New Equinor CEO vows net zero emissions from operations and products by 2050

Norway's state-controlled Equinor aims to achieve net zero emissions from its operations and consumption of its products by 2050, new CEO Anders Opedal said Nov. 2, while reiterating the goal of increasing oil and gas output by 3% annually in 2019-26.

In February, Equinor had announced it would target a 50% reduction in "net carbon intensity," comprising its own operational emissions and those from its products, by 2050. It also set the goal, which remains in place, of achieving net zero emissions from its own operations globally by 2030.

However, the goal of net zero emissions from consumption of the company's oil and gas production aligns it with European rivals such as BP, Shell and Total.

"Equinor is committed to being a leader in the energy transition. It is a sound business strategy to ensure long-term competitiveness during a period of profound changes in the energy systems as society moves towards net zero," Opedal, who took over from Eldar Saetre on Nov. 2, said. "Over the coming months, we will update our strategy to continue to create value for our shareholders and to realize this ambition."

The company added that it expects a gradual decline in world oil and gas demand from around 2030, but has also maintained a relatively positive view of oil prices over the coming decade, forecasting on Oct. 29 Brent prices to rise to $65/b in 2025, with a further rise to 2030. Outgoing chief financial officer Lars Christian Bacher also told analysts the same day that perceptions in the oil market were overly influenced by weak demand and not enough by the likely supply shortfall resulting from insufficient investment.

In its latest statement, Equinor defended its continued oil and gas commitments, saying, "Equinor is well positioned with world-class global assets in attractive areas with substantial value creation potential. By optimizing its portfolio through financial discipline and prioritization, Equinor will continue to develop competitive and resilient projects whilst maintaining industry-leading recovery rates, unit costs and carbon efficiency."

The company's oil and gas output was up 7% on the year in the third quarter, including a 25% jump in its Norwegian oil production on the back of the newly producing Johan Sverdrup field.

Renewables investments

However, Equinor has made major announcements of renewables investments in recent years, in particular in wind farms off the Norwegian and UK coasts and off the US Eastern Seaboard.

"Equinor is preparing for an expected gradual decline in global demand for oil and gas from around 2030 onwards. Value creation, not volume replacement, is and will be guiding Equinor's decisions. In the longer term, Equinor expects to produce less oil and gas than today," it said.

It added that achieving net zero emissions was dependent on "a well-functioning market for carbon capture and storage (CCS) and natural sinks, as well as the development of competitive technologies for hydrogen," going on to note its own Northern Lights project, a pilot project underway to sequester emissions from cement manufacturing and other industrial process beneath the North Sea. It is also involved in a CCS project off England's east coast called the Northern Endurance Partnership, alongside BP, Shell, Total, Italy's Eni and transmission network operator National Grid.

"Building on its capabilities from oil and gas, Equinor is well positioned to provide low-carbon technologies and establish zero-emission value chains. Equinor is driving the development of these technologies through projects such as Northern Lights, which aims to store CO2 from industrial sites across Europe. Equinor also assumes that an increasing share of oil and gas will be used for petrochemicals towards 2050," it said.

Opedal takes over having previously been executive vice president for technology, projects and drilling. He has held numerous roles since joining the company in 1997.