One major company found the secret to making a profit from $25 oil
Getty Images/Win McNamee
The group said it has cut costs and ramped up the amount of oil it plans to siphon, lifting production targets.
Even if the price of oil drops again, it will still be able to make money:
- Statoil cut Norwegian Krone 99 billion (£9.18 billion, $12 billion) worth of costs.
- It raised its estimated production output to 440,000. This is an increase from its first phase of production output estimate at 315,000-380,000 barrels per day.
- It hopes to eventually expand its full production capacity on the project to 660.000 barrels of oil per day.
- The cut in costs and increase in production "have been achieved by higher drilling and well efficiency and high quality in project planning and execution," said the company.
"We are now seeing the results of good cooperation between Statoil, its partners and suppliers. We are strongly reducing investment costs, and we are increasing the process capacity, resource estimate and value of the field. Johan Sverdrup is a world-class project, and we want to create high value for the owners and society for generations," says Eldar Såtre, CEO of Statoil.
The Johan Sverdrup project is Statoil's flagship oil project in Norway's North Sea oil region because it is the country's largest discovery in three decades. The Norwegian government owns 67% of the group's stock, while the rest are publicly traded, making profits at the company, a boon for the country's balance sheet.
Oil has been a tricky market to predict. Oil, which cost over $110 a barrel in June 2014, is now trading at about $47 a barrel. At one point this year it was touching $20 a barrel. Many companies have struggled to remain profitable with such a massive drop in prices from two years ago.
Statoil will do well to make money with oil around $25 per barrel. It does not look like oil prices are going to recover to triple digit highs any time soon. This is because the market is still massively oversupplied.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- Catan adds climate change to the latest edition of the world-famous board game
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- JNK India IPO allotment – How to check allotment, GMP, listing date and more
- Indian Army unveils selfie point at Hombotingla Pass ahead of 25th anniversary of Kargil Vijay Diwas
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market