New research: Equinor’s international oil & gas production a costly choice for Norway

Equinor’s ongoing pursuit of oil and gas production outside the Norwegian Continental Shelf has made Norwegians poorer, not richer, new ACCR research finds.

“The road not taken: Equinor’s alternative to international oil and gas growth” models a hypothetical scenario where, instead of pursuing international growth over two decades, Equinor paid higher shareholder dividends. This includes paying dividends to the Norwegian state, which under law would have invested this money in the Government Pension Fund Global (GPFG).

The findings show investments in GPFG equities would have generated $54 billion more value than Equinor’s international oil and gas assets, which means Norwegians would have been $36 billion (400 billion NOK) better off.

This is because Equinor’s international oil and gas portfolio has only generated US$2 billion in nominal terms from 2001 to 2023, despite US$103 billion of spending on international expansion.

Equinor’s international oil and gas projects have emitted five times Norway’s domestic emissions since 2001(6.3 GtCO2e) and are forecast to emit twice as much again by 2100.

Commenting on the research, Martin Norman, Investor Engagement Lead, ACCR said:

“Equinor’s leadership has serious questions to answer after delivering an international growth strategy with meagre returns and heavy emissions that has left Norwegian’s poorer, not richer.

“When investing the high returns from its domestic business in 2001, Equinor had a choice, and our research shows its decision to persist with an international growth strategy – for two decades - has taken away opportunities for shareholders to pursue long-term, diversified returns.

“Equinor’s shareholders should be wary of the company’s claims that it can fix this problem. Equinor has been repeatedly claiming to be improving its international portfolio for at least a decade, but since it started making these claims its international investments have lost more than US$1 billion (nominal).

“Our own earlier research found that ceasing international development and halting all exploration would move Equinor towards Paris alignment without diluting shareholder value. This new research intensifies the need for Equinor to explain in its forthcoming climate plan how it will manage the emissions and expense of its international portfolio as the global energy transition accelerates.”