Statoil Q3 profit drop 25 percent on higher costs
OSLO, Norway (AP) — Norwegian oil company Statoil ASA said Thursday its net profit fell by 25 percent in the third quarter, mainly due to increased production costs and a higher tax rate.
The company's quarterly earnings fell to 13.8 billion kroner ($2.5 billion) from 10.4 billion kroner in the same period a year ago.
Revenue for the quarter rose 32 percent to 166.4 billion kroner from 125.9 kroner, while operating costs widened to 127.6 billion kroner from 99.2 billion kroner in the third quarter 2010.
The revenue increase was driven by a 30 percent increase in the average prices for liquids and a 13 percent increase in average gas prices, as well as higher lifted volumes compared to the same period last year, the company said.
Howver, the result was weighed down by higher tax rates and a net impairment loss of 4.8 billion kroner related to its refinery business, Statoil said.
It said the higher production costs were mainly due to higher cost from fields preparing for production startup, such as Peregrino in Brazil and Leismer Demonstration Project in Canada.
They also included gas injection costs and restructuring costs from a merger recorded in the fourth quarter of 2007 that were partially reversed in the fourth quarter of 2009 and 2010, Statoil said.
Shares in Statoil climbed 1.3 percent to 143.6 kroner ($26) in early trading on the Oslo stock exchange.
"Statoil delivered strong financial results in the third quarter of 2011, reflecting operational performance in line with expectations and strong oil and gas prices throughout the period," said the company's CEO Helge Lund.
"The giant Aldous/Avaldsnes discovery clearly reaffirms the strong potential of the Norwegian continental shelf, and we continue our long-term effort to position Statoil as an industrial player and operator within unconventionals through the offer to acquire all shares of the Brigham Exploration Company," he added.