Statoil cuts investments due to oil price dip

Oslo - Norwegian oil giant Statoil cut back on planned investments on Friday as annual profits were slashed in half in the wake of tumbling oil prices and heavy write-downs.

The company reported annual profits of 21.9bn kroner ($2.9bn) for 2014 compared to 39.9bn kroner the year before and announced a 10% cut in its $20bn 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 8.9bn kroner in the last quarter.

Adjusted earnings - without exceptional items - stood at 136.1bn kroner compared to 163.1bn in 2013 and turnover was down 1.6% to 606.8bn kroner.

The group – 67% - owned by the Norwegian state - said it was stepping up an efficiency program to generate savings of $1.7bn per year from 2016 and that an 8% 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 one percent to 1.93 million barrels equivalent per day in 2014.

Statoil, which employs 23 000, forecasted an annual increase of two percent in organic production to 2016, and of 3% from 2016 to 2018.