Statoil posts surprise loss

Oslo - Norwegian oil giant Statoil posted on Wednesday an unexpected third-quarter loss owing to weak oil prices and a charge for depreciated assets.

The 67% state-owned firm reported a switch into a net loss of 4.7bn kroner (€558m, $706m).

That was down from a 14.3bn kroner profit a year earlier.

It came as a shock to analysts who had expected a profit of at least 9.0bn kroner.

The big downturn was mainly the result of a charge of 13.5bn kroner linked to the write down of its Kai Kos Dehseh oil sand project in Canada.

That was the result of the postponement of the Corner field development. It also took a charge for a fall of the value of assets in the Gulf of Mexico and Angola.

Like other oil companies, Statoil was also hit by lower prices of oil - down 7.6% this year in Norwegian kroner - and of natural gas.

Production was also slightly down to 1.829 million of barrels equivalent (mboe) per day from 1.852 mboe per day in the third quarter of 2013.

At the operational level, Statoil stayed in the black with operating income reaching 17bn kroner, but far from last year's 39.3bn kroner.

Revenue fell by 12.2% to 148.2bn kroner.

Statoil shares were up by 1.74% on the Oslo stock market in midday trading, while the main index was 0.61% higher.

The group, which is looking for a new head after Helge Lund left to join Britain's BP, kept its production target for 2014 at 2.0% higher than 2013.

Faced with soaring costs in the oil services sector and falling revenue due to lower oil prices, Statoil announced at the beginning of the year cuts in its investments, which will reach $20bn in 2014.

To boost its cash flow, the firm has also frozen or postponed development of fields in Norway and sold several assets.