These fields are the most affected – E24

Several analysts have been waiting for Equinor to adjust its price outlook and cut values.

It hit in the third quarter.

The company notes values ​​of NOK 27.4 billion, divided between NOK 13 billion in the US, around NOK 11 billion in international business, and more than NOK 3 billion in Norway.

The reason is that the company expects lower oil prices in the next few decades than previously assumed.

Therefore, Equinor follows many other oil companies. In the second quarter, Shell posted values ​​of $ 16.8 billion, while Total posted $ 8.1 billion and Eni posted values ​​of 2.8 billion euros.

Growing fears of a new corona wave sent oil prices tumbling to $ 36 a barrel on Thursday. Equinor’s stock was trading at just 117 kroner on Thursday, the lowest level since March. This gives Equinor a market value of NOK 382 billion.

– A league of its own

According to CEO Eldar Sætre at Equinor, two of Equinor’s assets account for the majority of write-offs in the third quarter.

– The ground and the Mariner have the greatest effect. They are the ones that stand out quite clearly. They come in their own league, says Sætre.

– For Bakken, we’re talking about $ 1.2 billion, roughly, and then there’s about $ 1 billion in Mariner, he says.

This corresponds to NOK 11 billion and NOK 9.5 billion, respectively.

– A demanding project

The British Mariner heavy oil field cost 7.7 billion dollars (73 billion kronor) and started up last year. It will hold around 300 million barrels and, according to the plan, will produce 70,000 barrels per day at the top.

According to Sætre, the company has now adjusted somewhat the amount it plans to take out of the field.

– Mariner is a demanding project. There is also an element on reserves that contributes. It’s mostly about pricing, but it’s also about booking adjustments, says Sætre.

– It’s a complicated reservoir, and we don’t have all the items in the reservoir in place. We have to develop the reserves a little step by step, he says.

Expect an oil price of $ 65

After thoroughly reviewing supply and demand expectations, Equinor now expects an oil price of $ 65 per barrel in 2025.

By 2030, the company expects oil prices to rise somewhat, but remain below $ 70 a barrel on average. By 2040, the company believes the price will be $ 64 a barrel, before dropping below $ 60 by mid-century.

Previously, the company expected oil prices of $ 77 a barrel in 2025 and $ 80 in 2030.

– This is not an exact science. When you go through this, there are a lot of variables, says Sætre.

– You’re just doing the best you can, he says.

Common in the third trimester

Equinor usually sets foot on the ground in the third quarter and evaluates what is a reasonable expectation for future oil prices.

It also means that the company must reconsider what is a correct book value in the various fields and assets around the world.

The price outlook in the oil industry is constantly changing. This can quickly lead to the company writing down its values ​​later, or more being written down.

– There is still great uncertainty about this estimate of expectations, says Sætre.

– This is the best evaluation we have now, he adds.

Also in the third quarter of last year, the company took a big stock downgrade. At the time, it was particularly related to American business.

Sætre then stated that the company had so far noted the values ​​of the US operations at NOK 84 billion.

Recently, a report on Equinor’s controversial US investment was published. The company’s total loss was estimated at around NOK 161 billion.