Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Statoil sees oil slump as opportunity to cut costs

Statoil news
Statoil's head office in Norway

Norwegian oil producer Statoil sees the crude price downturn as a chance to slash costs and become more efficient, with a senior executive calling it a “great opportunity” to improve operations.

Torgrim Reitan, Statoil’s head of United States operations, said his goal is to retool the company’s shale and offshore oil projects to be nimble enough to survive across a range of oil prices.

“A price downturn like this only happens once every 20 years, and it’s a great opportunity,” Reitan said on the sidelines of the IHS CERAWeek conference, the world’s largest annual gathering of oil executives.

“You will never have a sense of urgency like you do right now.”

Reitan took the reins of Statoil’s US operations last fall and immediately confronted a division struggling with high costs, senior executive flight and questions about where best to allocate capital.

Four American Statoil leaders jumped ship last year to form their own oil company, a brain drain of talent at one of the worst times for the Norwegian state-owned company.

Already, Reitan has laid off 20% of his staff and slashed the cost per barrel to produce oil by more than 40%.

“If you get it right these days, you can make some lasting changes that will stand for years and years,” said Reitan, who previously was Statoil’s chief financial officer. “The winners of the next decade are shaped today.”

Reitan’s generally upbeat outlook – effectively making lemonade from the low-price lemons – stands in stark contrast to the dour mood permeating much of the CERAWeek conference in Houston this week, with rival executives forecasting a lower-for-longer oil price scenario and further industry contraction.

Reitan himself acknowledged that oil prices need to rise and that cost cuts and efficiency gains alone will not help Statoil.

He holds a goal for his division to be profitable at oil prices of $50 per barrel by 2018, which would be an improvement from the $90 per barrel level in 2014.

Still, oil prices hover below $30 per barrel today.

“I do see a very tight market going forward, with a big, big demand for our products over time,” Reitan said.

Recommended for you

More from Energy Voice

Latest Posts