Equinor 2Q profit supported by higher European output

: Crude oil, Electricity, Emissions, Natural gas
24/07/24

Norway's state-controlled Equinor posted a small rise in profit on the year in the April-June period, as a lift in its European production offset lower gas prices.

Equinor reported a profit of $1.87bn in the second quarter, up by 2.2pc on the year but down by 30pc from the first three months of 2024. The company paid two Norwegian corporation tax instalments, totalling $6.98bn, in the second quarter, compared with one in the first quarter. Equinor paid $7.85bn in tax in April-June in total.

Its average liquids price in the second quarter was $77.6/bl, up by 10pc from the second quarter of 2023. But average gas prices for Equinor's Norwegian and US production fell in the same period by 17pc and 6pc, respectively.

The company noted "strong operational performance and lower impact from turnarounds" on the Norwegian offshore, including new output from the Breidablikk field. Equinor's entitlement production was 1.92mn b/d of oil equivalent (boe/d) in April-June, up by 3pc on the year.

The company cited "high production" from Norway's Troll and Oseberg fields in the second quarter, as well as new output from the UK's Buzzard field. But US output slid, owing to offshore turnarounds and "planned curtailments onshore to capture higher value when demand is higher", the company said. It estimates oil and gas production across 2024 will be "stable" compared with last year, while its renewable power generation is expected to increase by around 70pc across the same timespan.

Equinor's share of power generation rose by 14pc on the year to 1.1TWh in April-June. Of this, 655GWh was renewables — almost doubling on the year — driven by new onshore wind capacity in Brazil and Poland. "Construction is progressing" on the UK's 1.2GW Dogger Bank A offshore windfarm, Equinor said. It is aiming for full commercial operations in the first half of 2025 at Dogger Bank A — a joint venture with UK utility SSE.

Equinor was granted three new licences in June to develop CO2 storage in Norway and Denmark. The Norwegian licences — Albondigas and Kinno — together have CO2 storage potential of 10mn t/yr. The Danish onshore licence, for which Equinor was awarded a 60pc stake, has potential capacity of 12mn t/yr. Equinor has a goal of 30mn-50mn t/yr of CO2 transport and storage capacity by 2035.

The company's scope 1 and 2 greenhouse gas (GHG) emissions amounted to 5.6mn t/CO2 equivalent (CO2e) in the first half of the year, edging lower from 5.8mn t/CO2e in January-June 2023. It also incrementally cut its upstream CO2 intensity, from 6.7 kg/boe across 2023, to 6.3 kg/boe in the first half of this year.

Equinor has kept its ordinary cash dividend steady, at $0.35/share, and will continue the extraordinary cash dividend of $0.35/share for the second quarter. It will launch a third $1.6bn tranche of its share buyback programme on 25 July.

By Georgia Gratton

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25/04/29

Carney’s Liberals to form next Canadian government

Calgary, 28 April (Argus) — Canadian prime minister Mark Carney and his Liberal party are projected to win the country's 45th general election, but securing a majority of seats in Parliament is unclear with many tight races still to be determined. The Liberal party is on track to take 156 of the 343 seats up for grabs, according to preliminary results from Elections Canada at about 11pm ET. The Conservatives, led by Pierre Poilievre, will form the official opposition with an estimated 144 seats so far. The Liberals seat count is comparable to the 160 won in the 2021 election while the Conservatives are up from 119. If the Liberals win a minority they would need the support of other parties to pass legislation, as they did prior to the election. The win completes the comeback for the Liberal party which just a few months ago languished in polls as dissatisfaction of then-prime minister Justin Trudeau rose. Carney and his experience navigating economic crises resonated with voters as they found themselves in a trade war initiated by US president Donald Trump. The US has imposed a 25pc tariff on Canadian steel and aluminum since 13 March and Canadian automobiles since 9 April. Canada has retaliated to each wave with tariffs of their own. Canadian oil and gas has been exempt from US tariffs but Trump's trade action has led many politicians and Canadians at large to re-examine the need to diversify its energy exports. Trade corridors, pipelines and LNG facilities were promoted by both Carney and Poilievre. Carney and Trump agreed in late-March that broader, comprehensive economic negotiations would happen after the election. The Liberals have held power since 2015, but only in a minority capacity since the 2019 election. Inflation, housing, Trump top concerns The key issues for Canadians this election cycle were inflation, housing, cost of living and international relations — particularly the aggressive moves from the US, according to polls. Diversifying trade and growing energy production have been promoted by both Conservative and Liberal leaders — and prime minister hopefuls — looking to become less dependent on US customers and kickstart a lagging economy. Canada is the world's fourth-largest oil producer with over 5.7mn b/d of output, and the fifth-largest natural gas producer at 18 Bcf/d, according to the Canadian Association of Petroleum Producers (CAPP). The US is Canada's largest foreign customer of each, but verbal and economic attacks on Canada by Trump have prompted politicians and Canadians at large to reexamine their trade strategies. Poilievre says Liberal policies over the past decade have stifled the country's productivity and allowed it to become the weakest performer in the G7. Liberal policy needs to be undone so Canada can "unleash" its oil and gas sector to better protect its sovereignty , says Poilievre. Carney's campaign had centered heavily on Trump, emphasizing the threat comes from abroad, not within. Carney wants to make Canada an "energy superpower" but maintains current legislation is the way to do it, despite calls to the contrary by oil and gas executives . By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Environmental markets wary of Trump's next moves

25/04/28

Environmental markets wary of Trump's next moves

Houston, 28 April (Argus) — US President Donald Trump's recent threat of legal challenges against state climate and clean energy policies has roiled environmental markets waiting to learn the scope and avenues those confrontations could take. Trump's 8 April executive order, which directed the Department of Justice (DOJ) to consider contesting state policies that threaten "American energy dominance", targeted California's cap-and-trade program by name, but it may also extend to other policies, including renewable portfolio standards (RPS). But uncertainty about the extent of the administration's ambitions has injected another variable into an already volatile economic landscape. Market anxieties may not fade soon. US attorney general Pam Bondi has until early June to report on actions she has taken and make recommendations for other steps by the White House or Congress. Conservatives in some states already have asked her to scrutinize particular programs. Administration arguments One angle from which the DOJ could attack state programs is the well-trod "dormant Commerce Clause", a legal doctrine that says state laws cannot discriminate against or impose undue burdens on another state's economic activity. But such a challenge is more difficult if a program is merely stipulating, "if you want to come to our state, our electricity market or our fuel market, here are the rules to play by", according to Matthew Dobbins, a partner at Vinson & Elkins and member of the law firm's environment and natural resources team in Houston. Courts have dismissed lawsuits that tried this approach against low-carbon fuel standards in California and Oregon , as well Colorado's RPS. In addition, an appeals court last year threw out a case against Washington's cap-and-invest program, ruling it did not overstep in its handling of in-state versus out-of-state electricity suppliers. The US Supreme Court may soon decide whether to hear an appeal of the case. More broadly, a 2023 Supreme Court decision upholding a California law restricting interstate pork sales based on animal treatment makes such dormant Commerce Clause challenges "a lot harder", according to Nico van Aelstyn, partner at Sheppard Mullin in San Francisco. The DOJ could try using the "Equal Sovereignty" doctrine, which stipulates that one state's rights cannot exceed another's, van Aelstyn said. This has been used in cases against California's vehicle emissions standards and other states' climate "superfund" laws, which penalize oil and gas companies for historical emissions. But van Aelstyn described it as "not really tested yet." That administration has also been hoping to fast-track Supreme Court rulings on the executive orders by justifying them through "declared emergencies," according to Dobbins. This use of emergency powers will likely reveal how far the court will go to "pressure test" the administration's requests for speedy judicial relief, as justices work through a growing emergency docket through the end of term in June or July. Relitigating the past Amid growing trade tensions between the US and Canada, the DOJ could also revive a 2019 lawsuit against California's cap-and-trade program. A US district court at the time ruled that federal purview over foreign affairs does not preempt the state linking its program with Quebec's. Although the first Trump administration appealed the ruling, former president Joe Biden withdrew the case, leaving the matter undecided with one claim potentially still ripe for judicial review. "What that'll probably come down to is how much Canada has expressed its anger . . . and if the administration is willing to go 'all in' on trying to provoke one of our largest trading partners," Dobbins said. But even if California severed ties with Quebec, the province is a small part of the market, and its absence is unlikely to cripple the state's program. Meanwhile, in the markets… Trump's executive order has put states and US companies alike on the back foot, adding to a "shock and awe" barrage from tariffs and potential rollbacks to federal clean electricity incentives , said Tom Harper, a partner on consultant Baringa's energy advisory team in New York City. That volatility has led clean energy developers and buyers to hold off on decisions until they have a bit more stability. "You're almost in a state of paralysis because you can't go and deploy a team on a project. You can't go and arrange finance because the cost is moving day to day," Harper said. The tariffs have also fed growing concerns about the US economy, which have spilled into environmental markets. The California Carbon Allowance (CCA) market, already a bit bearish because of ongoing delays to planned program changes, plunged the day after Trump's executive order. Argus assessed CCAs for December delivery that day at $26.74/t — at the time their lowest price since November 2022. The lack of certainty around federal legal developments continues to whittle away at bullish signals, leaving market participants to wait for a clear outcome. Adding another layer of uncertainty is the fact that disputes may spill outside of the court system. Following the same logic as of Trump's " national energy emergency ", the US Federal Energy Regulatory Commission (FERC) could hypothetically issue an emergency order to halt carbon and clean energy programs. The recent resignation of a Democratic commissioner, giving Trump the ability to install a Republican majority, could facilitate that pathway. But using FERC to shutter these programs would be on weak legal footing, van Aelstyn said. The Trump administration has no issue using extrajudicial tools to enforce its policies, such as its January pause on federal funding that left states like California — which receives more than $100bn in backing and grants from the US government each fiscal year — grappling with potential budget holes. Two federal courts have said the administration must dole out the funds, but agencies have been slow to comply. "If they can withhold congressionally appropriated research funds for universities because they don't like their policies with regard to free speech on their campuses, what else might they do?" van Aelstyn said. "Withhold Medicaid funding to states where they don't like their renewable energy standards?" By Denise Cathey and Patrick Zemanek Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Brazil to hold auction to recover degraded land

25/04/28

Brazil to hold auction to recover degraded land

Sao Paulo, 28 April (Argus) — Brazil's finance, environment and agriculture ministries will host a second auction to recover 1mn hectares (ha) of degraded lands in all Brazilian biomes except the Amazon, the national treasury said on Monday. The auction will be a part of Eco Invest, a currency-hedging program targeting renewable and low-carbon projects to draw foreign investment, announced in February 2024. The finance ministry and central bank developed the program with the World Bank and the Inter-American Development Bank. The auction is part of New Brazil, a wider energy transition project within the finance ministry. The project aims to finance conversions of degraded lands in different biomes to sustainable and productive ecosystems through private investments. The Amazon biome, the most hit by deforestation, will receive a "customized and exclusive auction" that will be announced later, the environment ministry said. Participants must submit project proposals to the national treasury by 13 June. The government expects to raise up to R10bn ($1.76bn) in the auction. Land-use change and deforestation Emissions from land-use change and deforestation in Brazil reached 1.06bn metric tonnes of CO2 equivalent (tCO2e) in 2023, down by 24pc from a year earlier, according to greenhouse gas tracking platform SEEG. These activities have been leading Brazil's total emissions since 1990 — when historic tracking began — followed by agriculture and cattle raising and the energy sectors. There are currently 280mn ha of farmlands, of which around 29pc are degraded. The government aims to recover up to 40mn ha of grasslands in the next 10 years, the environment and climate change ministry said. The Eco Invest auction will finance the first round of the initiative, dubbed the Green Way program, according to the agriculture ministry. Brazil aims to reduce its total greenhouse gas emissions by 67pc by 2035 from its 2005 levels and sees reducing deforestation as one of its main ways to achieve that goal. The country will host the upcoming UN Cop 30 climate summit in Belem city, in the Amazon biome, as the administration looks to lead the global energy transition . By João Curi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Canadians go to polls in general election

25/04/28

Canadians go to polls in general election

Calgary, 28 April (Argus) — Voting in Canada is underway today with the governing Liberal party looking to complete a comeback in polling against the Conservative party to clinch its fourth-straight term. There are 343 seats up for grabs in Canada's Parliament and polls throughout the five-week campaign indicate the Liberals have a reasonable chance to win a majority, which would allow them to implement policies without needing the support of other parties. Latest polling figures show the Liberals at 43pc, the Conservatives at 39pc, the New Democratic Party (NDP) at 8pc, the Bloq Quebecois at 6pc, and the Green Party at 2pc, according to poll aggregator Canada338 on Monday. The Liberals have held power since 2015, but only in a minority capacity since the 2019 election. The key issues for Canadians this election cycle are inflation, housing, cost of living and international relations, according to polls. Diversifying trade and growing energy production have been promoted by both Conservative and Liberal leaders — and prime minister hopefuls — looking to become less dependent on US customers and kickstart a lagging economy. Canada is the world's fourth-largest oil producer with over 5.7mn b/d of output, and the fifth-largest natural gas producer at 18 Bcf/d, according to the Canadian Association of Petroleum Producers (CAPP). The US is Canada's largest foreign customer of each, but verbal and economic attacks on Canada by US president Donald Trump have prompted politicians and Canadians at large to reexamine their trade strategies. Conservative leader Pierre Poilievre says Liberal policies over the past decade have stifled the country's productivity and allowed it to become the weakest performer in the G7. Liberal policy needs to be undone so Canada can "unleash" its oil and gas sector to better protect its sovereignty , says Poilievre. Liberal leader Mark Carney's campaign has centered heavily on Trump, emphasizing the threat comes from abroad, not within. Carney wants to make Canada an "energy superpower" but maintains current legislation is the way to do it, despite calls to the contrary by oil and gas executives . A fresh face for the Liberals and a foe to rally against in Trump has lifted the fortunes of the party, which some critics speculated only months ago could lose most of its seats. As recent as January, the Liberals were facing a 26-point deficit in polls, but the party mounted a comeback at the expense of both the Conservatives and the left-leaning NDP. The Conservatives would likely have to overtake the Liberals by several percentage points to win enough seats to form a government, based on the past two elections in 2019 and 2021. More Canadians voted for Conservatives than any other party in those races, but the Liberals came away with the most seats, owing to their success in winning tight races. The last polls close on Canada's west coast at 10pm ET with preliminary results expected shortly after. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Oil services spell out initial cost of Trump’s tariffs

25/04/28

Oil services spell out initial cost of Trump’s tariffs

New York, 28 April (Argus) — The world's top oil field service firms are starting to count the cost of US president Donald Trump's unprecedented trade wars, amid a challenging outlook caused by tariff-related volatility that has sent oil prices lower and sparked fears of a recession. Halliburton forecasts a 2-3¢/share hit to second-quarter results, with its completion and production unit — which includes the hydraulic fracturing (fracking) business — accounting for 60pc of the expected fallout, and drilling and evaluation making up the rest. Baker Hughes says full-year profit could be reduced by $100mn-200mn, assuming that the tariff levels in effect under Trump's 90-day pause remain in place for the rest of the year. While SLB, the world's biggest oil field contractor, says it is to early to fully assess the potential impact of tariffs, the company is taking proactive steps to shore up its supply chain and manufacturing network, as well as pursuing exemptions and engaging with customers to recover related cost increases. Crude prices slumped to a four-year low earlier this month after Trump's tariffs threw global markets into a tailspin. The oil field service industry argues that it is better prepared for a downturn this time around, given a focus on capital discipline and returns in recent years. Yet the double blow of tariffs and an accelerated return of Opec+ barrels to the market could cause further headaches — even as firms move to mitigate the impact. "We need a bit more clarity and stability in the structure of tariffs so that we can really understand what levers we can pull and then what the overall outcome is going to be," Halliburton's chief financial officer, Eric Carre, says. "There's just a lot of moving parts right now." Global upstream spending will be "down by high-single digits" this year, Baker Hughes says. The company forecasts a low-double digit decline in North America spending by its clients, and a mid-to-high single-digit drop internationally. "A sustained move lower in oil prices or worsening tariffs would introduce further downside risk to this outlook," chief executive Lorenzo Simonelli argues. "The prospects of an oversupplied oil market, rising tariffs, uncertainty in Mexico and activity weakness in Saudi Arabia are collectively constraining international upstream spending levels." While Baker Hughes' "strong weighting" to international markets and a diversified and local supply chain provide a cushion, the company is seeking to limit the tariff impact for its industrial and energy technology division by exploring domestic procurement alternatives and improving its global manufacturing footprint. The Wright stuff Liberty Energy , whose former chief executive Chris Wright was picked by Trump to serve as his energy secretary, expects modest tariff-related inflationary impacts on engines and other electric components, some of which are being offset by lower prices or volume discounts. "All said, we don't anticipate a significant direct impact from tariffs at the moment," chief financial officer Michael Stock says. Shale producers are also starting to figure out how they may be affected, with Diamondback Energy reviewing its operating plan for the rest of the year. "Should low commodity prices persist or worsen, Diamondback has the flexibility to reduce activity to maximise free cash flow generation," the company says. And Devon Energy aims to boost annual pre-tax free cash flow by $1bn, partly by doubling down on efficiency savings — a strategy that has gained momentum from the recent tariff turmoil. "Given the challenging market and shifting competitive landscape, this is the right moment to focus internally and improve our profitability," chief executive Clay Gaspar says. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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