Norway: Statoil Increases Oil and Gas Production by 17 pct in 2Q
Statoil’s second quarter 2012 net operating income was NOK 62.0 billion, a 2% increase compared to NOK 61.0 billion in the second quarter of 2011.
“Statoil continues to deliver good financial results and strong cash generation. We increased oil and gas production by 17% in the second quarter compared to the same period last year. Production in the second quarter was as expected and we maintain our production guidance for 2012,” says Helge Lund, Statoil’s president and CEO.
Statoil’s adjusted earnings of NOK 45.8 billion in the second quarter are 5% higher than the same period in 2011, mainly a result of higher gas prices and increased volumes of oil and gas sold.
“We increased our gas production by 33% and we also grew liquids production by 8% consistent with our growth ambitions through start-ups, ramping up production and lower maintenance effects,” says Lund.
On the Norwegian continental shelf (NCS), Statoil delivered positive production performance primarily through higher gas sales, achieving an 11% total production increase. There was limited maintenance on the NCS in the second quarter and a higher maintenance level is expected in the third quarter.
Statoil increased international production by 32%, including more than doubling the production in North America compared to the second quarter last year. Statoil has announced two high-impact discoveries offshore Tanzania and Norway since the previous quarter, continuing the exploration success from 2011 and the first quarter of 2012. Over the past 15 months a total of eight high-impact discoveries have significantly added to Statoil’s resource base.
“Since the previous quarter, Statoil has made additional strategic progress, including further implementing the co-operation agreement with Rosneft, successfully completing the divestments of Statoil Fuel & Retail ASA to Alimentation Couche-Tard and NCS assets to Centrica, and sanctioning two projects on the NCS. We continue to leverage our competitive strengths towards delivering on the production ambition of above 2.5 mmboe per day for 2020,” says Lund.
Due to higher activity level and higher share of capitalised exploration, Statoil expects to invest around USD 18 billion in capital expenditures in 2012. Statoil now expects to complete around 45 wells with a total activity level at around USD 3.5 billion, excluding signature bonuses.
Key events since first quarter:
Continuing international growth – production increase from ramp-ups of several fields internationally.
Important industrial developments continued on the NCS – sanctioning the Svalin fast-track and Gullfaks subsea compression projects, installing the Valemon steel jacket in the North Sea and taking the first construction steps for the Aasta Hansteen field in Northern Norway.
Portfolio management to enhance value creation – closed the divestments of Statoil Fuel & Retail ASA to Couche-Tard and NCS assets to Centrica.
Strong exploration performance – two high-impact discoveries: The gas and condensate discovery King Lear in the North Sea is an important contribution to revitalising the NCS with high-value barrels, while the Lavani gas discovery offshore Tanzania supports Statoil’s ambition for international growth. High exploration activity with drilling in 22 wells, six discoveries and six awaiting final evaluation. Nine wells ongoing at the end of the second quarter 2012.
Early access at scale in new and promising basins – awarded 26 leases in the first lease sale in the Central Gulf of Mexico since March of 2010.
Signed agreements with Rosneft on joint bidding for exploration licenses in the Norwegian Barents Sea and on joint technical evaluation covering two Russian onshore assets. Farmed into shale opportunities in Australia.
Press Release, July 26, 2012