Equinor offers stake in North Sea oil field for $1bn
Equinor is looking to offload a 19 per cent stake in the Martin Linge oilfield based in the North Sea, according to Reuters.
The energy company hopes to raise $1bn from the sale.
Equinor currently holds a 70 per cent stake in the field and Petoro, which manages Norway’s interests in offshore oil and gas licences, owns the remaining 30 per cent.
The stake is reportedly being marketed by Lambert Energy to potential bidders.
The Martin Linge offshore field started production last June and is expected to reach a peak output of 115,000 barrels of oil equivalent per day next year.
However, the proposed sale of the near one-fifth stake for reportedly $1bn would place the oil field’s overall value below its $7bn development costs.
Reuters has also learned Equinor is additionally hoping to sell its 7.6 per cent stake in Ekofisk, which is the oldest oilfield complex in the Norwegian North Sea and underpins the Brent crude benchmark.
Norway’s oil and gas sector has attracted a flurry of deals recently – with companies looking to offload fossil fuel assets which still remain popular with investors despite the pressure to shift towards renewable sources.
This includes British Gas owner Centrica offloading its fossil fuel assets in the region to Sval Energi as part of a $1.1 billion deal last month.
Nevertheless, Equinor remains committed to exploratory drilling.
The firm’s head of exploration Norway, Jez Averty, confirmed Equinor is set to drill 25 exploration wells off its native country in 2022, up from 16 this year, to sustain its future cash flow.
He told Reuters the planned operations in Norway were estimated to cost between $300m and $400m.
He said: “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.”
The increased activity in the region is a relief for North Sea focused investors, after Siccar Point paused work on the controversial Cambo oil field near the Shetland Isles last month.
The decision followed oil giant Shell pulling out of the project amid pressure from climate change activists and disapproval of the project from Scotland’s first minister Nicola Sturgeon.
Internationally, Equinor plans to drill around 10-13 exploration wells next year.
This includes in the U.S. Gulf of Mexico, offshore Canada, Angola and Brazil, as well as in East Siberia, onshore Russia.
Overall, Equinor expects to spend around $900m on exploration globally this year, but it no longer provides a comparable guidance for 2022.