Equinor has indicated a potential decrease in its renewable energy investments towards 2030 following its recent acquisition of a stake in Orsted. Here are the key details:
Acquisition Details: On October 7, Equinor announced a $2.5 billion purchase of a 9.8% stake in Orsted, which it plans to increase to 10% pending regulatory approval. This acquisition is expected to contribute 1.7 gigawatts (GW) to Equinor’s renewable energy portfolio, which aims for a total of 12-16 GW by 2030.
Strategic Shift: CFO Torgrim Reitan explained that acquiring stakes in existing projects allows Equinor to access offshore wind developments at more favorable prices compared to building new projects. This could lead to lower organic capital expenditures (capex) while still progressing toward their renewable goals.
Market Sentiment: Investors have shown increasing skepticism towards oil companies’ rapid expansion into renewables, leading some firms like BP and Shell to scale back their renewable ambitions.
Financial Outlook: Equinor’s organic capital expenditure for 2024 is now projected to be between $12 billion and $13 billion, down from previous estimates. This adjustment reflects reduced investments in its Polish and Brazilian renewable projects and currency impacts from a weaker Norwegian crown.
Performance Metrics: In Q3, Equinor reported adjusted earnings before tax of $6.89 billion, lower than the $7.08 billion anticipated by analysts. The company’s oil and gas output remained stable at 1.98 million barrels of oil equivalent per day.