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Statoil delivers record results

February 21, 2001, 18:25 CET

A profit before tax of NOK 38.1 billion has been reported by Statoil for 2000, representing an increase of 183 per cent from the year before. This result is the best in the group’s history.
Net profit for the year came to NOK 11.3 billion, an improvement of NOK 6.6 billion from 1999. And the return on capital employed rose from 5.9 per cent in 1999 to 15.1 per cent.

“This is a very satisfactory result,” says chief executive Olav Fjell. “We have benefited from developments in the oil and gas market, and our improvement efforts have also contributed.
Our costs have been reduced in line with the targets we’ve set for ourselves, and we have improved the overall portfolio by concentrating operations on our core assets.”

The average price for Brent Blend oil was NOK 251 per barrel in 2000, compared with NOK 140 the year before. The average gas price rose by 70 per cent, while refining margins almost doubled.

At 31 December 2000, the group had cut its operating, administrative and exploration costs by a total of NOK 3 billion compared with the end of 1998. The group trimmed NOK 17.6 billion from its debt and improved its equity by NOK 7.6 billion.

“Our profitability and financial position are good,” notes Mr Fjell. “That gives us freedom of action.”

Annual results for health, safety and the environment (HSE) in Statoil show that the improvement trend of recent years has come to a halt.
“I’m not satisfied with progress on safety,” says Mr Fjell. “There were too many serious incidents registered last year. We have accordingly initiated a number of measures to improve safety results. The manager’s role is very important in this context. In addition, a full review of technical safety has been launched at all our facilities.”

Income statement, Statoil group

NOK mill
2000
1999
Operating revenues
208 156
138 788
- Exploration and production Norway
35 373
14 589
- International exploration and production
818
(1 996)
- Refining and marketing
4 557
(276)
- Petrochemicals
441
(23)
- Other
162
8

Profit before financial items
41 351
12 302

Profit before taxation
38 071
13 470

Net profit for the year
11 335
4 696

Reserves and production

The group had booked proven reserves of NOK 1 517 million barrels of oil and natural gas liquids at 31 December 2000, as against 1 562 million the year before. Booked proven gas reserves totalled 1 466 million barrels of oil equivalent (boe), up from 1 430 million.

International holdings now account for 18 per cent of Statoil’s total booked proven reserves.
Daily oil production by the group averaged 509 000 boe in 2000, compared with 465 000 in 1999. Of the 2000 figure, 57 000 boe derived from Statoil operations outside Norway.
Gas production by the group averaged 21,9 million cubic metres per day compared with 25,1 in 1999, a decline which reflects the sale of Statoil Energy in the USA during 2000.

Business segments

Exploration and production achieved a profit before financial items of NOK 36.2 billion, as against NOK 12.6 billion in 1999. This breaks down between NOK 35.4 billion from operations in Norway and just over NOK 800 million from international activities.

Planned cost reductions on the NCS were achieved through workforce downsizing and operational savings. In addition, the balance sheet was slimmed down through the sale of NOK 2.1 billion in interests on the NCS.

Statoil had a good year for exploration off Norway, with six new discoveries.
Gas production commenced from the Åsgard field in the Norwegian Sea on 1 October 2000, with output exported via the Åsgard Transport pipeline and the Kårstø complex north of Stavanger.

The Sygna field and the Heidrun north flank project were brought on stream earlier in the year. As operator, Statoil has started development work on the Kvitebjørn and Glitne — the latter is the smallest, independent development on the NCS — and is working on plans to develop the Kristin, Mikkel and Snøhvit discoveries.

International exploration and production achieve a profit of NOK 818 million as against a loss of NOK 2 billion in 1999. This improvement reflects higher oil prices and cost savings.

The basis for Statoil’s international operations was strengthened during 2000 through new discoveries in the Caspian as well as off Nigeria and Angola. Hydrocarbons were found in 12 of the 19 exploration wells in which Statoil participated outside Norway during the year, and booked reserves increased by 10 per cent.

Production also began from the Sincor heavy crude project in Venezuela, and Statoil
resolved to take part in the development of Ireland’s Corrib field. The authorities in Turkey, Georgia and Azerbaijan have approved the agreement on laying an oil export pipeline from Azerbaijan to Ceyhan in Turkey. Statoil concluded a partnership agreement with the NIOC, Iran’s national oil company.

Refining and marketing achieved a profit of NOK 4.6 billion as against a loss of NOK 276 million in 1999. The main reasons for this improvement were very good refining margins and a stronger performance by the Navion subsidiary. Work continues on restructuring the latter.

While the retailing collaboration with Sweden’s ICA showed an improvement in results, the rest of this business was hit by lower sales and reduced margins.The collaboration agreement between Statoil and Shell over their respective Mongstad and Pernis refineries was initiated in 2000.

Petrochemicals showed a profit of NOK 441 million before financial items, compared with a loss of NOK 23 million in 1999. Results for methanol improved significantly as a result of better margins and stronger cost control.

Prospects

Statoil has pursued a demanding restructuring process over the past two years, enhancing its cost-efficiency and financial position. The group will continue to maintain strict capital discipline.

The government proposes to open up for an increased number of owners in Statoil by listing the group on the stock market. Initially, new owners corresponding to 10-25 per cent of the value of the group will be brought in through the listing. The state will retain at least two thirds of the shares in the group. Statoil is organising its work in order to be prepared for implementing a stock exchange listing at the time determined by the Ministry of Petroleum and Energy.

In connection with these preparations, the parent company will change its name from Den norske stats oljeselskap a.s to Statoil ASA.

See also:
Annual accounts and directors' report
Presentation set
PDF-version (0,9 MB)

Further information from:
John Ove Lindøe, senior vice president public affairs, tel: +47 51 99 68 81
Wenche Skorge, vice president public affairs, tel: +47 51 99 79 17