Norway's Statoil suffers shock profit loss

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Statoil headquarters in Stavanger, south-west Norway. Photo: Heiko Junge / NTB scanpix
21:23 CET+01:00
Norwegian oil giant Statoil posted on Wednesday an unexpected third-quarter loss owing to weak oil prices and a charge for depreciated assets.

The 67-percent state-owned firm reported a switch into a net loss of 4.7 billion kroner ($706 million).

That was down from a 14.3-billion-kroner profit a year earlier.

It came as a shock to analysts who had expected a profit of at least 9.0 billion kroner.

The big downturn was mainly the result of a charge of 13.5 billion kroner linked to the write down of its Kai Kos Dehseh oil sand project in Canada.

That was the result of the postponement of the Corner field development. It also took a charge for a fall of the value of assets in the Gulf of Mexico and Angola.

Like other oil companies, Statoil was also hit by lower prices of oil - down 7.6 percent this year in Norwegian kroner - and of natural gas.

Production was also slightly down to 1.829 million of barrels equivalent (mboe) per day from 1.852 mboe per day in the third quarter of 2013.

At the operational level, Statoil stayed in the black with operating income reaching 17 billion kroner, but far from last year's 39.3 billion kroner.

Revenue fell by 12.2 percent to 148.2 billion kroner.

Statoil shares were up by 1.74 percent on the Oslo stock market in midday trading, while the main index was 0.61 percent higher.

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The group, which is looking for a new head after Helge Lund left to join Britain's BP, kept its production target for 2014 at 2.0 percent higher than 2013.

Faced with soaring costs in the oil services sector and falling revenue due to lower oil prices, Statoil announced at the beginning of the year cuts in its investments, which will reach $20 billion in 2014.

To boost its cash flow, the firm has also frozen or postponed development of fields in Norway and sold several assets.

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