.My name is Tone Lunde Bakker. I am Chair of the Corporate Assembly and the Nomination Committee at Statoil. As you will see from the notice convening the meeting, the Board of Statoil ASA has appointed me today to open today's Annual General Meeting in accordance with Section 512 of the Norwegian Public Limited Liability Companies Act. With me on the panel, I have Chair of the Board of Directors, Øystein Løseth, Chief Executive Officer, Eldar Sætre, Vice President General Counsel, Hans Henrik Klouman, and Corporate Secretary, and Attorney at Law, Hilde Grønland Kuburic. The video you just saw was a presentation of one of Statoil's project, Project Imagination, which is intended to inspire young people to study sciences and make use of their engagement in the best interest of society. Listening to these children, I believe we're headed for a bright future.
Before we begin, I would like to ask everyone to please switch your mobile phones to silent mode. All Shareholders in attendance and entitled to vote receive ballot slips when they registered. If that is not the case, they should get their ballot slips now. The ballot slips will be used for any written ballots. It has also been possible to vote electronically for a period of time prior to the AGM. Those who are attending the General Meeting today and have already voted electronically need not vote again. In the event of any written ballot, the ballot will be tallied in an adjacent room under the supervision of representatives of the external auditor, KPMG. If anyone would like to take the floor during the General Meeting, please give a sign and introduce yourself by name.
Shareholders may grant the right to speak on their behalf to one Advisor. Those who would like to take the floor will be asked to go to the restroom. This is necessary for technical reasons. That is due to the direct webcast of the General Meeting. Those who take the floor will have a time limit of three minutes to state their case. Such a time limit is necessary to ensure that all the Shareholders who would like to participate have an opportunity to provide input. To facilitate practical implementation of the meeting, we will try to organize comments and questions on an issue-by-issue basis. I will come back to this as we proceed. We will continue with Item 2, registration and attending Shareholders and proxies.
In my capacity as moderator, it is my duty under Section 513 of the Norwegian Public Limited Liability Companies Act to make a list of the shares that are legally represented at this AGM. The Secretariat is in the process or has now created a list of Shareholders in attendance and proxies attending on behalf. There are 90 individuals here today eligible to vote, who are entitled to vote. Along with the advanced votes cast, they represent a total of 76.58% of the company's share capital. 70.88% of these people represent their own shares, while 5.91% represent proxies. Advanced votes have been cast for 3.69% of the share capital. We will proceed with Item 3, Election of the Chair for the Meeting.
The Board of Directors proposes that the General Meeting elects the Chair of the Corporate Assembly, that is me, to Chair the meeting. Can the General Meeting accept this? Since there is no objections, the Chair of the Corporate Assembly is elected. We move on to Item 4, approval of the notice and the agenda. Section 5-10 of the Norwegian Public Limited Liability Companies Act states that the General Meeting shall be convened by written notice to all Shareholders with a known address. Pursuant to Section 5-10, second subsection of the Norwegian Public Limited Liability Companies Act and Section 5-11-B , first subsection, literal one, the notice of the meeting shall be sent out not later than three weeks prior to the meeting.
The notice convening the meeting and notice of attendance were sent to all Shareholders registered in the Norwegian Registry of Securities on the date of the notification pursuant to the deadlines specified in the act. The notice, Financial statements, and Director's report, as well as other attachments to the notice, are published on the company's website in compliance with Section 5-11- A of the Norwegian Public Limited Liability Companies Act and the company's Articles of Association. Thus notification has taken place in accordance with the Norwegian Public Limited Liability Companies Act and Provisions of the Articles of Association. The Chair proposes that the discussion on Item 7, which concerns the authorization to distribute dividend based on approved Annual Accounts for 2016. Item 8, which Board of Directors' proposal to continue the scrip dividend program.
and 10 and 11, which are proposals submitted by Shareholders, be dealt with in connection with Item 6. The point of dealing with these items together is to maximize time efficiency. Voting will take place in accordance with the notice of the meeting concerning these items. It is only the discussions that will be merged to facilitate a more comprehensive treatment and overall discussion. This is the same method we have employed previously. Are there any comments to the notice or the proposed agenda? If not, the General Meeting is declared to be legally convened, and the agenda is adopted. We continue with Item 5, election of two persons to co-sign the minutes together with the Chair of the meeting. The following are nominated to sign the minutes of the meeting along with the Chair of the Meeting, Johan A. Alstad.
Alstad, the State's Representative from the Ministry of Petroleum and Energy, and Tor Eriksen. Are there any comments to the nomination? There are not, and Johan A. Alstad and Tor Eriksen are therefore elected. The General Meeting is now to address Item 6, approval of the Annual Financial Statements and Directors' Report, and dividend for fourth quarter 2015. As has been said, Items 7. 11 will be merged with the discussions under Item 6. The Annual Report and Accounts with the Auditor's Report and the statement of the Corporate Assembly have been made available on the company's website. Reading them aloud is therefore unnecessary.
I give the floor to the Chair of the Board, Øystein Løseth, who will account for the Board's view of Operations and Proposal for dividend, the Board's proposals for authorization to distribute dividend based on approved Annual Accounts for 2016, the Board's proposals for approval to continue the scrip dividend program, and the Board's report on corporate governance. The Chair of the Board will also present the Board's response to the three proposals from the Shareholders, that is Items 9, 10, and 11. The floor will then be given to CEO Eldar Sætre. Later, under Item 13 on the agenda, the Chair of the Board will give a separate report on the Board of Directors' proposed statement regarding remuneration for executive management. You have the floor.
Thank you, Tone. All right, I'll just try to raise it without too much noise. Dear fellow Shareholders and welcome to this Annual General Meeting. After another challenging year for the oil and gas industry, this year's Annual General Meeting takes place on a slightly more optimistic note for the industry. The low prices that we saw throughout last year continue to impact the profitability, not only our company, but for the whole industry. Even though things fluctuates, then the arrows are pointing in the right direction, at least so far this year. It's been important to spend the time wisely during the challenging year that our industry has been through, and it's therefore encouraging to see how well the company has delivered on its improvement program. The result is that Statoil emerges from the economic downturn strengthened and is well-positioned for further growth and development.
I'd like to revert to this later in more detail, but let me start with our number one priority, safety and security. A good safety performance is fundamental for all operations in this company. Last year, we experienced the most serious helicopter accident on the Norwegian Continental Shelf since 1997. The crash outside Bergen took 13 lives. After several years with a positive trend, the serious incident frequency increased last year. For 2016 as a whole, the serious incident frequency, measured as incidents per million hours worked, was 0.8 compared with 0.6 in 2015. The Board is concerned about this development. Together with the administration, the Board has focused on new steps to get back to a positive trend to improve our safety performance.
This work will continue and remain our number one priority in 2017, and the Chief Executive Officer will explain in more details how we have responded to the challenge. Let me now move to comment on the company's activities for 2016, including the Board of Directors report and, as mentioned, the matter of dividend and dividend distributing shares, the Board's statement on corporate governance, as well as the Board's response to Items 9, 10, and 11. I will later revert to the Board of Directors' statement on remuneration to executive management under Item 13. Well, 2016 started with oil prices below $30 per barrel. While prices increased towards the end of the year, our average realized liquids price was still below $40 per barrel for the year as a whole.
Compared with our competitors, we delivered a competitive return on investments to our Shareholders, and the results from our improvement program also demonstrated a clear progress with Annual efficiency gains of $3.2 billion, compared with 2013, and that was well above the target set for the year. The work to achieve continuous improvement will continue. The company is now moving from an improvement program to an improvement culture. New targets are set to improve our competitiveness further. This is also the core of our sharpened strategy, which the Board has worked on together with the Administration throughout 2016. Always safe, high value creation, and low carbon emissions are at the core of a strategy developed to protect and strengthen Shareholder value.
With solid and sound operations, a values-driven production growth, and a world-class project portfolio, we are in a position to create added value in a market that is improving. Climate challenge is increasing and requires that both Business and Industry, as well as Politicians, pull in the same direction. This is so that we can identify and find the most efficient and effective measures and deliver on the Paris Agreement. Statoil took early action to tackle the climate change, and we are one of the world's most carbon efficient producers of Oil and Gas. There is still room for improvement, both for Statoil, for the industry, and for society as a whole.
Therefore, it's encouraging to see that the U.K. recently experienced its first full day of electricity generation that was coal-free and to see that the United States' carbon emissions are the lowest for the past 25 years. Both natural gas and wind power have played an important role by replacing coal in the energy mix. Statoil has also contributed towards this end. Going forward, investments in renewable energy will continue to increase quickly, and Statoil is in the process of establishing a substantial industrial position within new energy solutions, where the main focus is on ocean wind. At the same time, oil and gas will remain important sources of energy for many decades to come. The future's need for energy will require considerable investments in new oil and gas resources.
Our ambition is to implement concrete action to reduce greenhouse gas emissions from our operations and also to build a more resilient portfolio to climate change and build a strong position in renewables. Statoil recently launched our climate roadmap. It describes the company's ambitions and the new set of measures to be implemented. Our sustainability report includes further detail on how our portfolio will be impacted by stricter climate regulation. The report demonstrates that Statoil's portfolio is robust also from a climate vantage point. In a cyclical industry, it is important to have financial muscle. Statoil has such strength. The sharpened strategy also facilitates for safeguarding and to use the latitude and flexibility created within the framework of a responsible financial management.
The solid and improved profitability in our project portfolio that we're now investing in, along with increased cost efficiency in all parts of our operations as well as good operations with high operating regularity in our facilities, will over time provide capabilities and cash flow for the company, allowing us to continue to pay a competitive dividend. Our dividend policy remains firm, and it is an important commitment to the Shareholders of the company. It is also an expression for the Board of Directors' faith in the company's ability to create long-term value. The Board has proposed to pay a dividend of $0.2201 per share for the fourth quarter 2016, a dividend that is unchanged from the third quarter 2016. The distribution of quarterly dividend is an integral part of the company's dividend policy.
Along with the authorization granted by last year's General Meeting, the Board ask this year's Annual General Meeting for an authorization to pay quarterly dividends until next ordinary General Meeting, and I here refer to Item 7. Based on our dividend policy, the Board proposes that the dividend share program will be continued up to and including the third quarter 2016. I refer to Item 8. Shareholders who will not subscribe for dividend distributing shares at the time of the expiry of the Subscription period will be paid the next dividend in cash without having to take any action. As for previous quarters, the Subscription price for the fourth quarter 2016's dividend distributing shares will be set with a discount of 5% relative to the applicable share price.
Other dividend issues will also see that the discount will be circulated at the discretion of the Board, but still not so that the discount for the first to third quarters can exceed 10%. The dividend issue for the fourth quarter 2016 is something that we propose the Annual General Meeting should endorse, and I refer to Item 8.1. The issues for the first three quarters of 2017 will be approved by the Board based on the authority that we propose that this Annual General Meeting grant, and I refer to item 8.2. According to an agreement with the Ministry of Petroleum and Energy, the state will still use its quarterly dividend to subscribe for the number of shares necessary for the state to maintain its stake of 67%.
Statoil's Corporate Governance policy is based on transparency and equal treatment of our Shareholders. The Board's mandate is to create long-term added value for the Shareholders. We are to safeguard the interest of all Shareholders, and we are to take into account the company's other Stakeholders. The Board works to maintain high standards for Corporate Governance based on the Norwegian and International standards for best practice. We are constantly evaluating the company's management systems, risk management, and control routines to ensure that we run our operations in a responsible, profitable manner. In 2016, the Board had a total of eight ordinary and two extraordinary meetings, with an average attendance of more than 98%.
In addition, each of the Board's subcommittees had five or six meetings, and the members of the Board also visited some of Statoil's activities in Norway, Brazil, Tanzania, Russia, and the United States to gain more insight into and knowledge about Statoil's activities, as well as the company's local organizations. Next, I would like to address Items 9, 10, and 11. This year, three motions have been put to the Annual General Meeting by Shareholders. Like the Chair said, the Board's responses were distributed with the notice of the meeting, so I will therefore only summarize the Board's responses to them. I will begin with the Board's response to Item 9, concerning the Proposal to Abstain from exploration drilling in the Barents Sea. Climate change represents one of the greatest challenges of our time.
Statoil fully recognizes the need for the oil and gas industry's contributions to limit global warming. Statoil's ambition is to remain one of the world's most carbon-efficient oil and gas producers. Production licenses 859 and 855 were awarded in the 23rd license round in accordance with current Legislation after a thorough impact assessment and with Broad support in the Norwegian Parliament, and Statoil has made binding commitments for all operations under the licenses awarded. Petroleum activities have taken place in the Barents Sea since 1980, and both relevant authorities and the industry have extensive experience in managing operations in this part of the Norwegian continental shelf.
The Board of Directors is of the opinion that the company has made the necessary preparations to ensure that the operations are carried out in the best possible manner and that environmental risks are reduced to the lowest possible level. Based on the above, the Board of Directors recommends to the Annual General Meeting to vote against the proposal. Next, the Board's response to Item 10 and the proposal from a Shareholder to discontinue exploration activities and test drilling for fossil energy resources. Exploration for production, transport, refining, and marketing of petroleum are defined as the company's primary activities in section one of the company's Articles of Association. Statoil was an active supporter of the work towards an ambitious climate agreement at the COP21 Summit in Paris in 2015.
As has already been mentioned, the company has established a roadmap with a holistic approach to the climate issue with clear reduction targets for its own climate emission and growth within the area of renewable energy. Changing the world's energy system is a considerable challenge and will require significant renewable energy investments. At the same time, the most respected forecasters expect that there will be a substantial need for oil and gas to meet the global energy demand for several decades. Declining production from existing fields means that the world over time depend on new resources being brought to the market. Statoil's ambition is to remain one of the world's most carbon efficient oil and gas producers, and this will enable us to continue to create value for our Shareholders in a sustainable way through technology development and industrial cooperation, both in Norway and Internationally.
Furthermore, the Board stresses the importance of complying with the principles of good corporate governance. Hence, the company strategy is to be determined by the Board. Based on this, the Board of Directors recommends to the General Meeting to vote against the proposal. Finally, the Board's response to Item 11 and the proposal from a Shareholder regarding risk management processes. The Board of Directors takes all allegations of potential mismanagement and wrongdoing in the company seriously. This Shareholder motion follows the Shareholder proposal that was submitted by the same Shareholder to the Statoil 2016 Annual Meeting, requesting that an Investigation Committee be set up to investigate alleged mismanagement and wrongdoings in Statoil's risk process. Such concerns were also submitted or reported to Statoil's ethics helpline.
The administration decided in dialogue with the Board of Directors to initiate an investigation by the recognized U.S. Law Firm Gibson, Dunn & Crutcher. Their investigation concluded after extensive work and a number of interviews with relevant persons that there was no merit to the allegations. The Board considers that the allegations raised in the Shareholder proposal do not warrant further follow-up, and this is also supported by the thorough external review. The Board also stresses the importance of complying with the principles of good corporate governance, whereby the administration considers which specific positions in the company that are to be established. Against this backdrop, the Board of Directors recommends to the Annual General Meeting to vote against the proposal. The General Meeting, Statoil has come out of this cyclical downturn that the industry has suffered the last few years strengthened, and the company is well-positioned for the future.
At the same time, the company continues the efforts to improve its competitiveness to maintain high value creation for its Shareholders. I would like to take this opportunity to commend the company's employees for their deliveries and effort during this time of transition. These have indeed been challenging times for many of our coworkers. I also wish to thank the company's ex-executive management and administration for their fine cooperation and for all the good work they delivered during the year. I would also like to commend Chief Executive Officer Eldar Sætre for the way he has managed the company through times of difficulty. His efforts both internally and externally has been important for this company. I would like to thank you for your attention, and I now give the floor to our CEO, Eldar Sætre.
Thank you very much, Øystein. Dear fellow Shareholders, I'm very glad to see you all here. I would like in my presentation to share my thoughts about the markets that we operate in before I give you my comments on the company's results for 2016 and also our updated strategy as an energy company towards 2030. I would also like to start with the most important element here, the safety and security. It was almost two weeks ago, we commemorated that one year had passed since the Turøy accident, 29th of April last year, where 13 people lost their lives when a helicopter crashed between Gullfaks B and Flesland. Last year, we also experienced a fatality at a subcontractor in South Korea.
These are for us strong reminders of our risk picture and also that safety is not only about statistics or numbers, but about individual people, individual incidents behind the statistics. That's why safety is a personal matter, both because it concerns our colleagues, their families, but also because this is a responsibility that you can never get away from. Our serious incident rate, as the Chair of the Board has shown, a negative trend last year after several years of continuous improvements. This last development is something we're not very satisfied with, and we have implemented several measures in order to enhance our safety work. We maintain a clear focus on safety management and safety culture in addition to a strong focus on learning, risk understanding, and not least cooperation at all levels of the company are very important elements of this work.
At a time when we also need to succeed in the turnaround and improvement of the operations of the company, it is important to be very clear in saying that safety is our number one priority. There's no room for measures that compromise the safety level in our improvement work. I'd now like to share a few general remarks with you about our industry and our markets. The oil and gas industry is at a crossroads today. That goes for many dimensions. In the markets, we now see that the traditional commodity cycles, but at the same time, we see structural changes in the bigger energy picture. We see that these two elements give a compound effect. OPEC's production limits, implemented together with countries like Russia, has contributed to increase the oil prices some compared to last year.
This has, however, been partially offset by increased production of shale oil in the U.S. Overall, these factors have contributed to stabilizing the prices, the oil prices around $50 per barrel. Has brought us closer to a so-called rebalancing of the market. At the same time, we're now experiencing the third year in a row where the investments in new conventional production capacity are expected to decrease. This is a completely new situation in our industry. This happens despite the fact that the demand for oil is continuing its growth in the order of 1.5% Annually. The International Energy Agency has recently said that they are far from seeing any top in the demand in the coming few years.
We can think that the market will gradually feel the effect of several years of lack of investments, combined with a natural production reduction of 3%-5% Annually, and a continuous growing demand. The production gap we will be facing will probably be bigger than what the U.S. can fill with her, their unconventional resources. At the same time, the world is moving towards a low-carbon society. This is, of course, a necessary development, and we are convinced that this development will continue despite the fact that we see a few signs of decreasing global cooperation and collective efforts in favor of the climate. Like the Chair of the Board said in his presentation, the U.K. has recently experienced its first full day of electricity generation without coal. Two things have been instrumental here.
First of all, that gas, essentially from the Norwegian continental shelf, has replaced coal. Secondly, a massive development of renewable energy. I also recently visited China and signed a memorandum of understanding with Beijing Gas Group based on a massive effort into replace coal by gas in Beijing. These are examples of the role that Statoil wishes to play as an energy company. I will revert to how our strategy towards 2030 will position us in connection with this. Let me now move on with my comments to the results for 2016. At the start of last year, the oil price was below $30 per barrel.
As the Chair of the Board said, our average realized liquids price was below $40 per barrel for the year as a whole, below $40. Of course, this has an impact on Statoil's results, which mainly is an upstream company. The company reported a negative IFRS result in the Annual accounts of $2.9 billion, whereas the adjusted earnings were $4 billion. The operational performance of the company was, however, good. Despite the fact that 2016 was a year with extensive maintenance, plant maintenance on our production facilities, we increased the production compared to last year, thanks to high production efficiency, ramp up of production on new fields, and more efficient drilling operations, that is to say, well capacity.
The reserve replacement ratio was 87%, which gives an average of 90% for the last three years. The so-called organic investments in 2016 was around $10 billion. $3 billion below our estimation at the beginning of the year. Thanks to improved efficiency, strict prioritization throughout the organization, and above all, disciplined project implementation. We approved five new upstream projects last year, one in the U.S. and one in Norway, and 1 offshore wind project in the U.K. When it comes to cost improvement, the target for 2016 was $2.5 billion in yearly efficiency improvements compared to 2013. We delivered $3.2 billion. I am impressed by the results our organization has achieved on many areas.
The real test is not what we have been able to do during the crisis, but what is going to happen when there is coming an upturn of the market. There will be price fluctuations also in the future, and it's extremely important that we are not relaxing now and contributing to a situation where the history repeats itself. It's time now to make a fundamental change in the way we operate our industry. We must learn more from other industries and make sure that we work on simplification, standardization, and industrialization, so that these will become notions that our industry are known for. The potential is huge, and the journey has barely started.
The next phase for us is therefore to move from an improvement program, top-down, to an improvement culture, where we make continuous, improvements throughout the organization, bottom-up as well. We are well on our way. The main improvements since 2013 are related to rationalization, doing things differently, not market effects or postponing of activities. These improvements, we have to maintain them, we have to enhance them, even if we will receive more help from the market gradually. We continue to improve our portfolio of new development projects. If we look at the projects that have been started since 2015, that is mainly Johan Sverdrup and new projects that will start their production within 2022. This portfolio now has a break-even price, average break-even price of $27 per barrel. This is really a step change improvement compared to earlier.
Through challenging all solutions all the way from reservoir to the market, we are able to produce more resources from this portfolio, for lower investments. In 2019, the first oil will arrive from Johan Sverdrup, where the break-even price for the whole development now is reduced below $25 per barrel, and below $20 per barrel for phase I . Combined with a production ambition for the whole reservoir of 70%, this is quite unique. Johan Sverdrup has always been one of the world's most profitable projects, and now we have managed to improve it. Many projects are following this example. For instance, Johan Castberg, Snøhvit Expansion, Trestakk, Utgard on the Norwegian Continental Shelf, Peregrino Phase II in Brazil, and Vito in the U.S., Gulf of Mexico, just to mention a few.
As the Chair mentioned, we have also used 2016 to sharpen our strategy, as we said, to focus it. We would like to further develop that or based on four strategic principles. Firstly, our portfolio must be composed of projects that enable us to always create positive cash flow from operations, even when the oil price drops below $30 per barrel. Having operations and installations that contribute with significantly positive cash flow, also in a low price scenario, is of decisive importance to ensure our financial robustness.
To illustrate this, I may mention that the operating expenses of the Norwegian Continental Shelf in the fourth quarter last year were at the lowest level for the past 10 years, and that production efficiency have increased by 6.5 percentage points, equivalent to 75,000 barrels per day with very low additional costs. A flexible investment program is the second principle. Thanks to a powerful improvement program, strict prioritizations in all parts of the organization, and our flexible positions onshore in the United States, Statoil was able to reduce investments by more than 50% for the past two years, while at the same time increasing our overall production capabilities. Flexibility to adjust investments when you want it and not when you have to are key. The third principle is about having the capabilities to take counter-cyclical action.
This means to strengthen the financial capacity during good years, while at the same time managing this capability to strengthen our resource base and continue to invest in building technology and competency during more demanding times. The fourth and last principle is all about being well-prepared, as prepared as you possibly can be for a low-carbon future. I will also refer to this later. All together, this will be a clear and value-driven strategy. On the Norwegian Continental Shelf, we have a unique position that we want to continue to leverage to maximize value in ongoing operation and also through future projects. As the biggest future contributor to our project portfolio the next few years, and with a high exploration potential, the Norwegian Continental Shelf will continue to be Statoil's backbone. In our international activities, we are strengthening our investments in our core areas.
One of these area is Brazil, where we, through the acquisition of the Carcará field, in addition to the operatorships for Peregrino and Pão, and our strategic partnership with Petrobras, have established a strong position. In the United States, we will continue our improvement efforts and further develop our flexible onshore position. In addition, our ambition is also to develop one or two core areas internationally, both offshore and onshore, with similar potential by leveraging our current positions and through active exploration activities and business development. For the midstream and marketing business area, they need to continue to ensure marketing, trading, and transport of our oil and gas production through having access to attractive markets and continuously develop our global trading activity. In addition, we are now also in the process of establishing a profitable portfolio in renewables. A future low-carbon society will change the energy industry over time.
Some people view this as a threat, like, to our industry, but we choose to focus on the opportunities that this represents for us. The demand for energy will continue to increase going towards 2040, and that will happen even in a two-degree scenario. However, in Statoil, we believe that carbon emission and other greenhouse gas emissions should, and to an increasing extent, will have a price tag. Carbon efficiency will therefore be an increasingly important competitive edge for us going forward. How we operate our activities will be more important, and also that we will develop our activities so that it supports the ambition expressed by the Paris Agreement. Our emissions per barrel in the production process are now about half the global average, and carbon efficiency will also be increasingly more important in designing our future portfolio.
In March, we presented our climate roadmap, which also lays out our ambition towards 2030. Annual carbon emissions must be reduced by 3 million tons. Carbon intensity should be cut by 20%, equivalent to 2 kg of CO2 per barrel of oil equivalents. R&D investments must be increased to support these measures. At the same time, we also see that renewable energy are quickly becoming more competitive and continues to be the fastest-growing source of new electricity production. We also see that to an increasing extent, more technology and innovation rather than policy and regulations drives this development. Statoil is an energy company, and therefore we consider renewable energy as a fully integrated part of our strategy. From an industrial vantage point, this represent an opportunity to leverage our core competency to create value in new areas.
The ongoing offshore wind project, Dudgeon in the U.K., is a good example illustrating this. With its 67 turbines, this project also reinforces our strength in project implementation, logistics, and marine operations. From a financial vantage point, renewable energy will offer an attractive balance between profitability and risk for industrial players such as Statoil. From a strategic vantage point, renewable energy will help make our income more robust through stable and long-term cash flows that are independent of oil and gas price cycles. Dear Shareholders, let me summarize. 2016 was a challenging year for the oil and gas industry and for Statoil. This situation has also opened great opportunity for us, and I am proud to say that Statoil has emerged from this economic downturn as a stronger and far more competitive company. We've been through a rather radical and extensive process of change.
We have reduced current costs, we have improved our projects, and we have sharpened our strategy to be even more values-driven in all our operations. In brief, Statoil is well-positioned for the future and for creating long-term added value. Thank you for your attention.
Thank you very much. I would like to thank, Chair of the Board, Øystein Løseth, and also CEO Eldar Sætre. This brings us to Item 9, a proposal put forward by a Shareholder, and the proposal under Item 9, was distributed with a notice of the meeting, and it's also being shown on the screen, so it will not be read aloud. I give the floor to the Shareholder who submitted the proposal, who will have five minutes for his or her presentation.
Thank you very much. Well, there were many good things were said.
I would like to make comments, not to everything. My name is Truls Gulowsen, and I am Head of Greenpeace in Norway, and I represent our four shares, plus a number of shares, from all over the country who have asked us to vote environmentally friendly on their behalf. We have been Shareholder of Statoil for ten years now this year. We started to warn against the unprofitable ventures of Statoil in Canada, in oil sands, tar sands, that also harm the environment and that is damaging. I would now like to congratulate the company and the current Board and also the Administration to have got rid of these stakes because it was wrong from the very start. Well, I would like to be slightly more precise than Chair Mr. Løseth said.
We don't ask people to vote against everything to abstain from exploration drilling in the entire Barents Sea, but only the two licenses.
As for tar sands, we would have wanted, and here I would like you to bear in mind, that if you had listened to us from the very start, then Statoil would probably not have had to waste NOK 100 billion on this venture. I mean, from 2007, they could have applied these funds better within the renewable energy area. We are happy that you are now looking to invest more in renewable energy. At the same time, it's also important to read the Stavanger Aftenblad daily here that said that only 20% of the investments are made in this area, so they're still investing too little and too slowly.
This does not really align with all the time spent in the company's presentations on this business area. Well, expensive and poor quality oil is one thing, but they also engage in exploration activities in vulnerable area. We talked about the Oslo Bay last year. I believe that even though the BP as a partner pulled out of it, I don't think that Statoil is fully out of it. We are particularly concerned, as you all know, because of the activities in the Arctic. Statoil, whether or not Statoil is one of the most active Stakeholders there, whether or not Arctic is ice-free or not, and that is because the world's climate will not stand the pressure of lifting and recovering oil therefore.
We can't see how the ventures in the Arctic fits in with the goals of the Paris Agreement. We see that there are measures that support the agreement, but not enough are done to leave oil and gas in the ground. As I've said from this rostrum numerous times, there are more oil and gas in the ground that the climate can sustainably deal with. We have also sued the state for granting licenses under the Norwegian constitutions. This is not something that we have done. Hans Petter Graver, a professor of law, said, "Law will become increasingly important the more distance you put between a measure and the actual political actions that do not follow up the goals set.
Court control to follow up some of the measures taken are within the framework of the law, and there's also a long tradition in Norway's rule of law to balance the Constitution against climate. The case would be heard in the court from the 13th of November, and this is seen by the court as a relevant case. Through the 23rd licensing round, it includes the Gemini and the Korpfjell licenses. That is also part of Statoil's drilling program this summer. I believe that it is completely lack of respect to carry out exploration activities in these areas where there is a very dubious legal basis for doing so without the court to have heard the case, and therefore we ask Statoil to refrain from drilling these exploration wells now.
Since the legality of these licenses are pending in the courts, and maybe this is not a strong argument, but I hope that Statoil will see the reality in this, namely that they are undermining the Constitution, that is, the ministry, that they are undermining the Constitution if they let Statoil go through with the exploration drilling. I hereby ask for a written ballot, and it is soon our Constitution Day, and I would like everyone to support our Constitution by voting for or against it.
We come back to this Item 9, and the voting on the proposal later. Let us pass on to Item 10, another proposal by a Shareholder. It's distributed and is being shown on the screen, so will not be read aloud.
I now give the floor to Shareholder who has submitted the proposal, five minutes to present his proposal.
Chair and fellow Shareholders, I've taken part in all the AGM the last few years, and I presented my proposal in order for a change of the policy in a more sustainable and climate-friendly direction. All my proposal have been rejected both by the Board and the AGM, but there is still hope. This has not been in vain. The Board has, in its new fresh climate roadmap 2013, replied in a positive manner to my proposal in 2016 in order to devise a strategy in order to solve the energy needs of today within the climate targets. The Board also has followed the advice to refrain from engagements in projects that are loss-giving.
I'm thinking about fracking in the U.S. and tar sands in Canada. I'm very happy to see that the Board now has changed its approach. This is to the satisfaction of the Shareholders, the climate, and the climate activists. I would like to thank the Board for having adjusted the course in the right direction. The new roadmap announces an increase in the investments in renewable energy to 15%-20%, and also energy efficiency up to 20%. The big question here is whether this positive change, of course, in the climate roadmap is big enough to offset the negative climate effect or impact of the activities in exploration activities and drilling for new reserves on the Norwegian continental shelf.
The target in the Paris Agreement is according to IEA states that 70% of the energy reserves have to remain in the ground in order to realize the objects or the targets in the Paris Agreement. It's a waste of investments to do this because they cannot be put into production. I think this is a demonstration that the Board has not taken seriously the challenges, the climate challenges, because they want to continue exploration up until the ice age. I will therefore ask for the support of the AGM for this proposal. The Board presents a strategy and an impact assessment of a full discontinuation of all exploration activities and test drilling for this, and that we earmark projects for energy efficient solutions, and this should be done in the.
The strategy, including environmental impact, will be presented in the Annual report for 2017-2018.
Thank you very much, and we will be coming back to any other input, and possibly a vote or ballot. We now move to Item 11, a proposal put forward by a Shareholder. The proposal was distributed with a notice of the meeting and is being shown on the screen, so it will not be read aloud. The Shareholder who submitted the proposal will have five minutes for his presentation.
Okay, thank you. It'll go a lot faster. Case 11 raises risk management issues vital to Statoil's economic future, and as a result of the corporate cultural conflicts following the merger with Norsk Hydro in 2007. Prior to the merger, Statoil's management culture required that technical specialists provide advice based on rigorous scientific methodologies and comprehensive data analysis in support of business development and strategic investment decisions. Norsk Hydro's oil and gas exploration management promoted a culture where specialists manipulated and selectively biased technical arguments and data to support management's investment decisions, either positively or negatively, depending on the management desired outcome. This corrupted culture failed to provide material growth and contributed directly to the financial demise of Norsk Hydro oil and gas, which necessitated the merger/bailout by Statoil Shareholders.
As a result of the merger, Statoil acquired Norsk Hydro's exploration portfolio assets for an undisclosed valuation, here estimated at NOK 40 billion. Despite the fact that Statoil's pre-merger risk analysis evaluation showed them to be essentially worthless. Risk analysis processes following the merger were systematically corrupted by the Norsk Hydro culture so that greatly inflated internal valuations could be assigned to these toxic assets and thus advance within the portfolio to be drilled. In the 10 years following the merger, exploration drilling has clearly shown the resulting destruction of our Shareholder value. The total losses to Statoil over this period are estimated at NOK 100 billion. Because about 80% of these losses are tax-deductible, the Norwegian state also bears the bulk of these losses in the form of reduced tax revenues. This translates to approximately NOK 100,000 per Norwegian family.
As staggering as these sums are, should Statoil ultimately fail, the destruction of Shareholder equity as well as potential liabilities would be far greater. Those familiar with these events have confided privately that if the details became fully known, many Statoil or former Norsk Hydro executives would probably be in prison. Prior to the merger, Statoil created world-leading exploration risk analysis methods, even nominated for its prestigious Health, Safety and Environmental Prize. The founding scientific achievements were also recognized by International Professional Societies with honors and awards. Despite these technical advances, Statoil's Chief Geologist still maintains their corrupted risk management culture, blocking credible efforts to reinstate them.
For example, the cost of Statoil's high pressure and high temperature exploration, these are known as HPHT wells, deeper than 4 km, is about 10 times that of conventional exploration targets, despite the fact that HPHT reservoirs contain only 3% of global conventional oil reserves. The carbon footprint of these high-risk targets and their environmental impact are also 10 times greater. A 10-year study conducted by the Norwegian Petroleum Safety Authority shows that HPHT safety incidence rates are 1.5 serious accidents per well, as compared to 0.15 incident for conventional wells. Pre-merger Statoil specialists accurately predicted that most of the giant oil potential on the Norwegian continental shelf was in shallow reservoirs within the thermal interval of 60-90 degrees C and not in deeper targets.
This prediction is verified by Lundin Petroleum's 2010 giant oil discovery, Johan Sverdrup, whose reservoir is at a depth of only 2 km and a temperature of 86 degrees C. When a requested and approved Deepwater Horizon white paper was submitted, communicating the geological processes mainly responsible for high pressure development with implications for drilling risk and safety, the author who stands before you today was forced to leave Statoil, despite having served over 20 years with distinction beginning in 1986. Several other loyal Statoil employees have suffered similar fates surrounding these shameful events since the merger. Statoil 2017 AGM Case 11 is perhaps the most important Shareholder vote for the future of this corporation.
Arcadia Resources' investment partners strongly recommends a vote for Case 11 to reestablish risk management integrity within Statoil and help rebuild the strong foundations required for value creation and future growth. Given the prevailing low oil price environment, it is imperative that we act now on this vital corporate issue. Thank you.
Thank you very much, and we will revert to the vote on this motion. We will now open the floor for comments on the reports of the Chair of the Board and the Chief Executive, as well as comments on the three proposals from Shareholders that have been presented. Due to time constraint and to allow enough time for everyone who would like an opportunity to speak, I would ask that you keep your comments brief and to the point. The floor is now open. I also ask those of you who would like to speak to please go to the microphone and introduce yourself.
This other business concerns Item 18 from last year's AGM. Arcadia Resources challenges the statements by our Chairman's reply to Item 18 regarding the proposed Risk Management Investigation Committee during the 2016 AGM. In addition to the formal Board's response, the following was added, and I quote, "And for the sake of good order, I would like to say that the current and previous employee that was suggested as possible members of this committee for the inquiry have said that they haven't been asked about this and don't support the current motion. But the Shareholder wanted to maintain his proposal for the AGM." End of quote. Firstly, this unprofessional and unnecessary statement by Statoil's Chairman is immaterial to the proposal, but more importantly, it is false. These raise questions as to why it was added to the Board's written response.
Apparently, the purpose was to protect the integrity of the proposal as well as the Shareholder making the proposal just prior to the actual vote. This may have been done because the Chairman likely knew that Item 18 had about 20 million shares voting in support, which probably represents several thousand Shareholders, many of them likely current and previous employees. The Chairman may have also been concerned that other Shareholders at the meeting, particularly the Norwegian Ministry representative who cast the deciding votes, might be moved to approve the proposal if it had considerable support from current and previous Statoil employees.
If so, the Chairman's statement was deceitful, malicious, and a slanderous attack because according to communications and possessions of Arcadia, Statoil, in fact, knew that the nominated committee members had been asked and that at least three had accepted to serve should the proposal be approved, including nominated current and previous employees. Statoil's Chairman knowingly lied to its Shareholders. This is clearly unethical behavior, which when formally established by our records, could result in dismissal, possibly by a Shareholder vote of no confidence or by resignation in face of the same. If Statoil's Chairman does not redraw these false statements and publicly apologize, Arcadia calls for a vote of no confidence in Statoil's Board as led by its current Chairman. No corporation should tolerate such behavior by its Chairman, particularly concerning important matters of corporate governance.
I now give the floor to the Chair. Before that, are there any other ones who would like to provide any comments or inputs? That does not seem to be the case. I hereby give the floor to Chair of the Board, Øystein Løseth. Thank you, Tone. As for the praise from the two first Shareholders who provided proposals, I thank them. This does not change the view of the Board, and we will still ask the Shareholders to vote against Items 9 and 10. On the subject of Item 11 and the last comment, I have one comment that I would like to make.
Last year, I informed you that the former Shareholder that had been proposed to be a member of the Investigation Committee said that they had not been asked about this and that they did not supported the proposal from the Shareholder. This was information that we got from the persons in question, and we have no reason to doubt the correctness of these statements. Thank you. If there are no one else who would like to ask for the floor, that does not seem to be the case, we will now regard these as having been dealt with. I now give the floor to State Authorized Public Accountant Mona Larsen from KPMG, who will read excerpts from the auditor's report for 2016. That brings us back to the approval of the Annual accounts and D irector's report for 2016.
Thank you, Tone. Yes, I am a Partner at KPMG and responsible for Auditing Statoil according to Norwegian law and regulations. Together with Jimmy Dyb, I have signed the audit report for the Statoil group for the accounting year 2016. I refer you to the Annual report for the complete audit report for 2016 issued on the 9th of March 2017. The audit report for 2016 is significantly changed compared to previous years. That is because there are new requirements for all listed entities. The requirements are more comprehensive. The conclusion now comes first in the audit report, whereas previously it was at the end of the report. That is not the biggest change. For Statoil, our opinion is unmodified.
This means that in our opinion, the financial statements are prepared in accordance with laws and regulations and give a true and fair view of the financial position of the company as at 31st December 2016, and its financial performance and its cash flows for 2016. The most significant change to the audit report compared to previous years is that we are to report on key audit matters. Key audit matters are those matters that were of most significance in our audit of the financial statements for 2016. For each such key audit matter, we report why we believe that, the matter is a key audit matter and how we have addressed the matter in our audit.
These matters were addressed in the context of our audit of the financial statements as a whole, and as such, we don't express any discretionary opinions on these matters separately. In 2016, we have reported three key audit matters for Statoil, and these matters are, one, the valuation of upstream assets, it is taxation, and it's the estimate of asset retirement obligations. The common denominator for these items is that they require considerable judgment as they involve assumptions about the future, such as future oil and gas resources, prices, foreign exchange rates, production profiles, rig rates, and so on. The audit report is now longer. It's more than five pages long, and as Tone said, it is included in the Annual report, and therefore, I will not read the whole report from the rostrum. Thank you for your attention. Thank you, Mona.
As the Chair of the Corporate Assembly, I will now read the statement on the Board's proposal. At this meeting on the 17th of March 2017, the Corporate Assembly reviewed the financial statements for 2016 for Statoil ASA and the Statoil group and the Board's proposal for the allocation of the negative result. The Corporate Assembly supports the Board's proposal for the Annual accounts and the allocation of the loss. The General Meeting is encouraged to adopt the Board's proposal for the Annual accounts for 2016 for Statoil ASA and for the Statoil group, as well as the Annual report on the distribution of the proposed dividend for the fourth quarter of 2016.
If the motion to continue the scrip dividend program under Item 8 is approved, the payment of cash dividend is expected to take place around the 23rd of June 2017. The expected dividend payment date in U.S. dollar under the ADR program in the United States is around the 26th of June 2017. If the scrip dividend program is not approved by the AGM, dividend will be paid out in cash and earlier than outlined above. The date will be communicated prior to payment. Can the General Meeting approve the proposed resolution under Item 6? There seems to be no objections, and the proposal is hereby carried. We will continue to Item 7, authorization to distribute dividend based on approved Annual Accounts for 2016. The proposed resolution was distributed along with the notice.
It is displayed on the screen and will not be read out aloud. Can the General Meeting adopt the proposed resolution under Item 7? There seems to be no objections, Board of Directors' proposal is thereby carried. We move on to Item 8, the Board's proposal of continuation of the scrip dividend program adopted at last year's Annual General Meeting. The General Meeting is asked to vote on the proposed decisions under Item 8.1 concerning share capital increase for issue of new shares in connection with payment of dividend for the fourth quarter 2016 and Item 8.2, authorization to the Board of Directors to increase the share capital in connection with the payment of dividend for the first quarter through third quarter 2017. Can the General Meeting adopt the proposed resolutions under Items 8.1 and 8.2?
There seems to be no objections, and the resolutions are thereby carried. We will now move on to the vote under Item 9. We've understood that the Shareholder is requesting a written vote, and this will now be carried out. The proposal submitted under Item 9 is now displayed on the screen. The Shareholders are asked to tick off by using ballot slip A of the ballot slips you have received. The ballot will be collected after the written vote under Item 10 and 11. For all written ballots, those who are in attendance here and who have already cast their vote electronically in advance do not need to vote again now. For the proposed resolution to be adopted, a simple majority of votes cast is required.
Please note that abstentions, ballot slips where abstention box has been ticked off, and ballots incorrectly completed with more than one box ticked off will not be counted among the number of votes cast. The tallying will take place in a separate room under the supervision of the external Auditor. In addition to this, the electronically cast advance votes will naturally be included in the results of the vote. If you would like to support the Shareholder's motion, you vote for the motion and vote against the motion if you want to follow the Board's recommendation. We will now move on to the vote under Item 10. The proposal that has been submitted is shown on the screen. We will then move to the written ballot. The Shareholders are invited to tick off under ballot B on the ballot slip they have received.
Also for this item, if you would like to support the Shareholder's motion, you vote for the motion, and you vote against the motion if you want to follow the Board's recommendation. For the proposed resolution to be adopted, a simple majority of votes cast is required. We are now moving on to Item 11 and vote, and the proposed motion is shown on the screen. We will proceed to a written vote. The Shareholders are invited to tick off under ballot C on the ballot slip they received. Ballot slips A, B, and C will then be collected. The same applies for this item, which means that if you would like to support the Shareholder's motion, you vote for the motion and vote against the motion if you want to follow the Board's recommendation.
For the proposed resolution to be adopted, a simple majority of votes cast is required. Are there anyone who have not had their ballot slips collected? That is not the case. We will proceed, and we'll come back to the result when the votes have been counted and we have a result for you. Let's move on to Item 12, the Board of Directors' report on corporate governance. Pursuant to Section 5-64 of the Norwegian Public Limited Liability Companies Act, the General Meeting shall review and consider the Board's report on corporate governance submitted in compliance with Section 3-3- B of the Norwegian Accounting Act. The statement is included in chapter 3 in Statoil's Annual report and has been made available on Statoil's website prior to the General Meeting.
The General Meeting shall carry out an advisory vote regarding the corporate governance report, and the Board proposes that the General Meeting endorses the report. Reference is made to the Chair of the Board's comments to the report earlier at today's General Meeting. I ask you, are there any comments to the report? General Meeting has thereby endorsed the Board's report. We will now proceed with Item 13, the Board of Directors' statement on stipulation of salary and other remuneration for Executive Management. In accordance with Section 6-16- A of the Norwegian Public Limited Liability Companies Act, the Board of Directors will prepare a statement regarding the stipulation of salary and other remuneration for Executive Management.
The statement is included in chapter 3.12 of Statoil's Annual report and note 4 to Statoil ASA's Annual account, which have been made available on Statoil's website prior to the AGM. I give the floor to Chair of the Board, Øystein Løseth, who will give a briefing on the statement.
Thank you, Tone. Through the statement on executive remuneration and other employment terms for Statoil's Corporate Executive Committee, the Board of Directors has submitted a report on the company's remuneration policy, the formal decision-making process, and the overall remuneration concept for the Executive management. Statoil's remuneration policy and terms are closely anchored in the company's values, HR policies, and performance-based frameworks. The remuneration policy and principles executed in 2016 were in accordance with the declaration given to the AGM on 11th of May 2016. There was no general salary increase for members of the Executive Committee or other executives in the company in 2016.
In 2016, changes were implemented to Statoil's individual variable remuneration schemes, and one of the changes decided was the introduction of a threshold whereby the company's adjusted earnings affect bonus payments as well as a performance modifier to strengthen the link between Statoil's performance and results as compared to our competitors and the annual bonus amounts. Furthermore, the long-term incentive scheme was adjusted in accordance with applicable guidelines for executive salaries. Statoil ended up with negative adjusted earnings after tax of $208 million, strongly impacted by low oil and gas prices throughout 2016. This result is below the threshold for bonus payments. At the same time, the company delivered strong operational results throughout 2016, and the improvement program has helped strengthen its competitiveness. Particularly on the total Shareholder return, the company delivered competitive results.
Based on an overall assessment of total results in line with the guidelines for bonus payments, it has been concluded that a 50% reduction will be applied to general bonus, individual bonus, and long-term incentive awards. The company's established remuneration principles and concepts are mainly continued in the same form as previously endorsed by the Annual General Meeting. I will now comment on the CEO's terms and conditions. The Chief Executive Officer's base salary was NOK 5.7 million with an additional fixed remuneration element of NOK 2 million. Only the base salary is included in the pensionable income. In its assessment of the CEO's performance and consequently his Annual bonus for 2016, the Board has attached importance to his solid delivery and production, efficiency improvement, and project optimization.
The relative total Shareholder return in the first quartile, measured against industry peer group of 11 comparable companies, was seen, and it was a good performance. The number of oil and gas leakages was somewhat above target, while the CO2 intensity for the upstream portfolio was in line with target. As has also been mentioned, the serious incident frequency was somewhat above target. It was 0.29 compared to the target of 0.18 incidents per million hours worked. The CEO's salary package was slightly adjusted in 2016. The company's long-term incentive scheme was amended to align with the new governmental guidelines for executive remuneration. Long-term incentive awards are no longer included in the calculation basis for variable pay.
In order to avoid an unintentional significant reduction in the CEO's overall compensation as a result of the amendments, his fixed remuneration element was increased by NOK 373 thousand, effective from first of January, 2017. Furthermore, the CEO has a variable performance-based pay, which has a maximum potential of 50% of total fixed remuneration and a long-term incentive scheme with a maximum grant of 30% of fixed remuneration. Pension terms remain unchanged in accordance with a previously agreed pension agreement. As for the Executive Vice President, John Knight, based on a mutual understanding and at his own initiative, the Executive Vice President, that is John Knight, who was employed by Statoil UK, will resign from the company effective from first of January, 2019.
In order to ensure clarity and predictability regarding compensation and costs for Knight's remaining period of employment, it's been decided to adjust his remuneration package effective for the earning year of 2016. The adjusted remuneration package does not include variable remuneration elements, and this has been compensated for through changes in the fixed elements. His overall terms and conditions are competitive, but not market-leading in the market where he was recruited. It is the Board of Directors' opinion that the remuneration package is in alignment with the governmental guidelines on executive remuneration. As concluding remarks, I'd like to say that the Board deems it important to offer executive compensation that is competitive, but not market-leading in the markets we operate. Executive compensation should also be seen as fair and aligned with overall compensation levels in the company and with Shareholders' interests.
The Board must strike this balance, and this is our responsibility. Our rewards and recognition for executives are designed to attract and retain the right people who are committed to deliver on our business strategy and who are able to adapt to changing business environment. The Board is of the firm belief that the remuneration system and practices are transparent and that they are in accordance with prevailing guidelines and good corporate governance. Thank you. Thank you, Øystein. In accordance with Section 5-6 of the Norwegian Public Limited Liability Companies Act, the Board of Directors shall prepare a separate statement on salary and other remuneration for executive management. The AGM shall conduct an advisory vote on the Board statement for the current financial year, that is financial year 2016, Item 11.1.
Furthermore, the act requires that the part of the statement relating to remuneration linked to the development of the company's share price is subject to approval by the General Meeting. Are there any comments to the statement or declaration? Does the General Meeting want us to deal with these two parts of the proposal separately? This doesn't seem to be the case, and the General Meeting has thereby endorsed the Board's statement, Item 13.1, and approved the proposal for remuneration linked to the development of the company's share price, Item 13.2. We now move for Item 14, which concerns approval of remuneration for the company's external auditor for 2016. The General Meeting is asked to approve the auditing fees for Statoil ASA for 2016.
It's proposed that the auditor's fee for auditing services in 2016 for Statoil ASA of NOK 7,807,801 be adopted by the General Meeting. Can the General Meeting adopt the proposed resolution under Item 14? There seems to be no objections, and the proposal is hereby carried. We'll then move on to deal with Item 15, namely the stipulation of remuneration to members of the Corporate Assembly. The proposal has been distributed with a notice of the meeting and is being shown on the screen, so it will not be read aloud. As Chair of the Nomination Committee, I can inform you that the proposed increase in remuneration is in line with the general salary increase in society. Are there any comments to the proposal? There are none, and the proposal is therefore carried.
Next, let's move to Item 16, the determination of remuneration for the Nomination Committee. The Nomination Committee has proposed changes to the remuneration for the Nomination Committee, and the proposal is now shown on the screen. This proposed increase in remuneration is also in line with the general salary increase in society.
Are there any comments to the proposed resolution? If not, the proposal is carried. We now move to Item 17. Since 2004, the company has offered a share savings plan for employees of the group. The purpose of this scheme is to augment good business culture and encourage loyalty through employees becoming part owners of the company. More than 80% of all employees in Norway participate in the share savings plan. At the Annual General Meeting in 2016, it was decided to authorize the Board to acquire shares in the market for this purpose. This authorization expires on the date of the Annual General Meeting in 2017. It is proposed that the General Meeting gave the Board of Directors a new authorization to acquire shares in the market in order to continue the company's share savings plan.
The proposed resolution was distributed with a notice of the meeting, and it's also shown on the screen, so it will not be read aloud. Can the General Meeting adopt the proposed resolution under Item 17? There seems to be no objections, and the proposal is thereby carried. We will now move to Item 18, authorizations to acquire Statoil ASA shares in the market for subsequent annulment. The Board of Directors requests the Annual General Meeting for authorization to repurchase up to 75 million own shares in the market, approximately 2.3% of the company's share capital. In accordance with Section 9-4 of the Public Limited Liability Companies Act, such authorization is common in many listed companies. The repurchase of own shares benefits Shareholders by the remaining shares representing an increased ownership interest in the company.
For a detailed explanation of the background for the motion, see the notice convening the meeting. The motion has also been distributed with a notice of the meeting, is being shown on the screen and will not be read aloud. Can the General Meeting adopt the proposed resolution under Item 18? There seems to be no objections, and the proposal is thereby carried. Let's move to Item 19, relative to marketing instructions for Statoil ASA and adjustments of this. On 25th May 2001, the Annual General Meeting of Statoil ASA adopted the marketing instruction for Statoil ASA, which requires Statoil to market oil and gas produced from the state's direct financial interests in the petroleum sector, SDFI, together with its own oil and gas.
The overall objective of the marketing arrangement is to maximize the total value of Statoil's and the state's petroleum and ensure a fair distribution of the total value generated. In order to comply with this objective, a need for making certain adjustments to the applicable pricing and allocation principles under the marketing instruction have been identified, especially for natural gas and LNG, in order to be in line with this objective. The Board of Directors supports the proposal and recommends that the Annual General Meeting adopts a decision that the necessary adjustments to the marketing instructions shall be made. The adjustments, as such, will be made by the state represented by the Ministry of Petroleum and Energy. The Board of Directors will follow up on the adjustments made.
The proposed resolution was distributed with a notice of the meeting, is being shown on the screen and will not be read aloud. Can the General Meeting adopt the proposed resolution under Item 19? There seems to be no objections, and the proposal is thereby carried. We now want to announce the results of the vote under the Items 9, 10, and 11, but we haven't received them yet, so we have to make a short break here.
All right. I ask everyone to find their seats, and then we will revert to the last item on our agenda. All right. We have received the results of the votes on the Shareholders' proposals on the Items nine, ten, and eleven. Of 2,500,350,241 votes cast on Item 9, 3,176,245 voted for the motion, accounting for 0.13% of the votes cast. This corresponds to 0.10% of Statoil share capital. The proposal was not carried.
Of 2,501,470,499 votes cast on Item 10, then 2,747,209 voted for the motion, accounting for 0.11% of the votes cast. This corresponds to 0.08% of Statoil share capital, and the proposal was not carried. Of 2,501,227,636 votes cast on Item 11, then 5,475,833 voted for the motion, accounting for 0.22% of the votes cast. This corresponds to 0.17% of Statoil share capital. The proposal was not carried. All right.
We have now dealt with all Items on our agenda, and shortly the minutes from this Annual General Meeting will be posted on the company's website. I now would like to thank all Shareholders for attending the Annual General Meeting. The meeting is adjourned. All right, I ask everyone to find their seats, and then we will revert to the last item on our agenda. All right. We have received the results of the votes on the Shareholders proposals on the Items 9, 10, and 11. Of 2,500,350,241 votes cast on Item 9. Then 3,176,245 voted for the motion, accounting for 0.13% of the votes cast. This corresponds to 0.10% of Statoil share capital.
The proposal was not carried. Of 2,501,470,499 votes cast on Item 10. 2,747,209 voted for the motion, accounting for 0.11% of the votes cast. This corresponds to 0.08% of Statoil share capital, and the proposal was not carried. Of 2,501,227,636 votes cast on Item 11. 5,475,833 voted for the motion, accounting for 0.22% of the votes cast. This corresponds to 0.17% of Statoil share capital. The proposal was not carried. All right.
We have now dealt with all Items on our agenda, and, shortly, the minutes from this Annual General Meeting will be posted on the company's website. I now would like to thank all Shareholders for attending the Annual General Meeting. The meeting is adjourned.