Statoil's Q2 Profit Down to 5% of Q2 2015

Low oil and gas prices drove Norwegian major Statoil's second-quarter profit down to $180mn, compared with last year's $3.65bn, it said July 27. Last year's figure was inflated by a major asset sale: it sold its stake in the Shah Deniz 2 and related infrastructure for Nkr12.3bn (now worth $1.4bn).

Adjusted earnings were $913mn, down from last year's $2.883bn. Operating costs were lower, it said, "mainly as a result of the ongoing cost improvement initiatives." Adjusted earnings after tax was a loss of $28mn, down from a gain of $929mn in the same period last year.

Statoil CEO Eldar Saetre

It produced 1.959mn barrels of oil equivalent/day, up 6% compared with the second quarter of last year, after allowing for the effects of asset sales. That growth will slow down now: Statoil is lowering its capital expenditure guidance for 2016 from $13bn to $12bn and its exploration guidance for 2016 from $2bn to $1.8bn. Production guidance remains unchanged and expected annual organic production growth is 1% from 2014 to 2017.

“We see continued progress on our plan to improve efficiency and make faster and deeper cost reductions. As an additional tool to strengthen the company’s financial flexibility, we have successfully introduced a scrip dividend”, said CEO Eldar Saetre.

The quarter was marred by 14 fatalities: 13 in the April 13 helicopter crash and one in an industrial accident in South Korea. Following the helicopter accident, Statoil initiated an investigation to identify ways of improving helicopter safety on the Norwegian continental shelf and the report is expected to be ready by the end of September.

William Powell