Statoil’s earnings drop

Norwegian energy giant and LNG operator Statoil reported a 58 percent drop in its adjusted operating profit for the year 2016. 

Adjusted earning were at US$4 billion for 2016, down from $9.63 billion in the previous year.

The company’s adjusted earnings in the fourth quarter of 2016 were $1.66 billion, 6 percent down from $1.78 billion in the same period in 2015, attributing the dip to exploration well expenses and the lower European gas prices.

Statoil reported a net operating income of $80 million for the twelve months period, dropping 94 percent from the 1.37 billion the year before. It also reported a  loss of $1.90 billion in the fourth quarter compared to an income of $152 million in the same period of 2015.

The company said in its quarterly report that the result was impacted by $2.3 billion in net impairment charges mainly due to reduced long-term price assumptions.

Eldar Sætre, president and CEO of Statoil said the “result was impacted by the negative result from our international operations due to expensed exploration wells, high maintenance activity and impairment charges,” adding that the company achieved strong results in its improvement programme, saving $700 million above target of $2.5 billion.

Statoil delivered equity production of 2,095 mboe per day in the fourth quarter compared to 2,046 mboe per day in the same period in 2015.

The increase was primarily due to the ramp-up of new fields and strong operational performance. Excluding divestments, the underlying production growth was 2 percent compared to the fourth quarter last year.

Statoil updated its outlook for 2017-2020 period expecting a capital expenditure of around $11 billion for 2017. The company estimates a 4-5 percent production growth in 2017 from 2016, and an annual production growth of around 3 percent from 2016 to 2020.