Norway’s Equinor Adds to North Sea Oil and Gas Portfolio

The Buzzard oil field. Photo: Suncor Energy

Norway’s Equinor Adds to North Sea Oil and Gas Portfolio

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March 3, 2023

By Kari Lundgren and Christian Wienberg (Bloomberg) —

Norway’s Equinor ASA agreed to buy Suncor Energy UK Ltd. for $850 million, adding to its oil and gas production in the North Sea as Europe races to replace Russian supplies.

Since Moscow’s invasion of Ukraine a year ago, Equinor’s importance to Europe has never been greater as the region seeks alternative sources of energy. The firm is now using its vast profit from last year — a result of flat-out production and soaring gas prices — to boost capacity as well as reward shareholders.

The transaction gives Equinor a 30% non-operated stake in the producing Buzzard oil field and an additional 40% operated interest in the Rosebank development, the company said in a statement on Friday.

“We are building on our longstanding position as a broad energy partner to the UK, strengthening our position as a reliable energy provider in Europe,” Executive Vice President for Exploration and Production Philippe Mathieu said in the statement. Equinor is aiming for a “deepening in our core countries.”

Equinor supplied 29% of the UK’s natural gas demand last year and is investing in energy infrastructure around the country, including offshore wind parks, hydrogen projects and carbon capture and storage technology.

“The Suncor UK deal makes strategic sense,” Teodor Sveen-Nilsen, an analyst at SpareBank 1 Markets, said Friday. “We expect Equinor to exit countries and not enter new countries in the next few years, as well as focusing investments in countries where the company already has a strong foothold.”

The acquisition will add about 15,000 barrels of oil equivalent a day in equity share this year, Equinor said.

The Buzzard field, operated by China’s Cnooc Ltd., produces about 60,000 barrels a day. Expected recoverable reserves from the Rosebank field west of the Shetland Islands total about 300 million barrels. Following the deal, Equinor will own 80% of that asset.

© 2023 Bloomberg L.P.

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