Teodor Sveen-Nilsen

Teodor Sveen-Nilsen asked about the CapEx run rate into 2028, specifically if it would remain below the previously announced $13 billion, and requested an explanation for the price review that boosted the MMP segment's results.

Answer

CEO Anders Opedal explained that CapEx reductions were primarily due to a revised market view on renewables and low-carbon solutions, while oil and gas investments remain consistent. He anticipates a somewhat consistent CapEx outlook going forward, with more details to be provided in June. CFO Torgrim Reitan clarified that the price review was a normal mechanism in gas contracts, where Equinor won an arbitration case, leading to a one-off payment in 2026 and a new pricing mechanism.

Teodor Sveen-Nilsen asked about the CapEx run rate into 2028, specifically if it would remain well below the previously announced $13 billion, and requested an explanation for the price review that boosted MMP results.

Answer

President and CEO Anders Opedal stated that while 2028 guidance isn't available, consistent oil and gas investments combined with reduced renewables/low-carbon CapEx due to market conditions suggest a somewhat consistent CapEx guidance going forward. CFO Torgrim Reitan explained the MMP price review was a successful arbitration outcome for a gas contract where prices dislocated from market rates, resulting in a one-off payment in 2026 and a new mechanism for the contract.

Teodor Sveen-Nilsen asked what specifically changed in Equinor's approach to Ørsted, leading to the decision to seek a board seat, and requested an update on the expected ramp-up pace for the Bacalhau project to reach plateau production.

Answer

CFO Torgrim Reitan explained that taking a board seat in Ørsted was important to signal Equinor's support as a shareholder during recent challenging months. Regarding Bacalhau, he confirmed production started on October 15th, highlighting its complexity. He noted that 19 wells (11 producers, plus injectors) will be drilled in Phase I, with continuous drilling and completion through 2025 and 2026, making it too early to provide an exact plateau date.

Teodor Sveen-Nilsen from SpareBank 1 Markets AS followed up on the Ørsted question, asking what specifically changed in Equinor's offering or strategy regarding a board seat since the initial share acquisition. He also requested insights into the expected ramp-up pace for the Bacalhau project to reach plateau production.

Answer

Torgrim Reitan, CFO, clarified that signaling support during the recent challenging period for Ørsted was a key factor in taking a board seat. Regarding Bacalhau, Mr. Reitan confirmed production started on October 15th, noting its complexity. He explained that ramp-up will involve continuous drilling and completion of 19 wells through 2025 and 2026, making it a gradual process unlike Johan Castberg, with no exact plateau date yet.

Teodor Nilsen asked if Equinor is considering hedging its gas sales amid high long-term prices and sought clarification on the downside risk to the full-year oil and gas production guidance.

Answer

Executive Torgrim Reitan confirmed Equinor will not hedge its gas sales, as the company wants its investors to have full exposure to European gas price volatility. Regarding production, he acknowledged some downside risk remains from potential U.S. curtailments but stated the company is maintaining its 'stable production' guidance for the year.

Teodor Sveen-Nilsen of SpareBank 1 Markets questioned the confidence in the flat year-over-year oil and gas production guidance and asked how the recent reorganization of the renewables business might affect long-term production targets.

Answer

Executive Torgrim Reitan affirmed the production guidance, citing strong operational performance, the EQT transaction, and manageable U.S. gas curtailments. He cautioned that Q3 turnarounds would be significant at 125,000 boe/d. On renewables, Reitan emphasized that value creation and capital discipline take precedence over volume targets, stating the company will focus investments where value is clearest, though ongoing projects are proceeding as planned.

Teodor Sveen-Nilsen from SpareBank 1 Markets requested an update on the Wisting project and its contribution to NCS production targets, and asked for an explanation of the relationship between the 3% impairment discount rate and the company's targeted returns for renewable projects.

Answer

EVP & CFO Torgrim Reitan stated that Wisting is a promising project being matured for a future investment decision and is part of the risk-weighted portfolio supporting the 2035 NCS production ambition. He clarified that the 3% discount rate for impairment testing reflects the cost of capital, whereas for investment decisions, the company targets a significant premium, specifically double-digit equity returns for renewables, abandoning the previous 4-8% range.

Teodor Sveen-Nilsen of SpareBank 1 Markets requested an update on the Wisting project and its contribution to the 2035 NCS production target. He also asked for a reconciliation of the 3% impairment discount rate with the stated ambition for double-digit equity returns on renewable projects.

Answer

EVP & CFO Torgrim Reitan described Wisting as a promising project being actively worked on, with a potential investment decision next year or later, noting it's part of the risked portfolio for the 2035 ambition. He clarified that the 3% impairment discount rate reflects the cost of capital for such an investment, whereas the double-digit return target is a required premium for making an investment decision, abandoning the previous 4-8% range.