Oil money and the future of BiToro and Equinor

debate

This is a discussion post. The post was written by an external contributor, and quality assured by Aftenbladet's debate department. Opinions and analyzes are the author's own.

The state has these companies as their principal owner and proprietor, and in a democracy, the people and politicians must gain insight and common determination on how to manage and develop these companies for the future for the benefit of the people of Norway.

There is enormous value creation associated with the oil and gas business of the Norwegian continental shelf and the money the state receives, which politicians want to use for their ideal good projects which are often part of the “green transition” being pursued.

Financial subsidies

Kvadshim cautions against giving BiToro the ability to promote unprofitable investments. In the same way, Equinor should highlight the company's renewed investment, which requires state efforts in the form of financial subsidies so that Equinor can defend its investments.

This project requires much higher energy prices to be profitable than what we are used to, and I would argue that the people of Earth are not yet ready to pay that high a price.

As a result of this new renewable energy strategy, Equinor has simultaneously begun to downgrade priorities for long-term exploration for new oil and gas fields on the Norwegian continental shelf. Exploration is only undertaken around existing fields where the potential size relates exclusively to smaller discoveries that can be produced in the near future. The long-term perspective of the research, which led, among other things, to Johan Sverdrup's giant discovery in 2010, has been halted. This was recently (December 11) indicated by the Norwegian Petroleum Directorate through Director Kirsti Daly, who called for exploration that could lead To new great discoveries.

Today Equinor's management wants to change Equinor into a company where the cornerstone will be “renewable energy” and where oil and gas make less sense in the long term. But as it appears today, the share of oil and gas in the global energy mix will not decrease much in the future. The share of oil and gas has not declined in the past 20 years, despite big words among politicians and the media, and despite people saying that the green transition has begun.

That is, the green transition that has been ongoing for several years has not yet reduced the world's need for oil and gas. There is no reason to believe that the need for oil and gas will decrease much as long as there are no new energy sources on the horizon that have low costs and guarantee a stable 24/7 energy supply. Energy prices are the key to our prosperity around the world, and skyrocketing energy prices are a recipe for more poverty. Therefore, the global economy will not be governed by wishful thinking, but by realities related to profitability and what people can accept.

The wisest thing to do would be to maintain and develop Equinor as a strong oil and gas company with a focus on supplying the energy that the world's population needs.

Risky game

Oil and gas is what makes the company financially strong and Norway's economy strong, and it is a risky game to manage Equinor into a “renewable company” based on political thinking and goals.

Oil money is what supports the whole project, so it can suddenly leak out. Government financial investment in renewable energy (wind, solar, etc.) from Equinor should be separated into a separate company so that it is clear to people and investors how much it costs and how profitable it is.

Today, investment in renewable energy within Equinor comes at the expense of a long-term perspective in oil and gas where the search for new, larger deposits is not in focus.