Statoil 1Q Profits up 74%, as Polarled Passes to Gassco

Norway’s Statoil posted May 4 net 1Q income of $1.06bn, 74% higher year on year, marking a big improvement from its $2.79bn loss posted in 4Q 2016. It also handed over responsibility for operation of the new Polarled pipeline to Gassco earlier this month.

Equity production grew by 4% year on year to 2.146mn barrels of oil equivalent in 1Q 2017 – of which 45% gas, 55% liquids – with its average realised liquids price up 70% at $49/b, and higher North American gas prices also a key contributor.

Upstream net operating income was $3.24bn in Norway, but minus $161mn internationally.

CEO Eldar Saetre said Statoil plans to achieve an extra $1bn efficiency gains this year, to a total of $4.2bn. It also reduced its net debt ratio to 30%

Statoil also intends to continue to mature its large portfolio of exploration assets, estimating a total spend in 2017 on exploration of some $1.5bn excluding signature bonuses, and was embarking on a six-month Barents Sea exploration campaign.

Its outlook also envisaged net 2017 production to be around 4%-5% above last year’s.

About one-third of Statoil’s equity production was outside Norway: 753,000 boe/d, up 3%. This was boosted by the ramp-up of In Salah Southern (onshore Algeria) and Corrib (offshore Ireland) gasfields, partly offset by divestments of some North American oil sands and Marcellus shale assets.

Net operating income quadrupled year on year to $4.25bn, notwithstanding a $351mn loss booked on the sale for $328mn cash of Kai Kos Dehseh oil sands activities in Canada to Athabasca Oil Corp which closed January 31 2017. The sale was announced in 4Q 2016.

Statoil said a federal judge in Brazil granted an injunction, at the request of a trade union, to suspend the assignment to Statoil of Petrobras’s 66% stake in offshore licence BM-S-8, noting that the injunction was suspended May 2 by the president of the federal regional court but may be appealed. It also noted talks with Angola to resolve a dispute over additional profit taxes.

Pipes used to build Polarled (Photo credit: Eva Sleire / Statoil)

Polarled passes to Gassco

In other news May 4, Norwegian state subsea gas trunklines operator Gassco said it took over operatorship of the Polarled pipeline built to carry gas initially from the Statoil-operated Aasta Hansteen development in the Norwegian Sea to the Nyhamna process plant. The takeover occurred May 1.

Gassco is now responsible for the 482-km, 36-in Polarled pipeline and to follow up the Shell-led Nyhamna expansion project on behalf of the joint venture that owns Polarled, the first offshore pipeline to cross the Arctic Circle. The pipeline has a design capacity of 70mn m³/d.     

Mark Smedley