Oil & Gas

2nd Quarter 2015

• Higher volumes in natural gas trading business lead to considerable sales growth
• Earnings considerably down quarter-on-quarter, mainly due to lower price of oil

In the Oil & Gas segment, sales grew considerably compared with the second quarter of 2014 (volumes 21%, prices/currencies –9%, portfolio 3%). This was mainly an effect of higher volumes in the Natural Gas Trading business sector. Income from operations before special items fell considerably as a result of the sharp drop in the price of oil; in addition, the previous second quarter had included income from offshore lifting in Libya. An earnings increase in the Natural Gas Trading business sector was only partially able to compensate for the decline in the Exploration & Production business sector. Net income decreased considerably.

We posted a considerable sales decline in the Exploration & Production business sector as a result of lower prices. In the second quarter of 2015, the price of Brent blend crude oil averaged $62 per barrel (–44%), while it had sold at $110 per barrel in the same quarter of the previous year. Furthermore, sales in the second quarter of 2014 had included offshore lifting in Libya. These two effects were only partially offset by volumes increases in Norway and Russia as well as positive portfolio effects from the activities acquired from Statoil at the end of 2014. Earnings dropped considerably as a result.

The Natural Gas Trading business sector saw a considerable, volumes-driven sales increase compared with the previous second quarter while prices dropped significantly. Earnings rose considerably, especially as a result of a procurement-end price revision implemented in the second quarter of 2015.