Why is Equinor Halving Renewables Spend & Growing Oil & Gas?
Equinor is slashing its investments in renewables to US$5bn over the next two years, down from around the US$10bn it had initially pledged.
In its Q4 and 2024 full-year results, Equinor said it is “reducing investments to renewables and low-carbon solutions to around US$5bn in total after project financing for 2025-2027”.
It is also “lowering expected capacity in renewables” to between 10GW and 12GW by 2030.
Its previous target was between 12GW and 16GW.
“Equinor is well positioned for further growth and competitive shareholder returns,” Equinor President and CEO Anders Opedal says.
Why is Equinor slashing its renewable investment?
Despite dropping oil from its name when it rebranded from Statoil to Equinor in 2018 — said to reflect the company’s transition from oil and gas to a broader energy company — Equinor’s focus is shifting back to its roots.
Its latest results lay out its plan to increase production of fossil fuels while halving renewables spending.
Anders says: “Our oil and gas production outlook is increased to more than 10% growth from 2024 to 2027.”
He adds that “by adapting to market situations and opportunities, we are set to create shareholder value for decades to come.
“In 2024 we delivered solid financial results and high production through strong operational performance,” he continues.
“We now expect the 2025 Johan Sverdrup production to be close to the level of the last two years. This shows how we work systematically to improve our producing assets to remain a safe and reliable provider of energy.”
The Johan Sverdrup oil field lies about 140km from Stavanger, Norway, in the North Sea, where Equinor operates the Aldous Major South site.
Despite this, CEO Anders is confident that Equinor will reach its net zero targets.
“We have a consistent growth strategy and our strategic direction remains the same,” he says.
“We continue to reduce emissions from our production and build profitable business in renewables and low-carbon solutions towards our net zero ambition in 2050.”
Equinor’s Rosebank oilfield
These results come after a Scottish court ruled consent for Rosebank — an oilfield in the North Sea 80% owned by Equinor — and Shell’s Jackdaw site was granted unlawfully.
Legal challenges brought by environmental groups including Greenpeace and Uplift thrust the oil fields and their owners into a court battle about their legitimacy.
New consent for these sites is being arranged, with the court ruling that work to ready it for production can continue — although no oil and gas can be extracted until the fresh approval is declared.
Equinor attests that Rosebank — expected to create more than 2,000 jobs and be responsible for 7% of UK oil production from first oil to 2030 — is “part of our contribution to energy security and creating jobs for Britain”.
With it estimated to be the site of around 300 million barrels of oil, Equinor says there are “sound and rational reasons for developing Rosebank”.
Equinor says: “Oil and gas will be needed to power the global economy for many years to come, including in independent scenarios of what would be needed in a Paris-aligned trajectory.
“As well as being primary sources of energy, oil and gas will be needed as input to low carbon fuels such as blue hydrogen for hard-to-abate sectors and as feedstocks for non-energy applications such as chemicals.
“To meet the needs of society, Equinor will continue to produce oil and gas for the foreseeable future.”
Drill, baby, drill?
During his US Presidential reelection campaign, President Trump repeatedly proclaimed “drill, baby, drill”.
Since returning to office, he has reversed bans on offshore drilling, given his approval for Arctic oil exploration and lifted restrictions on LNG exports.
Trump’s stance on oil and gas — as well as his pledge to roll back climate policies and withdraw the US from the Paris Agreement and the UN Framework Convention on Climate Change — has been followed by other energy companies reducing their renewables investments.
bp and Shell have both scaled back their plans, with TotalEnergies saying it will reduce its low-carbon energy investments.
“The oil and gas landscape was less favourable in 2024,” TotalEnergies CEO Patrick Pouyanné told reporters.
“In the end, it will still be the third highest results in company history.”
In 2023, Enel cut its renewable energy ambitions for the 2024-2026 period by approximately €5bn (US$5.2bn) as part of its strategic plan.
The International Energy Agency’s The Oil and Gas Industry in Net Zero Transitions World Energy Outlook Special Report predicts that demand for oil and gas will peak before 2030.
However, it also says that oil and gas will remain necessary in 2050 — although on a reduced production scale.
“After the peak, demand is not currently set to decline quickly enough to align with the Paris Agreement and the 1.5°C goal,” it says.
“But if governments deliver in full on their national energy and climate pledges, then oil and gas demand would be 45% below today’s level by 2050 and the temperature rise could be limited to 1.7°C.”
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