Statoil earnings disappoint on output and price falls

Norwegian oil group Statoil announced Thursday a 58-percent plunge in its first quarter net profit, attributing the decline to falling production and oil prices.

Net profit fell to 6.4 billion kroner (841.9 million euros, $1.1 billion) from 15.1 billion a year ago. The adjusted net profit, which is closely watched since it excludes financial items such as variations in the value of inventories, registered a more moderate decline of 28.6 percent to 12 billion kroner.

Operating profit was down by 34.4 percent to 38 billion kroner, while sales slumped by 17.2 percent to 161.7 billion.

The earnings were significantly lower than what analysts had forecast, and the Statoil share price was down by 3.13 percent in midday trading on the Oslo stock exchange.

Statoil's oil and gas production declined by nine percent in the first three months of the year, to two million barrels of oil equivalent per day, and the company maintained its forecast that production in 2013 would be lower than in 2012.

Maintenance work in the second and third quarters of this year were expected to cut production by around 45,000 barrels of oil equivalent per day in 2013.

But the company said it still expected an annual average increase of between two and three percent between 2012 and 2016, and forecast that production would exceed 2.5 million barrels a day in 2020.

The first quarter earnings were impacted by unexpected production interruptions on the Troll and Snoehvit gas fields in Norway, and the Peregrino oil field in Brazil, the company said.

At the same time, oil and gas prices declined, by 10 and 11 percent respectively in Norwegian kroner.

Statoil also registered a one-off cost of 4.9 billion kroner linked to its Cove Point liquified natural gas terminal in the US.

Other European oil heavyweights such as Anglo-Dutch Shell, Italy's Eni and Total of France have all reported a decline in profits in the first quarter owing to the lower oil price.

One notable exception was Britain's BP, which tripled its net profit thanks to the sale of its share in its Russian joint venture TNK-BP.