OSLO: Norwegian energy firm Statoil reported an unexpected third-quarter net loss on Wednesday, weighed down by a string of impairment charges on projects from Canada to Angola, even as its underlying performance was in line with forecasts.
Statoil earned a net loss of 4.8 billion crowns ($726 million) against a 13.7 billion crown profit a year ago and well below expectations for a 9.5 billion crown net profit.
Still, the firm maintained its production and capital spending guidance for the year and its adjusted operating profits of 30.9 billion crowns, though down by a quarter from a year ago, was in line with forecasts.
"These charges were mainly related to an impairment of the Kai Kos Dehseh asset in Canada, triggered by the postponement of the Corner field development, as well as impairments of exploration assets in the Gulf of Mexico and Angola," Statoil said. Statoil's underlying performance was weighed down by low European natural gas prices, tumbling oil prices and the impact of asset sales which cut into its volumes.
The firm said it still expected to spend $20 billion on capital expenditure this year, despite the recent fall in oil prices, and it was looking to increase output by 2 percent.
"Deferral of gas production to create future value, gas off-take, timing of new capacity coming on stream and operational regularity represent the most significant risks related to the production guidance," it said.
State-controlled Statoil earlier this year abandoned its long-term production targets and cut back capital spending plans, arguing that it needed to return more cash to shareholders and had to become more selective about its investments after a decade-long spending boom.
It has also sold a string of production assets from Azerbaijan to Norway to raise cash and reduce future spending commitments, having operated for years with a negative cash flow after dividend payments. Its outlook has also been clouded by the unexpected move of its CEO to rival BG Group and several exploration failures, particularly in the Arctic Barents Sea.
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