Statoil enjoys benefits of higher oil prices Norway's largest oil and gas company Statoil reported fourth-quarter adjusted net income of 14.5bn Norwegian crowns ($2.5bn), a 34 per cent increase on a year ago, thanks to higher oil prices. "Statoil delivered record financial results, further improved safety and made important strategic progress in 2011," Helge Lund, Statoil's chief executive said in a statement. He said the company had had a good year for exploration in 2011, with discoveries in the North Sea and the Barents Sea that helped to add more than 1bn barrels to Statoil's resource base. Statoil also said it achieved a reserve replacement ratio of 1.17 last year, including acquisitions, meaning it found more oil than it produced. It is planning capital expenditure of $17bn this year, up from $16bn in 2011. Last year, Statoil also made a big bet on unconventional oil and gas in the US, acquiring US independent oil company Brigham Exploration in October for $4.4bn. That gave it access to promising tight oil reserves in North Dakota and Montana. Oil production was 1.975m barrels of oil equivalent a day in the fourth quarter, a slight increase on a year earlier. The company said it hoped to increase production this year by 3 per cent, and has plans to reach output of 2.5m barrels a day by 2020. In a note, Bernstein Research said Statoil's adjusted operating income for the fourth quarter of 45.9bn crowns came in below consensus estimates. Analyst Iain Pyle said that was due to weaker-than-expected earnings from Statoil's international business, where a sharp rise in production costs caused by new project start-ups offset increases in production. He also noted that Statoil's Norwegian production was continuing to decline, and said there were "real risks" to production downgrades through 2012.