Statoil's results for the first quarter of 2003
"I am pleased that we have delivered another strong quarterly result," says chief executive Olav Fjell. "This performance has been influenced by high oil prices, continued good production and high natural gas sales from the Norwegian continental shelf, and improved downstream margins. It is gratifying that we secured a new contract to increase our deliveries to the European gas market. Both internationally and on the NCS, we strengthened our position with new operatorships."
Earnings per share came to NOK 1.66 for the first quarter of 2003 as against NOK 1.39 in the same period of last year.
Results for the first quarter were strengthened by comparison with the same period of 2002 through an increase in oil prices, higher production and improved downstream margins. These effects were offset to some extent by lower gas prices and a weaker USD exchange rate against the NOK. While oil prices measured in USD rose by 56 percent compared with the first quarter of 2002, they were up by 23 percent in NOK. Gas prices declined by six percent in NOK.
Income tax for the first quarter of 2003 came to NOK 8.9 billion, giving a tax rate of 70.4 percent as against 71.8 percent for the same period of last year.
Statoil's oil and gas production averaged 1,159,000 barrels of oil equivalent per day (boe/d) for the first quarter, an increase of six percent from 1,096,000 boe/d in the same period of 2002. High gas output on the NCS made the biggest contribution to the rise in production. The NCS accounted for 1,082,000 boe/d of the group's first-quarter output, with international operations contributing 76,000 boe/d. Production from the Sincor project in Venezuela was reduced during the period as a result of political unrest, which affected Statoil's overall international output.
Three exploration and appraisal wells were completed during the first quarter, yielding two discoveries - one internationally and the other on the NCS.
Statoil secured one operatorship and interests in three further production licenses when awards were made in Norway's North Sea licensing round. On January 1, 2003, the group became operator for all fields in the Tampen area of the Norwegian North Sea after taking over this role from Norsk Hydro on Visund, Snorre, Tordis and Vigdis. Statoil has increased its provision for losses on rig charters by NOK 700 million in anticipation of persistent excess capacity in the rig market.
The producing life of the Glitne field in the North Sea has been extended by approximately 1.5 years after recoverable reserves were increased by 40 percent. A new production well will be drilled.
Statoil secured two new operatorships outside Norway during the first quarter. These cover responsibility for gas sales and business development for the gas pipeline for the Shah Deniz field off Azerbaijan, and the operatorship for block four on Venezuela's Plataforma Deltana. The decision to develop Shah Deniz was taken on 27 February this year. Fabrication work on two of the three platforms for phases six-eight of Iran's South Pars development has begun, and drilling operations are being planned.
Statoil secured a new gas contract from Electricite de France covering one billion standard cubic meters (scm) annually over 15 years. Deliveries will begin on October 1, 2005.
Gas sales rose by 16 percent from the first quarter of 2002 to 5.9 billion scm. This high figure reflected the cold winter in Europe and customer use of their contractual flexibility to take gas.
Results for the Manufacturing & Marketing business area improved sharply, rising by NOK 1.6 billion from the same period of 2002. Higher refining margins and better results from oil trading were the most important reasons for this increase.
The acquisition of Preem's Polish service stations was completed in the first quarter. Completed on April 7, the sale of Navion to Teekay will be recorded in the second quarter of 2003.
Production of virtually sulphur-free petrol began from the Mongstad refinery near Bergen during the first quarter.
Serious incidents per million working hours improved from 3.9 in the first quarter of 2002 to 3.4. Total recordable injuries per million working hours rose from 5.3 to 5.9. A contractor employee lost his life in an accident on the Saipem 7000 crane barge in the North Sea. This incident is being investigated and improvement measures are being implemented to avoid similar accidents.
Statoil was listed on the FTSE4Good sustainability index on the basis of an assessment of its environmental and social performance.
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