Oslo shares close lower, led by faltering oil price, Statoil UPDATE

Oslo shares close lower, led by faltering oil price, Statoil UPDATE

	Published : Fri, 27 Apr 2007 16:33 By : Agencies Print this Story

(updating with full report)

OSLO (Thomson Financial) - Oslo share prices closed lower, led down by a faltering oil price and Statoil, as production concerns took the edge off news of a 2 bln usd oil sands acquisition by Statoil in Canada, dealers said.

The OSEBX benchmark index closed 3.31 points down at 475.23 and the OSEAX All Share index dropped 3.35 points to 537.63.

Total turnover amounted to 13.2 bln nkr.

Statoil lost 2.3 pct to 166.75 nkr, as negative market sentiment undermined news that it was said it had an agreed an all-cash offer to acquire Canada's North American Oil Sands Corporation (NAOSC), in a deal worth 2 bln usd, or 20 cad per share.

Calgary-based NAOSC, was formed in 2001, and operates more than 257,000 acres of oil sands leases located in the Athabasca region of Alberta, north-east of Edmonton.

But Brent crude eased after tensions abated between Iran and the EU over the former's nuclear programme.

'Prices have been trading within the same range for about a week and there isn't an awful lot of activity out there,' said one Norwegian oil trader.

'The consensus about why things are softer is indeed the easing of Iranian tensions,' the trader added.

Also helping sap Statoil's strength was news, after the market closed on Thursday night, that Statoil will miss its 2007 production guidance after deciding to 'temporarily cease' production of gas and condensate from the Kvitebjorn field in the North Sea, cutting total Norwegian production by 190,000 barrels of oil equivalent per day (boepd).

The firm, which had previously forecast daily production of 1.3 mln boepd during 2007, said it will now announce a new production forecast during the week commencing May 7.

Among other Norwegian energy producers Norsk Hydro slid 2.4 pct to 206 nkr.

Oil services companies also had a weaker time.

Eastern Drilling closed down 0.4 pct to 134. It posted a first quarter operating loss of 518 mln usd, narrowing from an 802 mln loss at the same point last year, as it continues to invest in new rig capacity.

Eastern Drilling is currently subject to a 135 nkr per share mandatory offer from peer Seadrill, which currently owns 63.96 pct of the firm, following a drawn-out bidding process. Seadrill ended the session 0.9 pct easier at 98.50.

Fred Olsen Energy, the Norwegian offshore drilling services firm, paid the penalty after it posted first quarter results below expectations at both the operating and pretax levels, on higher operating costs and reduced revenues from the Bredford Dolphin rig, which is undergoing scheduled renovations.

For the first quarter, Fred Olsen posted operating profits of 246.9 mln nkr, down from 267.8 mln last time, and below the 272 mln consensus forecast of analysts polled by TDN Finans.

Fred Olsen closed down 1 pct at 297 nkr.

Away from the oil and oil services sectors, solar energy company Renewable Energy Corporation surged 7.4 pct to 167 after it posted first quarter results ahead of expectations across the board.

The results were boosted by a combination of higher prices and increased wafer and module production.

In other moving stocks, Yara International rose 0.3 pct to 177 nkr, Orkla rose 1.1 pct to 95.10 while among the financials DnB NOR shed 1.3 pct to 84.70.

patrick.mcloughlin@thomson.com

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