Photo: Equinor

High oil & gas production and prices lift Equinor’s profit

Norwegian state-owned energy giant Equinor has recorded “strong financial results” in the third quarter of 2022 thanks to increased output, primarily gas, and elevated energy prices due to the growing demand as a result of the global energy crisis.

Equinor reported on Friday that it delivered adjusted earnings of $24.3 billion in the third quarter of 2022, up from $9.77 billion in the same quarter last year. The firm’s adjusted earnings after tax were $6.72 billion in 3Q 2022, up from $2.78 billion in the same period last year.

Anders Opedal, president and CEO of Equinor, commented: “High production combined with continued high price levels resulted in very strong financial results with adjusted earnings of more than 24 billion dollars before tax. The earnings enable us to continue investing in the energy transition, while building resilience in uncertain times. It also increased our tax contributions, in total around 17 billion dollars in tax payments in the quarter.”

The Norwegian giant’s net operating income was $26.1 billion in the third quarter of 2022, up from $9.57 billion in the same period in 2021, while net income was reported at $9.37 billion in 3Q of 2022 compared to $1. 4 billion in the second quarter of 2021.

As energy prices remained high in this quarter, “significantly higher” than for 3Q 2021, Equinor realised a European gas price which was 60 per cent up from already high levels last quarter, while the realised liquids prices were 13 per cent lower. The company outlined that it delivered “strong results” from sales and trading, particularly from gas and power, selling to the markets with the highest demand.

Taking into consideration the strong earnings in the quarter, the board of directors has decided to increase the extraordinary cash dividend from $0.50 per share to $0.70 per share for the third quarter of 2022. Since the second quarter of 2022, the expected total capital distribution for 2022 has increased from around $13 billion to around $13.7 billion.

High output contributes to energy security

Furthermore, Equinor outlined that “solid operational performance” and projects on stream resulted in high production despite a larger scope of turnarounds than for the same quarter of the previous year. Even though the Norwegian player started measures to increase deliveries of gas to Europe in the third quarter of last year, E&P Norway still increased gas production by 11 per cent compared to the same quarter last year. This is supported by the ramp-up of the LNG production at Hammerfest LNG.

“Norway’s and Equinor’s role as a reliable energy provider is more important than ever. I am proud of all our people going to great lengths to keep energy production high and secure. Working together with our partners and the authorities, we have taken extra measures to increase security in this situation. The Russian war in Ukraine has changed the energy markets, reduced energy availability and increased prices. Equinor continues to provide stable flow and high production, with record-levels of gas from the Norwegian continental shelf,” explained Opedal.

Moreover, Equinor put the Peregrino field in Brazil back in production mode in July and ramped up the output, while the Peregrino phase 2 came on stream in October, taking the total plateau production level to 110 000 barrels per day.

Related Article

The company explained that the production in the E&P USA was at the same level as the third quarter last year, with a higher share of the production from the offshore assets.

According to Equinor, total power production for 3Q of 2022 ended at 491 GWh with 294 GWh being produced from renewable energy assets, down 3 per cent from the same quarter last year mainly due to lower wind and higher maintenance activity. In addition, 197 GWh of the production was gas-to-power production from Triton Power in the UK.

During the third quarter of 2022, Equinor completed seven exploration wells offshore while two wells were ongoing at the end of the quarter.

Projects showcasing energy transition strategy

Meanwhile, Equinor is working on growing the Norwegian Continental Shelf (NCS) as a hub for commercial CO2 storage, with Northern Lights JV signing the first commercial customer and being on track for start-up in 2024. The state-owned giant has entered into partnerships to develop solutions for large-scale commercial CO2 storage with pipes from Europe to the NCS.

The company also applied to extend the operated Sheringham Shoal and Dudgeon wind farms in the UK with an additional 719 MW. In addition, the Norwegian firm sanctioned the Blandford Road battery storage project – the first commercial battery storage asset for the company – which will have a 25 MW/50 MWh capacity. Equinor further highlighted that the floating wind farm, Hywind Tampen, on the NCS is currently being connected and will be completed in 2023.

Related Article

Additionally, the Johan Sverdrup phase 2 and Njord are on track to come on stream in the fourth quarter of 2022 while the wind farm Dogger Bank in the UK is expected to bring its first phase into operation in 2023.