Equinor ASA EQNR, a Norwegian state-owned energy company, has announced significant progress on its development projects with 19 initiatives currently underway. In the proposed National Budget for 2025, the Norwegian Ministry of Energy detailed the status of 13 Equinor-operated projects that are either under development or have recently been completed.
According to Trond Bokn, head of project development at Equinor, the company’s developments in 2023 contributed to significant economic activity, with 25 billion kroner flowing into Norway’s supplier industry. Bokn noted that Equinor, together with its industry partners, has successfully completed six projects in the past year. Despite overall positive developments, the reported projects have seen a cost increase of 6.5 billion 2024-NOK over the past year, a rise of about 3%, attributed mainly to currency fluctuations.
EQNR’s Johan Castberg Project: Anchoring Success for 2024
One of Equinor’s flagship projects, Johan Castberg, is progressing steadily toward its scheduled startup by the end of 2024. The production ship has already been anchored at the field, but the project experienced a cost increase of 2.2 billion 2024-NOK over the past year. This hike is linked to extended time spent at Aker Solutions, as well as currency effects amounting to 800 million NOK. Since its initial plans for development and operation (PDO), Johan Castberg’s costs have increased 25.7 billion 2024-NOK.
Equinor’s Oseberg Gas Phase 2: Delays and Rising Costs
Equinor’s Oseberg gas phase 2 project, which involves partial electrification and installation of a compressor module, has also faced financial challenges. The project’s cost increased 1.2 billion 2024-NOK in the past year, and 2.5 billion since the PDO. Delays related to the destruction of transformers in a factory fire at Hitachi and heightened complexity have pushed the commissioning date to late 2027, a year behind schedule.
EQNR’s Snohvit Future: Adapting to Safety Requirements
Equinor’s Snohvit Future project, focusing on the electrification of Hammerfest LNG, also encountered cost escalations. Since the PDO, costs have risen 1.9 billion 2024-NOK, with currency effects contributing more than 500 million NOK. Safety concerns prompted a redesign of an electric boiler, leading to a further increase in expenses.
Equinor's commitment to advancing these substantial projects in Norway is crucial for the company to ensure the long-term security of oil and gas supplies to Europe. While cost increases and complexities have posed challenges, Equinor remains focused on delivering these projects efficiently and effectively, demonstrating its resilience and strategic vision in the evolving energy landscape.
EQNR's Zacks Rank & Key Picks
EQNR currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like PEDEVCO Corp. PED, Archrock Inc. AROC and Core Laboratories Inc. CLB. While PEDEVCO and Archrock sport a Zacks Rank #1 (Strong Buy) each, Core Laboratories carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. PED stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations.
The Zacks Consensus Estimate for PED’s 2024 EPS is pegged at $0.08. The company has a Value Score of B. It has witnessed upward earnings estimate revisions for 2024 in the past 60 days.
Archrock is an energy infrastructure company based in the United States, focusing on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
The Zacks Consensus Estimate for AROC’s 2024 EPS is pegged at $1.04. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Core Laboratories, an oilfield services company, has a deep portfolio of sophisticated, proprietary products and services that positions it to take advantage of the growing maturity in the global hydrocarbon reserve base. CLB’s expanding international upstream projects indicate a positive trajectory for revenues and profitability, especially as oil demand continues to rise globally.
The Zacks Consensus Estimate for CLB’s 2024 EPS is pegged at $0.95. The company has a Value Score of B. It has witnessed upward earnings estimate revisions for 2025 in the past 30 days.
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