StatoilHydro Profit Almost Wiped Out as Demand Slumps

StatoilHydro ASA, the world’s largest offshore oil and gas operator, said profit was almost wiped out in the second quarter as the global recession sapped fuel demand, denting prices for crude and natural gas.

Net income fell to 77 million kroner ($12.8 million), or 0.02 kroner a share, from 18.8 billion kroner, or 5.89 kroner, a year earlier, the Stavanger, Norway-based company said in a statement today. Analysts estimated a profit of 7.1 billion kroner. Sales dropped 39 percent to 104.6 billion kroner.
StatoilHydro, which is 67 percent owned by the Norwegian government, got an average $53.7 a barrel in the quarter, down 53 percent from a year earlier, while realized gas prices slipped 18 percent to 1.82 kroner per cubic meter of gas.

“StatoilHydro maintains a high activity level and robust operations both in Norway and internationally,” Chief Executive Officer Helge Lund said in the statement. “Although the outlook for the global economy seems somewhat less pessimistic and the balance of risks appears to have improved, the uncertainty remains high,” he said.

The company, which has operating rights on about 80 percent of Norway’s oil and gas production, is expanding to countries such as the U.S., Canada and Brazil as North Sea reserves dwindle. Oil output in Norway is forecast to drop almost 10 percent this year, according to the country’s Petroleum Directorate. StatoilHydro’s reserve replacement ratio fell to 34 percent last year from 86 percent in 2007.

Bloomberg