March 20, 2024 [Reuters]- Equinor is investing around $6 billion a year in oil and gas exploration and drilling in Norway to maintain steady output levels through 2035, CEO Anders Opedal told Reuters.
The Norwegian energy giant has become Europe’s main gas supplier, supplanting Russia after the European Union sanctioned Russian gas imports in the wake of Moscow’s invasion of Ukraine.
The annual $6 billion investment is the most Equinor can make without eroding returns from operations in an area where it has been producing for more than 50 years, Opedal said in an interview on the sidelines of the CERAWeek energy conference.
“We couldn’t invest more per year without losing efficiency and degrading the efficiency of our investments,” he said.
Equinor has 50 oil and gas projects either underway or in planning stages in the Norwegian North Sea to sustain output and offset the natural decline of existing fields, he said on Monday.
The company plans to drill 30 exploration wells per year over the next decade.
Norway exported around 109 billion cubic metres (bcm) of gas through its 8,800-km (5,468-mile) pipeline network connecting it to Europe in 2023, down from 116.9 bcm a year earlier, pipeline system operator Gassco told Reuters in January.
Equinor’s net share of production is around 40 bcm per year on average, which the company will maintain stable into 2035, Opedal said. Equinor also plans to sharply grow its solar and wind power generation by the end of the decade.
As well as increasing gas purchases from Norway, European countries have imported more liquefied gas to compensate for lost Russian supplies.
Gas prices soared to record levels in 2022, then this winter they dropped to near pre-crisis levels as inventories remained high and demand slumped due to a mild winter and conservation measures.
European gas stocks are “in a good position” and are expected to be above 50% of storage capacity at the end of winter in April, he said.
Equinor’s head of international oil and gas production Philippe Mathieu told Reuters his division also aims to maintain output outside Norway steady by 2035 by investing mostly in its current production hubs including Britain, the Gulf of Mexico, Brazil and Angola.
Around 70% of its exploration spending will focus on finding new resources near existing fields, Mathieu told Reuters, while Equinor also plans to explore for oil and gas resources in new areas including offshore Canada’s east coast and Argentina.
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