Equinor ASA EQNR, along with Exxon Mobil Corporation XOM,has announced its exit from Suriname Block 59. ExxonMobil, as the leader of the consortium, has transferred its ownership in Block 59 to Hess Corporation in a non-financial transaction.
Equinor’s decision to depart from the South American nation aligns with the company’s broader objective to focus on a few core production areas, such as Norway, the U.S. Gulf of Mexico and Brazil. The company also intends to boost its investments in renewables and the low-carbon energy segment.
In the past six years, Equinor has departed from about 20 countries, including South Africa, Mexico, Turkey and Nicaragua. In most of these countries, its activities involved exploring oil and gas.
Per a company spokesperson, Equinor does not plan to pursue any further exploration opportunities in Suriname. The company has decided to withdraw its operations from the deepwater Block 59 exploration license.
Following the transfer of ownership, Hess will own a 100% stake in the block. While this transaction marks Equinor’s exit from Suriname, ExxonMobil continues to operate in the country through Block 52. A representative of ExxonMobil stated that the company has completed all work commitments for Block 59. XOM will continue to evaluate its acreage in Suriname.
Equinor withdrew from Russia following its invasion of Ukraine in 2022. The company also divested its assets in Nigeria and Azerbaijan in 2023. After the recent deals, involving Equinor's exit from several countries, the company's international footprint will be reduced to fewer than 10 countries outside Norway. This strategy marks a stark contrast with respect to the international expansion strategy initiated by EQNR’s former management.
Despite the company’s decision to cut its global presence, Equinor aims to increase its international production by 15% during 2024-2030. The company expects to reach 800,000 barrels in its daily oil equivalent production. The increase is expected to be driven by the new fields in Brazil, the United States and the UK.
In 2023, its international operations accounted for 34% of the oil and gas production. Outside Norway, the United States was the largest contributor in production, followed by Angola, Brazil and Algeria.
Zacks Rank and Key Picks
Currently, EQNR carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are SM Energy SM and Matador Resources MTDR. SM Energy presently sports a Zacks Rank #1 (Strong Buy), while Matador carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
Matador Resources is a leading U.S.-based exploration and production firm. The company has consistently exceeded production expectations, demonstrating operational efficiency and robust growth. For 2024, the company expects its average daily oil equivalent production to be in the range of 158,500-163,500 BOE/d. The robust production outlook, combined with the favorable oil price environment, is expected to positively impact the company's bottom line.
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