Norway’s Equinor booked a massive one-off windfall from sale of stakes in its offshore wind projects in the US and UK, as the oil & gas group reaped the rewards of its early embrace of a sector that is now centre-stage in the energy transition.
Equinor posted gains of almost $1.4bn on sales of a half-share of its New York projects to BP, and a minority stake to Eni in the giant Dogger Bank development off the UK.
Equinor CEO Anders Opedal said the deals demonstrate “our ability to create value from accessing and maturing renewable projects”.
The divestments to its fellow oil & gas groups come years down the line from Equinor’s initial forays into offshore wind, where it was an outrider in terms of the fossil energy sector.
In the case of New York, Equinor – then known as Statoil – in 2016 paid what was at that time a record $42.5m for the rights to develop offshore wind off the state.
The deal with BP for a 50% stake in the Empire Wind 2 and Beacon Wind 1 projects of up to 4.4GW brought Equinor $1.1bn, as the two partners gear up to supply power from the wind farms that were successful in two procurement rounds won by the state.
In the case of Dogger Bank, Equinor/Statoil’s foresight stretches back to 2010 when it was part of the original consortium that won rights to develop what will at 3.6GW become the world’s largest operating project, which it is advancing with partner SSE.
Equinor in the first quarter became the first major oil & gas group to split off financial reporting of its renewable operations, which although still a small part of its overall oil & gas business is large enough to make it a key player in the energy transition.
As well as developing huge offshore wind farms for entry to service this decade, Equinor already operates projects off the UK, including the pioneering Hywind floating development off Scotland.
The divestment windfalls massively inflated renewable revenue and segment profit for the quarter, which came in at $1.38bn and $1.34bn respectively.
Equinor said power output of 450GWh in the first quarter of 2021 was down from 558GWh in the same three months of 2020, reflecting lower wind speeds in the latest quarter.
“For the Equinor operated windfarms the twelve-month period ending 31 March average production-based availability was 96.6%.”