Statoil says it is getting ‘more for less’ after reporting jump in Q3 profits

Norwegian oil major Statoil today reported a jump in third quarter profits and said it expected to increase production by 6% this year.

Statoil, which recently activated the world’s first floating wind farm off Peterhead, also said its projects and cost cutting programmes were on track.

The company is working towards first oil on the Mariner project east of Shetland next year. Project partners finished installing the platform at the start of August.

In the third quarter, Statoil achieved 15% production growth and an 11% reduction in operating costs per barrel.

Statoil also expects to lower full-year capital expenditure by £750million to £7.5billion.

Third quarter revenues increased by 11% year-on-year to £10.2billion, while pre-tax profits were up 43% to £710million.

The company said it benefited from higher prices, lower turnaround activity, the ramp-up of new fields and strong operational performance.

Net operating income was impacted by net impairments charges of £600million, mainly related to an unconventional onshore asset in North America.

Chief executive Eldar Saetre said: “We continue to realise efficiency improvements and deliver strong progress on project development and execution.

“This is the result of hard work from the organisation, in close collaboration with our suppliers and partners, and strict capital discipline. We are getting more for less.”

The firm has maintained a dividend of $0.22 per ordinary share for the third quarter.

Biraj Borkhataria, analyst at RBC Europe, said: “The one disappointing figure in the result is that cash generation came in below our expectations, partly driven by higher cash taxes, which suggests limited upgrades to full-year cash flow consensus, in our view.”

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