Norwegian state oil company Statoil reported an 11 percent jump in operating profits for the first quarter, but faces more criticism at home and abroad. Its controversial oil sands project in Canada, the lack of carbon capture at its Mongstad plant in Norway and its eagerness for more offshore exploration off Northern Norway were all back in the news this week.
Financially, the company continues to pump up profits and fill Norway’s state coffers with so-called petrokroner. Statoil CEO Helge Lund could report net operating profits for the first quarter of nearly NOK 40 billion, up 11 percent from the NOK 35.5 billion earned in the first quarter of 2009.
Net income in the first quarter amounted to NOK 11.1 billion, up from NOK 4 billion in the like period last year. The 181 percent increase was mainly the result of higher net operating income in international exploration and production, Statoil reported, reduced losses on net financial items and a lower tax rate.
Statoil faces a potentially noisy annual shareholders’ meeting, though, because of some controversial operations. Its participation in the Alberta oil sands project in Canada, for example, has long been condemned by environmentalists who demand Statoil pull out of it. Not only does the project tear up the landscape, they argue, but it will generate “enormous” carbon emissions.
Newspaper Aftenposten reports that now the environmentalists are getting some support from the Swedish investment fund Folksam, which says it will vote for a proposal from WWF and Greenpeace that Statoil pull out of Alberta. So will some other major shareholders, including Storebrand Kapitalforvaltning.
The Norwegian government finds itself in an awkward position on the Alberta project. Cabinet Minister Erik Solheim, in charge of environmental affairs, has publicly criticized it and the government has long advocated measures to reverse climate change. It’s ironic that its own state oil company is involved in oil sands, even though Statoil claims it can help reduce Alberta’s impact and aims to cut its emissions by more than 40 percent by 2025.
Carina Lundberg Markow of Folksam told Aftenposten that “we have had discussions with Statoil … and been told they want to extract the oil sands in the best possible environmental way. But they haven’t been able to tell us how they will do that. Therefore they haven’t managed to convince us.”
Markow said it’s “unfortunate that a company like Statoil” is involved in oil sands, which she called “the most environmentally unfriendly oil extraction you can imagine.”
WWF and Greenpeace remain angry that the Norwegian government, which owns 67 percent of Statoil, remains quiet on the issue. They want the state to use its ownership position to oppose oil sands involvement.
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