John Olaisen

John Olaisen inquired about the expected decline in Johan Sverdrup production for 2026 and subsequent years, and asked about the company's M&A strategy, specifically regarding international asset divestments and potential acquisitions.

Answer

CEO Anders Opedal stated that Johan Sverdrup is expected to decline by more than 10% but well below 20% in 2026, with efforts underway to minimize this decline, including new wells and high production efficiency. He noted that Johan Sverdrup Phase Three will come on stream in late 2027. Regarding M&A, he mentioned active divestments (e.g., Peregrino, Argentina onshore) and opportunistic investments (e.g., US gas in Marcellus), emphasizing a strategy of optimizing the international business for growth and remaining open to value-accretive opportunities.

John Olaisen inquired about the expected decline rate for Johan Sverdrup production in 2026 (how much and if it's a multi-year trend) and asked for an update on Equinor's M&A strategy, specifically regarding international assets on the sales list and potential acquisition targets.

Answer

President and CEO Anders Opedal confirmed a Johan Sverdrup decline of more than 10% but well below 20% for 2026, noting that the field will eventually decline despite efforts to mitigate it. He stated Equinor doesn't disclose specific M&A lists but remains active in divestments for value creation and opportunistic investments, particularly in U.S. gas, with a focus on optimizing and growing the international business in selected core areas.

John Olaisen questioned the sustainability of Equinor's $9 billion capital distribution for 2025, asking if it was secure regardless of commodity prices and what the outlook was for 2026. He also asked at what price level the dividend might become at risk.

Answer

Torgrim Reitan, an Equinor executive, stated the $9 billion capital distribution for the year is "very, very firm," supported by a strong balance sheet and liquidity. He explained that a significant drop in oil and gas prices would still leave substantial room for distributions. He also highlighted the Norwegian tax system's dampening effect, which offsets 78% of price declines, and the company's low production costs, reinforcing its resilience in low-price environments.

John Olaisen of ABG Sundal Collier asked for details on the dry well in Argentina and whether Equinor plans further exploration in the area. He also requested the size of the balance sheet debt related specifically to the renewables business.

Answer

Executive Torgrim Reitan confirmed the Argerich well was a dry frontier exploration well and that the company is still analyzing the data before deciding on the next steps for the large acreage. He then provided a specific figure for the debt related to the renewables business, stating it was $3.54 billion at the end of the quarter.

John Olaisen from ABG Sundal Collier asked for an updated timeline on when the Johan Sverdrup field is expected to come off its production plateau and inquired about current cost inflation trends, including any regional differences.

Answer

EVP & CFO Torgrim Reitan stated that Johan Sverdrup's 2025 production will be close to 2023-24 levels, supported by strong operational performance and new investments that have lifted recovery rate assumptions to 75%. He did not provide a specific date for coming off plateau. On inflation, he noted that while the company is driving internal efficiencies, the external market remains tight, though some softening is visible in the high-end floater market and is expected in Norway as tax-incentivized projects wind down.

John Olaisen from ABG Sundal Collier asked for the latest view on when the Johan Sverdrup field will come off its production plateau and inquired about current cost inflation trends, including any regional differences between Norway and the U.S.

Answer

EVP & CFO Torgrim Reitan noted Johan Sverdrup's high regularity and production levels, highlighting initiatives like water management and multilaterals that have raised recovery estimates, but did not give a specific date for coming off plateau. On inflation, he said the market remains tight, but noted some softening in the high-end floater market and expects pressure in Norway to ease as tax-package-related activity winds down, while Asian yards and subsea markets remain busy.