Second-quarter earnings at Europe's integrated oil and natural gas majors are expected to be roughly flat on the year despite higher crude prices. The stoppage of Libyan oil because of the civil war, outages due to maintenance and depressed gas prices dented profits.
Second-quarter earnings at Europe 's integrated oil and natural gas majors are expected to be roughly flat on the year despite higher crude prices. The stoppage of Libyan oil because of the civil war, outages due to maintenance and depressed gas prices dented profits.

Refining margins improved in the April-June period, but still remain weak.

At the top of investors' agenda are any comments on plans to boost oil production to benefit from the higher prices as well as to counter the missing Libya crude.

Statoil ASA (STS.LS) -- July 28, 0530 GMT

MARKET EXPECTATIONS: The high price of oil is expected to support earnings but as Statoil struggles with production disturbances, expectations are low. Goldman Sachs says the firm is likely to face a tough second quarter, due to heavy maintenance in Norway . "Production should be down year over year," says analyst Christine Tiscareno at Standard & Poor's. She expects earnings per share to be higher compared with the second quarter last year, as the company is helped by the high price of oil and by its recent NOK17.35 billion sale of a 24.1% stake in the Gassled pipeline venture. "According to how expensive the production problems were, earnings on a recurrent basis could be lower than last year's but earnings as a whole, taking into account extraordinary items, would be better because of the sale of the pipeline," Tiscareno says. No big news is expected from the Statoil report as the company recently held a capital markets day in New York .

MAIN FOCUS: Statoil's production issues are likely to remain in the spotlight. "Focus will be on production," says Endre Storlokken at Danske Bank. "What I am looking for is if the problems on the NCS [Norwegian continental shelf] have been finally solved," says Tiscareno. News on the company's international expansion will also be welcomed by the market. Statoil has said it expects to raise production from around 1.9 million barrels in 2010 to above 2.5 million barrels of oil equivalent a day in 2020.

Repsol YPF SA (REP.MC) -- July 28, premarket

MARKET EXPECTATIONS: Repsol should post higher net profit on higher oil prices, but output numbers may cast a shadow on bottom-line results. Libyan disruptions should have a noticeable effect on production in the quarter. Investors will also be watching refining margins, which have recovered after a tough 2009.

MAIN FOCUS: Libya should be an important theme, as production has been shut down there, and it's unclear when and if it will restart. Repsol is among the oil majors most exposed to Libya , sourcing about 5% of its production from the country. In addition, any comments on the progress of oil discoveries off the coast of Brazil will be relevant, as Repsol participates in a consortium exploring what is thought to be among the world's largest untapped oil reserves. Through its Argentine operations Repsol is also betting that huge shale gas discoveries lie in wait beneath the surface in Argentina 's Patagonia region.

Eni SpA (E) -- July 29, premarket

MARKET EXPECTATIONS: Analysts expect second-quarter adjusted net profit to be slightly lower than the EUR1.63 billion of the equivalent period last year as depressed gas prices take their toll. Eni is pursuing contract renegotiations with its gas suppliers that would allow margins to improve as it currently sells on gas at a loss. The renegotiated gas contracts will be backdated to the start of the year. Output is expected to be more than 10% weaker on the year as production from Libya , its biggest market, remains shut down.

MAIN FOCUS: Comments on the possible restart of Libyan output in the event of the rebels taking over the entire country. Investors will also be on the lookout for any details on the possible sale of Eni's multibillion-euro 33.3% stake in Galp Energia SGPS SA (GALP.LB) after the formation of a Portuguese government, which has a say in any sale.

Total SA (TOT) -- July 29, at 0600 GMT

MARKET EXPECTATIONS: Excluding the consolidation of a 12.8% stake acquired in Russian gas company OAO Novatek (NVTK.RS), the group's output in the second quarter is expected to be lower from the first quarter, due to the extensive maintenance program, the stoppage of Libyan production and the mild weather over the period in the Northern hemisphere. But the consolidation of Novatek is expected to limit the decrease. Regarding the group's net profit, most analysts expect it to be flat from the previous quarter despite the higher crude oil prices, due to a higher tax rate in the U.K., the cost of maintenance in the group's most profitable zones such as the North Sea and the Gulf of Guinea, while the continuing weakness in the refining margin should have dented downstream earnings.

MAIN FOCUS: Investors await any detail about the group's aggressive transformation strategy, after it acquired a 60% stake in U.S.-based SunPower, such as more exploration spending to add to its long-term growth portfolio. Total's Chief Financial Officer Patrick de La Chevardiere is expected to confirm the group's full-year guidance of flat production from 2010 at constant oil prices during the 1300 GMT conference call. Analysts are also anxious to get any detail over the lasting divestiture process of the group's U.K.-based Lindsey refinery after Chief Executive Christophe de Margerie admitted last week the group was no longer in exclusive talks with a potential buyer.

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