Impairment charge pushes Statoil into red

Norway’s Statoil posted a fourth-quarter loss of almost USD 1.9 billion on Tuesday, as necessary long-term price adjustments resulted in an impairment charge of USD 2.3 billion.

Net operating loss over the last three months of the year was recorded at USD 1.897 billion, compared with a quarterly profit of USD 152 million in 2015. Adjusted earnings were down 6% year-on-year to USD 1.66 billion.

“In the current price environment, we delivered solid financial results from our Norwegian operations and from our marketing and trading activity. Our result was impacted by the negative result from our international operations due to expensed exploration wells, high maintenance activity and impairment charges. We delivered strong production and solid operational performance across all segments in the quarter,” President and CEO Eldar Sætre said in a statement.

Statoil recorded a 24% increase in exploration expenses to USD 607 million over the fourth quarter. By year-end 2016, 23 exploration wells had been completed.

Equity production stood at 2.095 million boepd, up from 2.046 million boepd in the final quarter of 2015.

In 2017, Statoil expects organic investment to reach USD 11 billion, with exploration costs pegged at USD 1.5 billion. The company projects an annual production increase of 3% through 2020.