Statoil trims budget for 2016 by $1.7 billion

Norway’s Statoil ASA is reducing its organic capital expenditure to $13 billion in 2016 from $14.7 billion in 2015, the company reported.

Norway’s Statoil ASA is reducing its organic capital expenditure to $13 billion in 2016 from $14.7 billion in 2015, the company reported.

Statoil says it plans to invest “in a radically improved project portfolio, with an average breakeven of [$41/boe].” Exploration spending in 2016 will be about $2 billion.

From 2014 to 2017, the company estimates annual organic production growth of 1% from a rebased equity production level. From 2017 to 2019 Statoil expects 2–4% organic annual production growth.

“Statoil is well-positioned to capture value from an expected upturn in the market,” said Eldar Saetre, Statoil president and chief executive officer. “We have substantially improved our nonsanctioned project portfolio. More than 80% of the operated projects, with start-up by 2022, have a breakeven oil price below [$50/boe].”

The 2016 budget cut follows 2015 adjusted earnings of $9.01 billion, with adjusted aftertax earnings of $2.3 billion. It reported a full-year loss of $4.4 billion of net income in accordance with international financial reporting standards (IFRS), mainly due to lower short-term price assumptions leading to impairment charges and provisions.

During the fourth quarter, the company saw adjusted earnings of $1.79 billion, with adjusted earnings after tax of $188 million.

It reported a fourth-quarter IFRS net income loss of $1.01 billion.

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