A profit of NOK 7.9 billion before and NOK 2.3 billion after tax was achieved by Statoil in the first quarter of 2000. This represented increases of NOK 5.5 billion and NOK 1.6 billion respectively from the same period of last year.
"While this sharp improvement primarily reflects higher oil prices, expanded production and cost reductions also contributed," comments chief executive Olav Fjell.
"We're satisfied with progress so far this year, but our competitive position and the uncertainties surrounding oil prices mean we must continue our improvement programme as planned".
Mr Fjell notes that work on restructuring the group's operations is well under way. The divestment of Statoil Energy in the USA and activities in the Gulf of Mexico are on schedule, and interests in a number of Norwegian offshore licences have been offered for sale.
"The cost reductions achieved in the first quarter were significant, even though a high dollar exchange rate makes it challenging to achieve the budgeted cuts in Norwegian kroner."
| Quarterly accounts, Statoil group | |
|
| |
1st quarter 2000
|
1st quarter 1999
|
| Revenues |
49 645
|
25 761
|
| Profit before financial items |
9 483
|
2 288
|
| – E&P Norway |
8 537
|
2 282
|
| – International E&P |
273
|
(198)
|
| – Refining and marketing |
659
|
396
|
| – Petrochemicals |
94
|
(24)
|
| – Other |
(80)
|
(168)
|
| Profit before tax |
7 874
|
2 400
|
| |
|
|
| Net profit for the period |
2 322
|
716
|
Business segments
The exploration and production part of the business achieved a profit before financial items of NOK 8.8 billion, compared with NOK 2.1 billion in the first quarter of 1999.
Higher oil prices and crude production were the principal reasons for this improvement, but increased gas prices and lower costs also helped to strengthen results.
Operations on the Norwegian continental shelf achieved a profit before financial items of NOK 8.5 billion, up from NOK 2.3 billion for the same period of last year.
The international exploration and production business showed a profit before financial items of NOK 273 million, reflecting high oil prices.
Daily supplies of entitlement oil, including condensate and natural gas liquids, averaged 510 000 barrels as against 447 000 barrels in January-March 1999.
The average quoted price for a barrel of Brent Blend crude was USD 26.9 (NOK 221) compared with USD 11.3 (NOK 87) in the same period of last year.
Statoil's daily gas sales averaged 26.2 million cubic metres, up from 25.7 million. The average gas price increased by 40 per cent from the first quarter of 1999.
The Åsgard B gas treatment platform was positioned on this Norwegian Sea field on 24 April. Total development costs for the Åsgard chain of projects operated by Statoil will fall within the framework of NOK 65.7 billion announced in March 1999.
Deliveries from Åsgard B are due to start on 1 October, and will account at plateau for roughly 15 per cent of Norwegian gas exports to continental Europe.
The Norwegian government resolved on 28 April recommend that Statoil be allowed to proceed with its Kvitebjørn development in the North Sea.
Recovering an estimated 55 billion cubic metres of gas and 132 million barrels of condensate is expected to cost NOK 8.7 billion in 1999 money for field, transport and land-based facilities.
Statoil secured two operatorships and interests in three other licences from Norway's 16th offshore licensing round. These holdings include 20 per cent of the "President" block in the Norwegian Sea, which was seen as the acreage with the best potential in this round.
A promising discovery has been made by the group in its Norne licence, also in the Norwegian Sea. Preliminary estimates put recoverable oil at not less than 60 million barrels of oil.
The find can be tied back to the Norne production ship, and improves prospects for finding additional reserves in this area.
At 1 January, Statoil took over as operator for the Halten Bank South area of the Norwegian Sea, which includes the Kristin, Lavrans, Ragnfrid and Erlend fields.
A profit of NOK 659 million before financial items was achieved by the refining and marketing business, compared with NOK 396 million for the same period of last year.
This improvement largely reflects better earnings at Navion and higher refining margins.
Results for the new Statoil Detaljhandel Skandinavia company were satisfactory, but the other retailing activities performed poorly – largely because a mild winter reduced demand for heating and gas oils.
The petrochemicals business showed a rather higher profit than in the same period of last year, partly because of better margins on polyolefins for the Borealis group owned 50 per cent by Statoil.
Results from the group's methanol operations were unsatisfactory, but progress is expected in the second quarter.
Financial aspects
Net financial expenses for the first quarter totalled NOK 1.6 billion, compared with a net income of NOK 100 million in the same period of 1999.
This change primarily reflects unrealised foreign exchange losses related to long-term debt following the strengthening of the USD against the NOK.
Cash flow from operations improved to NOK 12.1 billion as against NOK 3.9 billion for the first quarter of last year.
On the basis that oil prices are now lower than in the first three months while exploration operations will be expanding, Statoil expects a somewhat reduced result for the next quarter.
See also:
Report first quarter
Presentation
Further information from:
John Ove Lindøe tel: +47 51 99 68 81
Wenche Skorge tel: +47 51 99 79 17