France's Total and Norwegian rival Statoil have added to the downbeat tone from the oil industry, promising to tackle a tough environment with cost cuts as they announced big drops in third-quarter profit. Both companies have benefited from a recovery in crude prices in recent months but Statoil said the price rise had a weak foundation.
Norway's largest company offered little hope on Wednesday that natural gas prices - battered by lower demand due to the economic crisis - would recover any time soon, while Total, Europe's largest refiner by capacity, said crude processors faced a "very difficult" environment.
"Although we see signs of improvement in the global economy, there is no firm evidence that industry investment, employment and private consumption have recovered in a sustainable way," Statoil chief executive Helge Lund said. Total's adjusted third-quarter net income fell 54 percent to 1.87 billion euros ($2.76 billion), in line with an average forecast of 1.84 billion, according to Thomson Reuters I/B/E/S.
Statoil's adjusted net profit fell 40 percent to 9.3 billion Norwegian crowns ($1.62 billion) in July-September, ahead of a mean forecast of 8.4 billion in a Reuters poll. Adjusted net income strips out gains or losses from one-off items such as asset sales, and unrealised gains related to changes in the value of fuel inventories. Analysts consider it the best measure of a company's underlying performance.
Statoil said production rose 10 percent in the quarter compared to the same period in 2008, to 1.71 million barrels of oil equivalent per day (boepd) thanks to new field start-ups and reduced hurricane impacts at its Gulf of Mexico fields. Total said its production of oil and gas rose a 0.5 percent in the quarter to an average 2.243 million boepd, against some predictions of a drop.
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