Equinor plans to drill 25 exploration wells in Norway next year – up from 16 this year – with the aim of building a Norwegian energy hub, with hydrogen at its core.
The energy giant’s hub concept is based on large-scale production and export of hydrogen, with plans to include both blue hydrogen, produced from natural gas, and hydrogen green, produced with renewable energies. Investment plans include the use of carbon capture and storage technology to mitigate or eliminate emissions associated with gas production.
The energy transition has become the core of Equinor’s business strategy, and this is reflected in an exploration strategy, both on a global scale – promising a pullout from all but the best in terms of profitability and profitability. opportunities for a lower carbon intensity – but also in Norway, where the public enterprise is part of a social and economic context which demands a carbon-free future.
Equinor’s senior vice president for exploration and underground production in Norway, Jez Averty, gave Upstream an overview of the exploration plan to be launched next year.
“We plan to drill around 25 exploration wells off the coast of Norway in 2022. Two-thirds of the wells are operated by Equinor. In comparison, we drilled 16 wells in 2021, â€said Averty, adding that some of the wells had not yet been approved by all partners.
According to the Norwegian exploration manager, most of the wells are located in the North Sea, a few in the Barents Sea and the rest in the Norwegian Sea.
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“In keeping with our strategy to prioritize value over volume, 80% of wells are infrastructure-led exploration, which means we aim to leverage infrastructure built over 40 years,†Averty said. .
Resources that can be tied to existing facilities tend to enable rapid project execution, with lower capital outlays and faster payback time, he noted.
Still, Averty has ranked 20% of next year’s exploration wells as “testing new ideas,” meaning planning higher risk and more profitable wells.
Most of these pure exploration wells are for natural gas, as Equinor has big ambitions to produce and export blue hydrogen, made from natural gas and carbon capture and storage.
“When we test new ideas, our main focus will be on finding gas. We can see that gas will play an important role in the energy transition. It is a catalyst for blue hydrogen.
Averty did not provide further details on which parts of the Norwegian continental shelf will be targeted for wild hunting.
“I can’t reveal that at this time,†Averty said, adding that more than 50% of the company’s exploration program is for either natural gas or a combination of natural gas and oil.
Averty stressed that the 25-well plan is also part of the company’s strategy to maintain its production level of 1.5 million barrels per day in Norway until 2030, and beyond.
Equinor intends to build its future activity around three pillars: the development of oil and gas projects, the increase in offshore wind production and the creation of new low-carbon activities such as carbon and hydrogen capture and storage.
“These are interconnected. Oil and gas are of crucial importance to society, which is evident in Europe where the lack of gas has caused an energy crisis. In addition, the oil and gas industry will be a key driver for an energy transition based on knowledge, technology and, above all, investment, â€said Averty.
Equinor plans to invest $ 23 billion in renewable energy through 2026. Continued oil and gas production will be a key factor in the huge investments needed.
“The Norwegian plateau generates significant cash flow, and we will use it to finance the transition. However, cash flow depends on continuous value creation, and exploration is the most important metric to ensure continued value creation and cash flow, â€he said.
A geologist by training, Averty believes that the Norwegian continental shelf is very competitive from an international perspective.
In 2021, Equinor discovered 119 million barrels of oil equivalent in Norwegian waters, with 16 exploration wells drilled.
Although the volumes are relatively low, in a regional and historical context, Averty said that Equinor’s exploration results between 2019 and 2021 are worth four times the investment in the exploration program, with an average price. of oil at equilibrium of $ 30 per barrel.
“We believe that having a meaningful but consistent and predictable investment framework is an important part of ensuring that the Norwegian continental shelf remains competitive. This avoids the peaks and troughs in activity that we have often seen in the industry and provides line-of-sight and predictability to our suppliers, â€said Averty.
Internationally, Equinor plans to drill approximately 10 to 13 exploration wells next year, including in the Gulf of Mexico in the United States, off Canada, Angola and Brazil, as well as in eastern Siberia, ashore in Russia, a company spokesperson said.
