Statoil slashes $2bn in spending as oil slumps

Norwegian national oil company Statoil has pledged to slash $2bn from this year’s planned investments and dramatically step up cost-cutting as it prepares for a sustained period of low oil prices.

Statoil slashes $2bn in spending as oil slumps
Statoil's Oseberg A platform. Photo: Harald Pettersen/Statoil
Eldar Sætre, who was confirmed as president and chief executive only three days before the announcement, said he believed that the company was well-placed to withstand the tough new conditions. 
“Our financial position is robust, and we maintain a stable dividend. Through our significant flexibility in our investment programme, we are well prepared for continuous market weakness and uncertainty,” he said in a press release. 
The company unveiled an unexpected loss of 8.9 billion kroner ($1.19bn) for the last three months of 2014, down from 14.8bn kroner in the same period in 2013, a performance Sætre put down to tumbling oil prices. 
“Statoil’s quarterly earnings were affected by the sharp drop in oil prices. Our net income was also impacted by specific accounting charges.”
The company said it planned to increase its annual cost-cutting programme by 30 percent from $1.3bn a year starting in 2016 to $1.7bn a year, to make it more resilient in the face of sustained low oil prices. 
Sætre, who had served as acting president and CEO since the company’s long-standing chief Helge Lund was poached by BG Group in October 2014, was confirmed in the post on Tuesday. 

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‘Call me Equinor’: Statoil changes name

Norway's largest oil company Statoil officially changed its name to Equinor on Wednesday as it forges ahead with its drive into renewable energy.

'Call me Equinor': Statoil changes name
CEO Eldar Sætre presents the name change in Stavanger. Photo: Carina Johansen / NTB Scanpix

Proposed in March and adopted on Tuesday at the shareholders' general meeting, the name change allows the company to take a step back — at least in name — from the Norwegian state, which owns 67 percent of its shares, and from oil. 

Equinor is meant to combine the idea of equity and equilibrium (“equi”) and geographical origin (“nor”) for Norway.

Founded in 1972 to operate Norway's large oil fields, the company — which is listed on both the Oslo and New York stock exchanges — is now active in renewable energies, including wind farms off the UK coast.

The group has earmarked 15-20 percent of its investments to “new energy solutions” by 2030.

But this shift has been cold shouldered by environmentalists concerned about global warming as they accuse the company of “green washing”.

“Statoil name change to attract young talent will not be sufficient as long as Equinor is exploring in vulnerable areas, such as the Arctic or the Great Australian Bight,” tweeted Truls Gulowsen, leader for Greenpeace in Norway.

READ ALSO: Norway pledges to spend less oil money in new budget