Oli and gas extraction, statistics of account, 1998

The average return on total assets fell from 19.9 per cent in 1997 to 10.5 per cent in 1998, while return on equity was reduced from 20.3 to 16.3 per cent. The equity ratio went down by 1.3 percentage points to 26.9 per cent.

The reduction in profitability is due to a dramatic drop in sales revenues, which in turn was caused by the low oil prices throughout 1998. As a result, operating profits in relation to operating revenues fell from 34.0 per cent in 1997 to 22.4 per cent in 1998.

Lower return on equity

The return on equity was also reduced in 1998. Return on equity went down from 20.3 per cent in 1997 to 16.3 per cent in 1998. A substantial share of the earnings of licensees benefited the government through direct and indirect taxes. Taxes in 1998 were estimated at NOK 13 billion (a decline from NOK 37 billion in 1997), of which taxes payable came to NOK 11 billion. Taxes thus accounted for 51 per cent of pretax profits. Oil and gas companies had an average annual profit of NOK 8.5 out of every NOK 100 turned over in 1998.

NOK 339 billion in total capital

Total capital in the companies was booked at NOK 339 billion at the end of 1998. Of this capital, 13 per cent was bound in current assets (mainly receivables) and 87 per cent in fixed assets (mainly property, plant and equipment). 18 per cent of the capital was financed by short-term debt. Long-term financing by long-term debt made up 55 per cent and long-term financing by equity capital 27 per cent at the end of 1998. The equity ratio dropped in the course of the year, thereby reducing the oil companies' financial strength in 1998.

The statistics are published annually in Daily Statistics and Official Statistics of Norway (NOS) Oil and Gas Activity.

Tables:

• Table 1 Financial highlights for licenses on the Norwegian Continental Shelf. 1987-1998
• Table 2 Financial highlights for licensees on the Norwegian Continental Shelf, included the state´s direct financial interest. 1997 and 1998