U.S. News

Statoil Reports Rise in Second-Quarter Profits

The state-controlled Statoil oil company on Monday reported an 11% increase in net profits for the second quarter from a year earlier due mainly to a lower tax bill and increased natural gas sales.

The Stavanger-based group said its net profit for the April through June quarter was 10.95 billion kroner ($1.86 billion, 1.36 billion euros) compared to 9.84 billion kroner a year earlier.

"We deliver strong results and a record high international oil production, while continuing our efforts to position the group for future growth," said Helge Lund, Statoil's chief executive.

He said a key development during the quarter was the final approval of Statoil taking over the oil division of smaller Norwegian rival Norsk Hydro by both companies' shareholders in July. The takeover is to be completed in Oct. 1.

The company reported second quarter revenues of 108.9 billion kroner ($18.5 billion,13.5 billion euros), a one percent increase on the 107.6 billion kroner reported a year earlier. Earnings per share for the quarter were 5.00 kroner ($0.85, 0.62 euros) compared to 4.42 kroner in the second quarter of 2006.

The results were announced before trading opened for the day on the Oslo stock exchange.

The group said its operating income declined 13% in the second quarter from a year earlier, due to lower oil and natural gas prices when measured in Norwegian kroner, which strengthened against the U.S. dollar during the period.

However, the group reported a 22% decline in its tax liabilities during the quarter, due to increased deductions allowed in Norway and a greater share of its earnings coming from outside Norway, in countries with lower taxes.

Average daily oil and natural gas production for the quarter was 1.11 million barrels of oil equivalents for the second quarter, a three percent increase on a year earlier. Oil equivalents measure the energy content rather than the volume of oil and gas.

Statoil, with about 25,000 employees in 33 countries, was founded in 1972 by the government, which began to partly privatize the group in 2001.