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Pre-tax profit of NOK 2.4 bn for Statoil in first quarter

April 27, 1999, 01:00 CEST
Profit before tax for the Statoil group in the first quarter of 1999 came to NOK 2.4 billion as against NOK 3.1 billion for the same period of last year. The result after tax was 0.7 billion NOK, compared to 1.2 billion NOK in the first quarter of 1998.

The two most important reasons for this decline are lower oil prices and a contraction in oil production from the same period of last year.

"This is an acceptable result when you consider that market conditions for our products remain difficult," says chief executive Harald Norvik.

"We're making good progress with our improvement efforts and cost cuts. That work will continue. An oil price of USD 15-16 per barrel does not reduce the need for such measures."

Cash flow from operations in the first quarter totalled NOK 3.9 billion, as against NOK 7 billion in the same period of 1998. Net investment came to NOK 4.4 billion, up from NOK 3.8 billion in the first quarter of last year.

The exploration and production segment reported a profit before financial items of NOK 2105 million, compared with NOK 3329 million for the same period of 1998.

Supplies of entitlement oil, condensate and natural gas liquids totalled 447.000 barrels per day, down from 488.000 barrels in the first quarter of last year. A decline in production from Norway's big offshore fields, particularly Oseberg and Statfjord, was only partly offset by higher international output. For the year as a whole, bringing new fields on stream is expected to increase daily production.

The average price for Brent Blend reference crude during the first quarter was NOK 87 (USD 11.3) per barrel as against NOK 106 (USD 14) in the same period of last year.

Daily sales of entitlement gas averaged 25.7 million cubic metres as against 25.2 million in the first three months of 1998.

The production facilities and transport systems operated by Statoil ran very well during the period. Oil began flowing from Denmark's Siri field on 2 March, and the plateau production will reach 50.000 barrels per day. Statoil has a 40 per cent interest in this project, which came on stream just three years after Siri was discovered.

Profit before financial items for the refining and marketing segment in the first quarter came to NOK 386 million, up from NOK 302 million in 1998. Trading with crude oil and products strengthened, while refining and shipping showed a rather lower result.

Petrochemicals had an loss before financial items of NOK 56 million for the period, as against a profit of NOK 243 million the year before. This weak result reflects low margins for both petrochemical products and for methanol.

Statoil's results are heavily dependent on oil price developments. The production curbs adopted by the Organisation of Petroleum Exporting Countries have so far helped to achieve a significant strengthening in prices during the second quarter. Results for this period are expected to be better than in the first three months.

Further information from Kai Nielsen, tel: +47 51 99 49 72