Equinor 4Q23 Results | Climate Transition Analysis
Equinor provided several updates for low carbon, but ultimately remains heavily entrenched in oil and gas.
We see risk Equinor may not have the expertise to meaningfully compete as global integrated power business as it diversifies its capabilities outside of upstream.
Key findings
Oil production grew by 2.1% in FY23 (2.08 Mboe/d), exceeding guidance of 1.5%. Production is expected to be stable in FY24, with 5% growth expected to FY26 (2.19 Mboe/d), before maintaining at 2 Mboe/d by FY30. Equinor previously indicated it would maintain FY22 production levels (2 Mboe/d) to FY30.
The company provided FY35 targets of >65 TWh of renewable power generation and 15-40 TWh of “decarbonised energy” (hydrogen, ammonia and gas power with CCS), and increased its target for CCS transport and storage capacity to 30-50 Mtpa by FY35 (previously 15-30 Mtpa).
Based on new guidance, we forecast a minimal shift in Equinor’s production by FY35 which is expected to be 94% oil and gas (from 99.6% in FY23), with renewables 5%, and ~1% from other hydrogen/gas + CCS (on a physical energy content basis, assuming 2 Mboe/d production in FY35).
Renewables & Low carbon solutions “gross capex” was reported as 20% of group in FY23, no values are provided, and numbers do not reconcile to capital expenditure included in Equinor’s results, making it difficult to assess progress against its FY30 target (50% of gross capex).
