Statoil posts loss, set to improve

Norwegian giant Statoil took at hit in 2015 as it posted a net loss in its Q4 income at US$1.08 billion (NOK 9.2 billion), and a $4.4 billion (NOK 37.3 billion) loss for the full year 2015, that the company said was a result of lower short term price assumptions leading to impairment charges and provisions. 

Statoil CEO Eldar Sætre.

CEO of Statoil, Eldar Sætre said the company is initiating a “step-up in its improvement program by 50% to @2.5 billion per year in 2016.”

One year ahead of its plan, Statoil said it will deliver an annual cost improvement of about 12% to $1.9 billion, compared to its 2016 target of $1.7 billion.

The company’s plan includes reducing its organic capital expenditure from $14.7 billion in 2015 to around $13 billion in 2016, an almost 12% difference, in addition to “substantially” improving its portfolio of non-sanctioned projects, with planned start-up by 2022, reducing the average break-even oil price from $70/boe in 2013 to $41/boe in 2016, Statoil said.

"The result in the fourth quarter is highly impacted by the weak commodity price. However, we continue to make strong progress on costs and efficiency. We are now further stepping up our improvement program, and tightening our capital and exploration expenditures. These are key elements in navigating the business during a period of low oil prices," Sætre said in the company’s Q4 and full year 2015 report.\

The Norwegian giant claims to have improved its non-sanctioned project portfolio, with more than 80% of its operated projects, scheduled for start-up by 2022, to have a break-even oil price below $50/boe.

Statoil posted adjusted earnings in Q4 2015 of $1.8 billion (NOK 15.2 billion), down 44% compared to Q4 2014 of $3.2 billion (NOK 26.9 billion).

Net income came in at $200 million (NOK 1.7 billion), compared to $1.1 billion (NOK 9 billion) in the same period last year.

The company did however complete 39 exploration wells during 2015, with three wells on-going at year-end. Adjusted exploration expenses in the quarter were $494 million (NOK 4.2 billion), down from $883 million (NOK 7.5 billion) in Q4 2014, mainly as a result of lower drilling activity and less expensive wells being drilled, Statoil reported.