Oslo  - Norwegian energy giant Statoil Hydro's fourth-quarter net income has dropped 67 per cent on the previous year, the group said Tuesday, citing a drop in oil prices.

The stronger US dollar rate also impacted earnings, the state-controlled group said, reporting net income for the quarter of 2.0 billion kroner (291 million dollars) compared to 6.2 billion kroner for the corresponding quarter 2007.

Net operating income increased 22 per cent to 37.8 billion kroner, while turnover was up 3 per cent to 150 billion kroner.

For the full-year 2008, operating income increased 25 per cent to 198.8 billion kroner while net income fell 3 per cent to 43.3 billion kroner compared to 2007.

Turnover year-on-year surged 25 per cent to 656 billion kroner.

"We have delivered record production and carried out our most active exploration programme ever," Statoil Hydro chief executive Helge Lund said in a statement.

Statoil Hydro, created in October 2007 with the merger of Norwegian oil and gas groups Statoil and Norsk Hydro, said 2008 was "one of the most volatile periods in the product, gas liquid and crude oil markets."

In its outlook, the group expected crude oil and gas liquids prices to remain at "relatively low levels" and prices to remain volatile.

Statoil Hydro said its average daily oil and gas output was 1,925,000 barrels of oil equivalent per day during 2008, up 5 per cent on 2007.

The group reported a rise in exploration spending, reflecting higher exploration activity.

The group drilled 79 exploration wells during 2008, of which 35 discoveries were declared, including eight outside the Norwegian continental shelf. (dpa)