However, Hydro’s oil and energy unit booked EBIT of NOK11.5 billion in Q2 2007, down from NOK13.2 billion in the same period of 2006, mainly due to increased depreciation and field costs, and lower oil prices measured in Norwegian kroner. Gas prices were also significantly lower.
The company’s results were also impacted by a fall in average oil and gas production in the quarter, which amounted to 558,000 barrels of oil equivalent (boe) per day, 52,000 boe per day lower than in Q1 2007, mainly due to planned maintenance work and the temporary shutdown of the Kvitebjorn field.
However, production in the second quarter was 21,000 boe per day higher than in Q2 2006, reflecting positive contributions from several partner-operated fields on the Norwegian Continental Shelf (NCS) and record-high production from Hydro’s international portfolio.
Hydro said that oil prices are expected to remain high for the next quarters. The company added that although planned maintenance shutdowns on the NCS will have negative impact on oil production in Q3 2007, the Ormen Lange/Langeled project is expected to come on stream in October as planned, and contribute significantly to production capacity in Q4 2007.
Hydro also said that its merger with fellow Norwegian player Statoil is on track for completion on October 1, 2007, following shareholder and regulatory approvals. Once complete, Hydro will operate solely as a global aluminum company.
