Earnings before interest and tax for Hydro’s oil and energy arm amounted to NOK11.2 billion in Q1 2007, compared with NOK14.1 billion in the first quarter of 2006.
The company said that crude oil prices fell considerably at the beginning of 2007, adding that although they improved from mid-January, they remained lower during the quarter compared with Q1 2006. As a result, Hydro realized an average oil price of $55.9 per barrel in Q1 2007, a decline compared with Q1 2006.
Nevertheless, the company’s overall oil and gas production rose to 610,000 barrels of oil equivalents (boe) per day in Q1 2007, boosted by record output from Hydro’s international operations. First-quarter production was 15,000 boe per day higher than in the fourth quarter of 2006 and at the same level as the first quarter in 2006.
Production from Hydro’s international portfolio was at a record high in the first quarter of 2007, mainly due to positive contributions from the Dalia field in Angola and the Terra Nova field in Canada.
Hydro said that following revised output forecasts for partner-operated fields on the Norwegian Continental Shelf, the company has reduced its 2007 oil and gas production target by 3.3% to 585,000 boe per day.
Hydro said that the upcoming merger of the company’s oil and gas activities with Statoil are proceeding according to plan. The merger, which is expected to be completed on October 1, 2007, will be up for approval by shareholders in Hydro and Statoil at extraordinary general meetings on July 5, 2007.
In addition, the Ormen Lange/Langeled project is proceeding according to plan, with 94% of the total project complete as of March 2007. The development is expected to be completed on time and within budget.
