Good result for third quarter

November 6, 2000, 00:00 CET

A profit of NOK 9 billion before tax was achieved by Statoil for the third quarter of 2000, an improvement of NOK 3.1 billion over the corresponding period of last year. Profit before tax for the first nine months came to NOK 25.9 billion as against NOK 11 billion for the same period of 1999.

The principal reasons for the improvement in results are:

  • higher oil and gas prices
  • better refining margins
  • cost reductions and more efficient operation.

"Results for the first nine months of this year are the best in our history," says chief executive Olav Fjell. "That reflects good markets, but reduced costs also made a positive contribution."
Several interesting discoveries internationally provide the basis for increased reserves and long-term production growth. The restructuring of our business is continuing.

"In the safety field, the positive trend we have experienced over many years is flattening out. Statoil's management devotes great attention to this area, and our aim is to ensure that the progress made in recent years continues."

Profit after tax for the third quarter came to NOK 3 billion as against NOK 3.3 billion in the corresponding period of last year. However, the 1999 figure included substantial gains on the sale of Saga shares and 50 per cent of the Scandinavian service station network. These gains are taxed at a lower rate than revenues from oil and gas operations.


Third-quarter accounts, Statoil group
(amounts in NOK mill)
3rd quarter
2000
3rd quarter
1999
1.1-30.9.00
1.1-30.9.99

Operating revenues
45 777
39 297
142 932
94 322
Profit before financial items
11 134
4 717
29 802
9 556

- E&P Norway
9 380
3 503
24 882
8 417
- International E&P
220
-168
865
-607
- Refining and marketing
1 270
1 364
3 503
1 948
- Petrochemicals
145
161
365
193
- Other
119
-143
187
-395

Pre-tax profit
9 023
5 909
25 851
10 963
Net profit for the period
3 036
3 297
8 426
5 168



Exploration and production

The exploration and production segment made a profit of NOK 9.6 billion before financial items for the third quarter, compared with NOK 3.3 billion in the same period of 1999.
This result breaks down into NOK 9.4 billion from the Norwegian continental shelf (NCS) and NOK 220 million from international upstream operations. Profit before financial items for the first nine months came to NOK 25.7 billion as against NOK 7.8 billion in January-September 1999. This improvement reflects higher oil and gas prices.

Supplies of entitlement oil during the third quarter averaged 496000 barrels per day compared with 492000 barrels for the same period of last year. Daily gas sales averaged 14.8 million cubic metres as against 22.1 million. The decline reflects the disposal of Statoil Energy in the USA and reduced sales from the NCS. Gas achieved a price of about NOK 0.90 per cubic metre for the first nine months, which was substantially higher than in the same period of last year. The average price of Brent Blend reference crude during the third quarter was NOK 272 per barrel, compared with NOK 162 for the same period of 1999.

Exploration results internationally are encouraging. Promising discoveries have been made off Nigeria, Angola and Kazakhstan. Statoil secured two operatorships off the Faroes during the period. The overall results of exploration on the NCS were weaker than expected.

As part of its concentration on core areas of the NCS, Statoil has reached agreements on selling interests in four fields and two exploration licences in these waters.

Gas production from the Åsgard field in the Norwegian Sea began as planned on 1 October. Development costs for the Åsgard chain of projects are within the estimate of NOK 65.7 billion. The Ministry of Petroleum and Energy has allocated gas deliveries to Statoil's Mikkel field in the Norwegian Sea. This ensures that the field can sell its gas in 2003-2010.

Refining and marketing

Statoil's downstream operations showed a profit of NOK 1.3 billion before financial items for the third quarter, as against NOK 1.4 billion in the same period of 1999.

Third-quarter results last year were influenced by one-off effects which made a positive contribution of NOK 500 million. Adjusted for these special items, the profit improvement for July-September derives principally from the refining business and from Navion.

Refining and marketing achieved an overall profit of NOK 3.5 billion before financial items for the first nine months, up by roughly 80 per cent from the same period of 1999.

Petrochemicals

The petrochemicals segment reported a profit of NOK 145 million before financial items for the third quarter, compared with NOK 161 million in the same period of 1999.
Borealis, owned 50 per cent by the group, showed a lower result than for the third quarter of last year. However, the methanol business achieved a substantial improvement as a result of significantly higher prices and increased production. Profit before financial items for this segment over the first nine months improved by roughly 90 per cent from the same period of last year, to NOK 365 million.

Financial aspects

Cash flow from operations at 30 September totalled NOK 28 billion, as against NOK 14.4 billion in the same period of 1999. Net cash flow to investing activities came to NOK 5.2 billion, compared with NOK 14.6 billion. The sale of Statoil Energy accounts for just over NOK 5 billion of this NOK 9.4 billion reduction.

Net financial expenses totalled NOK 4 billion at 30 September, as against net financial earnings of NOK 1.4 billion at the same time last year. This change primarily reflects unrealised foreign exchange loss on long-term debt as a result of a high NOK/USD exchange rate, and the gain on sale of Saga shares in the third quarter of 1999.

The return on average capital employed was 15.3 per cent on an annualised basis in the third quarter, as against 4.7 per cent the year before.

Prospects

On the basis of prevailing market conditions, a good result is also expected for the fourth quarter. The group's restructuring and improvement programme provides a good foundation for continued growth and development.

Further information from :
John Ove Lindøe, tel: +47 51 99 68 81 / Wenche Skorge, tel: +47 51 99 79 17

See also:
Report third quarter
Presentation - PDF (0,8 MB)