Norwegian oil giant cuts green investment in half

Norwegian energy giant Equinor has announced a halving of its renewable energy investments over the next two years, while simultaneously increasing oil and gas production. This move reflects the company's assessment of the pace of the energy transition and its consideration of profitability.

Equinor CEO Anders Opedal stated that the transition to low-carbon energy is happening slower than anticipated, with rising costs and customer reluctance to sign long-term contracts. He emphasized that due to insufficient future profitability, the company is scaling back its investments in renewable energy and low-carbon solutions, planning to reduce renewable energy investments from approximately $10 billion to $5 billion over the next two years, and abandoning its target of allocating half of its fixed asset budget to renewable energy and low-carbon products by 2030.

Concurrently, Equinor plans to increase its oil and gas production by 10% over the next two years. The controversial Rosebank oil field is estimated to contain 500 million barrels of oil. Mr. Opedal expressed confidence in the Rosebank oil field project, despite a recent ruling by a Scottish court that the granted permit was unlawful because the application did not adequately consider the project's full environmental impact. He insisted that the project is beneficial to the UK economy, creating jobs in Scotland and the UK, and argued that Western Europe and the UK should produce their own required oil and gas rather than relying on countries outside of Europe.

Tessa Khan of the environmental organization Uplift stated that Equinor's actions are overly optimistic. She believes that the development of the Rosebank oil field needs to meet regulatory processes and that there are very strong public interest objections, so the decision will not be smooth sailing. She added that new oil and gas fields will not lower UK energy bills or improve energy security because the oil will be drilled and exported, while renewable energy can achieve these goals. Khan questioned whether oil and gas companies are sincere partners in the energy transition and whether they genuinely care about reducing energy costs for the public.

Opedal also warned that low European natural gas storage levels could lead to price increases next year. He pointed out that natural gas storage levels this spring will be lower than in the same period last year, meaning that Europe needs to replenish more natural gas to maintain the same levels. Furthermore, the growth in China's demand for natural gas is intensifying energy competition, potentially driving up prices.