are interconnected and utilise the same
infrastructure.
• The fields within one hub are interconnected and one field
can depend on another to extract hydrocarbons.
• All gas produced on the different hubs is currently sent
directly through the NOGAT pipeline; once the Tyra hub
is redeveloped gas will be processed and transported
to shore via the Tyra hub or the NOGAT pipeline.
• The Gorm hub receives liquids from all the other hubs
and sends it to shore via pipeline from Gorm E.
The operator has ongoing
inspection and
maintenance plans in
place to proactively
maintain assets and
minimise the risk of
incidents.
Where events occur,
activities are adjusted to
respond to specific issues
as they arise and minimise
the impact.
Unchanged
Actual reserves
may differ from
reported reserves
estimates
The reported reserves and resources represent significant
estimates based on several factors and assumptions made as
of the reported date, all of which may vary considerably from
actual results. Further, oil and gas production could also vary
significantly from reported reserves and resources. Should
the actual results of the Company deviate from the estimated
reserves and resources, this may have a significant impact on
the value of the Group’s assets and cash flow from operations.
Material influencing factors
• Factors and assumptions on which the reserves estimates
are determined include geological and engineering
estimates (which have inherent uncertainties), historical
production, the assumed effects of regulation by
governmental agencies and estimates of future
commodity prices and operating costs.
• The Company is a non-operated partner in the DUC and
as such has less control of future decline mitigating
investments in the producing assets that has an impact
on oil and gas production.
Reported reserves are
based on independent
technical expert’s reports,
which are carried out at
least once per annum.
BlueNord has a
subsurface team with
appropriate technical
expertise that monitors
and reviews production
and reserves in addition to
the external reserves
reporting.
This provides oversight of
performance and
expectations throughout
the year to enable
response and follow up on
a timely basis should
concerns arise.
Unchanged
RISK TREND
Increasing
Unchanged
Decreasing
58
BlueNord
Annual Report and Accounts 2022
Risk Impact Mitigation Movement
Ongoing
investment in
developments
The Company makes and expects to continue to make
substantial investments in its business for the development
and production of oil and natural gas reserves. Such projects
require substantial investments to bring into production, which
comes with a number of inherent risks.
Material influencing factors
• Development projects have inherent execution risks
including cost overruns and delays, in addition to the
impact of commodity prices on the economics of a project.
• The Company may also be unable to obtain needed
capital or financing on satisfactory terms, which could lead
to a decline in its oil and gas reserves.
The Company intends to
finance future investments
with cash flow from
operations and
borrowings under its RBL
facility and other equity
and debt facilities. The
Company regularly
monitors liquidity,
borrowing base, and other
financial ratios.
Projects are screened for
technical and non-
technical risks with
economics reviewed at
multiple price scenarios.
Unchanged
Tyra
redevelopment
project
The Tyra redevelopment project is, to date, the largest project
carried out on the Denmark continental shelf. The project may
be further delayed, or the planned costs associated with the
project may increase from what has been previously
assumed and any such delay may have an adverse effect on
BlueNord’s financial position.
Material influencing factors
• The scope of the project includes removal of old facilities,
modifying existing ones, and installing new features; there
are inherent risks with such significant projects, including
risks of cost overruns and delays.
• The project has been delayed twice to date; the first in
November 2020 due to the COVID-19 pandemic, and again
in August 2022 driven by global supply chain challenges.
BlueNord maintains a
regular dialogue with the
operator’s key personnel
on the project in addition
to a review of weekly and
monthly progress
reporting.
BlueNord’s internal
technical experts are
closely involved with this
review and have an
established feedback
process with the operator.
Unchanged
Decommissioning
estimates
There are significant uncertainties and significant estimation
risks relating to the cost and timing for decommissioning of
offshore installations and infrastructure. A significant deviation
from such estimates may have a material adverse effect on
the Company’s results of operations, cash flow and financial
condition. This includes the timing of when security may need
to be put in place.
Material influencing factors
• Within the DUC, the partners are primarily liable to each
other on a pro-rata basis and, secondarily, jointly and
severally liable for all decommissioning obligations.
• There is an obligation for participants to provide security
for their respective share of any decommissioning liabilities
ahead of actual decommissioning based on calculations
as set out in the joint operating agreement.
Decommissioning
estimates are reviewed at
least on an annual basis
and updated every five
years in detail based on
technological, regulatory
and any other relevant
information at the time.
The need for
decommissioning
security is assessed
annually.
Unchanged
RISK TREND
Increasing
Unchanged
Decreasing
Principal Risks and Uncertainties continued
Oil and gas production and reserves continued
59
BlueNord
Annual Report and Accounts 2022
Strategic Report
RISK TREND
Increasing
Unchanged
Decreasing
Market risks
Risk Impact Mitigation Movement
Commodity prices
The Company’s main business is to produce and sell oil and
gas, therefore future revenues, cash flow, profitability,
financing, and rate of growth depend substantially on
prevailing prices of oil and gas. Because oil and gas are
globally traded, the Company is unable to control or predict
the prices it receives for the oil and gas it produces.
Commodity price fluctuations could reduce the Company’s
ability to refinance its outstanding credit facilities and could
result in a reduced borrowing base under credit facilities
available to the Company, including the RBL facility.
Fluctuations in commodity prices could also lead to
impairments of the Company’s assets.
Material influencing factors
• During 2022, the Ukraine conflict resulted in material
changes to oil and gas supply and prices, and it is not
possible to predict the future developments in the supply/
demand market and the prices related thereto.
• The hydrocarbons produced from specific fields may also
have a premium/discount in relation to benchmark prices,
such as Brent, which may vary over time.
• The majority of the natural gas produced by the Company
is sold at Trading Hub Europe (THE) prices. THE closely
follows the Dutch Title Transfer Facility (TTF) price. The
Company is more exposed to additional price volatility
deriving from proposed responses by the European
Commission, as seen with the proposed Market
Correcting Mechanism.
The Company actively
seeks to reduce this risk
through the establishment
of hedging arrangements.
BlueNord has to date
executed this policy in the
market through forward
contracts.
BlueNord enters hedging
contracts on both oil and
gas that mitigates the
short-term impact of price
volatility.
Further detail on
BlueNord’s hedging policy
can be found in note 2 to
the financial statements
and note 18 on financial
instruments.
Unchanged
Foreign currency
exposure
The Group is exposed to market fluctuations in foreign
exchange rates. Significant fluctuations in exchange rates
between euros and Danish kroner, and US dollars and Danish
kroner, may materially adversely affect the reported results.
Material influencing factors
• Revenues are in US dollars for oil and in euros and Danish
kroner for gas, while operational costs, taxes and
investments are in several other currencies, including
Danish kroner.
• The Company’s financing is primarily in US dollars.
The Company considers
currency risk to be low, as
the main financial items
held in a currency other
than the functional
currency of the respective
components is offset by
positions in other
components of the Group
and/or hedged.
Unchanged
60
BlueNord
Annual Report and Accounts 2022
Cyber security
Risk Impact Mitigation Movement
Key infrastructure,
networks or core
systems are
compromised or
are otherwise
rendered
unavailable
A compromised network or infrastructure would seriously
impair the Company’s ability to maintain regular operations,
including being able to continue reporting, regulatory and
financial obligations if required information were not available.
Material influencing factors
• Russia’s invasion of Ukraine in February 2022 has elevated
IT security risks around cyber crime and similar threats.
• Sabotage on the Nord Steam 1 and 2 pipelines in
September 2022 caused the Danish Energy Agency
(Energistyrelsen) to raise the preparedness level of the
Danish energy sector.
The Company has in
place IT controls and
processes, including
preventative security
routines, disaster
recovery and business
continuity plans.
The Company elevated its
IT security related routines
and IT systems to protect
against cyber criminality
and similar threats.
The heightened
preparedness level of the
Danish energy sector, was
immediately implemented
by the operator of the DUC.
Higher
Financial liabilities
Risk Impact Mitigation Movement
Available funding
to meet the
Company’s
financial liabilities
The Company has several debt instruments which expose it
to interest rate risk and obligations to meet certain covenants.
The Company’s material hedging programme provides
significant visibility over its ability to meet these requirements,
however if the Company is unable to, then actions to rectify
this position may be required. There can be no assurance that
such actions will be available or enough to allow BlueNord to
ultimately fulfil its obligations.
Material influencing factors
• Exposure to floating interest rates through the
Company’s USD 1.1 billion RBL.
• Exposure to fixed interest rates through a USD 208 million
convertible bond and a USD 175 million senior unsecured note.
• Under these financing instruments, the Company is subject
to several covenants, including maximum leverage relative to
earnings and demonstration of a minimum level of liquidity.
The Company has fixed
USD 1.0 billion of RBL
interest rate exposure until
30 June 2024.
The Company
restructured the NOR13
convertible bond into the
new NOR15 convertible
bond with revised terms
including a later
conversion date.
The Group monitors its
liquidity and covenant
coverage continuously to
ensure it will be able to
meet its financial
obligations as they fall due.
As of 31 December 2022,
none of the Group’s
interest-bearing debt
falls due within the next
12 months.
Lower
Principal Risks and Uncertainties continued
RISK TREND
Increasing
Unchanged
Decreasing
61
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Annual Report and Accounts 2022
Strategic Report
RISK TREND
Increasing
Unchanged
Decreasing
Risk Impact Mitigation Movement
Future capital
requirements
BlueNord’s future capital requirements will be determined
based on several factors, including production levels,
commodity prices, future expenditures that are required
to be funded, and the development of the Company’s
capital structure.
To the extent the Company’s operating cash flow is
insufficient to fund the business plan at the time, and in
particular the Tyra redevelopment project, additional external
capital may be required. BlueNord currently has a strong
financial base, supported by existing liquidity and hedging
positions, however any unexpected changes that result in
lower revenues or increased costs may necessitate the
raising of additional external capital. There can be no
guarantee that, if required, BlueNord would be able to access
the debt or equity markets on favourable terms, or if
necessary be able to adequately restructure or refinance
its debt.
BlueNord maintains a
strong relationship with its
banking syndicate
through continual
engagement to underpin
its borrowing position and
has an active investor
relations strategy to
support access to the
capital markets.
Lower
Insurance risk
The Company maintains liability insurance in an amount that it
considers adequate and consistent with industry standard.
However, the nature of the risks inherent in oil and gas industry
generally, and on the Denmark continental shelf specifically,
are such that liabilities could materially exceed policy limits or
not be insured at all. In which event, the Company could incur
significant costs that could have adverse effect on its financial
condition, results of operation and cash flow.
Material influencing factors
• Due to recent changes in the geopolitical situation,
including changes and uncertainties caused by the
Russian invasion of Ukraine in February 2022, there may
be an increased risk for the Group’s assets becoming a
target of war acts and/or sabotage, as seen with the Nord
Stream pipeline sabotage in September 2022.
• Any such acts of war or sabotage directed towards the
Group’s assets may have a material adverse effect on the
Group’s assets and financial position, and whether an
incident is classified as an act of war or sabotage under the
Group’s insurances may have consequences for the
Group’s right to claim insurance proceeds under the
relevant insurances.
The Company annually
reviews the adequacy of
insurance coverage.
Unchanged
62
BlueNord
Annual Report and Accounts 2022
Third-party risk
Risk Impact Mitigation Movement
Third-party risk
The Company does not have a majority interest in any of its
licences and consequently cannot solely control such assets.
Nor does the Company have operatorship over any of its
assets. The Company therefore has limited control over
management of such assets. Mismanagement by the
operator or disagreements with the operator as to the most
appropriate course of action may result in significant delays,
losses or increased costs to it.
Jointly owned licences (as is the case for the Company’s
licences) also result in possible joint liability, on certain terms
and conditions. Other participants in licences may default on
their obligations to fund capital or other funding obligations in
relation to the assets. In such circumstances, the Company
may be required under the terms of the relevant operating
agreement or otherwise to contribute all or part of such
funding shortfall. The Company may not have the resources
to meet these obligations.
The Company has
consultation rights or right
to withhold consent in
relation to significant
operational and
development matters,
depending on: the
importance of the matter,
the level of its interest in
the licence, or which
licence the contractual
arrangements for the
licence apply to.
The structure of
engagement with the
operator is contractually
set out in the joint
operating agreement.
Unchanged
RISK TREND
Increasing
Unchanged
Decreasing
Principal Risks and Uncertainties continued
63
BlueNord
Annual Report and Accounts 2022
Strategic Report
RISK TREND
Increasing
Unchanged
Decreasing
Politics, regulation and compliance
Risk Impact
Mitigation Movement
Changes in
obligations arising
from operating in
markets that are
subject to a high
degree of
regulatory,
legislative and
political
intervention and
uncertainty
Exploration and development activities in Denmark are
dependent on receipt of government approvals and permits
to develop assets. There is no assurance that future political
conditions in Denmark will not result in the government
adopting new or different policies and regulations relating to
exploration, development, operation and ownership of oil and
gas, environmental protection, and labour relations. Any of the
above factors may have a material adverse effect on the
Company’s business, results of operations, cash flow and
financial condition.
Material influencing factors
• Future political conditions in Denmark could result in
government adopting new or different policies, meaning
that the Company may be unable to obtain, maintain or
renew required drilling rights, licences, permits resulting in
work being halted.
• Due to the Russian invasion of Ukraine, new regulations
have been imposed by the EU, United States, United
Kingdom and other governments, which affects the export
and import of oil and gas to and from the Russian market.
• Trade restrictions on the Russian market could increase
the importance of the oil and gas fields in Europe, including
in Denmark. Such increase in importance could result in
governments adopting new regulations that could affect
the assets and the operations of the Group.
The Company maintains
a regular dialogue with
the Danish Energy
Agency as well as relevant
government ministries.
This ensures an up-to-
date understanding is in
place in order to act and
respond on a timely basis
to any impact on the
business.
Higher
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BlueNord
Annual Report and Accounts 2022
Risk Impact
Mitigation Movement
Danish taxation
and regulations
All of BlueNord’s petroleum assets are located in Denmark
and the petroleum industry is subject to higher taxation than
other businesses. There is no assurance that future political
conditions in Denmark will not result in the relevant
government adopting different policies for petroleum taxation
than those currently in place.
Material influencing factors
As an oil and gas producer in Denmark, the Company
is exposed to risk relating to the EU imposed Solidarity
Contribution and a law proposal for the implementation
is currently being presented in the Danish parliament.
As taxation has a major impact on the Company’s results,
such amendments may significant impact the group’s cash
flow and financial condition.
A further proposal yet to be adopted is regarding additional
CO
2
duties. The proposal as currently presented would be
implemented from 2025 but as it is still in proposal stage, the
timing and extent of impact remains uncertain.
Dialogue is maintained
with industry bodies and
the relevant government
ministries in order to
understand proposed
legislations before they
are enacted and provide
full impact analysis.
There is a Compensation
Agreement between the
Danish state and the DUC
such that the companies
participating in the DUC
are entitled to
compensation for tax
increases. Due to the
Agreement, any
alterations in present
legislation to the
disadvantage of the DUC
licencees can be
challenged for
compensation.
The compensation would
be determined with a view
to the impact of the
changes on the DUC,
however these cannot
exceed the net advantage
deemed to have been
obtained by the state.
Higher
Financial reporting
risk
While BlueNord has in place internal controls covering the
Company’s financial reporting function, any material error or
omission could significantly impact the accuracy of reported
financial performance and expose the Company to a risk of
regulatory or other stakeholder action.
Internal controls over
financial reporting are
designed and in operation.
Unchanged
Reputational risks
BlueNord may be negatively affected by adverse market
perception as it depends on a high level of integrity to maintain
the trust and confidence of investors, DUC participants, public
authorities and counterparties.
Any mismanagement, fraud or failure to satisfy fiduciary or
regulatory responsibilities, or negative publicity resulting from
other activities, could materially affect the Company’s
reputation, as well as its business, access to capital markets
and commercial flexibility.
Clear code of conduct,
ethical guidelines and
whistleblower procedure
in place.
See more on governance
on page 5.
Unchanged
RISK TREND
Increasing
Unchanged
Decreasing
Principal Risks and Uncertainties continued
Politics, regulation and compliance continued
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Strategic Report
RISK TREND
Increasing
Unchanged
Decreasing
Climate risk
Risk Impact Mitigation Movement
Changes to and
impacts of
environmental
regulations
All phases of the oil and gas business present environmental
risks and hazards and are subject to environmental regulation
pursuant to a variety of international conventions and state
and municipal laws and regulations.
Compliance with such legislation can require significant
expenditures and a breach may result in the imposition of fines
and penalties, some of which may be material, in addition to
loss of reputation.
Material influencing factors
• Environmental legislation provides for, among other things,
restrictions and prohibitions on spills, and releases or
emissions of various substances produced in association
with oil and gas operations.
• Legislation also requires that wells and facility sites are
operated, maintained, abandoned and reclaimed to the
satisfaction of applicable regulatory authorities.
• The Company is subject to legislation in relation to the
emission of carbon dioxide, methane, nitrous oxide and
other GHGs.
• Environmental legislation is evolving in a manner expected
to result in stricter standards and enforcement, larger fines
and liability, and potentially increased investments and
operating costs.
• With all assets on the Denmark continental shelf, the
Company is highly exposed to changes in Danish law.
The Company maintains a
regular dialogue with the
Danish Energy Agency as
well as relevant
government ministries.
This ensures an up-to-
date understanding is in
place in order to act and
respond on a timely basis
to any impact on the
business.
The operator has a
framework and controls in
place to manage within
regulatory requirements.
BlueNord maintains an
overview of the
requirements and
dialogue with the operator
through the appropriate
joint committees.
Unchanged
See also climate risks outlined under TCFD on page 42.
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Chair’s introduction 68
Leadership 70
Corporate Governance Report 72
Board activities 77
Audit Committee Report 78
Remuneration Committee Report 79
ESG Committee Report 80
Nomination Committee Report 81
Director’s Report 82
Reporting of payments to governments 87
BlueNord has a diverse
board, with the relevant
experience and skills to
support the Company
and best practice.
02
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Governance Report
Governance
Report
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Chair’s introduction
This section of the report demonstrates that BlueNord maintains
robust systems and practices that support the Board, Company and
the management team in making good decisions for the future of the
business, in the interest of all stakeholders. The Board believes that
good corporate governance is an essential building block for the
development of a successful and sustainable business.
Chair’s
introduction
Riulf Rustad
Executive Chair
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Governance Report
The Board believes that good
corporate governance is an essential
building block for the development of a
successful and sustainable business.
Stakeholders include, for example, employees,
contractors, suppliers, partners, regulators, end users and
of course other users of the environment around the
Company’s assets and areas of operation.
To support the Board and as a framework for the
Company to adhere to, BlueNord seeks to comply with
the Norwegian Code of Practice, which is available on the
Norwegian Corporate Governance Committee website
(www.nues.no).
The Company’s corporate values and code of conduct
also provide a framework on which the Company acts
and decisions are made. The code of conduct describes
the Company’s ethical commitments and requirements
related to business practice and personal behaviour.
BlueNord has a diverse board, with the relevant
experience and skills to support the Company and best
practice. The composition of the Board is such that it can
operate independently of any special interests.
The management team also has extensive and relevant
experience, applicable to supporting best practice,
including technical, operational, financial, financial market
and other wider corporate skills. The CEO and other
members of the management team report to the Board
on Company activities on a monthly basis.
The Board shall hold at least five ordinary proceedings
each year. During 2022, attendance at Board meetings
was 92.9 percent. Board meetings are based around a
formal agenda. The Board will annually seek to define and
evaluate the Company’s objectives, main strategies and
risk profiles to ensure it continues to create value.
To ensure a more detailed assessment and of key
areas of the business, the Board is supported by
various committees, which include audit, nominations,
remuneration and ESG. With an exception from the
nomination committee, the committees are made up
of members of the Board and management team,
in accordance with their relevant skills and position.
Board committees meet regular during the year, and
the average attendance during 2022 was 93.4 percent.
Committee meetings are held in person or online and
are based around a formal agenda, with the saliant
points reported to the wider Board.
The Board aims to ensure there is the opportunity
for continuous and transparent dialogue with
shareholders. This includes key decisions being put
to shareholders on an annual basis through an Annual
General Meeting (AGM). The meeting is held virtually
to encourage attendance and participation, with the
option to vote and asking questions.
Corporate
and Social
Responsibility
Find out more in our
Sustainability Report.
Find out more
on page 34
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Leadership
1. Riulf Rustad 2. Marianne Lie 3. Tone Kristin Omsted 4. Colette Cohen
Executive Chair
Board member, member of the
Audit Committee and Chair of the
Remuneration Committee
Board member and member of the
Audit Committee
Board member and Chair of
ESG Committee
Riulf Rustad is a Norwegian businessman
with a long track record from investments
in sectors such as oil and gas, oil services
and offshore. Mr. Rustad operates through
his platform Ousdal AS and holds/has
held various Board positions, both in listed
and unlisted companies. Mr. Rustad was
elected as Chair of the Board of Directors
of BlueNord in 2016, and was re-elected at
the AGM of 19 May 2022 for a period of
two years.
Marianne Lie is the owner of Fajoma
Consulting AS and is the founder and
Managing Director of Forum for
Miljøteknologi (FFM). She holds/has held
several Board positions both in listed and
unlisted companies. Lie has served as
a member of the Board of Directors in
BlueNord since 26 May 2016, and was
re-elected at the AGM of 19 May 2022
for a period of two years.
Tone Omsted holds a BA Hons. in Finance
from the University of Strathclyde. She has
broad experience from corporate finance
and capital markets, and currently serves
as head of investor relations at Entra ASA.
Previous experience includes 14 years as
an investment banking executive at SEB
Enskilda. She has also served on the
Board of Directors of Panoro Energy ASA.
Ms Omsted has served as Member of the
Board of Directors of BlueNord since
26 May 2016, and was re-elected at
the AGM of 19 May 2022 for a period
of two years.
Colette Cohen is a chemistry graduate
from Queens University Belfast and also
holds a master’s degree in Project
Management and Economics. Her career
began with BP in 1991 and she has worked
for companies including ConocoPhillips
and Britannia in the North Sea, Norway,
the US and Kazakhstan. Colette was SVP
for Centrica Energy’s E&P UK/NL and in
August 2016 became the CEO of The Net
Zero Technology Centre. Ms. Cohen has
served as member of the Board of
Directors of BlueNord since 7 August
2019, and was re-elected at the AGM of
19 May 2021 for a period of two years.
5. Robert J. McGuire 6. Peter Coleman 7. Jan Lernout
Board member and member of the
ESG Committee
Board member and member of the
Audit Committee
Board member and member of the
Remuneration Committee
Robert McGuire is the founder of
Longwing Partners LLC, a strategic
advisory firm. He has a 25-year global
track record as an adviser, investor and
business leader, has served on numerous
Boards and has extensive experience in
the energy sector, having led the European
energy businesses at both Goldman
Sachs and J.P.Morgan. Bob is also an
independent director at TSX-listed GDI
Integrated Facilities Services. He has a BA
from Boston College and an MBA from
Harvard Business School. Mr. McGuire
was elected as member of the Board of
Directors of BlueNord at an Extraordinary
General Meeting held on 2 March 2020,
and was re-elected at the AGM of 19 May
2022 for a period of two years.
Peter Coleman joined Taconic, a
shareholder in BlueNord, in April 2018
where he is a Director focusing on
European credit, based in their London
office. Prior to joining Taconic, Peter was
a Managing Director on the European
distressed debt team at SVP Global.
Previously, he was an Investment Director
in distressed debt at Sisu Capital and prior
to this, he was a Director in the corporate
finance group and tax group at
PricewaterhouseCoopers. Peter earned a
dual LL. B. and B.Com. from Victoria
University in New Zealand in 1996.
Jan Lernout is a partner and portfolio
manager at Kite Lake Capital
Management (UK) LLP, a shareholder in
BlueNord, which he founded in July 2010.
Prior to that he was a partner and portfolio
manager at Cheyne Capital Management
(UK) LLP and an Executive Director and
member of the Investment Committee in
the European Special Situations Group
(ESSG) at Goldman Sachs International.
He holds a Master in Commercial
Engineering from KU Leuven and an
MBA from the University of Chicago
Booth School of Business. He is a
CFA Charterholder.
Board of Directors
Management Team
8. Euan
Shirlaw
9. Marianne
Eide
10. Cathrine
F. Torgersen
11. Jacqueline
Lindmark Boye
Chief Executive Officer,
Chief Financial Officer
Chief Operating Officer EVP Investor Relations & ESG EVP Finance
Euan became Chief Executive Officer of
BlueNord in 2022, having joined the
Company as Chief Financial Officer in
2019 and having been appointed Acting
Managing Director in November 2021 . He
has a background of providing strategic
advice to a wide range of oil and gas
companies on acquisition, divestment
and merger activity, as well as raising
debt and equity capital. Prior to joining
BlueNord, Euan was a senior member of
the oil and gas advisory team at BMO
Capital Markets, having also focused on
the Energy space while working with
Credit Suisse, RBC Capital Markets and
Rothschild in London. He has an MSc in
Business and Accountancy from the
University of Edinburgh.
Marianne joined BlueNord in 2022 and
holds the position of Chief Operating
Officer. She has 30 years of experience
in the upstream oil and gas industry.
Prior to joining BlueNord, she held senior
management, commercial and technical
roles with Shell, BG Group, Gaz de France,
Conoco and Equinor, both based in
Norway and the United Kingdom.
Marianne has an MSc in Petroleum
Engineering from the Norwegian Institute
of Technology in Trondheim.
Cathrine joined BlueNord in 2019 and
holds the position of EVP Investor
Relations & ESG. She previously had
the role as Senior Account Director in
Hill+Knowlton, where she advised a wide
range of oil and gas and shipping
companies. During her seven years in
Hill+Knowlton, she was a member of the
Management Team and was also leading
the Financial Communications practice.
Prior to joining Hill+Knowlton, Cathrine
worked with institutional high-yield sales
at Pareto Securities Inc. in New York and
Clarksons Platou Securities. She has a
BSc in Business Administration and
Finance from Bocconi University.
Jacqueline joined BlueNord in 2019 and
holds the position as EVP Finance since
November 2022. She has over 20 years’
experience in finance and audit within the
energy industry in Australia, the UK and
Denmark. Prior to joining BlueNord,
Jacqueline has held various roles,
including leadership with Shell, AGL
Energy, EY and PwC. She holds a
Bachelor in Commerce and Bachelor in
Arts from Monash University in Australia
and is a member of the Chartered
Accountants Australia and New Zealand.
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1
4
9
2
5
10
3
8
11
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Board
• Sets the Company’s purpose, values and strategy, and satisfies itself that these are aligned with culture.
• Provides entrepreneurial leadership, promoting long-term sustainable success and shareholder value creation.
• Oversees the Group’s risk management processes and internal control environment.
• The Board delegates certain matters to its three permanent committees.
Executive Team
• Led by the CEO, who is supported by COO, EVP IR & ESG and EVP Finance.
• Responsible for the development and delivery of BlueNord’s strategy.
• Responsible for day-to-day management of the Company’s operations.
Audit Committee
• Reviews and reports to
the Board on the
Company’s financial
reporting, internal
controls, whistleblowing,
internal audit and the
independence and
effectiveness of the
external auditors.
Read the Audit Committee
report on pages 78.
Remuneration Committee
• Responsible for all
elements of the
remuneration of
Executive Directors, the
Chair and the Executive
Management Team.
• Reviews diversity, talent
development and
succession planning.
Read the Remuneration
Committee report on page 79.
ESG Committee
• Support the development
of the Company’s overall
environmental, social and
governance strategy.
• Ensure that the Board is
informed on material
relevant topics or events
related to the Company’s
work on ESG.
Read the ESG Committee
report on page 80.
Nomination Committee
• Reviews the structure,
size and composition of
the Board and its
committees, and makes
recommendations to
the Board.
• Reviews diversity, talent
development and
succession planning.
Read the Nomination
Committee report on page 81.
Norwegian Energy Company ASA (“BlueNord”, “the Company”) has made a strong commitment to ensure trust in the Group and to enhance
value creation for shareholders and society over time. The Company acts in a responsible and prudent manner through efficient decision
making and communication between the management, the Board of Directors (“the Board”, “Board of Directors”) and the shareholders of the
Company, represented by the AGM.
The Company’s framework for corporate governance is intended to decrease business risk, maximise value and utilise the Company’s
resources in an efficient and sustainable manner, to the benefit of shareholders, employees and society at large. The Company will seek to
comply with the Norwegian Code of Practice for corporate governance (“Corporate Governance Code”), which is available on the Norwegian
Corporate Governance Committee website: www.nues.no
The principal purpose of the Corporate Governance Code is to ensure: (i) that listed companies implement corporate governance that clarifies
the respective roles of shareholders, the Board of Directors and executive management more comprehensively than that which is required by
legislation; and, (ii) effective management and control over activities with the aim of securing the greatest possible value creation over time in the
best interest of companies, shareholders, employees and other parties concerned.
The Company will, due to the listing of its shares on Oslo Børs, be subject to reporting requirements for corporate governance under the
Accounting Act section 3-3b, as well as Oslo Børs “Continuing obligations of stock exchange listed companies” section 4.4. The Board of
Directors will include a report on the Company’s corporate governance in each Annual Report, including an explanation of any deviations from
the Corporate Governance Code. The corporate governance framework of the Company is subject to annual review by the Board of Directors.
According to the Company’s own evaluation, the Company deviates from the Corporate Governance Code on the following points:
• Item 4: The Board of Directors of the Company has been, and is expected to be, provided with authorisations to acquire own shares and
issue new shares. Not all such authorisations have separate and specific purposes for each authorisation, as the purposes of the
authorisations shall be explained in the notices to the general meetings adopting the authorisations.
• Item 11: Options have been granted to members of the Board of Directors through the share option program of the Company, first
implemented at a general meeting of 21 January 2016 and later extended and expanded.
• Item 14: Due to the unpredictable nature of takeover situations, the Company has decided not to implement detailed guidelines on takeover
situations. In the event a takeover were to occur, the Board of Directors will consider the relevant recommendations in the Corporate
Governance Code and whether the concrete situation entails that the recommendations in the Corporate Governance Code can be
complied with or not.
Governance framework
Corporate Governance Report
Accountability
Delegation
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Governance Report
1. Implementation and reporting on corporate governance
The Board of BlueNord is responsible for compliance with corporate governance standards. BlueNord is a Norwegian public limited liability
Company (ASA), listed on the Oslo Stock Exchange and established under Norwegian law.
In accordance with the Norwegian Accounting Act, section 3-3b, BlueNord includes a description of principles for corporate governance as
part of the Board of Directors’ Report in the Annual Report. The Company will seek to comply with the Corporate Governance Code. The
Company’s strategy is to continue its value creation to replace and maximise recovery of proven reserves and resources and to continue to
explore new opportunities in and above the ground.
2. Business
The Company is a publicly owned oil, gas and offshore industry Company with a strategic focus on value creation through increased recovery,
enabled by a competent organisation with a long-term view on reservoir management and the capability to invest in and leverage new
technology.
On an annual basis, the Board defines and evaluates the Company’s objectives, main strategies and risk profiles for the Company’s business
activities to ensure that the Company creates value for shareholders.
The Company integrates considerations related to its stakeholders, as well as social, environmental and sustainability considerations into its
value creation and shall achieve its objectives in accordance with the Company’s code of conduct.
The Company’s business is defined in the following manner in the Company’s articles of association, section 3: “The object of the Company is
direct and indirect ownership of and participation in companies and enterprises within exploration, production, and sale related to oil and gas,
and other activities related hereto.”
3. Equity and dividends
3.1 Equity
As of 31 December 2022, the Company’s consolidated equity was USD 602 million, which is equivalent to approximately 19 percent of total
assets. The Company’s equity level and financial strength shall be considered in light of its objectives, strategy and risk profile.
3.2 Dividend policy
The Company has not paid any dividends to date, whether in cash or in kind.
The Company does not expect to make dividend payments prior to completion of the Tyra redevelopment project. The Company may revise its
dividend policy from time to time. The Company currently intends to retain all earnings, if any, and to use these to finance the further business of
the Company.
3.3 Share capital increases and issuance of shares
At the AGM held on 19 May 2022, The board of directors was authorised to increase the Company’s share capital by up to NOK 245,490 (this
represents 454,754 shares at a nominal value of NOK 0.5398295) until the AGM in 2023, but in no event later than 30 June 2023.
On 28 December 2022, the share capital reduction was registered in the Norwegian registry of Business Enterprises, following the AGM
resolution the share capital was decreased by reducing the nominal value of the shares to NOK 0.5398295.
Outstanding shares as of 28 March 2023 were 26,199,472, which is an increase of 1,650,459 shares compared to year end 2021. During the
year, 1,159,411 shares were issued following conversion of parts of NOR13. Additional 491,048 shares were issued to NOR13 bondholders in
January 2023.
3.4 Purchase of own shares
The Board of Directors of the Company has been authorised to acquire and dispose own shares with a total par value of NOK 245,490
(this represents 454,754 shares), valid until the AGM in 2023, however in any event no later than 30 June 2023. The authorisation can be
used in relation to incentive schemes for employees/directors of the Group, as consideration in connection with acquisition of businesses
and/or for general corporate purposes.
As of 28 March 2023, the Company holds 137,162 of its own shares, approximately 0.52 percent.
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4. Equal treatment of shareholders and transactions with related parties
4.1 Class of shares
The Company has one class of shares. All shares carry equal rights in the Company, and the articles of association do not provide for any
restrictions, or rights of first refusal, on transfer of shares. Share transfers are not subject to approval by the Board of Directors.
4.2 Pre-emption rights to subscribe
According to the Norwegian Public Limited Liability Companies Act section 10-4, the Company’s shareholders have pre-emption rights in share
offerings against cash contribution. Such pre-emption rights may, however, be set aside, either by the general meeting or by the Board of
Directors if the general meeting has granted a Board authorisation which allows for this. Any resolution to set aside pre-emption rights will be
justified by the common interests of the Company and the shareholders, and such justification will be publicly disclosed through a stock
exchange notice from the Company.
4.3 Trading in own shares
The Board of Directors will aim to ensure that all transactions pursuant to any share buy back programme will be carried out either through the
trading system at Oslo Børs or at prevailing prices at Oslo Børs. In the event of such a programme, the Board of Directors will take the
Company’s and shareholders’ interests into consideration and aim to maintain transparency and equal treatment of all shareholders. If there is
limited liquidity in the Company’s shares, the Company shall consider other ways to ensure equal treatment of all shareholders.
4.4 Transactions with close associates
The Board of Directors aims to ensure that any non-immaterial future transactions between the Company and shareholders, a shareholder’s
parent Company, members of the Board of Directors, executive personnel or close associates of any such parties are entered into on arm’s
length terms. For any such transactions that do not require approval by the general meeting pursuant to the Norwegian Public Limited Liability
Companies Act, the Board of Directors will, on a case-by-case basis, assess whether a fairness opinion from an independent third party should
be obtained.
4.5 Guidelines for directors and executive management
The Board of Directors has adopted rules of procedures for the Board of Directors which inter alia includes guidelines for notification by
members of the Board of Directors and executive management if they have any material direct or indirect interest in any transaction entered into
by the Company.
5. Freely negotiable shares
The shares of the Company are freely transferable. There are no restrictions on transferability of shares pursuant to the articles of association.
6. General meetings
6.1 Notification
The notice for a general meeting, with reference to or attached support information on the resolutions to be considered at the general meeting,
shall as a principal rule be sent to shareholders no later than 21 days prior to the date of the general meeting.
The Board of Directors will seek to ensure that the resolutions and supporting information are sufficiently detailed and comprehensive to allow
shareholders to form a view on all matters to be considered at the meeting. The notice and support information, as well as a proxy voting form,
will normally be made available no later than 21 days prior to the date of the general meeting on the Company’s website: www.BlueNord.com/
general-meetings.
6.2 Participation and execution
To the extent deemed appropriate or necessary by the Board of Directors, the Board of Directors will seek to arrange for the general meeting to
vote separately on each candidate nominated for election to the Company’s corporate bodies.
The Board of Directors and the Nomination Committee shall, as a general rule, be present at general meetings. The auditor will attend the
ordinary general meeting and any extraordinary general meetings to the extent required by the agenda items or other relevant circumstances.
The Board of Directors will seek to ensure that an independent chair is appointed by the general meeting if considered necessary based on the
agenda items or other relevant circumstances.
The Company will aim to prepare and facilitate the use of proxy forms which allows separate voting instructions to be given for each item on the
agenda and nominate a person who will be available to vote on behalf of shareholders as their proxy. The Board of Directors may decide that
shareholders may submit their votes in writing, including by use of electronic communication, in a period prior to the general meeting. The Board
of Directors should seek to facilitate such advance voting.
7. Nomination Committee
The Nomination Committee is provided for and governed by the articles of association, in addition to instructions for the Nomination Committee.
For more information relating to the Nomination Committee, read the Nomination Committee report on page 81.
Corporate Governance Report continued
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Governance Report
8. Board of Directors: composition and independence
Pursuant to the articles of association, section 5, the Company’s Board of Directors shall consist of three to eight members, which are
shareholders’ elected members in accordance with a decision by the AGM.
The composition of the Board of Directors should ensure that the board can attend to the common interests of all shareholders and meet
the Company’s need for expertise, capacity and diversity. Attention should be paid to ensuring that the board can function effectively as a
collegiate body.
The composition of the Board of Directors should ensure that it can operate independently of any special interests. The majority of the
shareholder-elected members of the Board should be independent of the Company’s executive personnel and material business contacts. At
least two of the members of the Board elected by shareholders should be independent of the Company’s main shareholder(s), the executive
personnel and material business contacts.
The Board of Directors should not include executive personnel. If the Board does include executive personnel, the Company should provide an
explanation for this and implement consequential adjustments to the organisation of the work of the Board, including the use of Board
committees to help ensure more independent preparation of matters for discussion by the Board.
The Chair of the Board of Directors should be elected by the AGM.
The term of office for members of the Board of Directors should not be longer than two years at a time. The Board members can be elected f
or shorter term by the AGM. The Annual Report should provide information to illustrate the expertise of the members of the Board of Directors,
and information on their record of attendance at Board meetings. In addition, the Annual Report should identify which members are considered
to be independent.
9. The work of the Board of Directors
9.1 Rules of procedure for the Board of Directors
The Board of Directors is responsible for the overall management of the Company and shall supervise the Company’s business and the
Company’s activities in general.
The Norwegian Public Limited Liability Companies Act regulates the duties and procedures of the Board of Directors. In addition, the Board of
Directors has adopted supplementary rules of procedures, which provides further regulation on inter alia the duties of the Board of Directors
and the Managing Director, the division of work between the Board of Directors and the Managing Director, the annual plan for the Board of
Directors, notices of Board proceedings, administrative procedures, minutes, board committees, transactions between the Company and the
shareholders, and matters of confidentiality.
The Board shall produce an annual plan for its work, with a particular emphasis on objectives, strategy and implementation. The Managing
Director shall at least once a month, by attendance or in writing, inform the Board of Directors about the Company’s activities, position and
profit trend.
The Board of Directors’ consideration of material matters in which the Chair of the Board is, or has been, personally involved, shall be chaired by
some other member of the Board. The Board of Directors shall evaluate its performance and expertise annually and make the evaluation
available to the Nomination Committee.
9.2 Audit Committee
The Company’s Audit Committee is governed by the Norwegian Public Limited Liability Companies Act and a separate instruction adopted by
the Board of Directors. To read the latest Audit Committee Report, please see page 78 of this report.
9.3. Remuneration Committee
The compensation for members of the Board of Directors for their service as Directors is determined annually by the shareholders of the
Company at the shareholder AGM, on the basis of a motion from the Nomination Committee. To read the latest Remuneration Committee
Report, please see page 80 of this report.
9.4 ESG Committee
The Company’s ESG Committee was established to support the commitment to ESG and to evolve the Company’s role as a contributor in the
energy transition. To read the latest ESG Committee report, please see page 80 of this report.
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10. Risk management and internal control
Risk management and internal control are given high priority by the Board of Directors, which ensures that adequate systems for risk
management and internal control are in place. For more information about how risks are managed, please see the risk report on page 56.
11. Remuneration of the Board of Directors
The remuneration of the Board of Directors shall be decided by the Company’s shareholder AGM, and reflects the Board of Directors’
responsibilities, expertise, time commitment and the complexity of the Company’s activities. For more detail, please refer to the Remuneration
Committee Report on page 80.
12. Remuneration of the executive management
The Board of Directors will in accordance with the Norwegian Public Limited Liability Companies Act prepare separate guidelines for the
stipulation of salary and other remuneration to key management personnel. For more detail, please refer to the Remuneration Committee
Report on pages 80.
13. Information and communications
13.1. General
The Board of Directors has adopted a separate manual on disclosure of information, which sets forth the Company’s disclosure obligations and
procedures. The Board of Directors will seek to ensure that market participants receive correct, clear, relevant and up-to-date information in a
timely manner, taking into account the requirement for equal treatment of all participants in the securities market.
The Company will, each year, publish a financial calendar, providing an overview of the dates for major events such as its ordinary general
meeting and publication of interim reports.
13.2. Information to shareholders
The Company shall have procedures for establishing discussions with shareholders to enable the board to develop a balanced understanding
of the circumstances and focus of such shareholders. Such discussions shall be done in compliance with the provisions of applicable laws
and regulations.
All information distributed to the Company’s shareholders will be published on the Company’s website at the same time as it is sent to
shareholders, at the latest.
14. Takeovers
In the event the Company becomes the subject of a takeover bid, the Board of Directors shall seek to ensure that the Company’s shareholders
are treated equally and that the Company’s activities are not unnecessarily interrupted. The Board of Directors shall also ensure that the
shareholders have sufficient information and time to assess the offer.
There are no defence mechanisms against takeover bids in the Company’s articles of association, nor have other measures been implemented
to specifically hinder acquisitions of shares in the Company. The Board of Directors has not established written guiding principles for how it will
act in the event of a takeover bid, as such situations are normally characterised by concrete and one-off situations, which make a guideline
challenging to prepare.
In the event a takeover were to occur, the Board of Directors will consider the relevant recommendations in the Corporate Governance Code
and whether the concrete situation entails that the recommendations in the Corporate Governance Code can be complied with or not.
15. Auditor
The Board of Directors will require the Company’s auditor to annually present to the Audit Committee a review of the Company’s internal
control procedures, including identified weaknesses and proposals for improvement, as well as the main features of the plan for the audit
of the Company.
Furthermore, the Board of Directors will require the auditor to participate in meetings of the Board of Directors that deal with the annual
accounts; at least one Board meeting with the auditor shall be held each year in which no member of the executive management is present.
The Board of Directors’ Audit Committee shall review and monitor the independence of the Company’s auditor, including in particular the extent
to which services other than auditing provided by the auditor or the audit firm represents a threat to the independence of the auditor.
The remuneration to the auditor for statutory audit will be approved by the ordinary general meeting. The Board of Directors should report to the
general meeting on details of fees for audit work and any fees for other specific assignments.
Corporate Governance Report continued
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Governance Report
Board activities
The Board held eight meetings during 2022. A further two meetings
were held in 2023, prior to the publication of Q4 and this Annual
Report and Accounts. In addition, two written resolutions were
approved related to drilling of two infill wells on Halfdan North East
and approval of the 2023 budget.
Name Attendance
Riulf Rustad (Chair)
Marianne Lie
Tone Omsted
Colette Cohen
Robert McGuire
Jan Lernout
Peter Coleman
The Board has responsibility for the overall management of the
Company, including strategic priorities, identifying and assessing
principal risks, as well as the level of risk deemed appropriate for the
Company to take. The Board is responsible for establishing and
thereafter monitoring the risk and internal control framework.
The Board delegates a level of day-to-day management to the
CEO and Executive Team; however, the Board retains the ultimate
decision-making authority.
The areas of focus covered through Board meetings during 2022
has included:
• Established strategic priorities, including ESG strategy.
• Operational and performance updates, including regular
monitoring of the Tyra redevelopment project, Health,
Safety, Security & Environment (HSSE), capital structure
and liquidity outlook.
• Reviews and considers forecast medium-term liquidity position of
the Company.
• Review of executive management structure and performance,
including the permanent appointment of Euan Shirlaw as CEO.
• Established the short-term incentive and long-term incentive
programmes, as well as the executive retention scheme as
endorsed by the Remuneration Committee.
• In-depth consideration and ultimate approval of restructuring of the
NOR13 convertible bond loan, including regular dialogue with the
Executive Management team as the restructuring progressed and
finally the approval of the voluntary exchange offer into the new
NOR15 convertible bond loan.
• Review of the various Board committees’ performance and
confirmation of membership and continued committee structure.
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Audit Committee Report
BlueNord has established an Audit Committee
with formally delegated duties and
responsibilities within written terms of reference.
Marianne Lie
Audit Committee Chair
Work of the Audit Committee
• Support the Board’s responsibilities relating to the integrity of
financial reporting and the financial reporting process.
• Evaluate the risk management of financial reporting and monitor
the systems for internal controls.
• Review the external auditors’ independence and objectivity and
review the effectiveness and quality of the annual audit plan.
• Develop and implement policy for any engagement of external
auditors to supply non-audit services.
Activities during the year
The committee held five scheduled meetings during 2022. A further
two meetings were held in 2023, prior to the publication of Q4 and this
Annual Report and Accounts. In addition to the members of the
committee listed on this page, meetings of the committee were also
attended by the CFO and the Head of Group Reporting. The
Company’s auditor works closely with the Audit Committee and
attended all meetings during the year.
The committee spent considerable time during the year reviewing all
interim and annual reports before they are reviewed by the Board of
Directors and then published. Any identified risks and their effects on
financial reporting are discussed on a quarterly basis; in addition, the
management give a quarterly update on compliance.
Every quarter, the Audit Committee reviews the memorandum for tax
and impairment triggers. New accounting effects and issues are
monitored on a quarterly basis by the committee. Prior to the year-end
closing, the committee reviews key accounting principles, and
discusses early warning and key issues.
During the year, the Audit Committee has worked together with
executive management and the auditor to further develop the already
strong cooperation, and improve the processes and internal control
environment related to material financial reporting lines.
2022 meeting summary
In the course of eight meetings during FY2022-23, the Audit
Committee has continued to work on a range of audit matters.
These include overall performance and tax issues, compliance,
reviews of policy documentation, updates to delegated authority, and
liquidity forecasts. Reviews have also taken place regarding internal
controls and business continuity planning (BCP).
The committee received updates from KPMG regarding inspection
from the Financial Supervisory Authority of Norway (FSA), and
half-year accounting issues. Discussions were held on impairment
triggers and accounting effects from NOR13 fair value adjustments
and debt conversion, as well as tax effects and share capital
reduction compliance.
A review of the update process and control environment was
undertaken, as well as an impairment test due to a trigger event (the
shift in expected start-up of the Tyra redevelopment). The committee
also reviewed the accounting effects related to reduction of tax losses
due to FX changes, new LTIP scheme and NOR13 conversions and
restructuring.
The expected impact of the EU Solidarity Contribution was also
reviewed on an initial basis, and the risk picture related to the Nord
Stream incident and the drone activity offshore was also discussed.
The Audit Committee consists of the following
board members:
• Marianne Lie (Chair)
• Tone Omsted
• Peter Coleman
All members are independent of the Company’s executive
management and all three committee members sit on the Board of
Directors of Norwegian Energy Company ASA.
Committee meeting attendance
Name Attendance
Marianne Lie
Tone Omsted
Peter Coleman
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Governance Report
Established in 2021, the Remuneration Committee
is a preparatory and advisory committee which
supports the Board with regard to executive
management compensation.
The Remuneration Committee consists of the following
Board members:
• Marianne Lie (Chair)
• Jan Lernout
These members are independent of the Company’s executive
management, and both committee members sit on the Board of
Directors of Norwegian Energy Company ASA (since May 2016 and
May 2021 respectively).
The Remuneration Committee:
• is responsible for preparing the annual executive remuneration
report and, at least annually, reviewing and recommending any
amendments to the guidelines for executive remuneration, to be
proposed by the board for adoption by the AGM;
• shall monitor, evaluate and approve the application of the
guidelines for the remuneration provided to executive
management;
• may request information and assistance from executive
management which is deemed relevant for the remuneration
committee to carry out its tasks; and
• may seek advice and recommendations from sources outside of
the Company, subject to appropriate confidentiality.
Committee meeting attendance
Name Attendance
Marianne Lie
Jan Lernout
2022 meeting summary
The committee held five scheduled meetings during 2022. A further
two meetings have taken place in 2023 prior to the publication of the
2022 Annual Report and Accounts. In addition to the members of the
Remuneration Committee, the CEO and EVP People and Capability
have been invited to attend committee meetings where appropriate.
On the basis of the proposed total compensation policy for BlueNord,
the committee reviewed and updated the 2022 guideline on executive
remuneration, later approved by the AGM in May. The audited
Executive Remuneration Report was approved simultaneously in
accordance with the new regulations in the Public Limited Liability
Companies Act § 6-16b. The report was prepared for the first time in
the context of the latest guidelines on Company law requirements for
listed companies and general best practice trends in executive
remuneration disclosure.
In 2021, the committee reviewed the proposal for BlueNord’s total
compensation policy. Due to changes in the Company’s strategic
priorities for 2021, the amended annual performance bonus
programme and its key performance indicators for 2021 were
delayed, but approved in 2022. The work and discussion initiated
on a new long-term incentive (LTI) programme for executives and
employees to replace the existing programme continued into 2022
and included support from the Company’s legal advisers. The new
long-term incentive programme, aligned with the approved Executive
Remuneration Policy, was approved by the Board of Directors and
implemented in September. Existing options issued
to members of the Executive Team were cancelled and translated
into retention shares.
The Remuneration Committee endorsed and recommended terms
upon employment when the CFO, serving as acting Managing
Director since November 2021, was appointed CEO in May.
The committee has reviewed and recommended the proposed
annual salary increase for eligible employees in 2022 and
correspondingly the proposed annual performance bonus payment
applicable for executives and employees.
Executive Remuneration Report 2022
For more details on the Executive Remuneration,
please read the full report here.
Download the report at www.BlueNord.com/reports-and-presentations
Remuneration Committee Report
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ESG Committee Report
BlueNord established in 2020 an ESG Committee,
which formally oversees the Company’s ESG
activities and strategy.
The ESG Committee consists of the following
Board members:
• Colette Cohen (Chair)
• Robert McGuire
All members are independent of the Company’s executive
management and all committee members sit on the board
of directors of Norwegian Energy Company ASA.
Committee meeting attendance
Name Attendance
Colette Cohen
Robert McGuire
The ESG Committee shall:
• support the development of the Company’s overall environmental,
social and governance strategy;
• oversee the Company’s ESG activities and assess if any
developments or investments are compatible with, and supportive
of, the strategic objectives of the Company;
• ensure that the Board is informed on material relevant topics or
events related to the Company’s work on ESG;
• review the Company’s ability to address and mitigate risks related
to ESG; and
• ensure that the Company strives for transparency and high
standards in its ESG reporting
Activities during the year
The committee held five scheduled meetings during 2022. A further
meeting was held in 2023, prior to the publication of this Annual
Report. In addition to the members of the committee listed on this
page, meetings of the committee were also attended by the CEO
and the EVP, Investor Relations and ESG.
The committee has worked closely with key members from the
Executive Team during 2022 to develop the ESG strategy of the
Company, to identify material topics and to assess risks and
opportunities that are relevant to the Company. The committee has
also been involved in improvements of the standards and
transparency of the ESG reporting of BlueNord.
Following the committee’s work during 2022 and to date in 2023,
the Company is today reporting against the TCFD framework and
it has taken measures to adapt to the Norwegian Transparency Act
and the Anti-Discrimination Act. In addition, the Company has initiated
preparations to aligned itself to report against the new ESRS, which is
expected from 2025.
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Nomination Committee Report
According to the articles of association § 7 the Nomination Committee
shall consist of three members.
The term of office shall be two years unless the annual
general meeting determines that the term shall be shorter.
The Nomination Committee shall prepare a motion for the annual
general meeting relating to:
a) Election of members of the Board of Directors and the chairperson
of the Board of Directors.
b) Election of the members of the Nomination Committee and the
chairperson of the Committee.
c) The remuneration of the Directors and the members of the
Nomination Committee.
d) Any amendments of the Nomination Committee’s Mandate
and Charter.
Sections 6-7 and 6-8 of the Public Limited Companies Act apply
correspondingly in relation to the members of the Nomination
Committee.
Richard Sjøqvist
Audit Committee Chair
The nomination committee in BlueNord consists of:
• Richard Sjøqvist (Chair)
• Kristian Utkilen
• Annette Malm Justad
Work of the Nomination Committee:
The Chair of the Nomination Committee is responsible for the
committee’s work and call of meetings, however each member can
request a committee meeting. The Nomination Committee shall
regularly review the structure and composition of the Board, including
the knowledge, skills, experience and diversity of the Board. It shall
keep under regular review that the needs of the Company is reflected
in the Board composition and give full consideration to succession
planning for the Board members. The Nomination Committee shall
also ensure that there is a formal and transparent procedure for the
appointment of new Directors to the Board.
The Nomination Committee will have contact with the Company’s
shareholders, Board of Directors and the Company’s executive
personnel. All shareholders of BlueNord have the possibility to
propose candidates. If a candidate is proposed, the Nomination
Committee shall consider the experience, competence and capacity
of each candidate.
The Nomination Committee’s proposal for the 2023 annual general
meeting will be published before the AGM and made available on
www.BlueNord.com/general-meetings
Activities during the period
The committee has taken note of the paragraph 5 of the articles of
association in which it is stated that the Board of Directors shall have
from 3 to 7 shareholders elected members and that such board
members are elected to a two year period unless the general meeting
decides upon a shorter term.
For the the annual general meeting. The table below identifies those
up for re-election among all the board members:
Riulf Karsten Rustad (Chair, not for election)
Marianne Lie (board member, not for election)
Tone Kristin Omsted (board member, not for election)
Robert J. McGuire (board member, not for election)
Colette Cohen (board member, for re-election)
Jan Lernout (board member, for re-election)
Peter Coleman (board member, for re-election)
During the period the nomination committee has particularly focused
on the board members whom are up for re-election. Additionally, the
nomination committee has also considered the remuneration of the
board members and members of the Nomination Committee.
The Nomination Committee has delivered its proposal on
27 March 2023.
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Director’s Report
Norwegian Energy Company ASA (“BlueNord”, “the Company”) is a Norwegian company listed on the Oslo Stock Exchange. The Company
was established in 2005 and has a strategic focus on value creation through increased recovery of hydrocarbons, enabled by a competent
organisation with a long-term view on reservoir management and the capability to invest in and leverage new technology.
Following the acquisition of Shell’s Danish upstream assets in 2019, Norwegian Energy Company ASA (BlueNord) holds a 36.8 percent
non-operated interest in the DUC and is the second largest oil and gas producer in Denmark. DUC is a joint venture between TotalEnergies
(43.2percent), Norwegian Energy Company ASA (36.8 percent) and Nordsøfonden (20.0 percent), and comprises four hubs (Halfdan, Tyra,
Gorm and Dan) and 11 producing fields. It is operated by TotalEnergies, which has extensive offshore experience in the region and worldwide.
Since the acquisition in 2019, Norwegian Energy Company ASA (BlueNord) has built a meaningful presence in Denmark and established good
relationships with its partners TotalEnergies and Nordsøfonden, as well as other stakeholders including the DEA.
Production assets and field developments
Norwegian Energy Company ASA (BlueNord) delivered strong production from the Halfdan, Dan and Gorm hubs in 2022 with a yearly average
of 26.7 mboepd and an overall operational efficiency at approximately 88.0 percent. The strategic ambition to improve operational efficiency to
90.0 percent for DUC overall in 2022 by reducing unplanned shortfalls and optimising the schedule for planned shortfalls was achieved in the
year, excluding the planned NOGAT gas export pipeline shutdown.
Production remained robust as a result of proactive workovers and well restimulations. In Q4, the planned ten-year maintenance of the NOGAT
pipeline were successfully completed. The jack-up rig Noble Sam Turner (renamed Shelf Winner) were extended with two years and the well
reservoir opportunity management campaign started.
The Tyra redevelopment is an ongoing project within the DUC and is the largest project ever that is carried out on the Danish continental shelf.
During 2022, several important project milestones were reached. Successful completion of offshore installation campaign for Tyra II, which now
has its final shape with all major lifts and installations completed. In 2022, the Company and its partners in the DUC announced a revision of the
Tyra start-up date, from Q2 2023 to winter 2023/2024. The revision was driven by global supply chain challenges that had impacted the yard
fabrication of the process module in addition to a revised plan by the Operator of the ongoing hook-up and commissioning work offshore.
The annual revision of reserves, performed by an independent organisation (RISC) in accordance with SPE PRMS 2018 standards, resulted in
total 2P reserves at year end 2022 of 182.4mmboe.
Capital structure
Convertible bond (NOR13)
USD 158 million convertible bond with an eight-year tenor and a mandatory conversion to equity after five years was issued in 2019. NOR13 has
paid in kind (PIK) interest with additional bonds at a coupon rate of 8.0 percent.
Norwegian Energy Company ASA (BlueNord) may alternatively, at its own discretion, pay cash interest of 6.0 percent subject to approval from
the RBL lenders. The Company has PIK coupon interest of 8.0 percent since issuance. Should the instrument be in place beyond the five-year
conversion period, the interest rate on NOR13 will be reduced to 0.0 percent for the remaining period.
In December 2022, the majority of the remaining convertible loan was transferred into the new convertible instrument, NOR15. Of the remaining
USD 13.8 million outstanding on NOR13 at 31 December 2022, USD 13.6 million was converted into equity by 13 January 2023.
Convertible bond (NOR15)
USD 207.6 million convertible bond with a five year tenor and a conversion to equity or cash settlement after three years. NOR15 consist of USD
151.4 million converted from NOR13 plus additional compensation bonds of USD 56.2 million. NOR15 has PIK interest with additional bonds at a
coupon rate of 8.0 percent.
Norwegian Energy Company ASA (BlueNord) may alternatively, at its own discretion, pay cash interest of 6.0 percent. Should the instrument be
in place beyond the three-year conversion period, the interest rate of NOR15 will be reduced to 0.0 percent for the remaining period subject to
approval from RBL lenders.
Reserve-based lending facility
In Q2 2021, the Company amended, extended and increased its previous facility, which had been entered into in Q2 2019. The Norwegian
Energy Company ASA (BlueNord) RBL facility is a seven-year, first lien, senior secured RBL with a total facility amount of USD 1.1 billion,
including a letter of credit sub-limit of USD 100 million.
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Governance Report
At the end of 2022, USD 800 million was drawn under the RBL, with an additional USD 100 million letter of credit outstanding. Principal
repayments on the facility will commence from the second half of 2024, and interest is charged on debt drawings based on the secured
overnight financing rate (SOFR) and a margin of 4.0-4.5 percent. In July 2022, Norwegian Energy Company ASA (BlueNord) made a voluntary
repayment of USD 100 million. In addition, the Company hedged the SOFR rate on USD 1.0 billion of principal from 1 November 2021 to 30 June
2024 at a rate of 0.4041 percent.
The Company has also established a link in margin payable under the RBL and the achievement of ESG targets on emissions intensity
reduction and power from renewables that will support progression of the Company’s ESG strategy. This provides a margin decrease for ESG
targets being met and a margin increase if ESG targets are not met. The ESG targets are assessed based on two sustainability targets: (i) the
relative carbon emissions intensity, assessed from 2024 onwards, and (ii) progress towards powering offshore activities from renewable
electricity sources, assessed from 2021 onwards. The targets do not currently include the Company’s investments in CCUS activities, which
could be subject to change with RBL lenders’ consent. ESG target (ii) assessments for years 2021 and 2022 are based on investment levels in
front-end studies for renewable power. Through various working groups meetings and third-party evaluations commissioned by the DUC,
these potential projects were deemed uneconomical, which resulted in a lower level of investment in 2021 than set by the target and a
consequent 3bps (0.03 percent) margin increase in the RBL facility throughout 2022.
Senior unsecured note (NOR14)
USD 175 million senior unsecured note with a coupon rate of 9.0 percent and a maturity in June 2026. In order to reduce exposure to future
market volatility, Norwegian Energy Company ASA (BlueNord) successfully reached an agreement with its bondholders in 2021, adding
additional headroom to certain financial covenants.
Group Financial Results for 2022
The consolidated financial statements of Norwegian Energy Company ASA (BlueNord) have been prepared in accordance with IFRS
and interpretations from the IFRS interpretation committee (IFRIC), as endorsed by the EU.
See the section on financial review, on pages 32 and 33.
Risk mitigation
The Company actively seeks to reduce the risk it is exposed to regarding fluctuating commodity prices through the establishment of
hedging arrangements.
Currently all the Company’s commodity price hedging arrangements is executed solely in the market through forward contracts. At the time of
this report, the Company had purchased the following:
Oil Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25
Volumes (bbl) 1,200,000 1,200,000 840,105 840,105 900,000 900,000 432,000 432,000 315,000 315,000
Price
(US$/bbl) 51.7 51.7 54.8 54.8 61.3 61.3 68.0 68.0 74.7 74.7
Equiv. daily
production
(mbbl/d) 13.3 13.2 9.1 9.1 10.0 9.9 4.7 4.7 3.5 3.5
Gas Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25
Volumes (MWh) 419,992 255,000 255,000 165,000 165,000 0 0 0 0 0
Price
(EUR/MWh) 162.1 155.6 155.6 170.1 170.1 0.0 0.0 0.0 0.0 0.0
Equiv. daily
production
(mboe/d) 2.8 1.7 1.6 1.1 1.1 0.0 0.0 0.0 0.0 0.0
In addition, the Company has a swap transaction with a group of banks to fix the Company’s floating interest rate exposure under the RBL
facility. See the section on risk factors and risk management on pages 103 and 104, and note 18 in the consolidated financial statements.
Principal risks and uncertainties
The Company is required to give a description of the principal risks and uncertainties which it faces. These principal risks and uncertainties are
included as part of the risk report and can be found on page 56.
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Going concern assumption
Pursuant to the Norwegian Accounting Act section 3-3a, the Norwegian Energy Company ASA (BlueNord) Board confirms that the
requirements of the going concern assumption are met and that the annual accounts have been prepared on that basis.
Our financial integrity, and our working capital and cash position, are considered satisfactory in relation to the planned activity level for the next
12 months.
Health, Environment and Safety
Norwegian Energy Company ASA (BlueNord) puts emphasis on its employees performing Company activities in line with the principals of
business integrity and with respect for people and the environment. During 2022, Norwegian Energy Company ASA (BlueNord) was, through
its ownership in the DUC in which TotalEnergies is the operator, involved in production of oil and gas, which could cause emissions to the sea
and air.
Norwegian Energy Company ASA (BlueNord) will conduct its business operation in full compliance with all applicable national legislation
in the countries where it is operating. The Company is committed to carry out its activities in a responsible manner to protect people and the
environment. Our fundamentals of HSEQ and safe business practice are an integral part of Norwegian Energy Company ASA (BlueNord)
operations and business performance.
For more information, see the sustainability section on pages 34 to 55.
Personnel resources and working environment
As at end 2022, the Group had 33 employees. 51.52 percent of the employees were women. In May 2022, Euan Shirlaw was appointed as CEO
in addition to his existing role as CFO. Euan Shirlaw had been Acting Managing Director since December 2021. In addition, Marianne Eide was
promoted to Chief Operating Officer and in November 2022, Jacqueline Lindmark Boye was promoted to EVP Finance.
As at end 2022, the Company’s Board of Directors consists of three women and four men, all elected by shareholders. There are no employee
representatives on the Board. As at end 2022, more than 40 percent of the Board members are women.
Norwegian Energy Company ASA (BlueNord) strives to maintain a working environment with equal opportunities for all, based on qualifications,
and irrespective of gender, ethnicity, religion, sexual orientation or disability. The Company pays equal salaries and gives equal compensation
and opportunities for positions at the same level, regardless of gender, ethnicity, religion, sexual orientation or disability.
Management compensation is described in the Executive Remuneration Report. Sick leave in the Group was 1.37 percent in 2022.
Research and development
Norwegian Energy Company ASA (BlueNord) invests in research and development to support and further grow its E&P activities. For more
information, see ESG section on page 34.
Corporate governance
The Board wishes to maintain an appropriate standard of corporate governance and to fulfil the recommendations in the Norwegian Code of
Practice for Corporate Governance. Corporate governance in Norwegian Energy Company ASA (BlueNord) is based on equal treatment of all
shareholders, a principle which is reflected in the decisions taken at the general assembly.
For more information about the Board’s composition and activities during the year, see the section on corporate governance on page 72
in this report.
AGM
The AGM held on 19 May 2022 re-elected Riulf Rustad, Tone Omsted and Marianne Lie. All matters on the agenda were approved.
In 2022 the Company held two extraordinary general meetings (EGM). The purpose of the EGM held on 30 November 2022 was to consider
the board’s proposal to amend the NOR13 bond terms. The purpose of the EGM held on 28 December was to consider the Board’s proposal to
issue a new subordinated convertible bond, NOR15, as an exchange offer to NOR13 bondholders. Both proposals were shareholder approved.
For more information about corporate governance and corporate social responsibility, see the relevant sections of this report.
Also, see www.BlueNord.com/corporate-governance and www.BlueNord.com/csr.
Director’s Report continued
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Governance Report
Directors’ and officers’ liability insurance
The Company has acquired and maintains a Directors’ and officers’ insurance policy to cover the personal liability for financial losses that
Directors and officers of the Company, and the Directors and officers of the Company’s subsidiaries, may incur in their capacities as such (styre
og ledelsesansvar). The policy is placed with a reputable international carrier on market terms.
Ownership
There are no restrictions on the transfer of shares in Norwegian Energy Company ASA (BlueNord). The Company currently has approximately
2,500 shareholders and 16.35 percent of the shares are held by residents of Norway.
Norwegian Energy Company ASA (BlueNord)
In 2022, the parent Company was a holding Company and the operating expenses mainly consisted of shareholder costs, consultancy fees,
legal fees and payroll expenses. Net financial loss mainly due to interest expenses from bond loans and net foreign exchange loss this year due
to fluctuations in the USD:NOK exchange rate, partly offset by interest received from Group companies.
For more information about financial risk and market conditions, and a statement regarding going concern, please see the relevant sections
above. These comments are also valid for the parent Company.
Parent Company financial results for 2022
Personnel expenses were USD 4.4 million in 2022 (2021: USD 3.7 million), increase mainly due to increase in average full-time equivalents and
related to the LTIP, which is valued and accounted for according to IFRS 2. Other operating expenses amounted to USD 4.1 million in 2022 (2021:
USD 3.2 million), the increase is related to higher consultant and legal fees. The net operating result for 2022 was a loss of USD 6.0 million (2021:
USD 5.0 million).
Net financial items amounted to an expense of USD 76.5 million in 2022 (2021: USD 24.8 million). The increased financial expense mainly related
to the extinguishment of the NOR13 bond loan, increased write-down of loans to subsidiaries, partly offset by increased interest income from
intercompany loans.
The Company’s net result for the year amounted to a loss of USD 82.5 million (2021: USD 29.8 million).
Allocations
The result for the year for Norwegian Energy Company ASA in 2022 was a loss of USD 82.5 million. The Board proposes the following allocations:
• allocated from other equity: USD 82.5 million
• total appropriation: USD 82.5 million
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Director’s Report continued
Outlook
Norwegian Energy Company ASA (BlueNord) has a stable business, underpinned by the Company’s position in the DUC and further supported
by risk mitigations. The volatility in prices has been significant and management is continuously assessing the market to mitigate commodity
price volatility. The Company has during 2022 entered into fixed-price swap contracts for additional oil and gas volumes from 2023 to 2024.
The Company monitors the Russia-Ukraine conflict closely and has not identified any negative impact on the Company’s assets or income.
See further detail on this issue and mitigations as outlined in the section Principal Risks and Uncertainties on page 57.
The Tyra redevelopment is progressing and will significantly enhance Norwegian Energy Company ASA (BlueNord) production on start-up.
The Company also expects direct field operating expenditure to decrease to USD 13 per barrel when Tyra is back in production winter 2023-24.
Norwegian Energy Company ASA (BlueNord) cash position has strengthened significantly during 2022 and the Company has a solid basis for
executing the strategy and the ambition to deliver material shareholder returns and significant value creation.
Activity to progress value additive organic DUC investment projects also continues, and we will seek to sanction projects as they are sufficiently
matured. Norwegian Energy Company ASA (BlueNord) believes economic investments in these projects will help to replace produced
reserves, and provide strong financial returns benefiting the Company’s shareholders.
The Company expects reduced production driven by high maintenance and activity levels in Q2 and Q3 2023.
Production Unit Guidance 2023 2022
Q1 mboepd 25.0-26.5 28.5
Q2 mboepd 20.0-21.5 26.5
Q3 mboepd 22.5-24.0 25.1
Q4 mboepd 24.5-26.0 26.9
The following sections of Norwegian Energy Company ASA (BlueNord) Annual Report constitute part of the Director’s Report.
Annual Report Chapter Reference Content Page Reference
Strategic Report Financial Review 32-33
Strategic Report Sustainability Report 34-55
Strategic Report Norwegian Transparency Act Statement 54
Strategic Report Principal Risks and Uncertainties 57-65
Governance Report Corporate Governance Report 72-76
Oslo
28 March 2023
Riulf Rustad Tone Kristin Omsted Marianne Lie Colette Cohen
Executive Chair Board member Board member Board member
Robert J. McGuire Jan Lernout Peter Coleman Euan Shirlaw
Board member Board member Board member Chief Executive Officer
87
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Governance Report
Reporting of payments to governments
This report is prepared in accordance with the Norwegian Accounting Act section § 3-3 d) and Securities Trading Act § 5-5 a). It states that
companies engaged in activities within the extractive industries shall annually prepare and publish a report containing information about their
payments to governments at country and project level. The Ministry of Finance has issued a regulation (F20.12.2013 nr 1682 – “the regulation”)
stipulating that the reporting obligation only applies to reporting entities above a certain size and to payments above certain threshold amounts.
In addition, the regulation stipulates that the report shall include other information than payments to governments, and it provides more detailed
rules applicable to definitions, publication and Group reporting.
The management of Norwegian Energy Company ASA (BlueNord) has applied judgement in the interpretation of the wording in the regulation
with regards to the specific type of payment to be included in this report, and on what level it should be reported. When payments are required
to be reported on a project-by-project basis, it is reported on a field-by-field basis. Only gross amounts on operated licences are to be reported,
as all payments within the licence performed by non-operators will normally be cash calls transferred to the operator and are as such not
payments to the government. All activities in Norwegian Energy Company ASA (BlueNord) within the extractive industries are located on
the Danish continental shelf and all are performed as non-operator. All the reported payments below are to the Danish government.
Income tax
The income tax is calculated and paid on corporate level and is therefore reported for the whole Company rather than licence-by-licence. The
income tax payment in 2022 is a USD 17 million first instalment repayment for 2022 pertaining to the special tax incentives implemented in 2017.
This repayment is triggered from 2022 and onwards if commodity prices exceed certain thresholds. It constitutes a repayment of tax benefits
previously received from the incentive scheme, in the case of market conditions significantly improving compared to the assumptions in 2017,
where the incentive scheme was implemented. This is set-of by a refund of approximately. USD 6 million pertaining to a settlement of a minor tax
dispute concerning income year 2011.
Other information required to be reported
In accordance with the regulation (F20.12.2013 nr 1682), Norwegian Energy Company ASA (BlueNord) is also required to report on investments,
operating income, production volumes and purchases of goods and services. All reported information is relating to Norwegian Energy
Company ASA (BlueNord) activities within the extractive industries on the Danish continental shelf:
• Total net investments amounted to USD 258.2 million, as specified in the cash flow analysis in the financial statements.
• Sales income (petroleum revenues) in 2022 amounted to USD 960.5 million, as specified in note 4 to the financial statements.
• Total production in 2022 was 9.8 million barrels of oil equivalents, see note 5 to the consolidated financial statements.
• For information about purchases of goods and services, reference is made to the Income Statement and the related notes.
88
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We have had a strong
year driven by excellent
underlying operating
performance and the
benefit of a supportive
commodity price
environment in 2022.
03
Consolidated Statements 90-125
Consolidated Statement of Comprehensive Income 91
Consolidated Statement of Financial Position 92
Consolidated Statement of Change in Equity 93
Consolidated Statement of Cash Flows 94
Notes 95
Statutory Accounts 126-137
Income Statement 127
Balance Sheet 128
Cash Flow Statement 129
Notes 130
Independent Auditor’s Report 138
Statement of Compliance 142
Alternative Performance Measures 143
89
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Annual Report and Accounts 2022
Financial Statements
Financial
Statements
90
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Annual Report and Accounts 2022
Consolidated statement of comprehensive income 91
Consolidated statement of financial position 92
Consolidated statement of change in equity 93
Consolidated statement of cash flows 94
Note 1: Summary of significant accounting policies 95
Note 2: Financial risk management 103
Note 3: Critical accounting estimates and judgements 105
Note 4: Revenue 106
Note 5: Production expenses 106
Note 6: Exploration and evaluation expenses 107
Note 7: Payroll expenses and remuneration 107
Note 8: Other operating expenses 107
Note 9: Intangible assets 107
Note 10: Property, plant and equipment 108
Note 11: impairments 109
Note 12: Financial income and expenses 110
Note 13: Tax 110
Note 14: Earnings per share 113
Note 15: Trade receivables and other current receivables 113
Note 16: Inventories 113
Note 17: Restricted cash, bank deposits, cash and cash equivalents 114
Note 18: Financial instruments 114
Note 19: Share capital 118
Note 20: Post-employment benefits 119
Note 21: Asset retirement obligations 119
Note 22: Borrowings 120
Note 23: Trade payables and other payables 123
Note 24: Share-based compensation 123
Note 25: Guarantees 124
Note 26: Investment in jointly owned assets 124
Note 27: Contingencies and commitments 125
Note 28: Related party transactions 125
Note 29: Subsequent events 125
Contents for Consolidated Statements
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Financial Statements
Consolidated Statement of Comprehensive Income
Income statement
USD million Note 2022 2021
Revenue 4 966.9 565. 3
Total revenues 966.9 565.3
Production expenses
5 (32 3 .4 ) (2 92.7 )
Exploration and evaluation expenses
6 (0 .7 ) (0.7 )
Personnel expenses
7 (1 2 . 5 ) (11 . 5 )
Other operating expenses
8 (1 9 .1 ) (1 0 . 9 )
Total operating expenses (3 55 . 7 ) (315 . 8 )
Operating result (EBITDA) 611 . 2 24 9 . 5
Depreciation/amortisation
10 (1 3 3 . 5 ) (11 2. 3 )
Net operating result (EBIT) 4 7 7. 7 1 3 7. 3
Financial income
12 58 .8 2 7. 8
Financial expenses
12 (2 8 7. 8 ) (16 0 . 2 )
Net financial items (2 29 .0 ) (132.3 )
Result before tax (EBT) 248 .7 4.9
Income tax benefit/(expense)
13 (279 . 2 ) (5 8 .1 )
Net result for the year (30 . 5 ) (5 3 . 2 )
Basic earnings/loss USD per share
14 (1 . 2 ) (2. 2 )
Diluted earnings/loss USD per share
14 (1 . 2 ) (2. 2 )
Statement of comprehensive income
USD million Note 2022 2021
Net result for the year (30 . 5 ) (5 3 . 2 )
Other comprehensive income (net of tax):
Items that may be subsequently reclassified to profit or loss:
Realised cash flow hedge 242 . 2 134. 8
Related tax – realised cash flow hedge (1 5 5 . 0 ) (86 . 3 )
Changes in fair value (5 7. 9 ) (372 . 2 )
Related tax – changes in fair value 5 2 .1 241 . 8
Currency translation adjustment (2 . 0 ) (3 .1 )
Total other comprehensive income for the year (net of tax) 79.3 (84.9 )
Total comprehensive income for the year (net of tax) 48.8 (1 3 8 .1 )
92
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All figures in USD million Note 31.12.2022 31.12.2021
Non-current assets
Exploration and evaluation assets
9 160.4 166 .0
Deferred tax assets
13 348 .8 526 .3
Property, plant and equipment
10 1,91 1.9 1 , 8 98 .7
Right-of-use asset 0.9 0 .7
Restricted cash
17, 18 2 03 .7 205.5
Receivables non-current
15 0.8 –
Derivative instruments
18 3 3 .7 9.7
Total non-current assets 2,660. 1 2, 806 .9
Current assets
Derivative instruments
18 130. 9 –
Trade receivables and other current assets
15 128 .6 108 .9
Inventories
16 5 5.9 51 . 4
Bank deposits, cash and cash equivalents
17 268.4 122. 6
Total current assets 583.9 283 . 0
Total assets 3, 2 44.0 3 ,089.9
Equity
Share capital
19 1.7 29.5
Other equity 600. 8 4 62.7
Total equit y 602 .5 492. 2
Non-current liabilities
Asset retirement obligations
21 9 4 6 .1 1,00 3.0
Convertible bond loans
18, 22 18 8 .7 1 5 7.1
Bond loan
18, 22 166.9 16 4.9
Reserve-based lending facility
18, 22 76 4 .0 8 5 7. 3
Derivative instruments
18 90.4 100 .9
Other non-current liabilities
22 0 .7 25 .4
Total non-current liabilities 2 ,1 5 6 . 8 2,308 .6
Current liabilities
Asset retirement obligations
21 9. 8 26. 2
Tax payable
13 209.0 16 .0
Derivative instruments
18 12 5.3 116 . 3
Trade payables and other current liabilities
23 140.6 130.5
Total current liabilities 48 4.7 2 8 9 .1
Total liabilities 2 ,6 41 . 5 2 , 5 9 7.7
Total equity and liabilities 3, 2 44.0 3 ,089.9
Oslo
28 March 2023
Riulf Rustad Tone Kristin Omsted Marianne Lie Colette Cohen
Executive Chair Board member Board member Board member
Robert J. McGuire Jan Lernout Peter Coleman Euan Shirlaw
Board member Board member Board member Chief Executive Officer
Consolidated Statement of Financial Position
As of 31 December
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Financial Statements
All figures in USD million
Share
capital
Share
premium fund
Treasury
share reserve
Currency
translation
fund
Cash flow
hedge
reserve
Other
equity
Total
equity
2021
Equity on 1 January 2021 29. 5 7 07. 0 (0 . 5 ) 5.6 14 . 3 (12 6 .0 ) 629 .9
Net result for the period (5 3 . 2 ) (5 3 . 2 )
Other comprehensive income
Realised cash flow hedge – – – – 134. 8 – 134 .8
Related tax – realised cash flow hedge – – – – (8 6 . 3 ) – (86 . 3 )
Changes in fair value – – – – (372. 2 ) – (372 . 2 )
Related tax – changes in fair value – – – – 241 . 8 – 241 . 8
Currency translation adjustments – – – (3 .1 ) – – (3 .1 )
Total other comprehensive income – – – (3 .1 ) (81 . 8 ) – (84 .9 )
Share-based incentive programme – – – – – 0.3 0.3
Total transactions with owners for the period – – – – – 0.3 0.3
Equity as of 31 December 2021 29.5 7 0 7. 0 (0 . 5 ) 2.6 (67. 5 ) (178 . 9 ) 4 92. 2
2022
Equity as of 1 January 2022 29.5 7 0 7. 0 (0. 5 ) 2.6 (6 7. 5 ) (17 8 . 9 ) 492 . 2
Net result for the period (30 . 5 ) (30 . 5 )
Other comprehensive income
Realised cash flow hedge – – – – 242 . 2 – 242 . 2
Related tax – realised cash flow hedge – – – – (1 5 5 . 0 ) – (1 5 5 . 0 )
Changes in fair value – – – – (57. 9 ) – (57. 9 )
Related tax – changes in fair value – – – – 5 2 .1 – 5 2 .1
Currency translation adjustments – – – (2 .0 ) – – (2 .0 )
Total other comprehensive income – – – (2 . 0 ) 81 .4 – 79 .3
Issue of shares 1.4 32 . 2 – – – – 3 3.6
Capital reduction, approved and registered (29 . 3 ) 29. 3 – – – – –
Settlement derivatives/conversion NOR13 – – – – – 21 .0 21.0
Share-based incentive programme – – – – – 1.5 1.5
Sale of shares – – 0.3 – – 5 .1 5.4
Total transactions with owners for the period (2 7. 8 ) 61. 4 0.3 – – 2 7. 6 61 .6
Equity as of 31 December 2022 1.7 768 . 4 (0 .1 ) 0.5 13.9 (1 81 . 9 ) 602 . 5
Consolidated Statement of Changes in Equity
94
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All figures in USD million Note 2022 2021
Cash flows from operating activities
Net result for the year (30 . 5 ) (5 3 . 2 )
Adjustments for:
Income tax benefit/(expense)
13 279 .2 5 8 .1
Tax pai d (11.6 ) (1 0 . 3 )
Depreciation
10 133. 5 112 . 3
Share-based payments expenses 1.4 0.3
Net financial items
12 2 29.0 1 3 7.7
Net gain on sale of assets
12 (0 . 2 ) –
Changes in:
Trade receivable
15 (7. 8 ) (2 9 . 4 )
Trade payables
1)
23 (1 5 . 6 ) (142 . 5 )
Inventories and spare parts
16 (4.5 ) (11 . 9 )
Prepayments
15 (4 . 2 ) 2.7
Over/under-lift
15 (7. 7 ) (14. 0 )
Other current balance sheet items (0. 0 ) (0 .1 )
Net cash flow from operating activities 561.0 49.8
Cash flows from investing activities
Consideration sale of asset 0.3 –
Volume guarantee – 14. 6
Tax paid/received
2)
Investment in oil and gas assets
10 (2 41 . 6 ) (2 28 .1 )
Investment in exploration assets
9 (2 . 4 ) 0.5
Abandonment paid (14 . 4 ) (21 . 2 )
Changes in restricted cash accounts
17 – (14 . 6 )
Net cash flow from investing activities (25 8 . 2 ) (24 6 . 5 )
Cash flows from financing activities
Long-term loans
22 (1 0 0 . 0 ) 14 8 . 8
Issue of long-term loans
22 (0 . 8 ) –
Lease payments (0. 4 ) (0.7 )
Sale of shares 5.4 –
Interest and financing costs (61 .6 ) (8 2. 0 )
Settled hedges – (1 . 5 )
Other financial items 0. 2 (4 . 6 )
Net cash flow from financing activities (1 5 7.1 ) 60.0
Net change in cash and cash equivalents 145 . 8 (1 3 6 .7 )
Cash and cash equivalents at the beginning of the year 122 .6 25 9. 3
Cash and cash equivalents at end of the year 268.4 122. 6
1) 2021 reflects the payment of the VAT liability related to 2020 of USD 156 million. The payment date was delayed to Q1 2021 by the Danish government as a response to the impact of COVID-19
on the economy.
2) Tax paid that was attributable to the period before the acquisition of Shell Olie-og Gasudvinding Danmark B.V. on 31 July 2019 is classified as investing activities.
Consolidated Statement of Cash Flows
For the year ended 31 December
95
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Annual Report and Accounts 2022
Financial Statements
Notes
96
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Annual Report and Accounts 2022
1 Summary of significant accounting policies continued
1.2 Consolidation continued
Subsidiaries continued
Notes continued
97
BlueNord
Annual Report and Accounts 2022
Financial Statements
98
BlueNord
Annual Report and Accounts 2022
1 Summary of significant accounting policies continued
1.6 Intangible assets continued
Notes continued
99
BlueNord
Annual Report and Accounts 2022
Financial Statements
100
BlueNord
Annual Report and Accounts 2022
1 Summary of significant accounting policies continued
Notes continued
101
BlueNord
Annual Report and Accounts 2022
Financial Statements
102
BlueNord
Annual Report and Accounts 2022
1 Summary of significant accounting policies continued
1.20 Share-based payments continued
Fair value continued
Notes continued
103
BlueNord
Annual Report and Accounts 2022
Financial Statements
104
BlueNord
Annual Report and Accounts 2022
2 Financial risk management continued
2.1 Financial risk factors continued
Notes continued
105
BlueNord
Annual Report and Accounts 2022
Financial Statements
106
BlueNord
Annual Report and Accounts 2022
Notes continued
107
BlueNord
Annual Report and Accounts 2022
Financial Statements
108
BlueNord
Annual Report and Accounts 2022
9 Intangible assets continued
Notes continued
109
BlueNord
Annual Report and Accounts 2022
Financial Statements
110
BlueNord
Annual Report and Accounts 2022
11 Impairments continued
Notes continued
111
BlueNord
Annual Report and Accounts 2022
Financial Statements
112
BlueNord
Annual Report and Accounts 2022
13 Tax continued
Notes continued
113
BlueNord
Annual Report and Accounts 2022
Financial Statements
114
BlueNord
Annual Report and Accounts 2022
Notes continued
115
BlueNord
Annual Report and Accounts 2022
Financial Statements
116
BlueNord
Annual Report and Accounts 2022
18 Financial instruments continued
Notes continued
117
BlueNord
Annual Report and Accounts 2022
Financial Statements
118
BlueNord
Annual Report and Accounts 2022
Notes continued
119
BlueNord
Annual Report and Accounts 2022
Financial Statements
120
BlueNord
Annual Report and Accounts 2022
21 Asset retirement obligations continued
Notes continued
121
BlueNord
Annual Report and Accounts 2022
Financial Statements
122
BlueNord
Annual Report and Accounts 2022
22 Borrowings continued
Notes continued
123
BlueNord
Annual Report and Accounts 2022
Financial Statements
124
BlueNord
Annual Report and Accounts 2022
24 Share-based compensation continued
Notes continued
125
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Annual Report and Accounts 2022
Financial Statements
126
BlueNord
Annual Report and Accounts 2022
Income Statement 127
Balance Sheet 128
Cash Flow Statement 129
Notes 130
Note 1: Accounting principles 130
Note 2: Revenue 132
Note 3: Investments in subsidiaries 132
Note 4: Restricted bank deposits 132
Note 5: Borrowings 132
Note 6: Guarantees 134
Note 7: Shareholders’ equity 134
Note 8: Share capital and shareholder information 134
Note 9: Share-based compensation 136
Note 10: Payroll expenses and remuneration 136
Note 11: Write-down of financial assets 136
Note 12: Tax 136
Note 13: Other operating expenses and audit fees 137
Note 14: Related party transactions 137
Contents for Statutory Accounts
127
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Annual Report and Accounts 2022
Financial Statements
Income Statement for Norwegian Energy Company ASA (BlueNord) Parent Company
For the year ended 31 December
USD million Note 2022 2021
Revenue 2, 14 2.6 2.0
Total revenues 2.6 2.0
Personnel expenses
10, 14 (4.4) (3.7)
Other operating expenses
13, 14 (4.1) (3.2)
Total operating expenses (8.5) (6.9)
Operating result before depreciation and write-downs (EBITDA) (5.9) (4.9)
Depreciation (0.0) (0.0)
Net operating result (EBIT) (6.0) (5.0)
Interests received from Group companies 25.1 16.3
Interest income 0.2 0.0
Foreign exchange gains 0.1 0.1
Total financial income 25.4 16.4
Extinguishment of bond loans
5 (57.5) –
Interest expense from bond loans (32.8) (32.5)
Interest expenses current liabilities (0.0) (0.0)
Interest expenses to Group companies – (0.1)
Foreign exchange losses (11.5) (7.7)
Impairment of financial assets
11 (2.7) (0.6)
Other financial expenses 2.5 (0.4)
Total financial expenses (101.9) (41.3)
Net financial items (76.5) (24.8)
Result before tax (EBT) (82.5) (29.8)
Tax
12 – –
Net result for the year (82.5) (29.8)
Appropriation:
Allocated to/(from) other equity (82.5) (29.8)
Total appropriation (82.5) (29.8)
128
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USD million Note 31.12.22 31.12.21
ASSETS
Non-current assets
Financial non-current assets
Investment in subsidiaries
3 393.5 392.6
Loan to Group companies
11 311.0 300.1
Restricted cash
4 61.1 65.0
Machinery and equipment 0.1 0.1
Other non-current assets 0.0 0.0
Total non-current assets 765.7 757.9
Current assets
Receivables
Trade receivables 0.0 0.0
Other current receivables 0.7 0.2
Total current receivables 0.7 0.2
Financial current assets
Restricted cash 0.1 0.1
Bank deposits, cash and cash equivalents 6.0 17.9
Total financial current assets 6.1 18.0
Total current assets 6.9 18.2
Total assets 772.5 776.1
EQUITY AND LIABILITIES
Equity
Paid-in equity
Share capital 1.7 29.5
Share premium fund 768.4 707.0
Treasury share reserve (0.1) (0.5)
Total paid-in capital 769.9 736.0
Retained earnings
Other equity (390.7) (315.3)
Total retained earnings (390.7) (315.3)
Total equit y
7, 8 379.2 420.7
Non-current liabilities
Convertible bond loans
5 223.2 189.3
Bond loan
5 166.9 164.9
Total non-current liabilities 390.1 354.2
Current liabilities
Trade payables 1.6 0.2
Other current liabilities 1.7 1.0
Total current liabilities 3.3 1.2
Total liabilities 393.3 355.4
Total equity and liabilities 772.5 776.1
Oslo
28 March 2023
Riulf Rustad Tone Kristin Omsted Marianne Lie Colette Cohen
Executive Chair Board member Board member Board member
Robert J. McGuire Jan Lernout Peter Coleman Euan Shirlaw
Board member Board member Board member Chief Executive Officer
Balance Sheet for Norwegian Energy Company ASA (BlueNord) Parent Company
For the year ended 31 December
129
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Financial Statements
USD million Note 2022 2021
Net result for the period (82.5) (29.8)
Adjustments for:
Depreciation 0.0 0.0
Write-down
11 2.7 0.6
Share-based payments expenses
7 0.5 0.3
Net financial cost/(income) 73.9 24.2
Changes in:
Trade receivable (0.1) 0.0
Trade payables 1.8 (0.1)
Prepayments (0.2) –
Other current balance sheet items (0.0) (6.0)
Net cash flow from operations (3.8) (10.7)
Cash flows from investing activities
Loans to Group companies 7.6 (132.7)
Investment in furniture, equipment and machinery (0.0) (0.0)
Net cash flow from investing activities 7.6 (132.7)
Cash flows from financing activities
Sale of shares
7 5.4 –
Interest and financing costs (20.2) (21.1)
Other financial items (0.8) (0.4)
Net cash flow from (used) in financing activities (15.6) (21.5)
Net change in cash and cash equivalents (11.9) (164.9)
Cash and cash equivalents at the beginning of the period 17.9 182.8
Cash and cash equivalents at end of the year 6.0 17.9
Cash Flow for Norwegian Energy Company ASA (BlueNord) Parent Company
For the year ended 31 December
130
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1 Accounting principles
Norwegian Energy Company ASA (BlueNord) is a public limited liability company registered in Norway, with headquarters in Oslo (Nedre Vollgate 1,
0158 Oslo).
The annual accounts for Norwegian Energy Company ASA (“BlueNord” or the “Company”) have been prepared in compliance with the
Norwegian Accounting Act (“Accounting Act”) and accounting principles generally accepted in Norway (“NGAAP”) as of 31 December 2022.
The Company is listed on the Oslo Stock Exchange under the ticker “NOR”. The financial statements for 2022 were approved by the Board of
Directors on 28 March 2023.
Going concern
The Board of Directors confirm that the financial statements have been prepared under the presumption of going concern, and that this is the
basis for the preparation of these financial statements. The financial solidity and the Company’s working capital and cash position are
considered satisfactory in regards of the planned activity level for the next 12 months.
Basis of preparation
The financial statements are prepared on the historical cost basis. The subtotals and totals in some of the tables may not equal the sum of the
amounts shown due to rounding.
Use of estimates
The preparation of financial statements in compliance with the Accounting Act requires the use of estimates. The application of the Company’s
accounting principles also require management to apply judgement. Areas, which to a great extent contain such judgements, a high degree of
complexity, or areas in which assumptions and estimates are significant for the financial statements, are described in the notes.
Revenues
Income from sale of services is recognised at fair value of the consideration, net after deduction of VAT. Services are recognised in proportion
to the work performed.
Classification of balance sheet items
Assets intended for long-term ownership or use have been classified as fixed assets. Receivables are classified as current assets if they are
to be repaid within one year after the transaction date. Similar criteria apply to liabilities. First year’s instalment on non-current liabilities and
non-current receivables are classified as current liabilities and assets. For interest-bearing debt where the Company is required to be in
compliance with financial covenants, the loans are classified as current liabilities if Norwegian Energy Company ASA (BlueNord) is in
breach with the covenants to that extent that the loan would be payable on the demand of the creditor. If a waiver is agreed with the creditor
prior to approval of these financial statements, the classification is carried forward in accordance with the payment schedule of the initial
borrowing agreement.
Investments in subsidiaries
For investments in subsidiaries, the cost method is applied. The cost price is increased when funds are added through capital increases or
when Group contributions are made to subsidiaries. Dividends received are initially taken as income. Dividends exceeding the portion of
retained profit after the acquisition are reflected as a reduction to book value.
Dividend/group contribution from subsidiaries are reflected in the same year as the subsidiary makes a provision for the amount.
Asset impairments
Impairment tests are carried out if there is indication that the carrying amount of an asset exceeds the estimated recoverable amount. The test
is performed on the lowest level of non-current assets at which independent cash flows can be identified. If the carrying amount is higher than
both the fair value less cost to sell and recoverable amount (net present value of future use/ownership), the asset is written down to the highest
of fair value less cost of disposal and the recoverable amount.
Previous impairment charges are reversed in later periods if the conditions causing the write-down are no longer present.
Notes
131
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Financial Statements
Foreign currencies
The functional currency and the presentation currency of the company is US dollars (USD).
Assets and liabilities in foreign currencies are valued at the exchange rate on the balance sheet date. Exchange gains and losses relating
to sales and purchases in foreign currencies are recognised as other financial income and other financial expenses.
Bonds and other debt to financial institutions
Interest-bearing loans and borrowings are initially recognised at fair value, net of transaction costs incurred. Subsequently, loans and
borrowings are measured at amortised cost using the effective interest method. Gains and losses arising on the repurchase, settlement or
cancellation of liabilities are recognised either in interest income and other financial items or in interest and other finance expenses within net
financial items. Financial liabilities are presented as current if the liabilities are due to be settled within 12 months after the balance sheet date,
or if they are held for the purpose of being traded.
Other liabilities
Liabilities, with the exception of certain liability provisions, are recognised in the balance sheet at nominal amount.
Taxes
The tax in the income statement includes payable taxes for the period, refundable tax and changes in deferred tax. Deferred tax is calculated at
relevant tax rates on the basis of the temporary differences which exist between accounting and tax values, and any carry forward losses for
tax purposes at the year-end. Tax enhancing or tax reducing temporary differences, which are reversed or may be reversed in the same period,
have been offset. Deferred tax and tax benefits which may be shown in the balance sheet are presented net. Net deferred tax assets are not
recognised due to uncertainty about future taxable profits.
Tax reduction on Group contributions given and tax on Group contribution received, recorded as a reduction of cost price or taken directly to
equity, are recorded directly against tax in the balance sheet (offset against payable taxes if the group contribution has affected payable taxes,
and offset against deferred taxes if the group contribution has affected deferred taxes).
Deferred tax is reflected at nominal value.
Cash flow statement
The cash flow statement has been prepared according to the indirect method. Cash and cash equivalents include cash, bank deposits, and
other current investments which immediately and with minimal exchange risk can be converted into known cash amounts, with due date less
than three months from purchase date.
Share-based payments
The Company operates a number of equity-settled, share-based compensation plans, under which the entity receives services from
employees as consideration for equity instruments (options and shares) of the Company. The fair value of the employee services received in
exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value
of the options and shares granted:
Fair value:
• including any market performance conditions; and
• excludes the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and
remaining an employee of the entity over a specified time period).
Non-market performance and service conditions are included in assumptions about the number of options and shares that are expected to
vest. The total expense is recognised over the vesting period (which is the period over which all of the specified vesting conditions are to be
satisfied). At the end of each reporting period, the Group revises its estimates of the number of options and shares that are expected to vest
based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a
corresponding adjustment to equity. When the options are exercised, the Company issues new shares. The proceeds received net of any
directly attributable transaction costs are credited to share capital (nominal value) and share premium. The social security contributions payable
in connection with the grant of the share options and shares are considered an integral part of the grant itself, and the charge will be treated as a
cash-settled transaction.
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2 Revenue
USD million 2022 2021
Management fee subsidiaries 2.6 2.0
Total revenue 2.6 2.0
3 Investments in subsidiaries
Investments in subsidiaries are booked according to the cost method.
USD million
Subsidiaries Location
Ownership/
voting right
Equity
31 December
Net
loss
Book
value
Altinex AS Oslo 100% 221.5 (2.5) 393.5
Norwegian Energy Company UK Ltd Great Britain 100% (1.1) (0.3) –
Djerv Energi AS Oslo 100% 0.0 (0.0) –
Book value 31.12.22 393.5
The impairment test as of 31 December 2022 justifies the overall value of Altinex and its subsidiaries.
4 Restricted bank deposits
USD million 2022 2021
Restricted cash pledged as security for abandonment obligation related to Nini/Cecilie
1)
61.1 65.0
Other restricted cash and bank deposits 0.1 0.1
Total restricted bank deposits 61.2 65.1
1) In connection to the asset retirement obligation of USD 61.1 million (DKK 432 million) in the group company Noreco Oil Denmark.
5 Borrowings
5.1 Summary of borrowings
USD million
Non-current debt 2022 2021
NOR13 Convertible Bond 14.2 189.3
NOR15 Convertible Bond 209.0 –
NOR14 Senior Unsecured Bond 166.9 164.9
Total non-current debt 390.1 354.2
Total borrowings 390.1 354.2
Details on borrowings outstanding on 31 December 2022
NOR13
In July 2019, Norwegian Energy Company ASA (BlueNord) issued a subordinated convertible bond loan of USD 158 million with a tenor of eight
years where the lender was granted a right to convert the loan into new shares in the Company at a conversion price of NOK 240 (USD 29.3) per
share by way of set-off against the claim on the Company. The loan has a mandatory conversion to equity after five years and carries an interest
of 8 percent p.a. on a PIK basis, with an alternative option to pay cash interest at 6 percent p.a., payable semi-annually. Should the instrument be
in place beyond the five-year conversion period, the interest rate on NOR13 will be reduced to 0.0 percent for the remaining term of the loan.
In November 2022, Norwegian Energy Company ASA (BlueNord) proposed some amendments to the NOR13 bond, which included a
two-year delay in the mandatory conversion date (8 November 2023 to 31 December 2025) and an inclusion of a call option to allow the
Company to redeem the NOR13 bond with cash in December 2025. To reflect the premium of the then share price relative to the NOR13
previous conversion price, the principal amount was updated from approximately USD 165 million to approximately USD 227 million by way
of issuance of compensation bonds. Conversion price was reset to USD 51.4307 per share and interest rate remained unchanged.
Following the proposed amendments, a claim arose from two minority NOR13 bondholders in which Norwegian Energy Company ASA
(BlueNord) received a temporary injunction from the Oslo District Court that restricted the NOR13 amendments from being implemented
(the “Ruling”). To allow the NOR13 bondholders who want to benefit from the commercial position represented by the amendments, Norwegian
Energy Company ASA (BlueNord) proposed a new NOR15 subordinated convertible bond for the bondholders to exchange their holdings of
NOR13 for NOR15 (see note below).
Notes continued
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Financial Statements
In December 2022, the Oslo District Court confirmed that the temporary injunction was withdrawn, and the Ruling is no longer in effect.
The exchange offer for NOR15 continued as planned, with 91.6 percent of the outstanding NOR13 bonds exchanged to the new NOR15 bonds,
and the remainder converted to equity or remained subject to the NOR13 amendments. The value of the NOR13 convertible bond at year end
is USD 13.8 million plus USD 0.4 million accrued interest. The extinguishment of the bond resulted in a financial cost of USD 63.1 million.
NOR14
In December 2019, the Company issued a senior unsecured bond of USD 175 million. The proceeds are utilised for general corporate purposes
and the bond carries an interest of 9.0 percent p.a., payable semi-annually, with a six-and-a-half-year tenor.
NOR15
In December 2022, Norwegian Energy Company ASA (BlueNord) launched an exchange offer for the NOR13 bondholders to exchange for a
new subordinated convertible bond of USD 208 million, with revised terms and a later and more flexible conversion date in 2025. The Company
issued a total of 207,641,201 new NOR15 bonds, each with a nominal value of USD 1. The NOR15 bond terms mirror the amendments of the
NOR13 bond except that inter alia a tap issue mechanism has been included. Interest payments are on similar terms with NOR13, which is an
interest of 8 percent p.a. on a PIK basis, with an alternative option to pay cash interest at 6 percent p.a., payable semi-annually.
5.2 Covenants
Reserve-based lending facility
The reserve-based credit facility constitutes senior debt of the Company and is secured on a first priority basis against certain of the Company’s
subsidiaries and their assets. The reserve-based credit facility agreement contains a financial covenant that the ratio of Net Debt to EBITDAX
(earnings before interest, tax, depreciation, amortisation and exploration) shall be: less than 6.0:1.0 at the end of financial years 2021 and 2022;
less than 3.5:1.0 at the end of financial year 2023; and less than 3.0:1.0 at the end of financial year 2024 onwards until the expiry of the facility.
Each test is carried out on the audited full year financial statements of Norwegian Energy Company ASA (BlueNord). Norwegian Energy
Company ASA (BlueNord) must also demonstrate minimum liquidity on a look forward basis of USD 50 million during the relevant period, which
is currently to the completion of the Tyra redevelopment project. The agreement also includes special covenants which, among other, restrict
the Company from taking on additional secured debt, provide parameters for minimum and maximum hedging requirements and restrict
declaration of dividends or other distributions. Norwegian Energy Company ASA (BlueNord) is in compliance with these covenants at the
end of 2022.
NOR14
In July 2021, Norwegian Energy Company ASA (BlueNord)’s written resolution regarding the addition of further headroom under the Leverage
Ratio covenant through to the end of 2023 was resolved and approved by the Company’s NOR14 bondholders. Based on this written resolution,
the maximum Leverage Ratio has been amended to 7.0x (from 5.0x) during the Tyra Redevelopment Period ending Q2 2023, 6.0x (from 3.0x)
during Q3 2023 and 5.0x (from 3.0x) during Q4 2023. From Q1 2024 onwards, the maximum Leverage Ratio will revert to 3.0x per the original
bond terms. In addition to the change in maximum permitted leverage, Norwegian Energy Company ASA (BlueNord)’s minimum liquidity
threshold has increased to USD 75 million until the end of 2023 (from USD50 million until end Q2 2023 and USD 25 million during Q3 and
Q4 2023). Norwegian Energy Company ASA (BlueNord) is in compliance with the covenants at the end of 2022.
5.3 Payment structure
Principal NOR14 Tot al
2026 175.0 175.0
Total 175.0 175.0
Interest
NOR13
1)
NOR15
1)
NOR14 Total
Interest rate – – 9.00%
2023 – – 15.8 15.8
2024 – – 15.8 15.8
2025 – – 15.8 15.8
2026 – – 7.9 7.9
Total – – 55.3 55.3
1) NOR13 / NOR15 carries a variable interest charge of: (i) 6 percent per annum in cash, payable semi-annually, or; (ii) 8 percent per annum PIK cumulative interest, rolled up semi-annually, to add
to NOR13 capital on conversion at expiry of the bond. Currently, the Company has elected the PIK interest of 8 percent and is therefore forecasting no cash interest payments on NOR13 in the
above table.
5.4 Pledged assets
Pledged assets relate to the carrying value of the pledged shares under the reserve-based lending facility entered into by the wholly owned
subsidiary Altinex AS, please see note 22 in the Consolidated Financial Statements.
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6 Guarantees
Overview of issued guarantees on 31 December 2022.
The parent company of the Group, Norwegian Energy Company ASA (BlueNord), has issued a parent company guarantee on behalf of its
subsidiary Norwegian Energy Company UK Ltd and Noreco Oil (UK) Limited. Norwegian Energy Company ASA (BlueNord) guarantees that,
if any amounts become payable by Norwegian Energy Company UK Ltd or by Noreco Oil (UK) Limited to the UK Secretary of State under the
terms of the licence and the Company does not repay those amounts on first demand, Norwegian Energy Company ASA (BlueNord) shall pay
to the UK Secretary of State on demand an amount equal to all such amounts. Under the forfeiture agreement between Harbour Energy plc
(previously Premier) and Norwegian Energy Company ASA (BlueNord), Harbour Energy plc assumes the risk. While this contingent liability to
the Secretary of State would need to be recognised in any future sale of the Company, Noreco Oil (UK) Limited does have recourse against
Harbour Energy plc if it defaults in its performance.
On 6 December 2007, Norwegian Energy Company ASA (BlueNord) issued a parent company guarantee to the Danish Ministry of Climate,
Energy and Building on behalf of its subsidiary Noreco Oil Denmark A/S and Noreco Petroleum Denmark A/S.
On 31 December 2012, Norwegian Energy Company ASA (BlueNord) issued a parent company guarantee on behalf of its subsidiary Noreco
Norway AS. Norwegian Energy Company ASA (BlueNord) guarantees that if any amounts become payable by Noreco Norway AS to the
Norwegian Secretary of State under the terms of the licences and the Company does not repay those amounts on first demand, Norwegian
Energy Company ASA (BlueNord) shall pay to the Norwegian Secretary of State on demand an amount equal to all such amounts. Noreco
Norway AS was liquidated in 2018, however as per 31 December 2022, the guarantee has not been withdrawn.
In connection with completion of the acquisition of Shell Olie-og Gasudvinding Denmark B.V., in 2019, Norwegian Energy Company ASA
(BlueNord) issued a parent company guarantee to the Danish state on behalf of the two acquired companies for obligations in respect of
licence 8/06, area B and the Tyra West – F3 gas pipeline. In addition, Norwegian Energy Company ASA (BlueNord) issued a parent company
guarantee towards the lenders under the reserve-based lending facility agreement, to Total E&P Danmark A/S for its obligations under the DUC
joint venture agreement (JOA) and to Shell Energy Europe Limited related to a gas sales and purchase agreement (capped at EUR 30 million).
7 Shareholders’ equity
Changes in equity
All figures in USD million
Share
capital
Share
premium
Treasury
reserve
Other
equity Tota l
Equity 31 December 2021 29.5 707.0 (0.5) (315.3) 420.7
Correction previous year – – – (0.1) (0.1)
Issue of shares 1.4 32.2 – – 33.6
Capital reduction, approved and registered (29.3) 29.3 – – –
Conversion NOR13 – – – 0.6 0.6
Share-based incentive programme – – – 1.5 1.5
Sales of shares – – 0.3 5.1 5.4
Net result for the period – – – (82.5) (82.5)
Equity 31 December 2022 1.7 768.4 (0.1) (390.7) 379.2
8 Share capital and shareholder information
2022 2021
Ordinary shares 25,708,424 24,549,013
Treasury shares (137,162) (438,161)
Total shares 25,571,262 24,110,852
Par value in NOK 10 10
Norwegian Energy Company ASA (BlueNord) owns 137.162 of its own shares. All shares have equal rights. All shares are fully paid.
Notes continued
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Financial Statements
Changes in number of shares and share capital:
No. of shares Share capital*
Share capital as of 31 December 2021 24,549,013 29.5
Issue of shares 1,159,411 1.4
Capital reduction, approved and registered – (29.3)
Share capital as of 31 December 2022 25,708,424 1.7
No. of shares
Treasury share
reserve*
Treasury shares as of 1 January 2021 – –
Purchase of Treasury shares (438,161) (0.5)
Treasury shares as of 31 December 2021 (438,161) (0.5)
Sale of Treasury shares 300,999 0.3
Treasury shares as of 31 December 2022 (137,162) (0.1)
* In USD million.
Changes in 2022
The company received conversion notice from bondholders holding NOR13 Bonds for USD 33.6 million, which pursuant to the bond term are
convertible into 1,159,411 new shares in the Company at a conversion price of USD 28.9734. Following such the share capital is increased with
NOK 11.6/USD 1.4 million.
The share capital is reduced with NOK 243.2/USD 29.3 million by reducing the nominal value of the shares. The reduction amount was
transferred to share premium fund. The share capital reduction has been registered in the Norwegian Registry of Business Enterprises on
28 December 2022. Following the share capital reduction, the Company’s share capital is NOK 13.9/USD 1.7 million divided on 25.708.424
shares, each with a nominal value of NOK 0.5398295.
The Company sold 300.999 of its own shares in relation to exercise of options held by a former Director of the Board and former members of
the Executive Team.
Overview of shareholders at 28 March 2023:
Shareholder* Shareholding
Ownership
share Voting share
Euroclear Bank S.A./N.V. 6,243,331 23.8% 23.8%
Goldman Sachs International 5,189,939 19.8% 19.8%
SOBER AS 1,850,000 7.1% 7.1%
Barclays Bank PLC 1,540,368 5.9% 5.9%
J.P. Morgan Securities LLC 1,435,010 5.5% 5.5%
Bank of America 774,408 3.0% 3.0%
J.P. Morgan Securities LLC 588,649 2.7% 2.7%
BNP Paribas 585,000 2.2% 2.2%
Sbakkejord AS 341,262 2.2% 2.2%
CLEARSTREAM BANKING S.A. 586,202 2.2% 2.2%
SOSYFR INVEST AS 268,368 1.6% 1.6%
Société Générale 425,000 1.3% 1.3%
Morgan Stanley & Co. Int. Plc. 300,225 1.2% 1.2%
FINSNES INVEST AS 318,000 1.1% 1.1%
VELDE HOLDING AS 222,222 1.0% 1.0%
Barclays Bank PLC 700,216 1.0% 1.0%
Goldman Sachs & Co. LLC 203,349 0.9% 0.9%
DNB BANK ASA 257,969 0.8% 0.8%
The Bank of New York Mellon SA/NV 228,149 0.8% 0.8%
OUSDAL AS 200,000 0.8% 0.8%
Total 22,257,667 85% 85%
Other owners (ownership <0,42%) 3,944,377 15.1% 15.1%
Total number of shares at 28 March 2023 26,202,044 100% 100%
* Nominee holder.
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9 Share-based compensation
Fair value of the options is calculated using the Black-Scholes-Merton option pricing model. Inputs to the model includes grant date, exercise
price, expected exercise date, volatility and risk-free rate.
Outstanding share options
Share
options Retention shares
Performance
shares
Total share options outstanding as at 1 January 2021 983,868 – –
Share options relinquished in 2021 (235,000) – –
Outstanding at 31 December 2021 748,868 – –
Granted in 2022 122,000 122,825 188,935
Exercised in 2022 (301,000) – –
Translated in 2022 (178,000) – –
Outstanding at 31 December 2022 391,868 122,825 188,935
For more details related to share-based payment, please see the Executive Remuneration Report 2022.
10 Payroll expenses and remuneration
USD million 2022 2021
Salaries (incl. Directors’ fees) (3.1) (2.8)
Social security tax (0.5) (0.4)
Pension costs
1)
(0.1) (0.1)
Costs relating to share-based payments (0.5) (0.3)
Other personnel expenses (0.2) (0.1)
Total personnel expenses (4.4) (3.7)
Average number of employees 7.6 6.7
1) Norwegian companies are obliged to have occupational pension in accordance with the Norwegian Act related to mandatory occupational pension. Norwegian Energy Company ASA
(BlueNord) meet the Norwegian requirements for mandatory occupational pension (“obligatorisk tjenestepensjon”).
For further information on remuneration to key management personnel and Board of Directors, please see note 7 in the Consolidated
FinancialStatement.
11 Write-down of financial assets
USD million 2022 2021
Net write-down loans to subsidiaries (2.7) (0.6)
Total write-down of financial assets (2.7) (0.6)
Write-down of loans to subsidiaries in 2022 and 2021 consists of impairment of loans to Noreco Oil (UK) Ltd. and Norwegian Energy Company
UK Ltd. The intercompany receivables to the UK investment are impaired to zero.
12 Tax
Reconciliation of nominal to actual tax rate:
USD million 2022 2021
Result before tax (82.5) (29.8)
Corporation income tax of income (loss) before tax -22% (18.5) (6.6)
Calculated tax expense (18.2) (6.6)
Permanent differences 12.7 0.0
Changes in deferred tax assets – not recognised 3.7 6.5
Prior year adjustments 2.0 –
Income tax expense – –
Notes continued
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Financial Statements
Deferred tax liability and deferred tax assets:
USD million 2022 2021
Net operating loss deductible 98.8 106.5
Interest limitation carried forward 35.8 36.4
Fixed assets 0.0 (0.0)
Current assets (21.8) 8.7
Liabilities 18.1 (22.0)
Tax base deferred tax liability/deferred tax asset 129.5 129.5
Net deferred tax liability/(deferred tax asset) (22%) (28.5) (28.5)
Unrecognised deferred tax asset 28.5 28.5
13 Other operating expenses and audit fees
USD million 2022 2021
Lease expenses (0.2) (0.2)
IT expenses (0.2) (0.5)
Travel expenses (0.2) (0.0)
General and administrative costs (0.1) (0.0)
Consultant fees (2.9) (2.0)
Other operating expenses (0.5) (0.3)
Total other operating expenses (4.1) (3.2)
Expensed audit fee:
USD 1,000, excl. VAT 2022 2021
Audit (313.0) (204.3)
Other assurance services 65.4 –
Total audit fees 378.4 (204.3)
14 Related party transactions
Transactions with related party
USD million 2022 2021
a) Allocation of cost to Group companies 3.1 2.5
b) Purchases of services – 0.1
c) Sale of assets – –
Interest income and interest expenses to Group companies are presented separately in the income statement.
Services are charged between Group companies at an hourly rate which corresponds to similar rates between independent parties. Allocation
of IT and management fee to group companies amounts to USD 3.1 million for 2022.
Balances with Group companies
Carrying value of balances with Group companies are stated on the face of the balance sheet and are all related to 100 percent
controlledsubsidiaries.
Norwegian Energy Company ASA (BlueNord) did not have any other transactions with any other related parties during 2022. Please see the
Executive Remuneration Report 2022 for Director’s fee paid to shareholders and remuneration to management.
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Opinion
We have audited the financial statements of Norwegian Energy Company ASA (BlueNord), which comprise:
• the financial statements of the parent company Norwegian Energy Company ASA (the Company), which comprise the balance sheet as at
31 December 2022, the income statement and cash flow statement for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies; and
• the consolidated financial statements of Norwegian Energy Company ASA (BlueNord) and its subsidiaries (the Group), which comprise the
consolidated statement of financial position as at 31 December 2022, the consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion:
• the financial statements comply with applicable statutory requirements;
• the financial statements give a true and fair view of the financial position of the Company as at 31 December 2022, and its financial
performance and its cash flows for the year then ended in accordance with Norwegian Accounting Act and accounting standards and
practices generally accepted in Norway; and
• the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2022, and its financial
performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by
the EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company
and the Group as required by relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have
been provided.
We have been the auditor of the Company for 15 years from the election by the general meeting of the shareholders on 25 April 2008 for the
accounting year 2008.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the
current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Valuation of production assets
Refer to note 3 Critical accounting estimates and judgements (section d), note 9 Intangible assets, note 10 Property, plant and equipment and
note 11 Impairments
Independent Auditor’s Report
Report on the Audit of the Financial Statements
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Financial Statements
The key audit matter How the matter was addressed in our audit
The recoverable amounts of production assets
are sensitive to changes in assumptions, in
particular oil and gas prices, discount rate and
oil and gas reserves. Any negative developments
in these assumptions and forecasts may be an
impairment trigger.
Management’s determination of the recoverable
amounts of the production assets is based on a
number of key assumptions such as expected oil
and gas prices, oil and gas reserves, economic
cut-off date, license related expenditures and
discount rate, which involve a high degree of
judgement. In addition, the calculation of
recoverable amounts requires complex financial
modelling of the cash flows of each cash
generating unit.
Significant auditor judgement is required when
evaluating whether the recoverable amounts, and
the assumptions which drive the underlying cash
flow estimates, are reasonable and supportable.
For each asset and cash generating unit we critically assessed and challenged the
determined recoverable amounts, and the assumptions which drive the underlying cash
flow estimates, including:
• comparison of management’s expected oil and gas prices to external forward curve
data and benchmark data from third-party analysts and competitors;
• comparison of the reserves estimates used to the assessments made by the
Company’s reservoir engineers to the operators assessments and certain third-party
reserves certification reports;
• comparison and assessment of forecasted operational expenditures and capital
expenditures to historical forecasts and approved license budgets;
• comparison of and assessment of managements expected economic cut-off date for
fields to the operators and third-party reports; and
• agreeing abandonment expenditures in this cash flow forecast with the abandonment
expenditures used in the abandonment provision.
In addition, KPMG valuation specialists assessed the reasonableness of the discount rate
applied with reference to market data and comparable companies credit risk.
We assessed the mathematical and methodological integrity of management’s
impairment models, including the modelling of tax related cash flows.
We also assessed the adequacy and appropriateness of the disclosures in the
financial statements.
Assets retirement obligations
Refer to note 3 Critical accounting estimates (section c) and judgements and note 21 Assets retirement obligations.
The key audit matter How the matter was addressed in our audit
The determination of the asset retirement
obligations (“ARO”) involves judgement related to
the estimation of future costs, the discount rate
applied, the economic cut-off date for fields and
the related timing of the expected costs.
Significant auditor judgement is required when
evaluating the abandonment provisions, and to
determine whether there is sufficient evidence
available to support the estimates and
judgements made.
Our audit procedures in this area included:
• assessing management’s process to determine the present value of the estimated
future decommissioning and removal expenditures required by local conditions and
requirements;
• we critically assessed and challenged the link between the economic cut-off date for
fields for consistency to the reserves estimate, for which a third party assessment has
been obtained;
• we assessed and challenged managements expected future costs estimates by
comparing these to reports from the operator company and evaluating the historical
accuracy of the cost estimates;
• assessing the discount and inflation rate applied with reference to industry practice
along with market and Company data; and
• we assessed the mathematical and methodological integrity of management’s
valuation model.
We also assessed the adequacy and appropriateness of the disclosures in the
financial statements.
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Other Information
The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report and the
other information accompanying the financial statements. The other information comprises information in the annual report, but does not
include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the information in the
Board of Directors’ report nor the other information accompanying the financial statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report and the other information
accompanying the financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and
the other information accompanying the financial statements and the financial statements or our knowledge obtained in the audit, or whether
the Board of Directors’ report and the other information accompanying the financial statements otherwise appear to be materially misstated.
We are required to report if there is a material misstatement in the Board of Directors’ report or the other information accompanying the financial
statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report:
• is consistent with the financial statements; and
• contains the information required by applicable statutory requirements.
Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate Governance and Corporate
Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Norwegian
Accounting Act and accounting standards and practices generally accepted in Norway, and for the preparation and true and fair view of the
consolidated financial statements of the Group in accordance with International Financial Reporting Standards as adopted by the EU, and for
such internal control as management determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern. The financial statements of the Company use the going concern basis of
accounting insofar as it is not likely that the enterprise will cease operations. The consolidated financial statements of the Group use the going
concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but
to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit.
We also:
• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control;
• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company’s and the Group’s internal control;
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made
by management;
• conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s and the
Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Company and the Group to cease to continue as a going concern;
• evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that achieves a true and fair view; and
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to
express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
Independent Auditor’s Report continued
Report on the Audit of the Financial Statements
141
BlueNord
Annual Report and Accounts 2022
Financial Statements
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and
to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the
financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on Other Legal and Regulatory Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Norwegian Energy Company ASA (BlueNord) we have performed an assurance
engagement to obtain reasonable assurance about whether the financial statements included in the annual report, with the file name
5967007LIEEXZXGE3C16-2022-12-31-en, have been prepared, in all material respects, in compliance with the requirements of the
Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to
Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML
format, and iXBRL tagging of the consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the
ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF regulation. This responsibility comprises an
adequate process and such internal control as management determines is necessary.
Auditor’s Responsibilities
Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material respects, the financial statements
included in the annual report have been prepared in compliance with ESEF. We conduct our work in compliance with the International Standard
for Assurance Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical financial information”.
The standard requires us to plan and perform procedures to obtain reasonable assurance about whether the financial statements included
in the annual report have been prepared in compliance with the ESEF Regulation.
As part of our work, we have performed procedures to obtain an understanding of the Company’s processes for preparing the financial
statements in compliance with the ESEF Regulation. We examine whether the financial statements are presented in XHTML-format.
We evaluate the completeness and accuracy of the iXBRL tagging of the consolidated financial statements and assess management’s use of
judgement. Our procedures include reconciliation of the iXBRL tagged data with the audited financial statements in human-readable format.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Oslo, 28 March 2023
KPMG AS
Mona Irene Larsen
State Authorised Public Accountant
(This document is signed electronically)
142
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Annual Report and Accounts 2022
Board and management confirmation
Today, the Board of Directors and the Managing Director reviewed and approved the Board of Directors’ Report and the Norwegian Energy
Company ASA (BlueNord) consolidated and separate annual financial statements as of 31 December 2022.
To the best of our knowledge, we confirm that:
• the Norwegian Energy Company ASA (BlueNord) consolidated annual financial statements for 2022 have been prepared in accordance
with IFRSs and IFRICs as adopted by the EU, and additional Norwegian disclosure requirements in the Norwegian Accounting Act;
• the financial statements for Norwegian Energy Company ASA (BlueNord) have been prepared in accordance with the Norwegian
Accounting Act and Norwegian Accounting Standards;
• that the Board of Directors’ Report for the Group and the parent company is in accordance with the requirements in the Norwegian
Accounting Act and Norwegian Accounting Standard no 16;
• that the information presented in the financial statements gives a true and fair view of the Company’s and the Group’s assets, liabilities,
financial position and results for the period viewed in their entirety; and
• that the Board of Directors’ Report gives a true and fair view of the development, performance, financial position, principle risks and
uncertainties of the Company and the Group.
Oslo
28 March 2023
Riulf Rustad Tone Kristin Omsted Marianne Lie Colette Cohen
Executive Chair Board member Board member Board member
Robert J. McGuire Jan Lernout Peter Coleman Euan Shirlaw
Board member Board member Board member Chief Executive Officer
Statement of Compliance
143
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Annual Report and Accounts 2022
Financial Statements
Norwegian Energy Company ASA (BlueNord) chooses to disclose Alternative Performance Measures as part of its financial reporting as a
supplement to the financial statements prepared in accordance with the IFRS. This information is provided as a useful supplemental information
to investors, security analysts and other stakeholders to provide an enhanced insight into the financial development of Norwegian Energy
Company ASA (BlueNord)’s business operations and to improve comparability between periods.
Abandonment spent (abex) is defined as the payment for removal and decommissioning of oil fields, to highlight the cash effect for
theperiod.
Adjusted EBITDA is adjusted for cost from share-base payment arrangements and non-payment insurance.
Adjusted EBITDA
USD million 2022 2021
EBITDA 611.2 249.5
Non-payment insurance 4.7 7.2
Share-base payment 0.6 0.3
Adjusted EBITDA 616.5 257.1
EBITDA Earnings before interest, taxes, depreciation, depletion, amortisation and impairments. EBITDA assists in comparing performance on
a consistent basis without regard to depreciation and amortisation, which can vary significantly depending on accounting methods or non-
operating factors and provides a more complete and comprehensive analysis of our operating performance relative to other companies.
Effective oil price is defined as realised oil price adjusted for derivative effects.
Effective gas price is defined as realised gas price adjusted for derivative effects.
Free cash flow (pre-investments) is defined as Net change in cash and cash equivalents including cash spent on investments in oil and
gasassets.
Interest-bearing debt defined as the book value of the current and non-current interest-bearing debt.
Net interest-bearing debt is defined by Norwegian Energy Company ASA (BlueNord) as cash and cash equivalents reduced by current and
non-current interest-bearing debt. The RBL facility and bond loans are included in the calculation with the total amount outstanding and not the
amortised cost including transaction cost.
Interest-bearing debt
USD million 31.12.2022 31.12.2021
Convertible bond loans (188.7) (157.1)
Senior Unsecured bond loan (166.9) (164.9)
Reserve-based lending facility (764.0) (857.3)
Other interest-bearing debt (25.0) (25.0)
Interest-bearing debt (1,144.6) (1,204.3)
Net Interest-bearing debt
USD million 31.12.2022 31.12.2021
Cash and cash equivalents 268.4 122.6
Convertible bond loan (221.5) (185.0)
Senior Unsecured bond loan (175.0) (175.0)
Reserve-based lending facility (800.0) (900.0)
Other interest-bearing debt (25.0) (25.0)
Net interest-bearing debt (953.1) (1,162.4)
Alternative Performance Measures
144
BlueNord
Annual Report and Accounts 2022
Supplementary oil and gas information (unaudited)
In March 2023, the Group reported oil and gas 2P reserves and near-term 2C resources, the report is reported separately from the Annual
Report 2022. RISC UK Ltd (RISC) has independently assessed the year-end 2022 2P reserves and near-term 2C resources associated with
Norwegian Energy Company ASA (BlueNord)’s interest in the DUC assets. 2P reserves and near-term 2C resources are reported according
to Society of Petroleum Engineering Petroleum Resources Management System (SPE PRMS) 2018 standards.
The 2P reserves and near-term 2C resources for the DUC portfolio and Lulita are shown below using the figures from the Annual Statement of
Reserves issued in March as basis.
Total reserves as of 31.12.2022
Field Hub Status
Liquids
(mill bbl)
Gas
(mmboe)
Oil Eq.
(mmboe)
Interest
%
Oil Eq.
(mmboe)
Dan Dan On Production 71.1 5.6 76.7 36.8% 28.2
Kraka Dan On Production 6.9 0.2 7.1 36.8% 2.6
Gorm Gorm On Production 21.8 – 21.8 36.8% 8.0
Skjold Gorm On Production 30.9 – 30.9 36.8% 11.4
Rolf Gorm On Production 2.3 – 2.3 36.8% 0.9
Halfdan (incl. Halfdan North East) Halfdan On Production 76.5 23.7 100.2 36.8% 36.9
Tyra Tyra Under Development 38.1 85.2 123.2 36.8% 45.3
Valdemar Tyra Under Development 38.4 18.3 56.7 36.8% 20.9
Roar Tyra Under Development 5.2 11.8 17.1 36.8% 6.3
Harald Tyra Under Development 0.6 0.4 1.0 36.8% 0.4
Lulita Tyra Under Development 0.7 3.5 4.3 36.8% 1.6
Halfdan Tor
North East Infill Halfdan Approved for Development 4.8 2.9 7.7 36.8% 2.8
Halfdan HCA Gas Lift Project Halfdan Approved for Development 1.1 6.0 7.1 36.8% 2.6
Valdemar Bo South Tyra Justified for Development 20.1 8.8 28.9 36.8% 10.6
Halfdan Ekofisk Infill Halfdan Justified for Development 5.7 5.0 10.7 36.8% 3.9
Total 2P Reserves 324.2 171.5 495.6 182.4
Total Near-Term 2C Resources as of 31.12.2022
Field
Liquids
(mill bbl)
Gas
(mmboe)
Oil Eq.
(mmboe)
Interest
%
Oil Eq.
(mmboe)
Adda 16.9 33.6 50.4 36.8% 18.6
Svend 11.4 1.7 13.2 36.8% 4.8
Halfdan North 33.1 4.3 37.4 36.8% 13.8
Total 2C Resources 61.4 39.6 101.0 37.2
Total 2P Reserves and near-term 2C Resources 385.5 211.1 596.6 219.6
Alternative Performance Measures
BlueNord
Annual Report and Accounts 2022
Financial Statements
145
Information about BlueNord
ESEF information
Name of reporting entity or other means of identification Noreco Group
Explanation of change in name of reporting entity or other means of
identification from end of preceding reporting period N/A
Domicile of entity Norway
Legal form of entity ASA
Country of incorporation Norway , UK, Denmark
Address of entity’s registered office Nedre Vollgate 1, 0158 Oslo, Norway
Principal place of business Oslo
Description of nature of entity’s operations and principal activities Oil and gas
Name of parent entity Norwegian Energy Company ASA
Name of ultimate parent of group Norwegian Energy Company ASA
Head office BlueNord
Headquarters Nedre Vollgate 1, 0158 Oslo, Norway
Telephone +47 22 33 60 00
Internet www.BlueNord.com
Organisation number NO 987 989 297 MVA
Financial calendar 2023
25 April Annual General Meeting
10 May Q1 2023 Report
12 July Q2 2023 Report
18 October Q3 2023 Report
Board of Directors
Riulf Rustad Chair
Marianne Lie
Tone Kristin Omsted
Colette Cohen
Robert J. McGuire
Jan Lernout
Peter Colman
Management
Euan Shirlaw Chief Executive Officer
Marianne Eide Chief Operating Officer
Cathrine Torgersen EVP, Investor Relations & ESG
Jacqueline Lindmark Boye EVP, Finance
Investor Relations
Phone +47 22 33 60 00
E-mail investorrelations@BlueNord.com
Annual Reports
Annual reports for BlueNord are available on www.BlueNord.com
Quarterly publications
Quarterly reports and supplementary information for investors and
analysts are available on www.BlueNord.com. The publications can
be ordered by e-mailing investorrelations@BlueNord.com.
News Releases
In order to receive news releases from BlueNord, please register
on www.BlueNord.com or e-mail investorrelations@BlueNord.com.
BlueNord
Org. number: 987 989 297
LEI Code: 5967007LIEEXZXGE3C16
BlueNord Annual Report and Accounts 2022
Oslo
Nedre Vollgt. 1
0158 Oslo,
Norway
London
25 Upper Brooke Street
London,
W1K 7QD,
United Kingdom
Copenhagen
Lyngbyvej 2
2100 Copenhagen Ø,
Denmark
www.bluenord.com