To make sure we always have a solid and competitive foundation we regularly assess how the development of technologies and changes in regulations – including the introduction of stringent climate policies – may impact the oil price, the costs of developing new oil and gas assets, and the demand for oil and gas. We also stress test our portfolio against the IEA’s World Energy Outlook scenarios on an annual basis, replacing our own planning assumptions for future oil, gas and carbon prices with the equivalent assumptions in the IEA 450 scenario. The analysis covers all accessed acreage, from exploration licences to fields in production, over the lifetime of the projects.
Our business needs to be resilient to a future environment that is likely to bring:
- higher carbon costs and stricter climate regulations across more jurisdictions
- falling demand for some of our core products/markets
- volatile prices and pressure on profit margins
- potentially disruptive technologies that could change our markets
In 2016, the result of the IEA stress test was a positive impact of 6% on the net value of the total portfolio, compared to using our own planning assumptions. However, both our own and IEA’s price assumptions may differ from actual future oil, gas and carbon prices, so there can be no assurance that the assessment is a reliable indicator of the actual impact of climate change on Equinor.