Norwegian oil firm Statoil has cut back on planned investments 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 ($2.9bn) for 2014 compared with 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 with 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 programme 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 1 percent to 1.93 million barrels equivalent per day in 2014.
Statoil, which employs 23,000, forecasted an annual increase of 2 percent in organic production to 2016, and of 3 percent from 2016 to 2018.