OSLO, Norway, Aug. 5, 2002 (PRIMEZONE) -- Statoil (OSE:STL) (NYSE:STO) achieved an income before financial items, tax and minority interests (EBIT) of NOK 11.1 billion (USD 1.5 billion) for the second quarter of 2002. That compares with NOK 14.3 billion in the second quarter of 2001, after adjusting for special items amounting to NOK 3 billion(1). EBIT for the first half of 2002 came to NOK 21.1 billion (USD 2.8 billion), as against NOK 29.7 billion, adjusted for special items, for January-June 2001.
Net income: NOK 6.1 billion Earnings per share: NOK 2.80 Substantial foreign currency gains Oil and gas production up 15 per cent Lower prices for oil and gas
Net income for the second quarter totalled NOK 6.1 billion (USD 0.8 billion), compared with NOK 3.6 billion in the same period of last year after adjusting for special items of NOK 2.6 billion. For the first half, net income amounted to NOK 9.1 billion (USD 1.2 billion) as against NOK 8,0 billion, adjusted for special items, in January-June 2001. Return on capital employed, adjusted for special items, was 15.6 per cent as against 17.6 per cent for 2001 as a whole. Earnings per share came to NOK 2.80 compared with NOK 1.81 (adjusted) for the second quarter of last year.
"I am particularly satisfied with developments in the upstream business in the second quarter," commented chief executive Olav Fjell. "The 15 per cent increase in total oil and natural gas production is due in part to high regularity in production on the Norwegian continental shelf (NCS) and to the fact that natural gas sales were 70 per cent higher than in the same period last year. Developments in the manufacturing and marketing business have improved compared with the first quarter, especially for petrochemicals. Our improvement programme has also contributed positively to the result. During the last six months, total improvements amounted to NOK 0.6 billion, demonstrating that we are on track in relation to the target of NOK 3.5 billion annually by 2004."
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A significant weakening of the U.S. dollar against the Norwegian kroner influenced both revenues and financial results for Statoil. Currency gains on debt strengthened the net quarterly income by NOK 2.9 billion. Tax expenses for the period amounted to NOK 10.1 billion, corresponding to 62.4 per cent.
"The strong decline in the USD exchange rate has reduced our revenues but has also provided considerable currency gains on our long-term debt denominated in USD," noted Mr. Fjell.
Statoil's combined oil and gas production in the second quarter of 2002 averaged 1 075 000 barrels of oil equivalent (boe) per day, as against 934 000 boe for the same period of last year. The average for the first half was 1 086 000 boe, compared with 969 000 boe in the first six months of 2001. This improvement reflects increased gas sales, higher production regularity on the NCS, and rising output from the Girassol field off Angola and Venezuela's Sincor project. The forecast for the year remains unchanged at an average daily production of 1 030 000 boe.
Sales by Statoil of gas from the NCS rose to an average of 4.3 billion cubic metres in the second quarter, compared with 2.5 billion cubic metres in the same period of 2001. This increase reflects higher sales under existing contracts as well as the start of deliveries under two new sales agreements, in the U.K. and Italy respectively.
A contract was signed with British Gas Trading in June for five billion cubic metres per year from Statoil and the state's direct financial interest (SDFI), with deliveries starting on October 1, 2005.
"We see positive results from efforts to increase our longterm gas sales," said Mr. Fjell. "The agreement signed with British Gas Trading is the largest single contract, measured in annual volumes, for sales of Norwegian gas during the last 15 years, and demonstrates Statoil's competitive strength in the UK market. I also find it positive that the discussion with the European Commission about Norwegian gas sales has found an amicable solution."
Work has now begun on the Snoehvit development in the Barents Sea, which represents the first project in Europe based on producing liquefied natural gas. Three wells completed internationally during the first half of 2002 all yielded discoveries. Seven exploration wells were completed in this period on the NCS, yielding five finds of which two were interesting oil finds. Statoil was awarded the operatorship of a deepwater licence and an interest in another licence in Norway's 17th offshore licensing round. This acreage represented the group's top priorities. Internationally, Statoil was awarded a 40 per cent interest in a deepwater block in Brazil's fourth offshore licensing round.
Low refining margins, product prices and shipping rates reduced results from Statoil's downstream operations in the second quarter of 2002 by comparison with the same period of last year. However, a certain positive trend carried over from the first quarter of this year. The Borealis petrochemicals group is making particular progress as a result of improved margins, higher volumes and cost cuts.
After the goals of Statoil's 1999-2001 cost reduction programme had been met at the end of last year, the group specified cost improvement measures required to attain its target of a 12 per cent return on capital employed in 2004. The aim is to improve income before financial items by NOK 3.5 billion compared with 2001. This programme is on schedule, and an improvement of NOK 0,6 billion had been achieved by June 30.
There was a slight increase in the total recordable injury frequency during the second quarter compared with the preceding three months, while the serious incident frequency declined. Safety statistics showed an improvement compared with the first half of last year. Nevertheless, a fatal accident occurred on April 17 on the chartered drilling rig Byford Dolphin, and the number of undesirable incidents remains high. Efforts to achieve further improvements to the level of safety in Statoil's operations continue to be pursued with undiminished vigour.
(1) The special items are related to the sales of licence interests on
the Norwegian continental shelf and a share in the Kashagan oil
field, with a total gain of NOK 3 billion before tax and NOK 2.6
billion after tax in the second quarter of 2001.
Please view the financial tables for this release by clicking on the link:http://reports.huginonline.com/868448/106254.pdf