Page 12 - EurOil Week 07 2023

EurOil PROJECTS & COMPANIES EurOil

Equinor to continue developing oil and gas

even as it expands transition investments

NORWAY NORWAY’S Equinor has announced that gas output will remain steady over the decade,
it will continue developing oil and gas, “ to according to Opedal.
Equinor maintains its ensure strong financial returns and that it does
focus on oil and gas “not leave valuable barrels behind,” even as it Surging profits
despite criticism. aspires to be “a leading company in the energy Equinor more than tripled its profit for 2022 to
transition.” $28.74bn, compared to $8.58bn the previous
The state-owned company aims to reduce year, due to soaring energy prices. However, its
its emissions by 50% from 2015 levels by 2030. profit in the final quarter fell by 16% to $7.90bn
The company also plans to reduce its net carbon as oil and gas prices fell. The company’s equity
intensity by 40% by 2035, including both direct production also fell by 5% to 2.05mn barrels
and indirect emissions. Equinor has committed of oil equivalent per day in the same quarter,
to investing over 30% of its capital expenditure mainly because of turnarounds in the US off-
towards transition investment by 2025 and more shore, the disposal of its Russian assets, and the
than 50% of capex towards the transition by deferral of gas production from the Norwegian
2030, while maintaining its oil and gas portfolio. continental shelf.
Equinor’s renewables segment incurred Opedal revealed that the company has no
losses of $63mn in the fourth quarter of 2022 plans to increase its gas output significantly, not-
and $84mn over the full year, although the com- ing that gas demand in Europe needed to fall for
pany stated that the renewables division is still in storage to be refilled ahead of next winter. He
the investing phase and its producing assets are expects a production growth of around 3% in
generating income. For Equinor, profitability is 2023.
at the heart of its renewables business, according Equinor sold its liquids on average for $94.1
to CEO Anders Opedal. per barrel in 2022, representing a 42% increase
Opedal said that recent policy changes in year on year. But the price in the fourth quarter
the EU and US would improve the commercial fell 14% compared with three months earlier to
viability of carbon capture and storage (CCS). $80.4 per barrel, although it was still 6% higher
Equinor is optimistic about new technologies than a year earlier. Equinor launched several new
like hydrogen and sees returns similar to renew- projects towards the end of last year, including
ables, although Opedal warned that it’s still too Peregrino Phase 2 in Brazil and Johan Sverdrup
early to offer concrete predictions. The viability Phase 2 off Norway’s coast.
of these new technologies will depend on subsi- The realised European gas price that Equinor
dies such as contracts for difference for hydrogen fetched in October-December was $27.22 per
and the emissions trading system (ETS) price for mmBtu, down 36% quarter on quarter and up
CCS, he added. 5% year on year. But for the whole of 2022, the
According to Equinor’s executive VP Irene realised price more than doubled to $31.22 per
Rummelhoff, subsidies will be needed for mmBtu.
both the CO2 and hydrogen value chains, but Equinor’s power generation totalled 2.7
by 2030, the EU ETS price will be higher than TWh in 2022, up 70% year on year. Renewa-
the cost of capturing and storing CO2, which bles accounted for 1.65 TWh, up 5.6% year on
means a commercially driven environment will year. The company brought online the 88-MW
be created, and the returns on investment will Hywind Tampen offshore wind project in the
differ. Equinor is a pioneer in CCS technology, fourth quarter, and its 3.6-GW Dogger Bank
as is Norway, and is a partner in the Northern farm is due to start up this year. Equinor wants
Lights CO2 storage development with Shell and to have 12-16 GW of installed renewable capac-
TotalEnergies. The first phase of the Northern ity up and running by the end of the decade and
Lights storage is fully booked, Equinor added. predicts “project base returns” of 4-8%.
Equinor has several hydrogen projects Equinor plans to keep organic capital expend-
planned, including the H2H Saltend hydro- iture steady at $10-11bn in 2023 and to maintain
gen co-firing project with UK utility SSE and an annual average of $13bn in 2024-26. It has
a partnership with German utility RWE on “baked in” inflation into those estimates, Opedal
hydrogen supply chains in Germany. Equinor said. The company has proposed a 50% hike in its
plans to have between 15mn-30mn tonnes per ordinary cash dividend to $30 per share.
year of CO2 transport and storage capacity and Equinor will pay close to $47bn in tax for last
3-5 “clean hydrogen” projects by 2035. Despite year once all payments are completed, the CEO
this, Equinor will remain a reliable and con- said, noting that this was “a record to be proud
sistent supplier of gas to Europe, and its oil and of.” ™

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