Statoil Lifts Exploration Target as Earnings, Output Up
OSLO, Oct 30 (Reuters) – Energy major Statoil emphasized a focus on profits over volumes, even while managing to beat forecasts for both earnings and output in the third quarter and raising its target for spending on exploration.
Statoil, which has expanded aggressively out of its traditional Norwegian base over the past several years, said on Wednesday it was on course to raise output by more than a quarter by 2020 but that the figure was not carved in stone.
"We are value and not volume driven," Chief Executive Helge Lund said, adding that Statoil had already discovered enough oil and gas and that reaching this year's output target was only a matter of the costs of developing finds.
"The entire industry is characterized by rising costs and declining profitability," Lund said. "It is imperative that we as an industry are able to constantly improve operations and control costs ... there is a need for further action."
With investments set at $19 billion this year, Statoil has been forced to sell some assets to finance growth and cover its cash needs after paying out dividends.
Those sales as well as a redistribution of shares in the major Ormen Lange gas field will hit production by up to 120,000 boepd next year, the company warned, a decline that it may be able to offset by production increases elsewhere.
Rather than a slowdown in spending, Statoil raised its 2013 exploration target to $3.75 billion from $3.5 billion and said it would drill 60 wells instead of a planned 50.
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