Equinor boost profits, but keeps a lid on spending

London (Quantum Commodity Intelligence) - Equinor boosted profits in the first quarter amid higher oil and gas prices and one-off sales in wind farms, but its oil and gas production fell year-on-year and the Norwegian oil company intends to keep a lid on spending and investment, it revealed in its Q1 results.

Equinor expects organic capital expenditure will be around $9 and $10 billion in 2021, down from its fourth quarter 2019 estimate for this year of $10-11 billion in 2021.

Oil and gas equivalent production, including product sharing agreements, was 2.168 million b/d in the first quarter, down from 2.233 million b/d a year earlier.

But production was up from 1.192 million b/d from the last three months of 2019.

The company expects prodution, in terms of barrels of oil equivalent, to rise by 2pc from 2020.

Boosted by sales of wind farms in ther UK and the US for $1.38 billion, Equinor's first quarter profit jumped to $5.47 billion, up from just $2.043 billion a year earlier.

But the company is waiting for market conditions to improve before changing course from the cost cutting in the wake of the Covid-19 pandemic.

Equinor's action plan in March 2020 created savings $3.7 billion, including a reduction in fixed operating costs of around $1 billion.

"There has been considerable uncertainty created by the Covid-19 pandemic and we are still unable to predict the ultimate impact of this event, including impact on general economic conditions worldwide," Equinor stated in the results.

"Our future financial performance, including cash flow and liquidity, will be impacted by the extent and duration of the current market conditions, the development in realised prices, including price differentials and the effectiveness of actions taken in response to the pandemic."

Equinor's ambition is to keep the unit of production cost in the top quartile of its peer group, it added.