Equinor posts record Q1 profit on gas price spike

Adjusted earnings at Equinor rocketed up to a record of nearly $18bn in the first quarter, the Norwegian state oil company reported on May 4, on the back of soaring gas prices in Europe.

The result compared with an income of only $4.71bn in the first quarter of 2021, and a profit of $15bn in the fourth quarter of last year. Equinor sells most of its gas on a spot basis, positioning it well to capitalise on the spike in European hub gas prices over the past year. The average price the company received for its gas in Europe increased by 345% year/year, "due to low gas stocks in Europe, high demand and tight supply," it said in a statement.

The company also expanded gas sales to Europe by 10%, while increasing overall gas production by 2% yr/yr, to 1.06mn barrels of oil equivalent/day. Equinor has secured permits from Norwegian authorities to ramp up gas supply from key fields including Troll, Oseberg and Heidrun. It is doing so in part by curtailing gas re-injection, at the expense of oil production.

"Continued capital discipline and cost focus enabled us to deliver very strong financial results and cash flow, strengthening the balance sheet," Equinor CEO Anders Opedal commented. "We have optimised the gas production to deliver higher volumes, and Hammerfest LNG is on track for a safe start-up on May 17."

Hammerfest LNG has been out of action since September 2020, when a serious fire broke out at the site.

Despite its strong numbers, however, Equinor has stuck to its February plan for $10bn in dividends and share buybacks this year, while some other international majors have increased their shareholder rewards.