Statoil (NYSE:STO), Norway's energy champion, saw net profit rise by double digits this quarter, but there's more to the story. Operating profits, which perhaps better reflect actual business conditions, dropped by double digits. How does such a discrepancy arise? Profit is profit, right?

Lofty Scandinavian tax rates take a big bite out of the Nordic operators' bottom lines. International activity in lower tax regimes helps to offset that tax burden. Statoil's international expansion is doing wonders for its tax rate, and consequently its net earnings. With the firm's recently consummated merger with Norsk Hydro's (NYSE:NHY) oil and gas assets, not to mention its move into the Canadian oil sands, I expect this international mix to continue to improve.

Lower taxes are a much-needed boost, given the high costs that are eating away at operating margins. Trailing-twelve-month production costs per BOE have risen over 10% this year. Given the global deepwater exploration fervor, I don't see cost pressures letting up any time soon.

Other elements of Statoil's performance were mixed. Price realizations faltered, but we can hardly blame the company for that. More importantly, production rose a modest amount -- nothing on the order of Apache's (NYSE:APA) strong flows, but still nothing to sneeze at. Chevron (NYSE:CVX), a strong operator in its own right, couldn't muster a production boost this quarter. Field declines also prompted ConocoPhillips (NYSE:COP) to report lower output results.

Compared to its large peers, Statoil is performing quite well. If this firm intrigues you, keep an eye on the upcoming Norsk Hydro integration. If all goes well, we're looking at a seriously savvy offshore operator.

Related Foolishness:

Norsk Hydro is an Income Investor pick. Find out why when you take the newsletter for a free 30-day trial.

Fool contributor Toby Shute doesn't own shares in any company mentioned. The Motley Fool has an intriguing disclosure policy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.