London, December 18, 2006 - Shearman & Sterling is representing Norsk Hydro ASA (Hydro) in the merger of its oil and gas business with Statoil ASA (Statoil), which will create Norway’s largest oil and gas company with a market capitalization of approximately $90 billion.  Hydro will be the world’s third-largest listed aluminum company and is expected to be the fourth-largest company listed on the Oslo Stock Exchange in terms of market capitalization when the deal closes.

Hydro’s shareholders will hold 32.7% and Statoil’s shareholders will hold 67.3% of the new company.  Hydro’s shareholders will receive 0.8622 shares in the new company for each Hydro share and will continue as shareholders of Hydro.  Statoil shareholders will maintain their holdings in the new company on a one-for-one basis.  The Kingdom of Norway will hold approximately 62.5% of the new company.  The new company will be listed on both the Oslo Stock Exchange and the New York Stock Exchange.

The proposed merger is subject to the approval of Hydro’s and Statoil’s shareholders, as well as by regulatory authorities.  The general meetings of shareholders are expected to be held during the second quarter of 2007.  Statoil will file a registration statement on Form F-4 with the SEC to register the shares that will be distributed to Hydro shareholders.  The merger, announced December 18, is expected to close in the third quarter of 2007.

The combined company is expected to have a total production of 1.9 million barrels per day in 2007 and proven oil and gas reserves of 6.3 billion barrels of oil equivalents.

The principal Shearman & Sterling attorneys advising Hydro are Of Counsel Pamela Gibson (London-Capital Markets), partners Jim Bartos (London-Capital Markets), George Karafotias (London-M&A) and Matthew Readings (London-Antitrust), consultant Chris Bright (London-Antitrust) and associate Sean Skiffington (London-M&A).