Norwegian oil and gas firm Equinor reported on Friday a small fall in quarterly operating profit, beating forecasts, and said its giant Johan Sverdrup oilfield in the North Sea remains on track to start production in November.

Earnings before interest and tax (EBIT), adjusted for one-off items, fell to $4.2 billion in the first quarter from $4.4 billion during the same period of 2018, higher than a forecast of $3.9 billion in a Reuters poll of analysts.

The company, which has a smaller refining business than rivals, fared slightly better than BP, Exxon Mobil, and Chevron which saw sharp declines in profits partly due to lower refining margins.

Equinor’s domestic and international oil and gas production units both beat forecasts, while its refining, marketing and renewable energy unit was largely in line with analysts’ expectations.

“The beat in both cases was largely down to lower costs, while in Norway costs were also helped by a weaker crown,” analysts at Berenberg investment bank said.

Equinor’s pipeline gas sales to Europe were also a positive surprise, given that many expected them to be lower due to weaker spot prices, RBC Capital Markets’ Biraj Borkhataria said.

Its quarterly oil and gas production was 2.18 million barrels of oil equivalents per day (boepd), slightly ahead of a 2.16 million forecast in the poll.

About 40 per cent of its production came from international operations, including in the United States, Angola and in Brazil which Equinor recently designated as a core growth area.

The company expects full year production in 2019 to be unchanged from last year, but to grow annually by 3 per cent over 2019-2025.

“Johan Sverdrup will start production later this year, and our project developments are on track to deliver production growth towards 2025,” Chief Executive Eldar Saetre said in a statement.

The company reiterated its financial outlook, including $11 billion in capital spending in 2019, and said it would pay a dividend of $0.26 per share for the first quarter, in line with expectations.

Some analysts have said the company could end the year with lower capital spending than guided, as in previous years.

“Given the company’s track record on capex, we would expect spending levels to be nudged down to $10-10.5 billion later in the year,” Borkhataria said.

Lundin Petroleum, a partner in the project, said on Thursday it saw possibilities to reduce Johan Sverdrup Phase 1 project costs, estimated at 86 billion Norwegian crowns ($9.80 billion), as offshore installations progressed smoothly.

Equinor was planning to spend around 5 per cent of its total capital expenditure on renewable energy projects this year, similar to 2018, he added.

Saetre said Equinor planned to take part in an upcoming British renewable energy auction in May to build a giant Dogger Bank wind park in the North Sea with its partner SSE.

Reuters