Det Norske Deepens Cost Cuts, Raises Output

Norway registered mixed results on Wednesday, with Det Norske Oljeselskap reporting EBIT for the third quarter at -91 million USD and Statoil awarding a 178 million USD contract to Jacktel for providing accommodation services on the Joahn Sverdrup oil field.

As done by others over the last days, Det Norske deepened cost cuts and raised output forecasts, on low oil prices. The firm controlled by Norwegian billionaire Kjell Inge Roekke is also involved in the Johan Sverdrup project. 

‘The average realized oil price was USD 52 (104 in the same period in 2014) per barrel, while gas revenues were recognized at market value of USD 0.26 (0.28) per standard cubic metre (scm)’ reads a note released on Wednesday. 

Det Norske cut costs for more than $100 million this year. As a result, production costs are expected to average $6.5 a barrel this year, down from a previous $8 to $10 range.  

Also on Wednesday, Norway's Statoil reportedly said its gas production capacity will be reduced by 25 million cubic metres per day on Thursday due to problems at the Heimdal riser platform.

Meanwhile, it awarded a contract for the Haven jack-up accommodation rig for the installation and commissioning period for the Johan Sverdrup project phase 1. 

“The Haven jack-up accommodation rig  will be an important tool in the final offshore installation and commissioning phase, putting together the different pieces of the Johan Sverdrup puzzle” Kjetel Digre, senior vice president for the Johan Sverdrup development project, commented in a second note.  

Statoil is also investing in renewable energy sources. On Tuesday, it said it will invest more than $230 million in the construction of a floating wind farm off Scotland.