Equinor 3Q23 Results | Climate Transition Analysis
Equinor released its 3Q23 results, revealing some headwinds in its renewable segment.
As an upstream business, Equinor is highly reliant on the buildout of its renewable business to transition but has only spent ~$2bn to date of its $23 bn target between FY21-26.
Key findings
FY23 guidance for growth in oil and gas production cut from 3% to 1.5% due to unplanned gas outages.
83% of 3Q capex was allocated to Equinor’s oil and gas segment in line with Equinor’s FY30 target of sustaining oil and gas production levels at FY22 levels. Capex on renewables was $193 m (6% of Group)
The renewable segment recognised an impairment of $300 m related to a 3.3GW offshore wind project, due to Equinor being unable to renegotiate its offtake agreement to account for rising costs. As a joint partner in the project, BP also announced at its 3Q23 result a $540m pre-tax impairment.
This is the first material renewables impairment we have witnessed across oil and gas majors, and it is unclear if similar challenges are being faced by Equinor’s peers.
Equinor is reliant on the successful build out of its renewable business to decarbonise but has only spent ~$2 bn on the segment since FY21. While it remains committed to the delivery of 12-16 GW of renewables by FY30, its additional commitment of $23 bn of capex (including acquisitions) in renewables between FY21-26, means it would significantly have to increase investment in renewables in the next 3 years
