Norwegian oil and gas major Equinor has announced an ambitious plan to accelerate its investments in renewable energy and low carbon solutions.
In a strategy update, the majority state-owned firm said that by 2030 more than 50% of its capital expenditure would go to renewable energy and low-carbon solutions, and that it would reduce its net carbon intensity 40% by 2035.
Equinor said it expects to invest $23 billion in renewables from 2021 to 2026. With this revised strategy, Equinor hopes to speed up its energy transition and broaden its energy portfolio.
Anders Opedal, President and CEO of Equinor, commented: “Our strategy is backed up by clear actions to accelerate our transition while growing cash flow and returns. We are optimising our oil and gas portfolio to deliver even stronger cash flow and returns with reduced emissions from production, and we expect significant profitable growth within renewables and low carbon solutions. This is a strategy to create value as a leader in the energy transition”.
Despite this ramp up of its green targets, the company predicts that its oil and gas output will continue to grow as new fields come onstream, and that it will deliver on its previous goal of a 3% annual increase in oil and gas output until 2026.
Equinor to focus on offshore projects and optimisation
Equinor says it will be exiting operated positions in unconventionals and prioritizing offshore operations where the company can utilize its core competence.
Equinor plans to optimise its current operations on the Norwegian continental shelf and to make improvements at the Johan Sverdrup field, which it believes will deliver strong value creation.
Anders Opedal, President and CEO of Equinor, said: “This is a business strategy to ensure long-term competitiveness during a period with profound changes in the energy systems, as society moves towards net-zero. We are building on our position as a global leader within carbon-efficient production of oil and gas.”
Equinor also announced the decision to increase its quarterly dividend to $0.18 per share from $0.15 paid in the first quarter, and the introduction of a new annual share buy-back programme of around $1.2 billion starting from 2022, when Brent oil prices exceed $50/barrel.
Companies face growing pressure to go greener
This recent pivot by Equinor is on trend for the oil and gas sector, where there is an increasing emphasis on trying to make the most of the fields and assets already in operation to create cleaner and cheaper energy.
Similarly, expectations for greener exploration and development of new fields means companies are under pressure to be as efficient, environmentally conscious, and accountable as possible.
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