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Statoil sees Q2 earnings sink on weak oil prices

July 25, 2013

OSLO, Norway (AP) — Lower oil and gas prices weighed heavily on second-quarter earnings at Norway’s Statoil, even though production levels were more or less unchanged.

The company said Thursday its net operating income fell by 45 percent in the quarter to 34.3 billion kronor ($5.8 billion) from 62 billion a year ago, while net income plummeted 84 percent year-on-year to 4.3 billion kronor. Total revenues over April to June sunk 26 percent to 148 billion kronor from a year ago.

“Our financial results were impacted by lower prices for liquids and gas and weak trading results,” said CEO Helge Lund.

The impact of lower prices on the company’s bottom line was evident as Statoil’s output for the three months fell only 1 percent to just under 2 million barrels of oil equivalent per day as production at more mature fields began to decline.

Lund said the quarter was still “solid” operationally as the company posted record production from fields outside Norway.

Statoil, which is two-thirds owned by the Norwegian state, continues to explore aggressively but at home and abroad. Exploration costs for the quarter were 5.1 billion kronor ($860 million), the same as a year ago.

However, the company said that during the second quarter it cut back on drilling at expensive international wells and offset this by more exploratory work on the Norwegian continental shelf.

“The activity level on new field developments is high,” said Lund. “We are executing our projects according to plan.”

Statoil is aiming to reach an output level of 2.5 million barrels of oil equivalent by 2020.

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