Norway's Statoil Thursday reported first-quarter output of 1.998 million b/d of oil equivalent, down 9% year-on-year, which, coupled with lower prices, cut net profit by more than half.
However, CEO Helge Lund said in the results statement that longer-term output growth plans remained on target.
"We are on track to deliver 2-3% average annual production growth from 2012 to 2016 and production above 2.5 million boe/d in 2020," he said.
Lund said Q1 production was hit by disruption to operations at the major Snohvit and Troll fields offshore Norway and the Peregrino field offshore Brazil.
CFO Torgrim Reitan told an analysts' conference call that the disruption was related to teething problems with new major fields and could not be seen as a longer-term change for the worse.
"I am not satisfied with the disruptions we have seen. Snohvit has had its challenges since startup. Peregrino is a run-in issue more than anything else and Troll is an electric motor on one compressor, isolated to that," Reitan said.
"I will not read this quarter as a change with how things work on the NCS [Norwegian Continental Shelf]," he added.
Statoil said output was also reduced in the short term by divestments from its NCS portfolio, including the $1.5-billion sale of non-core Norwegian assets to Germany's Wintershall in 2012.
But Statoil said it was playing the longer game in offloading non-core assets, and that proceeds from that sale were being actively reinvested in expanding key operations in the longer term.
These include the massive Johan Sverdrup oil discovery, one of the biggest ever made offshore Norway, which will come on stream in late 2018. It has recoverable reserves currently estimated at up to 3.3 billion barrels.
The 67% Norwegian state-controlled company said its Q1 net income more than halved to NOK6.4 billion ($1.1 billion) from NOK15.4 billion a year earlier.
Net operating income totaled NOK38 billion in Q1, down from NOK57.9 billion in Q1 2012, while revenue totaled NOK161.7 billion, down 17% from NOK195.4 billion a year earlier.
Statoil said its average liquids price came in at $103.50/barrel in Q1, down 7% from $111.50/b a year earlier.
But on the cost front, there was a 16% reduction in exploration expenditure to NOK 5.1 billion in Q1 from NOK6 billion a year earlier due mainly to less expensive wells being drilled.
GROWTH TO 2020 'NOT LINEAR'
Statoil warned again that growth to 2020 would not be linear and that equity production for 2013 was estimated to be lower than in 2012.
The impact on total production from the Wintershall sale would be about 40,000 boe/d, the company said, while growth in its US onshore gas production was expected to be around 25,000 boe/d lower than earlier forecasts.
As part of its "value over volume" strategy in Europe, the company said it produced somewhat higher gas volumes in 2012 than previously assumed, which reduced estimated 2013 gas production by around 15,000 boe/d.
Statoil said the current reduced capacity at Troll, where it had compressor problems, and the shutdown at Snohvit limited its flexibility in gas offtake. Snohvit had re-started production in Q2, it added.
At In Amenas in Algeria, where production was significantly reduced after an attack by Islamist militants in January, Statoil said the second train had started production in the second quarter, but further unspecified work was needed before the plant returned to normal production. It did not give a time frame.
Statoil said it was in close contact with In Amenas partners BP and Sonatrach and that increased security measures needed to be in place before its employees returned to the site.
Overall, Statoil said planned maintenance was expected to cut production by about 40,000 boe/d in Q2, most of it outside the NCS.
Maintenance was estimated to cut equity production of around 45,000 boe/d in 2013, most of which was liquids. "The highest maintenance activity is expected in the third quarter," Statoil said.