TEXT-S&P release on StatoilHydro ASA

(The following statement was released by the ratings agency)

June 10 - Standard & Poor's Ratings Services said today that its 'AA-' issue ratings on bonds issued by Norway-based StatoilHydro ASA (STL.OL: Quote, Profile, Research) (AA-/Stable/A-1+) will remain unchanged despite an announcement earlier in the day that the company plans to transfer domestic upstream assets to fully owned subsidiary StatoilHydro Petroleum.

The decision to leave the ratings unchanged is based on expectations that a planned intra-group loan agreement will proceed satisfactorily.

The assets to be transferred were originally held by Statoil ASA before it merged with Norsk Hydro ASA (NHY.OL: Quote, Profile, Research) in 2007 to form StatoilHydro ASA. Shares in international upstream-related subsidiaries of StatoilHydro ASA may also be transferred at a future date.

While external financial debt will remain with StatoilHydro ASA, a fully-owned subsidiary with no external liabilities established for the sole purpose of providing large senior unsecured long-term inter-company loans will provide such loans to StatoilHydro Petroleum, which in turn will own most of the group's consolidated operating assets. These loans will mitigate the structural subordination of StatoilHydro ASA's debt, as they will rank pari passu with any other senior unsecured financial debt at the StatoilHydro Petroleum level. Accordingly, no notching is warranted, as long as the loans equal or exceed StatoilHydro ASA's external debt.