Equinor released its 3Q23 results, revealing some headwinds in its renewable segment. 

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