May require additional dividends – E24

Energy giant Equinor is going through a transition, but it’s going very slowly, says SV deputy leader Torgeir Knag Fylkesnes.

What they do when they change is completely marginal. Fylkesnes tells E24 that large sums are being funneled elsewhere that is not in line with Paris’ goal.

To speed up the restructuring, SV is now demanding a new dividend policy at the company, where the state is the largest owner with 67 percent. SV will also halt Equinor’s $5 billion share buyback program.

If Equinor does not increase investments in green transformation, but continues to search for oil and gas, the country should demand extraordinary dividends and use the money in green investments, SV believes.

— Then you just have to increase the dividend in line with what you add to exploration costs, says Fylkesnes.

The Ministry of Commerce and Industry is responsible for the state ownership of Equinor.

E24 has asked Trade and Industry Minister Jean-Christian Vestri (Labour) whether he supports the SV’s proposal. He doesn’t answer directly, but says the size of the dividend is up to Equinor. Read Vestre’s answer at the bottom of the box.

11 percent of green investment

Equinor’s share of overall investment in renewable energy and low-carbon solutions increased to 11 percent last year, from four percent the previous year, according to the company. Sustainability Report.

Equinor expects to increase this stake to more than 30 percent in 2025 and more than 50 percent in 2030.

Fylkesnes wants to restructure Equinor faster and stop the search for new oil and gas. He points out that the climate goal of the Paris Agreement, according to the International Energy Agency, presupposes massive global investment in renewable energy along with a halt in new fossil projects.

Equinor spends significant resources continuing to search for oil and gas around the world, extending the age of oil. If the IEA scenario is to achieve net zero emissions, the development of new oil and gas fields must now be halted. But then you have to direct the money to renewable energy, says SV’s deputy commander.

Usually critical to increasing yield

SV has been critical of Equinor’s recent increase in earnings to owners. The party notes that the favorable tax package established by the European Parliament for the oil industry in 2020 should keep the activity on the shelf, and not go to the owners. SV prefers Equinor to spend its increased income on green investments.

Equinor is now making huge profits. This profit can quickly lead to more intensive exploration activities abroad. Our idea is that this money will be used for the green transformation, says Fylkesnes.

— Then either Equinor’s renewable energy division is heavily built up, possibly separate as a separate state company, or the state uses a portion of the profits to convert green, he says.

The country expects a strong return from Equinor of 26.7 billion Norwegian kroner this year, according to revised budget.

– You don’t recognize us

Equinor rejects SV’s claim that what the company is doing in the restructuring is marginal and not in line with the Paris target.

“No, we don’t recognize ourselves in it,” Equinor wrote in an email to E24.

“We are on track to develop into a broad-based energy company with a clear ambition of net zero in 2050, including emissions from using the products we sell. Our business strategy supports this ambition and the goals of the Paris Agreement,” the company wrote.

Equinor says the company is planning investments of more than NOK 200 billion in renewable energy through 2026, mainly offshore wind. The company’s restructuring plan was approved by the owners at this year’s general meeting. The company has promised to increase its renewable energy capacity to 12-16 gigawatts by 2030, and will transmit and store 15-30 million tons of CO2 annually by 2035.

Equinor writes: “In order to succeed in the restructuring and be able to unlock the necessary investments, it is essential that we jointly continue to maintain good cooperation between the industry, the authorities, relevant organizations and other actors.”

Want requirements in property report

The government will soon submit a property report, and Fylkesnes will tighten Equinor’s requirements.

in treatment From last year’s State Ownership Report, the Socialist People’s Party, the Labor Party and the Socialist People’s Party agreed to propose a new requirement for companies in categories 1 and 2 (such as Equinor) that they “contribute actively to the achievement of the goals of the Paris Agreement”. This should come in addition to Today’s requirements To achieve the highest possible return over time.

– SV wants to make Equinor part of the solution, to prevent them from undermining Paris’ goal of exploration, and to ensure more is invested in renewable energy, says Fylkesnes.

– A little bit

Equinor expects that ten percent of the company’s energy production in 2030 will come from renewable sources, while 90 percent will come from oil and gas, according to its 2021 sustainability report.

Equinor has launched several investments in renewable energy and low carbon solutions:

• The one billion Northern Lights project in carbon dioxide storage, which receives billions of support from the state
• The Hywind Tampen offshore wind project, which receives billions in support from state-owned Enova
• UK zero emission range with hydrogen and carbon dioxide purification
• A number of offshore wind energy projects in countries such as the USA, Great Britain and Poland

– Isn’t that enough?

– It’s very small compared to what they invest in. Big money goes to undermine the goal of Paris, while a small percentage helps achieve the goal. In general, this leads us in the wrong direction, says Fylkesnes.

Equinor is a listed company, shouldn’t the state then buy out the others and take the company off the stock exchange if it’s going to use it as a tool in the green turn?

We have a fairly strong majority in all decisions in the company. It would be like any owner of a business that has a very large ownership position, that you can use to achieve your goals. It’s not necessary to take it off the exchange, says Fylkesnes.