annualreview · baobab (future phases)2 27.39% 28.9 18.8 32.2 nigeria uge1 21.05% 58.7 51.6 67.9...

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

ANNUALREVIEW2017

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

Liquis et ped mod qui vollabo. Hendi bea natiur | Svenska Annual Review 2015 | 3

Con

tent

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

410121416182024262832374056575861

4 | Svenska Annual Review 2017 | Company Overview

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

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

take place in the hydrocarbon-rich basins of West Africa. Our production in 2017 came from the Ivory Coast. Svenska is wholly owned by Petroswede AB, which in turn is indirectly owned by Sheikh Mohammed H. Al-Amoudi.

MAIN EVENTS IN 2017The first well of the Phase 4 redevelopment of Baobab was drilled and completed at the start of 2016. The remaining Phase 4 wells are expected to be drilled in 2018. Further analysis has made the Atum and Anchova prospects in Guinea-Bissau look even more promising. A drill decision was made in 2017. During 2017 Svenska intensified its efforts to find and invest in new ventures for both exploration and for

production. The main focus is West Africa and countries such as the Republic of the Congo, Gabon and Cameroon, as well as selected parts of North Africa and the Middle East. In 2017, we completed a revised set of agreements between the Joint Venture partnership, the owner and operator of the Baobab Floating Production, Storage and Offloading vessel (FPSO) which motivates for long term investments and contributes to successful co-operation. These agreements pave the way for the Baobab Life Extension Project (BLEP) which aims to keep the FPSO on station without dry docking until the licence expires in 2038. With the Phase 4 drilling campaign postponed into 2018 the operational focus has been on maintenance and riser replacement and a comprehensive refurbishment programme.

Company Overview | Svenska Annual Review 2017 | 5

SVENSKA’S SHARE OF RESOURCES AND RESERVESDISCOVERIES AND PRODUCING ASSETS

Svenska’s WI

Oil (mmbo)

Gas (bcf)

Total (mmboe)

DISCOVERIES

Guinea-Bissau

Sinapa East1 70.71% 7.6 8.5 9.1

Ivory Coast

Kossipo South1 27.39% 8.3 6.6 9.5

Baobab (Phase 5)2 27.39% 12.0 6.7 13.2

Baobab (Future Phases)2 27.39% 28.9 18.8 32.2

Nigeria

Uge1 21.05% 58.7 51.6 67.9

Total Discoveries 115.5 92.2 131.9

PRODUCING FIELDS

Ivory Coast

Baobab2 27.39% 32.1 15.4 34.8

Total Reserves 32.1 15.4 34.8

OIL RESERVES BY FIELD OIL RESOURCES

Totals in boe calculated by Svenska using a conversion factor of 5.615 mscf/boe.1. Operator s estimate 2. Svenska s estimate

7.2% Kossipo South

6.6% Sinapa East

50.8% Uge

35.4% Baobab and Future Phases

100% Baobab

6 | Svenska Annual Review 2017 | Financial Overview

SVENSKA IN BRIEF | EXECUTIVE MANAGEMENT

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

DUNCAN RUSHWORTH

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

VP BUSINESS

DEVELOPMENT

LARS SCHENNINGS

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

CFO & VP BUSINESS SUPPORT

JAN HAGEN Manages the development and production of Svenska’s assets while leading the Reservoir & Facilities Engineering team.

EVP DEVELOPMENT & PRODUCTION

TORGNY BERGLUND

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

VP EXPLORATION

PRESIDENT AND CEO FREDRIK ÖHRN

SVENSKA PETROLEUM EXPLORATION AB

100%

120.0

100.0

80.0

60.0

40.0

20.0

0.0

See full list of Group companies on page 55.

2013 2014 2015 2016 2017 Total net sales EBITDAX Operating income

2013 2014 2015 2016 2017

200.000150.000100.000

50.0000

-50.000-250.000

SPE Nigeria AB

SPE Guinea-

Bissau AB

Svenska Petroleum Exploration

UK Ltd(Dormant)

Petroswede Insurance Company

DAC

Oljepros-pektering AB

(OPAB)

SPE CI Holding AB

SPE CI AB

SPE CI Finance AB

SVENSKA IN BRIEF | LEGAL STRUCTURE

2013

2.0

4.0

1.0

3.0

2013 2014 2015 2016

100

200

250

50

150

2014 2015 2016

Sinapa

Uge

Orso, Uge North, Nza

Kossipo

Baobab

Divested and expired licences

2017 2017

Financial Overview | Svenska Annual Review 2017 | 7

FIVE-YEAR OVERVIEW

PRODUCTION (mmboe) RESOURCES DEVELOPMENT (mmboe)

Baobab

(USD thousands) 2013 2014 2015 2016 2017

Total net sales 162,340 100,315 103,164 171,206 141,354

EBITDAX 70,094 46,588 81,002 78,570 83,293

Operating income -25,762 -184,977 22,655 29,848 45,531

Net income -30,432 -186,786 11,352 -9,648 31,063

2013 2014 2015 2016 2017

Operating cash flow 79,890 19,940 24,098 48,356 69,885

Investments -82,476 -151,627 -138,952 2,736 -24,887

2013 2014 2015 2016 2017

Operating margin* -15.9% -184.4% 22.0% 17.4% 32.2%

Net margin* -18.7% -186.2% 11.0% -5.6% 22.0%

Net debt/equity ratio 0.00 0.20 0.26 0.22 0.08

Equity/assets ratio 0.67 0.52 0.58 0.66 0.75

2013 2014 2015 2016 2017

Return on equity -4.6% -32.1% 2.2% -1.9% 5.8%

Return of average capital employed -3.2% -23.2% 2.8% 3.9% 6.5%

2013 2014 2015 2016 2017

Oil production (mmbo) 1.5 1.0 1.5 3.0 2.4

Average production (mbopd) 4.1 2.7 4.2 8.2 6.6

Resources/production ratio 175.3 194.5 93.0 55.7 76.6

EBITDAX/bbl 46.7 46.6 54.0 26.2 34.7

Definitions used in five-year overview* Recalculated due to adjusted definition

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

Operating margin: Operating income/ Total net sales

Net margin: Net income/Total net sale

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

Equity/Asset ratio: Equity/Total assets

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

Return on capital employed: EBIT/Capital Employed

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


LATVIA: 229 (3%)

GUINEA-BISSAU: 5,725 (77%)

NIGERIA: 1,300 (18%)

IVORY COAST: 170 (2%)

LICENCE ACREAGE AT YEAR END 2017(SQUARE KM)

LICENCES GUINEA-BISSAU70.71% interest in Block 2 (Sinapa)

70.71% interest in Blocks 4A and 5A (Esperanca)


LICENCES IVORY COAST

27.39% interest in Block CI-40

LICENCES NIGERIA

21.05% interest in OML 145

LICENCES LATVIA

90% interest in licence E-24 (Dalders)

Office

10 | Svenska Annual Review 2017 | Business Strategy

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

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

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

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

STRATEGY

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

VISION

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

TACTICS

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

MISSION

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

MARKETING

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

STRATEGY

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

ORGANIZATION

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

CEO’S COMMENT

A year of improvement2017 has been a year of rebalancing in the oil and gas industry. The oil price has stabilized at around USD 50/bbl and we have seen a decrease in the oil stocks as the consumption has increased. OPEC’s cutbacks provide good prospects for the future. To Svenska this has meant a year of improvement in both operation agreements and maintenance of equipment that will put us in a stronger position to be well prepared for our future expansion plans.

12 | Svenska Annual Review 2017 | CEO’s Comment

The Baobab field in the Ivory Coast is a success story. The decision to drill a further

three production and two water-injection wells show the partnerships commitment to the licence. Large oil deposits tend to grow and that goes for Baobab as well. What started as an estimated STOOIP of 788 mmbbls currently stands at 965 mmbbls. With the Phase 4 infill drilling campaign planned for 2018 much of the focus during 2017 in the Ivory Coast has been on the BLEP project that will ensure that the FPSO will not need to go

Stockholm, March 2018

FREDRIK ÖHRNCEO

A new agreement with a long-term perspective has given both parts incentives to be proactive to reinforce the quality.”

“Fredrik Öhrn, CEO

into dry dock. In addition we have made extensive in situ steel replacement of steel – both in the tanks and on the hull. Overall we have had a good year of high availability at the facility. Oil production from Baobab has averaged 24,288 boe/day and continued to show a healthy profitability at 2017 oil price levels. Financially Svenska is in a good position. We have a strong balance sheet and when an opportunity arises we are prepared to act.

QUALITY RISES WITH A CLOSER PARTNERSHIPOur FPSO is leased from the Japanese company Modec International Inc. A new agreement with a long-term perspective

has provided both parts incentives to be proactive with maintenance. The partnership deepens the collaboration between Modec and the partnership in the licence where the new KPI’s already are showing a strong improvement in operational performance.

EXTENSION IN GUINEA-BISSAU Last year we were hampered by the delay in the decision process to grant an extension to current licence period for our blocks in Guinea-Bissau. This is now in place and gives us a further three years to prepare for and execute

exploration drilling. The start of exploration drilling is planned for Q4 in 2018. If this well is successful we will have ample time to drill appraisal wells within the licence period. We are planning to establish our drilling base in Dakar from where we can load drilling equipment and set up accurate security and process systems. We continue to be very enthusiastic about the potential of our acreage in Guinea-Bissau. With the current focus on the MSGBC basin, following discoveries in Mauretania and in Senegal, we believe that we have some of the more interesting undrilled prospects available along the margin.

NIGERIAThe OML 145 licence in Nigeria containing the Uge discovery is still waiting for a resolution to the outstanding issue of the new petroleum code in Nigeria. The partnership in the licence continues to evaluate alternative development scenarios given the current reduction in overall development costs.

A RISING MARKETSvenska is constantly seeking new licences. The market is strong with more opportunities available. We are currently actively evaluating a number of countries and jurisdictions, and have spent a lot of time understanding the potential of new regions such The republic of the Congo, Gabon, Cameroon and Oman. Svenska has a tradition of working very long-term and putting a lot of preparation into our work. I wish to thank our professional and hardworking staff; their commitment and curiosity help us to develop the Company in order to achieve further growth and a prosperous future.

CEO´s Comment | Svenska Annual Review 2017 | 13

14 | Svenska Annual Review 2017 | Exploration

ExplorationDuring 2017, Svenska has had a strong focus on new opportunities in Oman and West Africa. The exploration activities in Guinea-Bissau have increased, following approval of the licence extension.

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

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

A STABILIZED OIL PRICE IN 2017The oil price decline since mid-2014 has frozen many planned investments in the upstream oil and gas industry. In 2017, we finally noticed a rebalancing in the oil and gas industry where the oil price has stabilized at around USD 50/bbl. This has had an effect on the readiness to drill exploration wells in Guinea-Bissau, and elsewhere, and we are looking forward to start drilling in the later part of 2018.

FOCUS ON OMAN AND WEST AFRICAIn 2017, we have had a strong focus on new opportunities in Oman and West Africa to diversify our portfolio. We are interested in extending our West African footprint as well as establishing

EXPLORATION

Torgny BerglundVice President, Exploration

a presence in the MENA. Throughout the year we have continued our exploration new ventures work in these regions. Based on previous years’ regional screening work, we have been focusing on specific countries this year. We have attended several data rooms in Oman and we have acquired a good understanding of the geology and the prospectivity, both on- and off-shore in order to evaluate farm-in possibilities. In 2016 we participated in a licensing round in Oman, but unfortunately we did not get any award. Now we are working on a new round on-shore, to be concluded in 2018. During the past year we have seen several farm-ins in Oman and placed a bid, but we did not reach an agreement. In West Africa, our regional studies

Exploration | Svenska Annual Review 2017 | 15

on prospectivity have continued with common risk segments and mapping. Our screening work in the Republic of the Congo, Gabon and Cameroon has built a solid foundation to evaluate future licensing rounds or farm-ins. We have also visited several data rooms in the Republic of the Congo and Gabon, but without submitting any bids.

DRILLING IN KOSSIPO NORTH CENTRALAn important activity during the year is the evaluation of the Kossipo North and Central prospect. The work is ongoing and suggests interesting volumes for future drilling, hopefully in conjunction with the planned Baobab infill drilling in 2018/19.

NO SOLUTION IN SIGHT FOR THE LATVIAN-LITHUANIAN BORDER DISPUTE“We are awaiting a solution of the border dispute,” says Torgny. “There was a licensing round in the Lithuanian area, but we chose not to participate since the resource potential was not large enough.” There are ongoing meetings between Latvia and Lithuania to find common ground for cooperation in various projects, including the border dispute – therefore, Svenska’s activities in licence E-24 offshore Latvia are on hold.“The licence is definitely an interesting asset,” says Torgny. “Once the border dispute is solved, drilling is very likely to take place.”

16 | Svenska Annual Review 2017 | Nigeria

The solution is about reducing costsThe long wait for decisions on Nigeria’s new Petroleum Industry Bill continues. Most of the planned development activities for offshore mining licence OML 145 are on hold. Reprocessing of 2003 seismic data may however lead to additional resources in deeper potential prospects.

OPERATIONAL UPDATE | NIGERIA

2017 was again a year of low activity in the whole

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

OML 145, UGEThe Uge Main discovery is located in the north-western part of the block in water depth of approximately 1,200 metres. It is 50 kilometres southeast of the large Shell-operated Bonga field complex in OML 118. The OML 145 operator, ExxonMobil, has undertaken detailed value

enhancement development studies to refine and optimize the development plan in order to increase recovery at lower costs. A recent estimate for an Uge field development base case has EUR (Estimated Ultimate Recoverable Reserves) of approximately 322 mmboe. The licence also contains three potential tieback candidates in the Uge North, Nza and Orso discoveries.

UGE FIELD DEVELOPMENTEfforts to enhance the probability of development are being investigated by the licence partners. A joint development with the adjacent Nsiko oil field and a shared FPSO was investigated with emphasis on the basis of design and cost estimates. Uge is located in OML 145 and operated by

LICENCES | NIGERIA

1

1. 21.05% interest in OML 145

Nigeria | Svenska Annual Review 2017 | 17

Esso Exploration & Production Nigeria (Deepwater West) Ltd while Nsiko is located in an adjacent undeveloped block (OML 140) operated by Star Ultra Deep Petroleum Ltd (a Chevron company) about 50 kilometres away; both with a resource size of approximately 300 mmboe. The conclusion of this study was that a joint development was technically feasible, but the economics remained marginal. Svenska and Oando, licence partner, have advocated a solution using a leased existing FPSO, which would require minimal refurbishment and would bring the start of production forward by a number of years. This would reduce the development cost and improve the economics of the project. To date

this suggested solution has not been embraced by the other partners. In 2017 an alternative development plan was investigated in which Uge became a tie-back to Nsiko, and was brought on production when ullage in the production system would allow. However, this solution also remained economically marginal, and the operator proposed to reprocess the 2003 3D seismic data using new and improved technology. Hopefully that will confirm expectations of additional oil reserves in other parts of the licensed area. Svenska believes there is potential south of the Uge Main discovery as well as in deeper formations in the block. There is also a multi-client survey being proposed. This would provide a brand new set

of data over the block and could be more advantageous to the exploration efforts than the reprocessing. The decision on seismic reprocessing or acquisition will be made in early 2018. Another factor affecting the development of Uge Main is further delays in anticipation of the new PIB, which may have an impact on technical solutions as well as affect the project economics.

An oil field holding 300-450 million barrels will be developed sooner or later. When things are back to normal in Nigeria, we will be ready.”Jan Hagen, EVP Production & Development

“

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

18 | Svenska Annual Review 2017 | Guinea-Bissau

1. 70.71% interest in Block 2 (Sinapa) 2. 70.71% interest in Blocks 4A and 5A

(Esperanca)

LICENCES | GUINEA-BISSAU

12

A year of preparationsIn 2017 the decision was made to drill the Atum prospect, located in the deep-water western part of our Guinea-Bissau acreage.

During the year a number of geological and geophysical studies were completed –

leading up to a full prospectivity review at the early June TCM meeting in Stockholm. At this same meeting Svenska concluded that, as an operator, we have viable drillable prospects in the blocks. The recommendation was made to go ahead with a decision to drill pending government approval of licence extension and improved terms. The government approval was gazetted on 4 August 2017 and we were informed of this decision shortly after by Petroguin, the Guinea-Bissau petroleum authority and our joint venture partner. At the November MCM/OCM licence meeting the joint venture made a resolution to drill in late 2018. “The actual drilling schedule will be dependent on access to a drilling rig and base. It will be coordinated between the operators in the area in order to optimize the operations, and reduce costs,” says Torgny Berglund, VP Exploration. “Costs related to drilling, mobilization and other services associated with drilling would be reduced. However, these coordination efforts may have an effect on the final timetable for drilling.”

SENEGAL’S DISCOVERIES INCREASED ACTIVITYThe significant oil discoveries made by operator Cairn in Senegal, some 220 kilometres due north of Svenska’s licence, pushed Svenska’s activities in Guinea-Bissau into a new phase. Two oil and gas discovery wells were drilled

in 2014, named SNE and FAN. Five appraisal wells have since been drilled on the SNE discovery that is located on the Senegal shelf margin. The geological setting in the western part of Svenska’s blocks in Guinea-Bissau is similar to that of the SNE discovery. This fact has significantly increased the interest in Svenska’s acreage as well as for Guinea-Bissau in general.

EXTENDED LICENSING PERIODSvenska applied for, and received a three year extension from November 2017 to November 2020. This gives us the ability to wait and drill later, but we have chosen to move on. If we make a discovery we need the time to do further drilling. The licence extension came with a larger equity for Svenska, as well as improved fiscal terms for water depths greater than 200 metres. “We have already recruited a drilling manager and an HSE manager to plan and prepare for drilling. The area

has received a lot of attention from the oil industry during the last year due to the discoveries in Senegal. There is a clear increase in activity in the area and a significantly growing interest specifically in our area and in our plans in Guinea-Bissau,” Torgny continues.

DRILLABLE PROSPECTS IN GUINEA-BISSAUThe Atum and the Anchova prospects in the deep waters of the western part of the licensed area have been further evaluated and we have decided to start drilling in Atum in the fourth quarter of 2018. “As a follow-up, we may farm into or look for new blocks in the region. We are continually looking for new options to expand our footprint in this active region,” Torgny concludes.

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

OPERATIONAL UPDATE | GUINEA-BISSAU

Guinea-Bissau | Svenska Annual Review 2017 | 19

Svenska holds a 70.7 per cent equity interest in our operated Sinapa Block 2 and Esperanca Blocks 4A and 5A licences. Our licence partner Petroguin, Guinea-Bissau’s national energy company, holds 10 per cent, while FAR Ltd holds the remaining 19.3 per cent.

Preparing for the future – a year of maintenanceThe most important event this year has been the completion of a revised set of agreements between the Joint Venture partnership and the owner and operator of the Baobab FPSO, which motivates for long-term investments and contributes to successful co-operation. These agreements pave the way for the Baobab Life Extension Project which aims to keep the FPSO on station without dry docking until the licence expires in 2038.

A conclusion was reached towards the end of 2015 that a life of field agreement with

Modec International Inc. providing a leased FPSO for Baobab until licence expiry was the commercially most favourable option for the Joint Venture.

LIFE OF FIELD AMBITION“A lot of work went into establishing a set of agreements, which would meet this objective resulting in a bare boat charter and operating & maintenance agreements being signed in February this year,” says Jan Hagen, Executive Vice President responsible for development and production. The new contracts comprise an incentive scheme and are based on KPIs covering

HSE, asset integrity and production.

MAINTENANCE IN FOCUSWith the Phase 4 drilling campaign being postponed, the operational focus has been on maintenance and riser replacement. A comprehensive refurbishment programme for the gas compressors has also been carried out. All planned work during the summer shutdown, including the changing out of the flare tip, was completed in record time, and a subsea choke replacement was carried out in August. The two risers due for replacement, one production and one water injection, were installed satisfactorily by the Technip vessel Deep Explorer in November. Finally, the steel renewal programme is progressing pleasingly

with estimated completion by mid-March 2018. All these activities have been completed within the allocated budget and timeframe, which is a tribute to the cooperation between all licence stakeholders.

RETURN TO DRILLING ACTIVITIESThe Phase 4 drilling campaign was aborted in the spring of 2016 with three production wells and one water injector suspended at the 20” shoe. However, preparations for restarting the drilling activities have been progressing throughout this year including locking in contracts with service companies and identifying a suitable drilling unit. Towards the end of the year the partnership sanctioned

20 | Svenska Annual Review 2017 | Ivory Coast

OPERATIONAL UPDATE | IVORY COAST

Ivory Coast | Svenska Annual Review 2017 | 21

the re-mobilization of a drilling complete the wells and issued a letter of award to the rig owner. In addition to the completion of the four suspended wells, the campaign will also comprise a firm additional water injector and options to drill another production well as well as potentially an exploration well. Mobilization is currently expected to take place on 1 March 2018.

PRODUCTIONProduction in 2017 has generally been good with a relatively high equipment reliability throughout the year. The compressors caused four or five plant trips, but the cause of these was quickly rectified and production resumed. The

average daily oil production has been approximately 24,288 boe/day, disregarding the planned shutdown period. “As the year draws to an end I think we are well prepared to embark on the quest of increasing the daily production as well as in a good position to tackle the environmental and technical challenges that lie ahead,” says Jan.

SVENSKA JOINED THE LICENCE IN 1997The Ivory Coast is the world’s largest exporter of cocoa beans and is also a big exporter of coffee. Petroleum has become another important export product since oil was discovered on the continental shelf of the Ivory Coast in the 1970s.

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

Licence/BlockCI-40

OperatorCNR International

Svenska’s interest27.39%

Obtained by Svenska1998

Production start2005

Remaining reserves128.6 mmbo

Total 2C contingent resources160.0 mmbo

Production 20179.81 mmbo

Company numbers

STATISTICS | BAOBAB FIELD

In 1997, Svenska farmed-in to the Espoir Field, Block CI-26, located north of the Baobab field, entering a partnership with Addax Petroleum, Ranger Oil, Tullow and the national oil company Petroci. When oil prices plummeted in 1998, Svenska left the licence for financial reasons, but stayed with the partnership in the newly formed CI-40 exploration licence, covering the Baobab prospect. Tullow and Addax decided to leave

the partnership. Ranger was acquired by, and incorporated with, Canadian National Resources (CNR).

DRILLING FOR OILInterpretation of the seismic data was completed by the operator, CNR, Svenska and Petroci. The first well was drilled in 2001 and the theory of oil migration paths into the reservoir was confirmed. An appraisal well was drilled in 2002 and only three years

later, production from the Baobab field commenced. At the time, this was the fastest oil development project ever performed in West Africa. The reservoir is located in water depths of 1500 metres. Production from the field commenced in August 2005 from ten horizontal wells aided by three water injectors. The produced fluids were co-mingled and transported via flow lines to an FPSO moored in 900 metres water depth.

A recently acquired 3D seismic survey indicates larger oil volumes than earlier expected.” Jan Hagen, EVP Production & Development

“

22 | Svenska Annual Review 2017 | Ivory Coast

OPERATIONAL UPDATE | IVORY COAST

A NEW JOB FOR TINAThe vessel used for conversion to an FPSO was a very large crude carrier (VLCC) of 350,000 deadweight tonnage (DWT) called “Tina”, built at Kockums shipyard in Sweden in 1978. After the Exxon Valdez accident in Alaska in 1989, single-hull tankers like “Tina” were no longer allowed to enter US ports or terminals. In 2004, she was converted into an FPSO by Modec International Inc. and contracted by the Baobab partnership. She left the Keppel shipyard in Singapore on 26 December 2004 – on the same day as the tsunami disaster struck the coasts of the Indian Ocean. The FPSO arrived in the field offshore the Ivory Coast in January 2005. Oil production started in August 2005. The FPSO is equipped to process hydrocarbons, separating crude oil, water and gas. The gas is partly used for power generation on board the vessel, partly piped via the Espoir export gas system to shore at the Adjue gas terminal and transported on to the Azito power generation plant near Abidjan, where it is used as feed stock for generating electricity. Crude oil is stored in cargo tanks on board. The storage capacity is a generous 2.4 mmbbls. The FPSO is owned and operated by Modec International Inc., a Japanese international supplier and operator of FPSOs.

HEAVY OIL WITH A COOL ADVANTAGECrude oil from the Baobab reservoir is comparatively heavy, but still attractive on the world market. It stays in liquid form down to -40°C, which is a big handling advantage for refineries in the northern hemisphere during winter conditions. Baobab crude oil is marketed and sold worldwide by Shell, the largest trading company of West African crude oil, trading about 800,000 bbl/day. Traded oil is transferred from the FPSO to shuttle tankers for further shipment to refineries. Shuttle tankers are normally designed to fit either the

Panama Canal or the Suez Canal. A Suez tanker has a capacity of 1 million barrels. “The FPSO’s large storage capacity is an advantage in price negotiations, since we almost always can guarantee that the cargo is available when the buyer’s tanker is approaching,” Jan explains.

NEW COMPLETION SOLUTION“When we started production, we used a borehole completion technology called ’Expandable Sand Screens’ (ESS), to prolong well life by controlling the intrusion of fine-grained sand,” says Jan. “400 wells had previously been successfully drilled using this technique, but to us the fine Baobab sand still presented a problem. We lost five out of ten wells during the first year, when the expandable sand screens collapsed.” The solution was another completion technology, the tried and trusted “Open Hole Gravel Packing” (OHGP). It was introduced in Baobab in 2009, when four new wells were drilled as replacements for the failed Phase 1 wells. Three of these four wells are still in service. Of the original 10 ESS wells, only one remains. “Losing the wells meant lower production, and for a while we were worried that there would not be a big enough oil stream to run the process equipment on the FPSO, which can handle a minimum stream of 5,000 bbl/day. But production never fell below 8,000 bbl/day, so we were able to handle the situation. The maximum limit for oil plus water, 70,000 bbl/day, will come in handy when the new production wells are in place.”

FURTHER DEVELOPMENT AND EXPLORATION OF ADJACENT PROSPECTBaobab will undergo further development, and new draining philosophies and technologies will be applied to exploit this resource to its maximum extent. Even with the Phase 4 wells in production, we are only targeting around 25 per cent of the oil in place. Future development phases are being considered, and a

conceptual scenario for Phase 5 is taking shape. Assuming this will be a six well campaign we believe that the Estimated Ultimate Recoverable Reserves (EUR) will be increased by another 50+ mmboe to reach a recovery factor of more than 30 percent. We further believe that there is still room for increase and the partnership is working towards a target in excess of 40 per cent by the time the licence reaches relinquishment. The Baobab production licence expires in 2028, but can be extended. “If production is still profitable by that time, we can opt for a 10-year extension,” Jan Hagen finishes.

Ivory Coast | Svenska Annual Review 2017 | 23

1. 27.39% interest in Block CI-40

LICENCES | IVORY COAST

1

Jan HagenExecutive Vice President

24 | Svenska Annual Review 2017 | Supporting the Organization

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

BUSINESS SUPPORTIn addition to the traditional finance function of Svenska’s shared centre for accounting, treasury and financial reporting located in Stockholm, the Business Support function also includes specialist sub-functions for Legal, Insurance and IT. The day-to-day finance operation is the heart of the support organization, providing timely operative and statutory reporting to the relevant stakeholders. Equally important, prudent financial management and planning are key objectives for the finance function, given the capital-intensive nature of the business. “In 2017 we have put lot of effort into long-term debt financing. Our existing reserve base lending facility was put in place in 2014, and would typically be refinanced during the third year,” says Lars Schennings, CFO. “We have spent much time reviewing different debt financing alternatives, both loans and bonds. Our objective is to have new financing is in place at the beginning of 2018.” Svenska insures most of its business through the subsidiary Petroswede Insurance DAC (PIDAC), an insurance captive domiciled in Dublin, Ireland. In recent years a key focus area for the board of PIDAC has been to further develop the compliance, reporting and governance framework in line with the EU Solvency II regulations that came into effect in 2016. In the spring of 2017 PIDAC reported for the first time to the financial regulator in Ireland, fully compliant under Solvency II. “IT security remains a key focus for us. Cyber threats are increasing exponentially, therefore we have to improve and strengthen our IT systems constantly,” concludes Lars.

Svenska is organized with staff in three different locations: Stockholm, London and Bissau. Business Support has the key role of providing the infrastructure needed for Svenska to operate as one company, regardless of the location of its staff. This includes an integrated, safe and reliable IT infrastructure and a user-friendly working environment for all Svenska staff.

BUSINESS DEVELOPMENTThe business development function has two objectives: firstly, to ensure that the Company’s growth objectives are met through acquisition and exploration of new venture activities and secondly, to manage the existing portfolio through asset divestments and farm-downs of exploration licences. In order to support these efforts, the department maintains an extensive network of investment banks, brokers and other exploration and production companies. “Much of our work in 2017 has been about implementing Svenska’s new ventures strategy in a number of focus countries,” says Duncan Rushworth, VP Business Development. “In Oman, the Company submitted a bid in the 2016/17 licensing round and submitted a number of proposals to enter existing licences. We have qualified for the 2017/18 licensing round and are investigating other opportunities in the country.” “The Company continues to review selected opportunities in Gabon, the Republic of the Congo, Cameroon and in the MSGBC Basin. Exploration licensing rounds are expected to take place in all of these areas during 2018 in which Svenska will be an active participant,” Duncan summarizes.

Lars SchenningsCFO

Duncan RushworthVP Business Development


Supporting the Organization

BUSINESS SUPPORT

TREASURY LEGAL INSURANCE ITFINANCE

ACCOUNTING & CLOSING

CONTROLLING

GROUP CONSOLI-DATION & TAX

26 | Svenska Annual Review 2017 | CSR

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

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

SUPPORTING SOS CHILDREN’S VILLAGES AND TOSTANIn an effort to give back to the communities near our operations Svenska successfully cooperates with SOS Children’s Villages on an ongoing basis. Children’s Villages is an international non-governmental social development organization that is active in the field of children’s rights. The organization is focused on family-based, long-term care for children who are unable to grow up with their biological families, in order to provide a much needed sense of safety and stability. During the year Svenska has provided support to Tostan. Tostan is an Africa-based charity focused on human rights, sustainable development and positive social transformation in West Africa.

Svenska strives to be a part of the development of our host countries, not only through the discovery and development of oil assets, but also by delivering the social commitments to our host communities.

INVESTMENT FOR THE FUTUREApart from such direct support to organizations such as SOS Children’s Villages and Tostan, Svenska continues to work closely with our licence co-venturers to support different social projects relating to education, healthcare and sustainable growth. Currently we are about to commence the building of a school for disabled children in the outskirts of Bissau. Over the past years we have had the opportunity to inaugurate schools that have been refurbished as well as a new recreation/cafeteria hall for the paediatric ward and the refurbished Emergency Care Unit and Operating facilities at the Simão Mendes hospital in Bissau.

Supporting Communities for Sustainable Growth

Térèse Steén, Business Processes Optimization Manager

CORPORATE SOCIAL RESPONSIBILITY

CSR | Svenska Annual Review 2017 | 27

Protecting People, Environment and Assets

28 | Svenska Annual Review 2017 | HSEQ

HEALTH, SAFETY, ENVIRONMENT AND QUALITY

Svenska’s Priorities and ObjectivesAs set out in our HSEQ Policy:• Provide a safe and healthy working

environment for those involved in Svenska’s activities;

• Operate in compliance with relevant regulations and requirements, striving to exceed these;

• Encourage open and honest communication;

• Continually improve our HSEQ performance and management system through reporting, monitoring and audits;

• Identify and manage risks in all our activities to eliminate or minimize harm to people, environment and assets;

• Set realistic yet challenging HSEQ goals;• Minimize emissions and discharges from

our operations;• Ensure that our operating partners place

the appropriate emphasis on activities that could have a negative impact on the health and safety of personnel and the environment.

In order for Svenska to achieve its aims we rely on the competence of our staff as well as our strong

corporate values and the enthusiasm and professionalism of our team. While driving efficiencies and seeking a greater return on investment, we also strive to maintain a healthy corporate culture by regularly reviewing our business practices and the effectiveness of our policies. Our ambition is to continually improve our ways of operating in manners that eliminates any harmful practices in business as well as to people and the environment.

UPHOLDING A SOUND BUSINESS CULTUREEnsuring a sound organizational culture, processes and management systems are the foundation of our long-term business strategy. Svenska actively engages in dialogue with industry networks, with the guiding principle of applying recognized HSEQ practises within our operations.The overall aim is to create value through strong financial performance based on profitability and competitiveness while safeguarding people’s health and safety, minimizing risks to the environment, and contributing to the continual growth of local communities.

Protecting People, Environment and Assets

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

HSEQ | Svenska Annual Review 2017 | 29

30 | Svenska Annual Review 2017 | HSEQ

ANTI-BRIBERY, CORRUPTION AND CODE OF CONDUCTSvenska is committed to complying with all applicable anti-bribery laws, including but not limited to the relevant Swedish and UK laws as well as local laws in the countries where we have interests in licences or otherwise do business. In addition to Svenska’s legal obligations, Svenska is also subject to contractual requirements introduced by our partners and other counterparties, undertaking that we comply with such law. Svenska requires the same from anyone with whom we do business. The latter is implemented by requiring all Svenska’s subcontractors to sign a template service agreement that includes an undertaking to follow Svenska’s Anti-Bribery Gifts and Entertainment Policy and Procedure and our Code of Conduct.

ASSESSING, MONITORING AND CONTROLLING RISKSvenska assesses, monitors and controls its risks and behaviours by creating mandates and commitments throughout the organization. These mandates include maintaining the highest standards of safety and working conditions while committing to minimize the environmental impact of our operations and a zero tolerance for bribery and corruption.

HEALTH, SAFETY, ENVIRONMENT AND QUALITY (HSEQ)Svenska has a strong track record on HSEQ matters and our responsibility for people and the environments where we operate is a top priority. Implementation of our HSEQ processes is the responsibility of each line manager and employee. In our work we comply with all the relevant statutory and regulatory requirements and aim to exceed them. As a responsible co-venturer in licences, Svenska uses its competence to assist the operator to improve project execution and secure operations. Svenska actively engages in dialogue with industry networks, with the guiding principle of applying recognized HSEQ practices within our operations.

The build-up of health and safety oversight and practices are core to Svenska’s strategy of increasing our operating capability. HSEQ considerations remain a top priority in our own organization and in the licences where we are a co-venturer.

RESPECT FOR HUMAN RIGHTS Svenska appreciates that its assets are situated in countries which at times have complex internal political situations. Svenska ensures that we take a firm stance against abuses of human rights. All of our staff receive regular training in the content of the Code of Conduct and Anti-Bribery Gifts and Entertainment Policy and Procedure. Before an investment decision is taken to invest in assets in a new country, Svenska undertakes an above ground risk assessment by following the Svenska New Country Entry Checklist. Full Sustainability Report is avialible on www.svenska.com

HEALTH, SAFETY, ENVIRONMENT AND QUALITY

HSEQ | Svenska Annual Review 2017 | 31


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

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

1974OPAB discovers oil on the Swedish island of Gotland.

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

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

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

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

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

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

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

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

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

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

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

32 | Svenska Annual Review 2017 | Our History

OPAB was an initiative of the Swedish government and Swedish private enterprises to harness some of the vast potential offered by a growing energy market. The state’s 50 per cent ownership stake confirmed that OPAB’s mission to find and produce oil and gas in Sweden was in the national interest. In 1973, as the first energy crisis crippled economic growth, the quest for hydrocarbons beyond Sweden

became the mission of Petroswede, another private-public partnership. In 1979, the state-owned company Svenska Petroleum acquired parts of Petroswede and launched a new company named Svenska Petroleum Exploration. Svenska would later enter into an agreement with OPAB to operate all of its fields and take over staff and premises.

1999First oil from the Janice field.

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

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

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

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

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

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

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

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

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

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

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

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

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

2017A revised set of new agreements is completed between the Joint Venture partnership and the owner and operator of the Baobab FPSO which provides motivation for long-term investments and contributes to successful co-operation.

Our History | Svenska Annual Review 2017 | 33

Business Review | Svenska Annual Review 2017 | 37

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

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

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

EVENTS DURING THE FINANCIAL YEAR During the year, Svenska’s share of oil production from the Baobab field in the Ivory Coast decreased compared to 2016. Svenska’s entitlement share of average production in the field was 6,630 (8,172) bbl/day. Compared to last year, the production was 18 per cent lower due to natural field decline in combination with two wells less in production. The decline is typically higher in the early phase after bringing new wells into production, defined as flash production, explaining the slightly higher decline rate than what would be expected long term. Following the production riser failure in December 2015 and subsequent inspection of the full riser infrastructure, it was decided by the Joint Venture to replace one production riser and one water injection riser. The equipment was manufactured in Newcastle, UK and

shipped to Abidjan where the replacement took place during the later part of the year and was successfully completed, incident free and without any downtime. The new operating contract regarding the FPSO was signed by CNR and Modec early in the year, setting out the principles for the long-term cooperation with focus on operational performance and securing that the vessel is maintained and fit for purpose throughout the licence period. Thanks to the new seismic 3D data over the CI-40 licence, acquired in 2015, the Joint Venture has now access to an improved image of the Baobab reservoir but also of other prospective resources within the licence perimeter. After extensive technical evaluations the discovery Kossipo in the southeastern corner of the licence has been significantly upsized and has become a candidate for tie-back to the Baobab field. The Joint Venture is planning for an additional exploration well to further appraise the volumes in Kossipo. In Nigeria the licence group in OML 145 has continued to commit only minimum licence costs as the outlook for developing the Uge asset is still uncertain. During the last year the activity in the Nigerian oil and gas market has picked up on the back of a recovering oil price. More asset deals and corporate transactions have been seen and new major oil discoveries have been announced. Still the lack of progress on the new oil and gas regulatory framework, under the label PIB, continues to frustrate holders of oil licences, like OML 145. The lack of clarity on the future fiscal impact under a new PIB makes progress difficult. In the meantime the licence group is engaging in internal workshops to optimize field development solutions, cost and scheduling. In Guinea-Bissau, where Svenska is operating Blocks 2, 4A and 5A, the extended and revised licence terms were approved and officially gazetted during the year. Most importantly the licence period has been extended by three years to 20 November 2020. The fiscal terms are also adjusted to reflect the new price environment and the shifted focus to the deeper waters of the western portions of the licences. Svenska’s working interest share in the respective licence has been raised from 55.0% to 70.71%, while the paying interest up until start of field development remains unchanged. Svenska has started planning for the drilling of an exploration well to target the worked-up deep water shelf-break prospects in the blocks.

Business ReviewSvenska Petroleum Exploration AB (Svenska) in 2017.

The drilling is expected to start towards the end of 2018 or the beginning of 2019. Thanks to the licence extension, exploration drilling and evaluation can be managed within the licence term. During the year Svenska’s attempts to obtain additional acreage was unsuccessful. Despite this setback, Svenska continues to work proactively in selected countries in Sub-Saharan West Africa and MENA. Svenska’s technical team has a proven track-record in working up prospects and finding oil and we strongly believe that Svenska is an attractive partner to host-countries and independent oil companies whereby we will continue pursuing business opportunities as they become available. The average annual price for Brent crude oil increased from USD 53.8 in 2016 to USD 54.0, per barrel. However the price per barrel rose from USD 56.7 in the beginning of 2017 to USD 66.6 at year-end, following a long and consistent drive upwards during the entire length of the second half of 2017. As of 29 January 2018, the price was USD 70.6 per barrel. In 2017, the US dollar weakened against several currencies, including the Swedish krona, with an average annual rate of USD/SEK 8.55. This exchange rate experienced a 10 per cent decrease from the beginning-to-end of 2017.

OPERATING INCOME AND COSTSConsolidated total net sales during the year were USD 141 (171) million. The underlying oil sales were in line with last year where lower production was offset by a higher oil price. The reduction in net sales is fully attributable to lower hedge premium income. Svenska continue to hedge 100 per cent of its projected oil production but in 2017, with small capital commitments and a stabilized price, the hedge strategy was to cover the risk of a significant price drop. Oil hedge premium income was USD 1.8 (32) million. Production was 2.4 million barrels of crude oil in 2017, compared with 3.0 million barrels the previous year. The average production was 6,721 (8,172) bbl/day. As already commented the lower production is explained by natural decline in the field. It should be noted that the Baobab field is producing both oil and associated gas. The average production was 7,443 (8,544) boe/day. Operation and exploration costs totalled USD 33 (37) million in 2017. The total figure is broken down into the following cost items: operating expenses USD 24 (28) million, royalty costs USD 3 (1) million, exploration and project expenses USD 1 (2) million and oil tax operational (the host government’s tax share in Production Sharing Contracts) of USD 5 (6) million. Consolidated depreciation and impairment of oil and gas assets for 2017 amounted to USD 37 (47) million. Employee payroll costs for 2017 were USD 9 (8) million. The number of employees was 27 (27) as of December 2017. Net financial items for 2017 were USD -3 (-10) million. The reduction in net financial items versus last year is mainly explained by a reversal of accrued expenses related to expired licences in Angola, following a final settlement in the country. Revaluation of financial receivables and payables was USD -1 (4) million and interest expense was USD -9 (-15) million. Interest income

USD 7 (0) million mainly refers to the reversal of the Angolan reserve, mentioned above. Other financial income was USD 0 (1) million. Tax cost for the Group was USD -11 (-30) million, corresponding to an effective tax rate of 26.1 (148.0) per cent. Last year included a tax adjustment of USD -15 million referring to tax prior years.

EARNINGS AND CASH FLOWThe Group’s operating profit for the 2017 financial year was USD 46 (30) million. Cash flow from operations before changes in working capital was USD 58 (86) million.

INVESTMENTS AND FINANCIAL POSITIONIntangible and tangible fixed assets at year-end were USD 630 (648) million. Investments in intangible assets were USD 3 (2) million. Investments in tangible assets were USD 22 (32) million. Cash and cash equivalents were USD 28 (30) million as of 31 December 2017. At year-end, Svenska had drawn USD 43 (84) million on the Reserves-Based Lending Facility and had an outstanding debt to affiliated companies of USD 26 (28) million.

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

CORPORATE SOCIAL RESPONSIBILITYSvenska also works actively within the CSR area and engages in several projects. Svenska continued its cooperation with SOS Children’s Villages in 2017. Svenska’s support covers the SOS Children’s Village in Abobo - Gare in the Ivory Coast, the SOS Hermann Gmeiner Primary & Secondary School in Guinea-Bissau and the SOS Children’s Village in Owu-Ijebu, Nigeria. During the year Svenska has provided support to

38 | Svenska Annual Review 2017 | Business Review

Tostan, an Africa-based charity focused on human rights, sustainable development and positive social transformation in West Africa. Svenska’s Sustainability Report 2017 sets out our approach towards sustainability and provides an overview of our intensions to contribute to a sustainable society. The full report is available on Svenska’s webpage (www.svenska.com).

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

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

Political risksSvenska operates in a global market. Changes in laws and regulations concerning for example foreign ownership, state control, taxes, royalties, environmental rules and/or customs duties may have a negative effect on the financial result. Risk factors like civil unrest, war, terror, border disputes and uprisings can also affect Svenska’s operations. By the end of 2017, there was no political risk insurance taken for any country where the Group is active. The need for such insurances is continuously evaluated. When needed, and if available, such insurance will be taken.

Environmental risksExploration and production of oil and gas can cause environmental damage. National laws and production agreements with partners can make Svenska financially responsible for such damages. All activities are conducted according to national laws and regulations, and in line with Svenska’s environmental policy. Svenska’s insurance program has cover against financial exposure in the event of pollution.

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

FUTURE EXPECTATIONS How the oil price will develop in the coming year is always very uncertain. The OPEC production quota implemented last year, and recently extended throughout 2018, impacts positively on price. Moreover the global oil demand remains strong. Continuing oil inventories draw-downs to levels below 5-year average will support the price and together lay a foundation for a price at the current level slowly increasing. Supply disruptions can trigger price spikes but the US shale production will put a ceiling on the price potential as they have effectively come to replace Saudi Arabia as the swing producer in the market. Svenska plans for continued redevelopment in the Baobab in 2018 with accompanying capital expenditure. Thanks to solid operating cash flows the capital commitments will be managed with only a moderate increase in indebtedness. The balance sheet will remain strong with excellent debt to capital ratios compared to peer companies.

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

Business Review | Svenska Annual Review 2017 | 39

40 | Svenska Annual Review 2017 | Financial Report

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME(USD THOUSANDS)

Note 31 Dec. 2017 31 Dec. 2016

Revenue from oil and gas 131,250 161,302

Other Revenue 10,104 9,904

Total revenue 1 141,354 171,206

Operational and exploration costs 2 -32,657 -37,335

Effect from oil price derivatives -7,776 -41,866

Other external costs -8,765 -7,275

Personnel expenses -9,278 -7,899

Depreciation & write-down 1, 3, 5 -37,240 -46,897

Other operating expenses -108 -85

Operating profit 1 45,530 29,849

Financial income 7,464 5,185

Financial costs -10,956 -14,915

Net financial items -3,492 -9,730

Profit before tax 42,038 20,119

Tax on profit for the year 4 -10,975 -29,767

NET PROFIT FOR THE YEAR 31,063 -9,648

Other comprehensive income

Exchange differences for the year 4,916 2,895

Remeasurements of defined benefit obligation - -258

Total other comprehensive income 4,916 2,637

Total comprehensive income 35,979 -7,011

Financial Report | Svenska Annual Review 2017 | 41

CONSOLIDATED STATEMENT OF FINANCIAL POSITION(USD THOUSANDS)

Note 31 Dec. 2017 31 Dec. 2016

ASSETS

Non-current assets

Intangible assets 1, 5 245,560 245,212

Tangible assets 1, 5 384,424 402,813

Other non-current receivables 755 612

Deferred tax assets 5 16,787 28,339

Total non-current assets 647,526 676,976

Current assets

Materials for drilling and operations 28,888 28,346

Trade receivables - 11,436

Prepayments and accrued income 24,694 28,894

Other receivables 1,903 3,167

Other receivables, Group 6,108 5,527

Prepaid tax 138 125

Short-term investments - 1,288

Cash and bank balances 28,403 29,637

Total current assets 90,134 108,420

TOTAL ASSETS 737,660 785,396


Note 31 Dec. 2017 31 Dec. 2016

EQUITY

Share capital 7,350 7,350

Reserves 38,586 33,670

Retained earnings including net profit/loss for the year 506,944 475,881

Total equity 552,880 516,901

LIABILITIES

Deferred tax liabilities 5 49,037 60,442

Other provisions 23,288 30,076

Long-term interest bearing liability 17,000 84,000

Shareholder related loan 25,661 28,141

Total non-current liabilities 114,986 202,659

Trade payables 1,078 713

Short-term interest bearing liability 26,000 -

Other liabilities 3,925 2,716

Accruals and deferred income 38,638 51,867

Current tax liabilities 153 10,540

Total current liabilities 69,794 65,836

Total liabilities 1 184,780 268,495

TOTAL EQUITY AND LIABILITIES 737,660 785,396

Information regarding group contingencies and pledged assets, see Note 6

EQUITY AND LIABILITIES(USD THOUSANDS)


Share capital

Revaluation pension

obligationTranslation

reserve1Retained earnings

including net profit/loss Total equity

Equity, opening balance 1 Jan, 2016 7,350 1,010 30,023 485,529 523,912

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

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

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

Net profit for the year - - - 31,063 31,063

Other comprehensive income - - 4,916 - 4,916

Equity, closing balance 31 Dec, 2017 7,350 752 37,834 506,944 552,880

1. The translation reserve comprises all exchange differences arising on the translation of financial statements of foreign operations which have prepared their own financial statements in a currency other than the Group’s presentation currency SEK, including this Annual Review in USD. Closing reserve includes 77 MUSD attributable to the Group’s presentation in SEK, -39 MUSD is attributable to currency effects in fixed assets and provisions (monetary non-monetary method)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(USD THOUSANDS)


CONSOLIDATED STATEMENT OF CASH FLOWS (USD THOUSANDS)

31 Dec. 2017 31 Dec. 2016

Indirect method

Operating activities

Profit before taxes 42,038 20,119

Reversal for non cash items 26,071 70,866

Sub-total, cash flow from operating activities 68,109 90,985

Taxes paid -10,403 -4,887

Total 57,706 86,098

Decrease(+)/increase(-) in inventories -507 5,088

Decrease(+)/increase(-) in current receivables 17,050 -702

Decrease(-)/increase(+) in current liabilities -4,364 -42,128

Cash flow from operating activities 69,885 48,356

Cash flow from investing activities

Acquisition of intangible assets 1, 5 -2,995 -2,381

Acquisition of tangible assets 1, 5 -21,892 -32,350

Increase in financial assets - -1,550

Decrease in financial assets - 39,017

Cash flow from capital investing activities -24,887 2,736

Repayment of borrowings -41,000 -53 337

Shareholder related loan repayment -5,232 -8,128

Cash flow from financing activities -46,232 -61,465

Cash flow of the year -1,234 -10,373

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

Cash & cash equivalents at the end of year 28,403 29,637

Notes to non-cash flow items:

Current oil tax -4,733 -6,582

Reversal of depreciation and write-downs (includes a write down of USD 2,995 million referring to Esperanca block 4A & 5A)

37,240 46,897

Provisions Abandonment reserves and other reserves -1,192 2,151

Unrealized value change put option 4,472 33,712

Currency effects 6,409 2,706

Other - -418

Reversal of licence reserve Nigeria - -7,600

Reversal of accrued expenses related to expired licences in Angola -16,125 -

Total non-cash flow items: 26,071 70,866


Amounts are in USD thousands unless otherwise specified.

STATEMENT OF COMPLIANCEThe year-end report for the financial year that ended 31st December 2017 has been prepared in accordance with IAS 34 and the Swedish Annual Accounts Act. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IAS B) and interpretations from International Reporting Interpretations Committee (IFRIC) that have been endorsed by the European Commission for application within EU. In addition the Swedish Financial Reporting Board standard RFR 1 Supplementary Accounting Regulations for Groups has been adopted.

Essential Accounting Policies

The accounting policies applied for the year are the same as those applied for the 2016 financial year and as described in the 2017 Annual Report. New or revised standards, interpretations and changes adopted by the European Union (EU) that are to be applied from 1st January 2017 have had no impact on the Group. Consequently, the application of the relevant IFRS has not been disclosed as a change in accounting policy. The year-end report does not contain all the information and disclosures provided in the annual report; the year-end report should therefore be read together with the annual report for 2017.

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

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

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


The Group´s operations are divided into operating segments based on the components that Svenska´s executive management reviews regularly. Svenska has identified the executive management as its operating decision maker. The Svenska Group´s operations are organized in such a way as to allow Group management to monitor and review income from sale of oil and gas, operating profit (EBIT), investments, assets and liabilities of the different functions. As the executive management reviews financial performance and decides on resource allocation based on functions areas, which represent the operating segments. Svenska Group´s internal reporting is structured in such way as to allow the executive management to review the performance and result of the function areas. It is on the basis of this reporting that the Group´s segments have been identified. In order to give complete understanding of the economic environment within the Group operations, the geographical areas are also reported. Intangible assets, oil and gas assets have been allocated to different segment. There are no sales between segments.

NOTE 1Segment Reporting

Total revenues1 2017 2016

Function:

Production2 137,862 161,319

Exploration3 2,771 7,616

Business Development 13 4

Administration 708 2,267

Total 141,354 171,206

Geographic information:

The Ivory Coast2 131,252 161,320

Guinea-Bissau 2,771 16

Nigeria3 - 7,600

Ireland 2,425 2,139

United Kingdom 5,991 5,218

Sweden 3,568 5,123

Angola 6,609 -

Group internal transactions -11,262 -10,210

Total 141,354 171,206

1. Revenues relates only to external transactions.2. Revenues from gas and crude oil refer to external customers. Revenue is attributable to the country of sale.3. 2016, Revenue includes reversal of licence reserves (Nigeria).

(USD THOUSANDS)


Operating profit/loss4 2017 2016

Function:

Production 57,681 32,684

Exploration5 -647 6,842

Business Development -6,131 -7,824

Administration -5,373 -1,853

Total 45,530 29,849


The Ivory Coast 50,955 32,455

Guinea-Bissau 47 -577

Nigeria2 -553 7,377

Latvia -163 -151

Ireland 788 -725

United Kingdom 247 99

Sweden -12,517 -8,629

Angola 6,726 -

Total 45,530 29,849

4. Internal costs are divided between the functions.5. 2016 includes a reversal of licence reserves, OML 145, Nigeria.

NOTE 1 Cont.

Depreciation, write-downs and abandoment costs, net 2017 2016

Function:

Production -34,451 -46,740

Exploration -2,595 -

Business Development -20 -11

Administration -174 -146

Total -37,240 -46,897


The Ivory Coast -34,451 -46,740

Guinea-Bissau -2,595 -

United Kingdom -20 -21

Sweden -174 -136

Total -37,240 -46,897

Tangible oil and gas assets 2017 2016

Production 382,911 401,178

Exploration - 9

Other tangibles:

Administration 1,513 1,626

Total 384,424 402,813



Nigeria - 9

United Kingdom 38 43

Sweden 1,475 1,583

Total 384,424 402,813


NOTE 1 Cont.

Intangible oil and gas assets 2017 2016

Exploration 245,470 245,070

Other intangibles:


Administration 57 86

Total 245,560 245,212



Guinea-Bissau 38,783 38,797

Nigeria 198,384 197,970

Sweden 90 142

Total 245,560 245,212

Liabilities & provisions 2017 2016

Production 150,525 186,029



Administration 31,077 52,308

Total 184,780 268,495

Geographic information


Guinea-Bissau 542 2,502

Nigeria 2,625 28,270

Latvia 2 3

Ireland 1,565 2,072

United Kingdom -215 -194

Sweden 29,736 31,822

Angola 8,174 25,427

Total 184,780 268,495

Income from external customers1 2017 2016

Customer6 131,250 161,302

6. Income from external customers, consisting of several large international oil companies and one customer in the Ivory Coast.The oil is sold on the international oil market using a broker.


NOTE 1 Cont.

Investments in the year 2017 2016

Production 21,864 32,114


Business Development - 67

Administration 28 236

Total 24,887 34,732

Geographic information


Guinea-Bissau 2,581 2,247

Nigeria 414 68

United Kingdom - 10

Sweden 28 293

Total 24,887 34,732

Depreciation 31 Dec. 2017 31 Dec. 2016

Whereof:

Intangible write-down and depreciation -2,648 -45

Tangible depreciation -34,592 -46,852

Total depreciation and write-down -37,240 -46,897

NOTE 3Depreciation and Write-Down

Operational and exploration costs 31 Dec. 2017 31 Dec. 2016

Whereof:

Royalty -2,633 -1,395

Operating expenses -24,223 -28,328

Oil tax, operational -5,278 -5,787

Exploration & project expenses -523 -1,825

Total operational and exploration costs -32,657 -37,335

NOTE 2Operational and Exploration Costs(USD THOUSANDS)

(USD THOUSANDS)


31 Dec. 2017 31 Dec. 2016

Specification of tax expense

Tax expense (-)/income for the period (+) -5,043 -6,615

Adjustment for prior years -102 -15,063

Current tax expense/income -5,145 -21,678

Deferred taxes relating to temporary differences -5,830 -8,089

Deferred tax income/expense -5,830 -8,089

Total tax expense (-)/income for the Group (+) -10,975 -29,767

Reconciliation of effective tax rate

Profit before taxes 42,038 20,119

Tax at Swedish enacted tax rate 22% (22%) -9,248 -4,426

Non-deductible expenses -478 -17

Non-taxable income 9,751 482

Tax effect, adjustment of tax reserve Angola 1,188 -

Tax effect, petroleum tax The Ivory Coast -1,432 -7 307

Effect of different tax rates for foreign subsidiaries -2 -180

Tax effect sale of subsidiaries 1 432

Exchange effects1 -11,427 -3 723

Other items 774 35

Tax attributable to prior years2 -102 -15,063

Tax expense (-)/income (+) -10,975 -29,767

Effective tax rate 26,1% 148.0%

1. Refers to exchange rate effects in companies with different reporting currencies than the legal currency.2. Previous year reserve for “tax attributable to previous years” has been completely regulated in 2017.

NOTE 4 Taxes (USD THOUSANDS)



NOTE 5 Intangible and Tangible Assets(USD THOUSANDS)

Intangible fixed asset 31 Dec 2017 31 Dec 2016

Opening balances 330,192 349,342

Disposals¹ - -21,532

Investments 2,995 2,381

Closing accumulated cost 333,187 330,191

Opening impairment -84,979 -106,469

Impairment for the year² -2,595 -

This year´s depreciations, other intangibles -53 -45

Disposals - 21,535

Closing accumulated impairment -87,627 -84,979

Carrying amount at end of period 245,560 245,212

Carrying amount per field Operator Participating interest %

31 Dec 2017 31 Dec 2016

OML 145, Nigeria, previously referred as OPL 214 ExxonMobil 21.05% 198,384 197,970

Guinea-Bissau, Block 2 Svenska 70.71% 8,164 8,991

Guinea-Bissau, Block 4A and 5A Svenska 70.71% 30,620 29,807

The Ivory Coast, CI-40 and Kossipo CNR 27.39% 8,303 8,303

Other intangibles - - 89 141

Total 245,560 245,212

1. Disposals 2016 is related to the Ivory Coast and Norway. 2. Impairment for the year 2017 is related to write-down in Guinea-Bissau.


Tangible fixed assets Oil and gas assets Other6 Total

Opening acquisition balance, 1 Jan 2016 689,817 3,783 693,600

Investments 32,114 236 32,350

Disposals3 -27,327 -426 -27,753

Reclassifications4 -30,023 - -30,023

Closing accumulated acquisition balance, 31 Dec 2016 664,581 3,593 668,174

Investments 21,864 28 21,892

Disposals5 -5,680 - -5,680

Closing accumulated acquisition balance, 31 Dec 2017 680,765 3,621 684,386

Opening depreciation, 1 Jan 2016 -222,450 -2,281 -224,731

Depreciation for the year -46,740 -112 -46,852

Disposals 5,790 432 6,222

Closing accumulated depreciation, 31 Dec 2016 -263,400 -1,961 -265,361

Depreciation for the year -34,451 -141 -34,592

Reclassification - -9 -9

Closing accumulated depreciation, 31 Dec 2017 -297,851 -2,111 -299,962

Carrying amount, 31 Dec 2016 401,181 1,632 402,813

Carrying amount, 31 Dec 2017 382,914 1,510 384,424

Oil and gas assetsCarrying amount per field Operator

Participating interest % 31 Dec 2017 31 Dec 2016

The Ivory Coast, CI-40 Baobab CNR 27.39 382,914 401,181

Total 382,914 401,181

Equipment & BuildingsCarrying amount at end of period 31 Dec 2017 31 Dec 2016

Svenska Petroleum Exploration AB 1,510 1,632

Total 1,510 1,632

Deferred tax liability, netCarrying amount at end of period 31 Dec 2017 31 Dec 2016

Deferred tax liability, net 32,250 32,103

Total 32,250 32,103

3. Disposals 2016 is mainly due to changes in the abandoment cost estimate (-21,537 TUSD) and disposals of equipment referring to Phase 3 and earlier (-5,790 TUSD). 4. Reclassification 2016 to inventory, due to discountinued drilling of Phase 4. 5. Impairment 2017 is related to write-down in Guinea-Bissau. 6. The column mainly refers to Equipment and buildings.

NOTE 5 Cont.

Pledged assets 2017 2016

Shares in subsidiaries 118,132 312,729

Contingencies 37 35

Total 118,169 312,764

Contingencies at 31 December consist of one contingent liability related to the Swedish pension plan (pension guarantee).According to the loan agreement (reserves based lending facility) shares in subsidiaries are pledged.

(USD THOUSANDS)

NOTE 6Pledged Assets and Contingent liabilities


Resources and reserves, Svenska share Oil (mmbo) Gas (bcf)

Total (mmboe) Oil (mmbo) Gas (bcf)

Total (mmboe)

Reserves (2P)

The Ivory Coast, CI-40 Baobab 32.1 15.4 34.8 34.7 15.8 37.5

Resources (2C)

Guinea-Bissau, Block 2 Sinapa East 7.6 8.5 9.1 5.9 6.6 7.1

The Ivory Coast, CI-40 Kossipo South 8.3 6.6 9.5 7.6 5.1 8.5

The Ivory Coast, CI-40 Baobab Phase 5 12.0 6.7 13.2 14.9 4.4 15.7

The Ivory Coast, CI-40 future Phases 28.9 18.8 32.2 28.9 8.7 30.4

Nigeria, OML 145 Uge 58.7 51.6 67.9 58.7 51.6 67.9

Total Resources (2 C) 115.5 92.2 131.9 116.0 76.4 129.6

Totals in boe calculated by Svenska using a conversion factor of 5,615 mscf/boe7. Source: 2P Svenska, the Ivory Coast 2C Svenska, other field´s Operators estimate8. Source: 2P PDC auditors, the Ivory Coast 2C Svenska, other field´s Operators estimate

20177 20168

NOTE 5 Cont.

Directly and indirectly owned as at 31st December 2017 Corporate reg. number Registered office

Svenska Petroleum Exploration AB (Parent company) 556093-2583 Sweden

Oljeprospektering AB 556126-4671 Sweden

Petroswede Insurance Company DAC 266707 Ireland

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

SPE Nigeria AB 556594-2512 Sweden

Svenska Nigerian Holdings Ltd 36352 Bermuda

Svenska Nigerian Investment LLC 6790 Nevis

Svenska Nigeria Exploration & Production Ltd 618208 Nigeria

Svenska Nigeria (Deepwater) Limited 639349 Nigeria

SPE Guinea-Bissau AB 556710-9458 Sweden

Svenska of Guinea-Bissau Ltd 37097 Bermuda

SPE West Africa BV NL 807556506 The Netherlands

SPE CI Holding AB 556688-3541 Sweden

SPE CI AB 556665-4884 Sweden

SPE CI Finance AB 556635-2935 Sweden

List of Group Companies

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


56 | Svenska Annual Review 2017 | Board of Directors

Board of Directors

Sheikh Mohammed H. Al-AmoudiBorn 1946

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

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

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

Jason MilazzoBorn 1962

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

Jamal Ba-AmerBorn 1961

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

Richard ÖhmanBorn 1951

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

Duncan RushworthBorn 1966

Vice President, Business Development.Employed since 2007.

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

Executive Management | Svenska Annual Review 2017 | 57

Fredrik Öhrn Born 1962

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

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

Executive Management

Jan HagenBorn 1952

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

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

Lars SchenningsBorn 1961

CFO and Vice President Business Support. Employed since 2008.

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

Torgny BerglundBorn 1953

Vice President, Exploration.Employed since 2000.

M.Sc. in Petroleum Prospecting at the Technical University of Trondheim (1977). Mobil Exploration 1978–1979, Norsk Hydro E&P 1979–2000 (Norway and internationally), altogether 39 years of experience.

58 | Svenska Annual Review 2017 | Terms and Definitions

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

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

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

Brent: Reference oil for the North Sea.

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

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

Crude oil: Includes condensate and natural gas liquids.

Cuttings: Rock fragments or chippings brought to the surface in the drilling fluid.

Terms and DefinitionsDecision Gate (DG): Decision gates are a governance structure to evaluate, authorize, and monitor projects as they pass through the project lifecycle.

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

FPSO: Floating production, storage and offloading vessel.

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

Hydrocarbon: An organic hydrogen/carbon compound.

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

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

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

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

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

Oil equivalents: See “Conversion table”.

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

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

Terms and Definitions| Svenska Annual Review 2017 | 59

actual quantity will be more than the amount estimated as “Proven and probable” and a 50% chance it will be less.

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

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

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

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

Seismic survey: Exploration method in which reflected shock waves,

recorded by seismometers, map underground formations.

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

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

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

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

MEASURESbbl: Barrelmbbls: Thousand barrelsmmbbls: Million barrelsmbo: Thousand barrels of oilmmbo: Million barrels of oilbopd: Barrels of oil per daymmbopd: Million barrels of oil per dayboe: Barrels of oil equivalentsmboe: Thousand barrels of oil equivalents

mmboe: Million barrels of oil equivalentsboepd: Barrels of oil equivalent per daymmcf: Million cubic feetbcf: Billion cubic feetmcm: Thousand cubic metresmmcm: Million cubic metresbcm: Billion cubic metresmmbngl: Million barrels of NGLsqm: Square metre

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

56 | Svenska Annual Review 2013 | Addresses

Head OfficeSVENSKA PETROLEUM EXPLORATION AB

Mail address:P.O. Box 27823SE-115 93 Stockholm, Sweden

Visiting address:Biblioteksgatan 29, Stockholm

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

SubsidiariesSVENSKA PETROLEUM EXPLORATION AB LONDON BRANCH

Mail and visiting address:25 Park LaneLondon W1K 1RA, United Kingdom

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

SVENSKA PETROLEUM EXPLORATION GUINEA-BISSAU AB

Mail and visiting address:Avenida das Nacoes Unidas 7 Bissau, Guinea-Bissau

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

SPE CI ABABIDJAN BRANCH

Mail and visiting address:Abidjan, Cocody7 Boulevard Latrille25 BP 945 Abidjan 25Côte d’Ivoire

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

ADDRESSES

annualreview · baobab (future phases)2 27.39% 28.9 18.8 32.2 nigeria uge1 21.05% 58.7 51.6 67.9...

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