Higher oil prices, cost cuts lift Statoil to 2Q profit

Norwegian oil company Statoil has managed to return to profit in the second quarter of 2017, helped by higher oil prices and cost cuts.

The company’s net income for the second quarter 2017 was $1,43 billion, compared to a loss of $302 million a year ago.

“Our solid financial results and strong cash flow are driven by good operational performance with high production efficiency and continued cost improvements. At oil prices around 50 dollars per barrel, we have generated 4 billion dollars in free cash flow, and reduced our net debt ratio by 8.1 percentage points since the start of the year. We expect to deliver around 5% production growth this year, and at the same time realize an additional one billion dollars in efficiencies,” says Eldar Sætre, President and CEO of Statoil ASA.

Sætre noted the recent start-up of the Gina Krog field, adding that the company was also making progress Johan Sverdrup and other important projects like Aasta Hansteen, Mariner, Oseberg Vestflanken, Peregrino II, Dudgeon and Hywind.

On the exploration side, he said: “So far this year, we have drilled 14 exploration wells and made nine discoveries. Several of these can quickly be put into profitable production. Our exploration program in the Barents Sea started with the Kayak discovery and gives us the opportunity to test several new prospects. We expect to drill around 30 exploration wells in 2017. Based on strict prioritization and efficient drilling operations we are able to reduce our guidance for exploration spending this year to around 1.3 billion dollars.”