Statoil says gas earnings offset loss in oil revenues for quarter
By the OGJ Online Staff
LONDON, Oct. 29 -- Norway's Statoil AS said Monday that a reduction of 16% in oil prices and weaker downstream earnings were offset by a 57% increase in gas sales, higher gas prices, and other financial gains.
The company reported a net income of 4.1 billion kroner ($453 million) or 1.88 kroner/share (21¢/share), for the third quarter of 2001, in line with financial institutions' expectations.
Net income for the first 9 months was 14.6 billion kroner or 7.15 kroner/share, an increase of 28% from the same period of 2000.
Statoil President and CEO Olav Fjell said, "Despite reduced prices and margins for our main products, the underlying results are sound. Planned cost reductions and restructuring are on schedule. Our production performance is good, allowing us to increase our forecast for the year to 985,000 barrels boe/d. Results so far this year confirm that we are on schedule to reach the goals for results and growth communicated during our initial public offering in June."
Oil and gas production averaged 999,000 boe/d during the third quarter, an increase of 11% from the same period of last year. Production for the first 9 months averaged 981,000 boe/d, up 2% on 2000.
All field developments included in Statoil's production target of 1.12 million boe/d for 2004 have now been sanctioned. These include the development and operation of Snøhvit, which will be the first offshore development in the Barents Sea, and the first project in Europe to be based on exports of liquefied natural gas.
The company said the Norwegian Gas Negotiating Committee has signed an agreement with the Polish state oil and gas company to supply Norwegian gas. The agreement means that Poland will receive 74 billion cu m of gas over a period of 16 years, starting in 2008. Statoil and the Norwegian state's combined share of the contract is 66.8%.
Gas deliveries started Oct 1 to Italy and the UK. Statoil and the Norwegian state will deliver 100 billion cu m of gas to Italy by 2025. In the UK, Statoil, and the state, under an agreement with BP PLC, will deliver 1.6 billion cu m of gas every year until 2016.
E&P Norway earned a third-quarter profit of 1.3 billion kroner, a decline of 11% from the same period of last year. This reduction was mainly attributable to a 16% fall in oil prices, higher exploration costs, and increased depreciation owing to the rise in production. Fifteen exploration and appraisal wells have been drilled so far this year, resulting in 10 finds. Statoil was operator for 10 of the wells. Volumes sold during the third quarter of 2001 were 926,000 boe/d, a 12% increase from the same period of last year.
International E&P earned a third-quarter profit before financial items of 125 million kroner, down 125 million from the same period a year ago. That was attributed to a fall in oil prices and a 9% fall in third quarter production. Average daily oil and gas sales for the third quarter fell from 68,000 boe/d in 2000 to 62,000 boe/d in 2001 because three wells were shut down at Jupiter gas field in the UK.