OSLO: Norwegian oil giant Statoil cut back on planned investments Friday as annual profits were slashed in half in the wake of tumbling oil prices and heavy write-downs.
The company reported annual profits of 21.9 billion kroner ($2.9 billion, 2.5 billion euros) for 2014 compared to 39.9 billion kroner the year before and announced a 10 percent cut in its $20 billion-investment budget for this year.
"Statoil's quarterly earnings were affected by the sharp drop in oil prices," the group's new chief executive Eldar Saetre said in a statement.
Hit by oil prices which fell by about a half since the summer and heavy write-downs of assets, Statoil went into the red in the second half of the year and recorded a net loss of 8.9 billion kroner in the last quarter.
Adjusted earnings -- without exceptional items -- stood at 136.1 billion kroner compared to 163.1 billion in 2013 and turnover was down 1.6 percent to 606.8 billion kroner.
The group -- 67 percent-owned by the Norwegian state -- said it was stepping up an efficiency program to generate savings of $1.7 billion per year from 2016 and that an 8 percent cut in the workforce last year could be followed by further staff reductions.
Despite a rebound towards the end of the year, the company's oil and natural gas production fell by one percent to 1.93 million barrels equivalent per day in 2014.
Statoil, which employs 23,000, forecasted an annual increase of two percent in organic production to 2016, and of three percent from 2016 to 2018.
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