Norwegian state-controlled oil group Statoil yesterday said pre-tax profits dipped by a smaller-than-expected 5 per cent in the second quarter as rising output helped to offset sagging prices.
Statoil also said it was on track to reach oil and gas production and earnings goals for 2004 but warned investors that a recent rally by the Norwegian krone against the dollar would make it tougher to achieve long-term earnings targets.
Pre-tax profits for the firm, Norway's biggest oil and gas producer ahead of Norsk Hydro, fell to 16.25 billion krone (€2.16 billion) in the three months to June 30th from Kr17.11 billion in the same period a year ago. Net income dipped to Kr6.06 billion from Kr6.23 billion, also exceeding forecasts of Kr5.53 billion.
The company owns part of the Corrib gas field, the development of which was suspended last month, and controls about 20 per cent of the petrol station market. It also has a minority stake in a major new ESB power plant in Ringsend, Dublin. A spokeswoman said the company does not disclose figures for the Irish operation.
Of the divisions, the natural gas unit was strongest while others were in line with or slightly lagged expectations. "For our gas activities the second quarter has been extraordinarily good," chief executive Mr Olav Fjell told a news conference.
Average oil prices fell by 10 per cent to $24.3 per barrel from $26.9 and were down 20 per cent when measured in krone.
Oil and gas output, meanwhile, rose by 15 per cent to 1.08 million barrels of oil equivalents (boe) per day from 934,000 in the same quarter of last year.
The rising sales insulated Statoil from lower refining margins that have hit earnings of oil majors including Exxon Mobil and Royal/Dutch Shell. Statoil gets only a small amount of its income from refining.
Mr Fjell said Statoil had regular output off Norway despite Norwegian oil output curbs in the first half of 2002 aimed at keeping prices high in an informal pact with OPEC.
Gas sales jumped 70 per cent and oil output from the Angolan Girassol field and Venezuela's Sincor project also rose.
"The figures were strong," said analyst Asbjoern Wigestrand at Handelsbanken. "I see that they sold more than they produced in the quarter, but even taking that into account it looks good. Production growth is 15 per cent and that's strong."
Statoil, partly privatised last year, also said that it was sticking to its average daily forecast production for 2002 of 1.03 million boe, rising to 1.26 million boe for 2007.
Maintenance halts in the third quarter would cut oil output by 15 per cent from the second. Mr Fjell said that both exploration and capital expenditure would rise in the second half of 2002.
