Equinor to Restrain Renewables Activity in Favor of Value Creation

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Equinor to Restrain Renewables Activity in Favor of Value Creation

Equinor ASA has cut its goal for installed renewable energy capacity to 10-12 gigawatts (GW) by 2030 and binned a plan to allot 50 percent of capital to renewables and low-carbon solutions by the end of the decade. The decision comes on the heels of its acquisition of a 10 percent stake in renewables developer […]

The decision comes on the heels of its acquisition of a 10 percent stake in renewables developer Orsted AS, which separately said it has discontinued a target to install 35-38 GW of renewable capacity by 2030.

“Equinor has high-graded the project portfolios in renewables and low-carbon solutions, and reduced cost and early-phase spend to improve the value creation for shareholders”, the Norwegian majority state-owned energy major said in its quarterly report. “The portfolio is expected to deliver more than 10 percent life-cycle equity returns”.

Equinor highlighted “value creation is at the core of decision making”.

For the carbon capture and storage sector, Equinor said it is keeping its ambition to store 30-50 million metric tons of carbon dioxide equivalent (MMtCO2e) a year by 2035. It said it has 2.3 MMtCO2e of storage capacity installed or under development, as well as licenses with over 60 MMtCO2e of annual capacity.

Equinor is retaining its aim to trim Scope 1 and 2 emissions by half by 2030. However, it said, “The pace of transition depends on frame conditions and market opportunities to create value”.

“Adjusting to the market situation and opportunity set, the range for the net carbon intensity ambition will be 15-20 percent in 2030 and 30-40 percent in 2035”, it said.

Equinor said it has “significantly” improved its free cash flow outlook by investment reduction and cost discipline.

It expects organic capital expenditure of $13 billion for 2025 and on average for 2025-27. Most of this is for an offshore wind project in the U.S.

“Stronger free cash flow provides capacity for Equinor to continue to deliver competitive capital distribution”, the company said.

“Equinor also strengthens its resilience and can be cash flow-neutral after all investments at an oil price around 50 dollars per barrel”.

Reduced Spending at Orsted

In the fourth quarter of 2024 Equinor raised its stake in Denmark’s state-backed renewables major Orsted to 10 percent after purchasing an initial 9.8 percent.

Chief executive Anders Opedal said October 7, 2024, as Equinor announced its entry as an investor, “This is a counter-cyclical investment in a leading developer, and a premium portfolio of operating offshore wind assets”.

“The exposure to producing assets complements Equinor’s operated offshore wind portfolio of large projects under development”, Opedal said.

“The offshore wind industry is currently facing a set of challenges, but we remain confident in the long-term outlook for the sector, and the crucial role offshore wind will play in the energy transition”, Opedal added then.

On Thursday, Orsted said it was withdrawing its decadal goal for renewables, saying, “We will adopt a focused approach to capital allocation by prioritizing geographies and technologies with the most attractive value-creation potential”.

“Ørsted has experienced challenges, especially related to the US offshore wind portfolio, which have led to further pressure on our credit metric”, it said in a press release. “This development, in combination with the wider renewable industry challenges, has led Ørsted to reduce its investment program towards 2030 by around 25 percent compared to its previous strategic ambition on a like-for-like basis.

“The reduced investment program is in line with our commitment to ensure a capital structure that can support a solid investment grade credit rating”.

Oil and Gas Growth

While reducing renewables investment, Equinor said it is aiming for a 10 percent growth in oil and gas production from 2024 to 2027.

It raised its expected production in 2030 from two million barrels of oil equivalent a day (MMboed) to 2.2 MMboed.

“For the NCS [Norwegian continental shelf], production is expected to maintain at a high level of around 1.2 million boe per day all the way to 2035”, it said.

“Equinor will continue to develop existing fields and an attractive project portfolio both on the NCS and internationally. Driving increased recovery and exploration near infrastructure is expected to bring high-value volumes with short lead time, low cost and low emissions”.

In the fourth quarter of 2024, Equinor reported 2.07 MMboed in equity production, down from 2.2 MMboed in the same three-month period a year ago.

Shareholder Returns

Equinor’s board approved a share buyback program of up to $5 billion for 2025, starting with a $1.2 billion first tranche ending April. In January 2025 Equinor completed its 2024 repurchase plan, redeeming $6 billion worth of shares.

“The 2025 share buy-back program will be subject to market outlook and balance sheet strength”, it said.

The board is proposing to increase Equinor’s ordinary cash dividend from $0.37 per share to $0.39.

Equinor posted $2 billion in net profit for the fourth quarter of 2024, down 23 percent year-over-year, as volumes and prices both fell. Adjusted net income was $1.73 billion, down six percent year-on-year.

Net operating income came at $8.74 billion, the same level as the comparable period in 2023. Adjusted operating income was $7.9 billion, down eight percent year-on-year.

Cash flow from operations after tax payments landed at $3.9 billion for the fourth quarter of 2024, while net cash flow before capital distribution was negative $2.16 billion.

Equinor ended 2024 with $45.97 billion in current assets including $8.12 billion in cash and cash equivalents. It had $35.02 billion in current liabilities including $7.22 billion in finance debt.

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OpenAI’s red teaming innovations define new essentials for security leaders in the AI era

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More OpenAI has taken a more aggressive approach to red teaming than its AI competitors, demonstrating its security teams’ advanced capabilities in two areas: multi-step reinforcement and external red teaming. OpenAI recently released two papers that set a new competitive standard for improving the quality, reliability and safety of AI models in these two techniques and more. The first paper, “OpenAI’s Approach to External Red Teaming for AI Models and Systems,” reports that specialized teams outside the company have proven effective in uncovering vulnerabilities that might otherwise have made it into a released model because in-house testing techniques may have missed them. In the second paper, “Diverse and Effective Red Teaming with Auto-Generated Rewards and Multi-Step Reinforcement Learning,” OpenAI introduces an automated framework that relies on iterative reinforcement learning to generate a broad spectrum of novel, wide-ranging attacks. Going all-in on red teaming pays practical, competitive dividends It’s encouraging to see competitive intensity in red teaming growing among AI companies. When Anthropic released its AI red team guidelines in June of last year, it joined AI providers including Google, Microsoft, Nvidia, OpenAI, and even the U.S.’s National Institute of Standards and Technology (NIST), which all had released red teaming frameworks. Investing heavily in red teaming yields tangible benefits for security leaders in any organization. OpenAI’s paper on external red teaming provides a detailed analysis of how the company strives to create specialized external teams that include cybersecurity and subject matter experts. The goal is to see if knowledgeable external teams can defeat models’ security perimeters and find gaps in their security, biases and controls that prompt-based testing couldn’t find. What makes OpenAI’s recent papers noteworthy is how well they define using human-in-the-middle

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