Equinor revels in record profits as European energy crisis sends gas prices to all-time highs
Equinor has reported record profits, as the war in Ukraine exacerbated Europe’s energy crisis and sent gas prices spiralling to all-time highs.
The state-controlled Norwegian company generated $18bn in adjusted pretax earnings during the first quarter, as it sold gas at prices more than four times as high as a year earlier.
Natural gas sales have become Equinor’s most profitable business, exceeding crude oil revenues, as the European Union (EU) scrambles to fill depleted gas storage systems.
The average invoiced European natural gas sales price was 345 per cent higher than in the first quarter of 2021 due to low gas stocks in Europe, high demand and tight supply.
Chief Executive Anders Opedal said: “Continued capital discipline and cost focus enabled us to deliver very strong financial results and cash flow, strengthening the balance sheet.”
The trading bloc has demanded EU member states commit to filling up storage systems to 80 per cent capacity ahead of this winter, well above current levels, estimated at 30 per cent last month.
There are growing fears the war in Ukraine will lead to a loss of Russian supplies from Western sanctions and conflict driven disruption.
Equinor’s $18bn earnings beat the $17.1bn predicted in a company-compiled poll of 25 analysts, and is a massive increase compared with a revised $4.1bn a year earlier.
It plans to spend $10bn this year on capital investments, and maintain the same level in 2023, and is also sticking with shareholder plans announced in February, with announced dividends and share buybacks of $10bn.
The results follow BP’s quarterly update yesterday, where it revealed heavy losses from writing down its Russian assets, but record underlying profits from lucrative fossil fuel trading.
Equinor reiterated its plan to withdraw from Russia, booking a $1.1bn impairment in the January-March quarter and dropping Russian crude supplies, as previously announced.
The company said: “Equinor has stopped trading in Russian oil. This means that Equinor will not enter into any new trades or engage in new transport of oil and oil products from Russia.”