Norway's Statoil Defies Oil Sector Gloom with Upbeat 1Q
OSLO, April 29 (Reuters) – Norway's Statoil defied gloom in the oil sector by reporting first-quarter earnings above expectations on Tuesday due to higher prices and good results from shale gas activities in the United States, lifting its shares.
Regarding new sanctions on Russia, Statoil's CEO told Reuters it was too early to say whether he would attend a high-profile St Petersburg economic forum in June as planned, as the firm had to assess the impact of the measures first.
Oil firms have seen their profit margins decline due to a rise in costs as crude becomes more difficult to extract and several big projects, such as Kashagan in Kazakhstan, have spiralled out of control.
Statoil was no exception in experiencing a squeeze in margins and in February said it would slash spending by $5 billion in 2014-2016, an 8 percent reduction from earlier expenditure plans, so it could pay more to shareholders.
Shares in Statoil were up 3.86 percent at 0755 GMT, outperforming a 0.79 percent gain in the European oil and gas index. The stock was among the best performers on the Oslo bourse, outstripping a 1.2 percent rise in the benchmark index.
Chief Executive Helge Lund said healthy prices and good results from its U.S. gas assets were behind the strong numbers. Statoil is present in all the major U.S. shale gas plays.
"The cold weather (in the United States) and good gas infrastructure (on the Northeastern Seaboard) has made it possible for us to get good prices," Lund told a news conference.
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