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Equinor: Profits Up, Carbon Down in High Graded US Upstream Portfolio

Equinor’s optimized upstream portfolio in the US is now delivering some of the highest-value production in the company with some of the lowest carbon intensities.

  • The US is Equinor’s largest source of production outside of Norway, currently delivering more than 50% of the profits from Equinor’s international upstream portfolio.
  • New projects underpin continued high production and profitability from the US offshore portfolio.
  • The refocused onshore portfolio positions Equinor for potential new low carbon value chains.

In the first six months of 2022, equity oil and gas production from the US was 332,000 barrels of oil equivalent per day (boepd) – 18% lower than the corresponding period last year following the 2021 sale of the Bakken assets. Despite lower production, net operating income increased to 2.2 billion USD – more than six times higher than the first half 2021.

“After a repositioning, I am pleased to see that our portfolio is delivering record high cash flow back to the company,” says Chris Golden, US country manager and senior vice president, U.S. Upstream, Exploration and Production International.

Two new projects in the Gulf of Mexico

With nine deepwater fields producing approximately 115,000 boepd, Equinor is one of the largest players in the US Gulf of Mexico.

“Since 2005 Equinor has built up a sizable position in the Gulf of Mexico, which offers some of the highest value, lowest carbon intensity oil and gas production in the company’s portfolio. We are continuing to build materiality in the region with two new projects – Vito and Sparta – that will ensure continued strong cashflow through the decade ahead,” says Golden.

Equinor has a 36.9% interest in the Shell operated Vito project, expected to start production in 2023.

In June Equinor agreed to transfer 51% ownership and operatorship of the Sparta project (previously North Platte) to Shell, retaining 49% as a partner.

“Sparta and Vito are valuable projects which are expected to add significant value with low-carbon emissions intensity,” says Golden.

ChrisGChris Golden, US country manager and senior vice president, U.S. Upstream, Exploration and Production International.

Focused onshore position

Following a more focused approach to unconventionals, Equinor has now consolidated its onshore activities in the Appalachian Basin. Equinor’s onshore gas position is estimated to provide stable production beyond 2050.

The non-operated Marcellus asset is one of the largest gas assets in Equinor’s global portfolio, on par with Troll in terms of equity production. The asset produces around 200,000 boepd net to Equinor with a low carbon intensity.

The operated Appalachian Basin asset in Ohio will restart drilling and completion activities later this year. The asset produces some of the lowest-emission barrels for Equinor globally at 0.6 kg CO2 per barrel in 2021.

Equinor is proactively working with partners to share experience and identify focus areas for emissions reductions, including electrification of drilling rigs, continuous methane monitoring and responsibly sourced gas certification.

Low carbon value chain opportunities

“In addition to offering a pathway to decarbonize our gas production in the Appalachian Basin, we are looking at opportunities to help other industries reduce their carbon footprint.” says Golden.

Earlier this month, Equinor, US Steel and Shell entered into a non-exclusive Cooperation Agreement to advance a collaborative clean energy hub in the Ohio, West Virginia, Pennsylvania region. The hub would focus on decarbonization opportunities that feature carbon capture utilization and storage (CCUS), as well as hydrogen production and utilization.

“The US is a country that fully realizes Equinor’s broad energy ambitions - optimized oil and gas production, growth in offshore wind, and opportunities in new low-carbon value chains. Our activities and opportunities are positioning the U.S. business to be a valuable contributor to Equinor’s net zero ambitions,” says Chris Golden.

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