Norwegian state-controlled Equinor posted a profit of $4.97bn for the first three months of the year, up by 5pc on the same period of 2022, as higher production rates helped to offset lower oil and gas prices.
Equinor's oil and gas production in the first quarter — including the effects of oil prices on production-sharing agreements — stood at 2.01mn b/d of oil equivalent (boe), up by 3pc on the year. The rise was driven by the restart of Norway's Snohvit gas field in June last year and the start-up of the second phase of the Johan Sverdrup oil field in the North Sea in December. The company expects full-year production to be around 3pc higher than in 2022, unchanged from previous guidance.
Equinor's first-quarter profit was squeezed by a $258mn loss recorded on the sale of the Corrib gas field in Ireland, but the year-earlier result was hit by a much larger $1.08bn impairment triggered by the firm's exit from Russia. Although Equinor's profit rose on the year, it dropped by 37pc on the quarter, largely because of the decline in oil and gas prices this year.
"Price realisation in the quarter was lower than the extraordinary highs witnessed in the prior year," Equinor said. The company realised an average liquids price of $73.8/bl in January-March, a decrease on the year and the quarter by 24pc and 8.2pc, respectively.
Equinor also achieved substantially lower gas prices on the year. Its realised piped European gas price for the first quarter was $18.79/mn Btu, a fall of 37pc from the same period of 2022. "Secure gas production to Europe remains a continued focus in 2023, representing 55pc of NCS [Norwegian continental shelf] production for the quarter," Equinor said.
The company also noted a "strong contribution" from its midstream, marketing and processing segment.
Outside its oil and gas operations, Equinor's share of renewable power generation rose to 524GWh in the first quarter, up by 3pc on the year. The increase was the result of "good availability" from the company's offshore wind farms and power generation from the 88MW floating offshore wind farm Hywind Tampen, which started up in the fourth quarter of 2022. The company closed its acquisition of Danish solar developer BeGreen in the quarter.
Equinor reduced the carbon intensity of its upstream oil and gas operations slightly on the year. It stood at 6.6kg of CO2/boe in the first quarter — down from 6.7kg CO2/boe in the first quarter of 2022. But its absolute emissions — scope 1 and 2 — rose to 2.9mn t/CO2 equivalent (CO2e) in January-March, up from 2.8mn t/CO2e in the same period of 2022.
Equinor has kept its estimated organic capital expenditure (capex) forecast steady at $10bn-11bn for 2023, with an average of $13bn/yr expected for 2024-26. But it noted that "rising environmental costs together with inflationary pressures were evidenced by an increase in upstream operating expenditure compared to the prior year".
The firm has also held its ordinary cash dividend steady, at $0.30/share, with an extraordinary cash dividend of $0.60/share for the first quarter. It will initiate a second tranche of its 2023 share buyback programme, at $1.67bn. It completed the first tranche on 20 March, with a total value of $1bn.
