Equinor shareholders receive $10bn after energy firm reports booming profits
Norwegian energy giant Equinor will pay out $10bn to shareholders this year, after recovering from the pandemic with record fourth-quarter pretax profits.
The group has now joined European rivals in cashing in on a boom in oil and gas prices.
Adjusted earnings before tax leapt to $15bn in the October-December quarter, up from $756m a year earlier.
This surpassed the $13.2 billion prediction established in a poll of 23 analysts compiled by Equinor.
Chief executive Anders Opedal said: “In 2021, there was still an operational impact from the pandemic, but the markets recovered with high prices, especially in the second half of the year. In Europe the energy prices reached record levels impacting industries and societies. Equinor focused on safe and stable operations as a reliable energy provider. Together with partners and regulators, we took steps to increase the production of piped gas to Europe significantly.”
Amid high energy prices and disciplined spending, Equinor generated $25bn of free cash flow last year, with the industry enjoying a massive turnaround over the past 12 months as markets overcame the pandemic-driven slump of 2020.
The price of European natural gas rose five-fold over 2021, while oil markets have rallied to eight year highs, with prices closing in on $100 per barrel.
Majority state-owned Equinor, which celebrates its 50 years this year, said it would pay a quarterly dividend of $0.20 per share, up from the $0.18 per share paid in the third quarter, and will pay an additional extraordinary dividend of $0.20 for a period of four quarters.
The company also plans to increase its share buybacks in 2022 to $5bn from $1.3bn in 2021, up from a previous plan of $1.2bn.
This follows impressive results and full-scale buyback schemes announced by both BP and Shell over recent days.
Commenting on UK opportunities, Opedal added: “We continue to invest in profitable projects supporting the energy transition. In the quarter, we took the final investment decision on Dogger Bank C, the third phase of the world’s biggest offshore wind farm and announced a divestment of a 10% interest in the project.”
Equinor’s shares have risen 68 per cent in the last 12 months, more than double the rise in the European oil and gas index.
The company also said it would sharpen its climate ambitions for the next decade, reducing net group-wide greenhouse gas emissions from its global operations – so-called scope 1 and scope 2 emissions – by 50 per cent by 2030.
The results are also a welcome boost following its whopping $1.8bn impairment charge after missing North Sea production targets.