Equinor Reduces Renewable Energy Commitment, Returns to Oil

Equinor has scaled back its commitment to renewable energy, returning to focus on fossil fuels seven years after dropping the word “oil” from its name. The Norwegian energy group, formerly known as Statoil, has announced it will increase fossil fuel production and halve investment in green energy.

Specifically, Equinor plans to produce 2.2 million barrels of oil equivalent per day by 2030, 10% higher than previously estimated

In renewables, the company has reduced its capacity target to 10-12 GW, down from 12-16 GW initially. In addition, investments in renewables and other low-carbon solutions between 2025 and 2027 will be reduced to $5 billion, a significant cut from the $10 billion previously planned.

Opedal, as reported by the Financial Times, said that Equinor is “well positioned to grow further and deliver competitive returns for shareholders.” The company consequently expects to increase free cash flow, achieved through portfolio improvement, reduced investments in renewables and cost optimisation.

Despite this shift in priorities, Opedal stressed that the company’s long-term strategy remains unchanged, with the aim of reaching net zero by 2050, continuing to reduce emissions and developing profitable renewable businesses.

Equinor’s decision comes as other industry giants, such as Shell and BP, have also changed their plans to transition to greener energy sources, under pressure from shareholders who demand financial returns comparable to those of the traditional oil and gas sector.

Analysts expect BP to revise its 2030 renewable capacity targets at an investor meeting this month. Meanwhile, energy giant Vitol said global oil demand would remain elevated until at least 2040.

Among other decisions, Equinor also announced the purchase of a 10 % stake in Ørsted, a global developer of offshore wind farms, thus moving closer to its goals in the renewables sector at a lower cost than would be the case if it were to develop such capacity on its own.

In 2024, global oil demand increased by almost 1 million barrels per day compared to 2023, a lower increase than the previous year, due to the cooling of the Chinese economy. Supply, however, remained stable and able to meet demand, with the United States becoming the world’s leading producer. These are some of the results found by Unem , the association of fuel companies, in its Preliminary Oil 2024 , presented in Rome.

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