Message from the chair and CEO

The invasion of Ukraine and Russia’s weaponisation of energy brought a deep crisis to a system already in imbalance. It became apparent that security of supply in Europe rests on reliable access to natural gas. The war continues to impact society and peoples’ lives. As part of an aligned response to the invasion, Equinor decided on 27 February 2022 to exit Russia.

During last year, the effects of global climate change proved the strong need to act on the goals in the Paris agreement. The energy sector must innovate to cut emissions and create low-carbon energy systems. We must accelerate investments in renewables, energy efficiency, and in low-carbon solutions to decarbonise industry and society. But to safeguard a just and inclusive change of the energy system, we must secure access to affordable and reliable energy.

In this context, Equinor is well positioned, as we focus on providing the energy the world needs while reducing emissions from our own operations and investing in the necessary systemic change towards net zero.

Geopolitical developments call for a balanced energy transition. More investments in energy production and infrastructure are needed to reduce the cost of energy, and security of supply and decarbonisation of the sector will be required. Enabling such a transition calls for longevity and stability of frame conditions. Even within the most ambitious goals of the Paris agreement and the net-zero scenario of the International Energy Agency, there will still be a need for oil and gas in the 2050 energy mix. A substantial part of the remaining demand will stem from the need for feedstock for industry and consumer goods to a global population of around 10 billion people.

Low-carbon hydrogen produced from gas has the potential to become an important source of energy in the future. Equinor’s Energy transition plan, supported by 97.5 percent of our shareholders at the annual general meeting in May 2022, outlines how Equinor will aim to deliver on its ambition to reach net zero by 2050.

In 2022, when it was more important than ever, people working for Equinor stepped up to deliver safe, secure, and reliable production with low emissions. The serious incident frequency for the company in 2022 was 0.4 per million hours worked, a slight improvement from the previous year, and the lowest frequency ever recorded. We progressed our emissions reduction (scope 1 and 2) by reaching a decline of 31 percent since 2015, taking us towards our ambition of net 50 percent reduction by 2030. In 2022, we also signed the world’s first commercial agreement on cross-border CO2 transportation and storage together with the joint venture partners in the Northern Lights project.

During the year, we have reached key milestones to deliver on our strategy through strong project execution. Johan Sverdrup phase 2 on the Norwegian continental shelf started production, adding barrels to a world-class oil field and making our portfolio even more robust. Peregrino phase 2 in Brazil came on stream in October, adding 250–300 million barrels while halving expected CO2 emissions per barrel over the field’s remaining lifetime. We generated first power at Hywind Tampen, the world’s first floating wind farm to power offshore oil and gas platforms. Further, we matured our renewables project portfolio, and won new offshore wind leases. We aim to emerge as a leading energy player in selected international markets.

Together with partners, suppliers, and authorities, we managed to increase our gas supply to Europe by 8 percent compared to 2021. In total we produced around 2 million boe per day, and 2.7 terawatt hours of power. The CO2 intensity of our production ended at 6.9 kg CO2 per boe, far below the global average. Our unit production cost for oil and gas was USD 6 per barrel, confirming continued cost control. With cost inflation and continued supply chain disruption, we focus on maintaining cost competitiveness through the cycles.

Equinor’s strong performance and results put the company in a robust financial position. We continue to optimise the oil and gas portfolio, accelerate renewables, and develop low-carbon solutions to deliver on our strategy. The strong cash flow from our oil and gas business together with our robust balance sheet enable us to continue investing and innovating. We aim to develop and bundle energy services and products, build new value chains, and invest in infrastructure projects, while delivering healthy and competitive returns to our shareholders.

With our gas reserves and existing infrastructure, we are uniquely positioned to develop low carbon value chains. In collaboration with governments, industry, and customers, we aim to build markets for hydrogen and carbon capture and storage to achieve necessary scale. Our strategy and portfolio of producing assets and projects position us well to be a leading company in the energy transition.

Equinor is in a strong position to create value in the energy transition, by providing affordable, low carbon and secure energy. In 2030 we aim to produce around 2 million barrels of oil and gas per day, and 35-60 TWh of power from renewables annually. In addition, we are developing capacity for energy storage through batteries and green hydrogen, as well as blue hydrogen and carbon transport and storage.

We would like to express appreciation of our employees’ strong performance under extraordinary circumstances in 2022. We would also like to thank Equinor’s shareholders for their continued investment, and our stakeholders for a strong commitment.

Jon Erik Reinhardsen, chair of the board
Anders Opedal, president and CEO