Oslo — Statoil officially changed its name to Equinor on Wednesday after a shareholder vote, raising but not necessarily answering questions as to the degree of strategic change in the Norwegian energy major's focus.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
It explained that dropping the reference to oil reflected the changing world and that Statoil was changing too, broadening its focus.
The company has said before that it is building a material industrial position within profitable renewable energy, and expects to invest 15-20% of total capex in new energy solutions by 2030.
But the name change has sparked controversy. In addition to raising eyebrows over a potentially confusing new national brand -- the new name obscures its founding rationale, based on the state and oil. It also revived the long-simmering debate about Norway's future status as a major European oil and gas producer and raised questions about the 67% state-controlled group's petroleum production levels in the longer term.
"It's fair to say that I was a bit shocked. It is radical. I had to check my diary to see it wasn't an April fools joke," said Arctic Securities analyst Christian Yggeseth. "From my point of view, the company is our national heritage."
In Norway's cosy energy industry -- based in the family-oriented coastal town of Stavanger where the company is headquartered -- Statoil has shone as a beacon of purpose through the decades in an increasingly uncertain world.
As the overwhelmingly dominant operator on the Norwegian shelf, and an increasingly global player, it has also been a national icon, as well as a money-making machine that has made Norway one of the richest countries per capita in the world.
But more frequently, sometimes jarring criticism has emerged, not only from environmentalists, who have urged Norway to end its addiction to oil money and diversify its economic base.
At the 2014 ONS international oil and gas summit in Stavanger, Tesla CEO Elon Musk told a hushed audience that included the head of the IEA and the CEO of Saudi Aramco, that the days of the petroleum industry were numbered.
In recent quarterly reports CEO Eldar Saetre has been open about the group's need to respond to the exponential rise of the new energy sector -- and the company has already made significant forays into offshore electricity production in Europe, including operating the UK's massive 317 MW Sheringham Shoal and 402 MW Dudgeon offshore wind farms.
But many felt the pace of change towards new energy would be, if not glacial, then gradual.
The name change to Equinor, however, has signaled a watershed moment -- that profound change, if not around the corner, may be much closer than thought.
NORTH SEA STALWART
All this has raised questions about the levels of oil and gas production coming from Norway in the longer term.
The company itself, making the announcement, reassured that the Norwegian Continental Shelf would remain the company's backbone.
But other Nordic energy groups have offloaded their oil and gas assets -- DONG Energy (now Orsted) to Ineos for $1.3 billion and then Maersk in a $7.45 billion deal with Total, both last year -- in moves unthinkable only a few years ago.
Analysts say there is no chance that Statoil will ever follow suit. "I think that is very unlikely given where they are, in Norway," said John Olaisen of investment bank ABG Sundal Collier when the announcement was made.
Wood Mackenzie's director of corporate research Norman Valentine said the corporate rebrand was a bold reinforcement of the company's shift towards new energy solutions.
"Statoil's strategy has become differentiated from the other majors," he said at the time. "The focus on offshore wind has obvious synergies with Statoil's legacy oil and gas business. Returns from wind power could add a steady, long-life element to the company's cash flow outlook, offsetting the risk of decline from core oil and gas assets next decade."
But others worry that the company has been blown off course. "I think they are very uncertain about the future direction of the company," Olaisen said.
Some analysts say broader portfolio focus could mean that some future, as yet undiscovered, petroleum that might previously have materialized may now not be realized.
"I think that they themselves assume peak oil demand could happen sometime after 2025. If that proves to be the case they would probably move elsewhere other than oil and gas," said Handelsbanken's Anne Gjoen.
The consensus is, though, that the symbolic name change won't alter the company's primary role for the foreseeable future. The new Equinor-operated Johan Sverdrup oil field, one of the biggest producers in the history of Norway, alone underpins its key oil role for decades to come.
Set to start pumping late next year, Sverdrup's 3 billion barrels of oil equivalent will provide a quarter of Norway's oil at peak production and generate more than $170 billion over its 50-year lifespan. With or without peak oil demand, Norway may need the company's oil and gas resources just as much as it needs state champion for renewable energy.
--Patrick McLoughlin, firstname.lastname@example.org
--Edited by Alisdair Bowles, email@example.com