Statoil’s Loss Widens in 3Q, BASF Feels Loss of Wingas
Statoil 3Q’s net loss increased to $427mn, a 24% bigger loss year-on-year, while net equity liquids and gas production also declined by 5% to 1.805mn barrels of oil equivalent/day (boe/d).
A heavy planned offshore maintenance programme, as well as Statoil’s continued gas ‘value over volume’ strategy, impacted overall production, the Norwegian firm said October 27.
Net operating income was also 16% lower at $737mn, which was primarily due to the decline in gas prices, said Statoil, but lower oil prices, reduced refining margins, and $324mn of exploration wells expensed in 3Q 2016 that were capitalised in previous periods were also factors.
Adjusted exploration expenses in the first nine months of 2016 were stable year on year.
Production in Norway declined by 12% year on year to 1.034mn boe/d in 3Q 2016, due to heavy turnarounds but also lower gas offtake at Troll and expected natural decline on mature fields. The effect of an earlier redetermination of Statoil’s equity stake in the Shell-operated Ormen Lange field in the Norwegian Sea, and the ramp-up of new fields partly offset the decrease.
Beyond Norway, net production grew by 5% to 772,000 boe/d thanks to the start-up since end-2015 of Ireland’s Corrib gas field and ramp-up of the In Salah Southern gas fields in southern Algeria.
Statoil’s average realised price for Brent oil in 3Q 2016 was $45.90/b, down 9%, while its gas prices fell by 30% in Europe to $4.85/mn Btu but firmed by 3% in North America to $2.02/mn Btu. Its reference refining margin fell by 59% to $3.90/b.
Wintershall profits down by 95%
German chemicals giant BASF, which includes upstream arm Wintershall, posted a 27% decline in its net 3Q 2016 income at €888mn ($969mn). As in 2Q, the September 2015 divestment of Wintershall’s gas trading and storage business to Gazprom – as part of a wider asset swap – hit BASF sales and profits.
BASF’s oil and gas division thus saw its net income shrink by 95% to just €33mn (from €625mn in 3Q 2015) and Wintershall’s upstream was impacted by “gas prices on European spot markets [that] fell sharply compared with the previous third quarter.”
Wintershall ramped up production mainly in Russia and Norway. But it was impacted by a previously announced reduced earnings contribution from its share in the Yuzhno Russkoye gas field.
Mark Smedley