Norwegian oil giant Statoil ASA (STO) said Thursday it may delay some Norwegian natural-gas production through 2012 and offered a cautious output outlook, offering the latest evidence of glut concerns despite a threefold rise in its fourth-quarter profit.
The possible postponement in Norway--the world's third-largest gas exporter--comes after booming production of liquefied natural gas and U.S. unconventional gas already led Russia and Qatar to freeze or push back some gas schemes.
A spokesman for Statoil said: "We are considering to postpone some gas production" in Norway. "If we believe we will have a higher value by pushing production in time, then we will do it," he added.
Asked on a conference call if the delay could continue through 2012, Statoil Chief Executive Officer Helge Lund said, "I cannot exclude that."
As a result, the company Thursday offered a cautious range on its outlook, with production potentially slightly down in 2010 and possibly lower than initially expected in 2012.
If it does postpone some Norwegian gas, Statoil's average hydrocarbons production in 2010 "will be in the lower end" of a targeted range of 1.925 million to 1.975 million barrels of oil equivalent a day, the spokesman said. That would be lower than the average 1.962 million barrels a day produced in 2009.
Statoil also said Thursday that its global output may be lower than expected in 2012 if a postponement occurs. It replaced a target of 2.2 million barrels of oil equivalent a day with a range of 2.1 million to 2.2 million barrels a day.
The numbers are calculated on the basis of the equity--or shares--held in each field and excludes, for instance, fluctuating entitlement effects tied to production-sharing agreements.
"The fact we see uncertainty in the gas market is the key reason for providing a range," instead of a single-number goal, Statoil CEO Lund said. "This has nothing to do with our operational capacity," he added.
The possible delay in Norway--where Statoil is the dominant producer--comes after OAO Gazprom (GAZP.RS) said last week that it would push back the start-up of its massive Shtokman field by three years.
On top of the delay in Russia--the world's largest gas exporter--Qatar has also decreed a moratorium until 2014 on new development projects at its North Field, the largest nonassociated gas reservoir in the world.
Qatar Energy Minister Abdullah Al Attiyah said last week that he was "concerned" about demand prospects for gas after the country decided to divert some of its tankers from the U.S. to Asia late 2009.
Despite medium-term worries, Statoil remains optimistic there will be a good market for its gas in the future. "I have a positive view on long-term gas," Lund said. He cited the value proposition of gas' carbon efficiency and the "opportunity of using more gas in electricity."