Equinor reports record earnings in 2022, to focus on energy transition and security in 2023

(WO) – Norwegian oil giant Equinor has released its earnings report for 2022. The fourth quarter and full year were characterized by a solid operational performance that contributed to global energy security. Equinor also reported nearly $75 billion in adjusted earnings.

Equnior reports that it’s in an excellent position to deliver strong returns through the energy transition, expecting above 15% return on average capital employed to 2030. The company expects roughly $20 billion in average annual cash flow from operations after tax towards 2030.

In 2023, Equnior plans to invest in a profitable and robust oil and gas project portfolio, contributing to energy security and decarbonization. The company will also progress on its energy transition plan with further growth in renewables.

Strong cash flow with longevity within oil and gas

Equinor will continue to invest and optimize its competitive oil and gas project portfolio to maintain a long-term reliable energy supply with low emissions from production. The portfolio of oil and gas projects coming on stream within 10 years has an average break-even price of around $35 per bbl, an internal rate of return of around 30%, an average pay-back time of about 2.5 years and an upstream CO2-intensity of below 6 kg per boe.

Together with the producing assets, this is expected to generate a strong cashflow with longevity. Equinor will continue to develop NCS as home ground and optimize in other core areas internationally.

Strong operational performance with new fields on stream

Equinor delivered a total equity production of 2,046 MMboepd for the fourth quarter, down from 2,158 MMboepd in the same quarter of 2021, impacted by turnarounds in the U.S. offshore, the exit from Russian assets and deferral of gas production from the Norwegian continental shelf (NCS) to periods with higher demand.

During the quarter, Equinor brought on stream the Peregrino phase 2 project in Brazil and Askeladd, Johan Sverdrup Phase 2 and Njord Future on the NCS.

The floating offshore windfarm Hywind Tampen on the NCS generated its first power in the fourth quarter and will be completed in 2023. Production from renewable energy sources was 517 GWh in the quarter, down 2% from the same quarter in 2021. Including gas-to- power, total power production for the quarter ended at 1,332 GWh.

Equinor completed five exploration wells offshore with one commercial discovery in the quarter and four wells were ongoing at the quarter end.

Delivering on always safe, high value, low carbon through 2022

For 2022, Equnior’s adjusted earnings were $74.9 billion, up from $33.5 billion last year. Adjusted earnings after tax were $22.7 billion, up from $10.0 billion in 2021. Equinor reports a net operating income for 2022 of $78.8 billion, and a net income of $28.7 billion.

In 2022, seven new fields were brought on stream, adding a total capacity of around 200 MMboepd when fully ramped up. Equinor is progressing on a highly competitive project portfolio and 13 plans for development and operations were submitted in 2022.

The operational and administrative costs increased through 2022 due to higher electricity prices, CO2-costs, inflationary pressure, and higher field cost, partially offset by significant currency effects when presenting in the US dollar and mitigating actions.

As a result of long-term improvement efforts and cost control, Equinor has already realized the ambition set for 2025 to achieve improvements with a cash flow effect of $4 billion.

Capital markets update: Strong returns through the transition

Equinor is well positioned for high value creation, providing energy security and contributing to decarbonization. One key ambition is to deliver a 50% reduction of net group-wide greenhouse gas emissions by 2030.

With a strong cash flow supporting a competitive capital distribution, and continued investments in a robust high-value portfolio, the company can deliver strong returns through the energy transition. Equinor is developing as a broad energy company, offering energy security and decarbonization opportunities.

Profitable and disciplined growth in renewables

With the first power from the world’s largest floating wind farm Hywind Tampen in 2022 and the world’s largest offshore wind farm, Dogger Bank in the UK, to start production in 2023, Equinor is demonstrating leadership within offshore wind.

The portfolio of projects within renewables and acreage is progressing well towards the ambition of 12-16 GW of installed capacity accessed by 2030. The strategy remains focused on profitable growth, demonstrating discipline and capturing value through market cycles. Equinor expects project base returns of 4-8 %.

Solid progress within low carbon solutions

In 2022, Equinor was awarded the Smeaheia CO2 license on the NCS and had in total accessed storage capacity of 30 million tonnes CO2 per year with current equity. Equinor is well positioned as the CO2 transport and storage market develops, and policies for low carbon projects progress.

Several projects with industrial partners are in maturation, and Equinor is progressing on its ambitions to offer decarbonization to industrial customers. The combined portfolio of projects for CO2 storage, hydrogen, energy storage and natural gas, provides flexibility and optionality, as well as a broad energy offering to industrial customers.