Equinor Plans More Wells, Shuffles North Sea Assets

Norwegian operator plans to drill 50% more exploration wells in Norway during 2022 than it did in 2021.

Image of an Equinor flag.
Equinor's flag flutters next to the company's headquarters in Stavanger in 2019.
Ints Kalnins/Reuters.

Equinor is set to drill more oil and gas exploration wells in 2022 than this year to help sustain the company’s future cash flow, a senior executive told Reuters on Tuesday. The operator plans to drill 25 exploration wells, up from 16 wells this year. The program will focus on near-infrastructure targets, according to Equinor’s Head of Exploration Norway Jez Averty.

“Exploration is the key to future value creation on the Norwegian Continental Shelf, future value creation is the key to cash flow, which is the key to delivering on the energy transition,” he said.

Equinor will drill about 80% of its exploration wells next year near existing fields at an estimated cost between $300 million and $400 million.

Outside of Norway, Equinor plans to drill around a dozen exploration wells next year, including in the US Gulf of Mexico, offshore Canada, Angola, Brazil, andin East Siberia, onshore Russia.

Elsewhere, the operator is looking to sell a stake in its Martin Linge oil field in the North Sea, hoping to raise more than $1 billion.

The sale is aimed at cashing in on the strong demand for Norwegian oil and gas assets. The country’s oil and gas sector has attracted a flurry of deals in recent months, despite growing pressure on governments and companies to combat climate change. Last week, Centrica and its partner, German utility Stadtwerke Munchen, agreed to sell their Norwegian oil and gas assets to Sval Energi for $1.1 billion.

Martin Linge started production last June and is expected to reach a peak output of 115,000 BOEDnext year.

Equinor holds a 70% stake in the field. Petoro holds the remaining 30%. Equinor plans to sell off a 19% stake, reducing its holding to 51%, sources told Reuters.

Equinor’s 7.6% stake in Ekofisk, which is the oldest oilfield complex in the Norwegian North Sea and underpins the Brent crude benchmark, may also be on the block.

Equinor has entered into an agreement to acquire all of Spirit Energy’s production licenses in the Statfjord area for $50 million. Spirit Energy’s daily production from the Statfjord area in the third quarter of 2021 was around 21,000 BOED.

“Statfjord is one of the earliest oil fields on the Norwegian Continental Shelf,” said Camilla Salthe, senior vice president for late-life assets in Equinor. “Since production start in 1979, Statfjord has produced 5.1 billion barrels of oil equivalent. We still have high expectations for Statfjord and have recently launched a plan to extend the life of the field towards 2040.”

Reducing CO2 emissions will be a key priority for the field. Toward 2030, Equinor plans to realize energy efficiency measures and consolidate infrastructure to reduce emissions from Statfjord by 50%.

The closing of the transaction is expected to be completed by the first half of 2022.