August 8, 2022

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Renewed ambitions will not rise after breaking numbers – E24

Investments in renewable energy ended at 560 million NOK in the second quarter. Opedal will not adjust its ambitions, despite a net profit of NOK 50 billion.

The Equinor chief presented quarterly results and announced a dividend of NOK 28 billion on Wednesday morning.
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And the giant oil company Equinor, on Wednesday, achieved an adjusted profit before taxes of $17.6 billion, compared to $4.64 billion at the same time last year.

The renewable energy sector delivered 15 percent higher energy production compared to the second quarter of last year, mainly due to production from the Guanizuil IIA solar power plant in Argentina, Equinor wrote in its quarterly report.

At the same time, production decreased from the previous first quarter of this year from 511 GWh to 325 GWh this year.

It is usually windy in the winter than it is in the spring. Usually that affects production on our offshore wind farms, says the CEO.

hinders renewable investments

– How much profit will you allocate this quarter to future renewables?

– I don’t have that number, but until 2026 we will invest approximately NOK 230 billion in the renewables sector. This year, the renewable energy sector makes up more than 20 percent of total investment, Obidal says.

Do you expect to reach the target of NOK 230 million by 2026?

Now it’s not a goal to spend money, but we imagine we’re going to spend that much based on the project portfolio and the plans we have for renewable investments. But of course each project will be evaluated individually in terms of profitability, he says.

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– When you make as much money as you do now, wouldn’t the idea of ​​raising your ambitions a bit on the side of renewables?

– Now he is already very ambitious. We have 12-16 gigawatts of offshore wind up to 2030. This will provide significant energy production. It will match, among other things, Ørsted and Scatec combined, so it’s quite an ambitious plan, says the Equinor chief.

Very tough competition

The government recently announced that it will grant licenses to about 30 gigawatts of offshore wind by 2040. The Equinor chief says it is the licenses that have delayed renewable investment.

– It is clear that we, like others, depend on the introduction of new projects and privileges. So far, one of the obstacles has been raising ambitions. At the same time, we see that there is no greater capacity in the supplier industry. More projects now non-cash doesn’t necessarily mean we get more projects done. Here we are trying to find a good balance, he says.

Carnegie analyst Oddvar Bjørgan says Equinor has not increased its investment in the renewables sector. He thinks it’s about not going back.

– The company aspires to increase investments in renewable energy, but it has not done so so far. I think that could be interpreted to mean that they didn’t find any projects that met the return requirements. He says that there has been very strong competition for projects, which has led to a sharp drop in the expected return.

Oil price volatility

Oil prices have fluctuated a lot lately. The price of a barrel of North Sea oil (Brent) is currently $105.11. The Equinor chief says oil demand is suffering from a global supply problem.

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We expect an oil market in the near future with fluctuations in relatively high prices, but with high uncertainty. Rarely have we seen as much uncertainty as we see it now, he says.

According to Obidal, the market is particularly sensitive.

Small news can have a big impact on the price. We see that the price fluctuated by $10 in a few days.

problem with the staff

At the beginning of June, oil workers went on strike and demanded a wage increase. This led to the intervention of Labor and Inclusion Minister Mart Magus Persen with the Compulsory Wages Board.

In August, the stage was set for local wage settlements. Bjorn Assel Tege said: Stavanger Avengersblad This week he expects salary growth in the upcoming settlement.

– Now we just finished the main negotiations. We’ll move to the local negotiations in August, and we’ll get back to that when we’re done, says Obidal.