Equinor buys for nearly NOK nine billion in the UK – E24

Equinor buys Suncor Energy UK Limited for nearly NOK nine billion. With the purchase, they get increased ownership in the upcoming Rosebank development, and a share in the Buzzard field, which is in production.

The case is updated.

The business Equinor UK Limited has entered into an agreement to buy the company Suncor Energy UK Limited for a total consideration of 850 million dollars (about NOK 8.9 billion), according to a melding.

Several analysts have expected that Equinor would go on a shopping spree. The company has made a lot of money from high energy prices recently, and by the New Year was sitting on a cash pile that included $15.6 billion in cash and $29.9 billion in what the company calls financial investments.

– This transaction is in line with Equinor’s strategy to optimize our oil and gas portfolio and strengthen our position in international core areas, says Philippe Mathieu, Executive Vice President for International Exploration and Production at Equinor.

Suncor Energy also sold its Norwegian portfolio to Sval Energi in August last year, including shares in the Oda and Fenja fields.

Canadian Suncor Energy writes in a melding that the sale of the British business is to be completed in mid-2023.

– The decision to sell our exploration and production business in the UK is a clear example of our desire to optimize our portfolio, says Kris Smith, Acting CEO of Suncor Energy.

Increases share in Rosebank

Equinor’s purchase in the UK includes a further share of 40 per cent in the Rosebank field, where an investment decision is scheduled to be made in 2023. Thus, Equinor will own a total of 80 per cent of the development.

The transaction also includes a 29.89 percent stake in the producing Buzzard field, which is operated by China National Offshore Oil Corporation.

Equinor’s own production will increase by around 15,000 barrels of oil equivalent per day in 2023 after the purchase.

250 million dollars of the purchase price is conditional on a final investment decision being made for Rosebank, Equinor states. Rosebank was discovered in 2004, and the expected recoverable resources are around 300 million barrels of oil.

Canadian Suncor Energy has also been heavily involved in oil sands production. This was among the first companies to be kicked out of the Oil Fund for climate reasons.

Environmental protests

A number of environmentalists have protested against the Rosebank development, most recently during the Crown Prince couple’s visit to the UK this week.

– The Crown Prince couple and Norwegian ministers are now in the UK and they must be aware of the growing opposition to Equinor’s Rosebank oil field, said leader Tessa Khan of the organization Uplift in connection with a protest earlier this week.

According to Equinor, the Rosebank development must be optimized to cut climate emissions. The production ship (FPSO) on the field is to be prepared for future electrification in accordance with the British restructuring plan North Sea Transition Deal.

The British Government has entered into an agreement with the oil and gas industry to transition to green energy and create 40,000 new jobs in low-carbon solutions, including hydrogen and CO₂ cleaning, by 2050. There are around 147,000 jobs in the UK oil and gas industry, according to the text of the agreement for North Sea Transition Deal.

The artist Aurora recently signed an open letter against the plan to develop Rosebank. The letter was signed by nearly 200 organizations and names, including the WWF World Wildlife Fund, Greenpeace, the Nature Conservancy and the Green Party.

In December, Equinor received the environmental plan for Rosebank in return with follow-up questions from OPRED, which is the supervisory authority and regulator for activity on the British continental shelf. OPRED called for more information on how the environmental requirements are to be met.

Equinor’s partner at Rosebank, Ithaca, is also working to develop the Cambo field on the British shelf. But it is insecurity also around this development, and several media point to the British government’s additional tax in the oil business.