HOUSTON (Reuters) - Norwegian oil producer Statoil ASA expects its U.S. shale operations to be profitable within two years at crude prices of $50 per barrel, an improvement helped by simplifying operations, technological improvements and cost cuts.

FILE PHOTO - Pump jacks drill for oil in the Monterey Shale, California, U.S. on April 29, 2013. REUTERS/Lucy Nicholson/File Photo

Torgrim Reitan, Statoil’s head of United States operations, said in an interview that the company’s push for the lower break-even price is largely due to internal improvements that should stick regardless of any price hikes from service providers.

“Our business clearly makes sense in a $50 (per barrel) environment,” Reitan said Monday on the sidelines of the CERAWeek conference, the world’s largest gathering of energy executives. “It is remarkable to see how the whole industry has responded positively to the new price reality.”

Statoil, which produces shale oil and natural gas in North Dakota’s Bakken, the Eagle Ford of Texas and the Marcellus of Pennsylvania, moved its U.S. operational staff to Austin, Texas, last year, a step Reitan said has helped push down costs.

The company’s U.S. shale oil break-even price stood at $66 per barrel at the end of 2016, a 35 percent improvement from the prior year. That should drop to $50 by 2018, he said.

“That is clearly coming from us taking away complexity from development,” he said, adding Statoil’s process to approve new projects has become far more stringent since oil prices started to plunge two years ago.

The moves come as Statoil sees U.S. shale as one of three regions vital to its long-term growth potential, alongside Norway and Brazilian offshore.

U.S. shale “clearly makes sense in the current environment,” Reitan said. “It has a lot to offer moving forward.”

Statoil expects service costs in the United States to rise 20 percent “within a few years,” Reitan said, though he said he didn’t expect any increases to hinder its 2018 break-even goal.

The company has spoken little on OPEC policy and doesn’t forecast what the cartel could do at its next meeting in May, Reitan said.

“We need to be prepared for volatility, no matter what,” he said.

Reitan declined to comment on whether Statoil was interested in acquiring acreage in the Permian, the one bright spot in the U.S. shale industry today due in part to its relatively low cost of operations.

In the Bakken, one of the company’s largest areas of operations, Statoil plans to add a drilling rig this year and “slowly grow” output through the end of the decade, Reitan said.

Statoil supported the development of the controversial Dakota Access Pipeline, seeing pipe as the safest way to transport crude, even though the company did not contract for transport on the line, Reitan said.