Equinor's Sverdrup field helps offset overseas oil output drop in Q3

State-controlled Equinor increased its Norwegian oil output by 4% on the year and 8% compared with the previous quarter to 650,000 b/d in the third quarter, thanks to the giant Johan Sverdrup field offsetting reductions elsewhere, particularly in the US, the company said Oct. 27.

In a results statement, CEO Anders Opedal noted the boost from substantially higher commodity prices, but said the global economy was "in recovery," with potential for more volatility.

Equinor said it had also benefited from strong upstream production efficiency and the startup of Norwegian gas and condensate field Martin Linge at the end of June, which partially offset the sale this year of its Bakken oil assets in the US to Grayson Mill Energy, and reduced shares of production at fields subject to production sharing contracts overseas.

Latest publicly available figures showed Johan Sverdrup, which came on stream in 2019 and now accounts for more than a quarter of the country's oil output, experienced a dip in in July before hitting a record monthly output level of 537,000 b/d in August, in line with a company forecast that production capacity would hit 535,000 b/d by midyear.

Overall, the group's oil output was down 4% on the year at 951,000 b/d due to the overseas reductions, with its US oil output dropping 35% to 98,000 b/d and oil output elsewhere dropping 8% to 203,000 b/d. The Bakken divestment, completed in August, still leaves Equinor with significant US production, including gas production from Appalachian Marcellus and Utica shale formations, targeted at New York State, and oil production in the Gulf of Mexico, where it operates the Titan field and is a partner in several others.

On the gas side, Equinor's Norwegian production was up 6% from a year earlier at 695,000 b/d of oil equivalent, despite the continued shutdown of the Hammerfest LNG facility after a fire last year, partly because the company flexed its output in response to higher demand and prices, as well as the startup of Martin Linge and the Troll phase 3 project. Overseas reductions meant the company's overall gas output was up by a more modest 3%, at 904,000 boe/d.

"We capture value from the higher commodity prices and with a solid operational performance we deliver strong results," Opedal said. "The global economy is in recovery, but we are still prepared for volatility related to the impact of the pandemic. The current unprecedented level and volatility in European gas prices underlines the uncertainty in the market," he added.

The company reiterated it expects to increase its oil and gas production globally by 2% this year, and said maintenance over the year would impact its equity share of production by 45,000 boe/d.

It made a $1.4 billion profit in the quarter compared with a $2.1 billion loss in the quarter a year earlier, while lowering its debt gearing.