Norwegian upstream oil firm Statoil has reported a surprise third quarter net loss on Wednesday, according to news site Reuters.
Low oil prices have translated into a sharp drop in profits for the Norwegian firm.
State-controlled Statoil said it took $2 billion worth of charges on a halted Canadian oil sands project and exploration assets in the United States and Angola, while its underlying operations were hurt by a 21 percent drop in gas prices and a plunge in oil price.
For the quarter, Statoil reported a net loss of 4.8 billion crowns ($726 million) against a 13.7 billion crown profit a year ago and well below expectations for a 9.5 billion crown net profit. Its adjusted operating profit of 30.9 billion was in line with forecasts.
Analysts said market reaction was relatively muted for an unexpected loss because the firm had taken decisive measures to cut costs through asset sales in places like Norway and Azerbaijan, project delays, layoffs and renegotiated contracts.
“Over the past months, Statoil has carried out a number of strategic moves which demonstrates that the company puts its money where its mouth is,” Swedbank analysts Teodor Sveen-Nilsen said.
“We believe the company’s cost cutting and capital discipline strategy is credible and will yield results over the next quarters,” Sveen-Nilsen added.
