Equinor (NYSE:EQNR) and its Wisting project partners have decided to postpone the investment decision that was scheduled for next month.
An investment estimate for Wisting stands at £8.79 billion, meaning the project has a positive Net Present Value before and after tax after the cost increase.
Equinor says it and its partners in the project will further mature the development concept, the power-from-shore solution, and consider new supplier models for Wisting.
Equinor Energy owns 35 % of the Wisting project and its partners include AkerBP which owns 35 %, Petoro with a 20 % share and INPEX Idemitsu Norge with a stake of 10 %.
An Equinor spokesperson has told Energy Voice that “there’s no change” on its plan for the Rosebank field FID which is expected next year.
Geir Tungesvik, Equinor’s executive vice president, projects, drilling and procurement said: “Equinor and partners have worked in close cooperation with the supply industry and developed a technically feasible and environmentally safe Wisting project for the Barents Sea.
“A development will generate substantial value for society and ripple effects in the north and nationally.
“In our updated investment estimate for the project, we see a cost increase due to increased global inflation and cost growth in the supply industry nationally and internationally.
“There is also uncertainty about the framework conditions for the project and execution capacity in the supplier market.
“Based on an overall assessment, we choose to postpone the investment decision.”
Further adding: “Many people have been working hard to realise Wisting, and the decision is demanding. However, in the current supplier market postponing the investment decision to ensure an economically sound development and robustness in the execution phase of the project is the right decision.
“When the pressure in the supplier market subsides, the Wisting project will be possible to execute in a good way.”
Executive vice president for exploration and production in Norway, Kjetil Hove, commented: “Equinor has been present in Northern Norway and in the Barents Sea for more than 40 years, and the industry has generated substantial value, activity, and jobs.
“We have a long-term perspective with the Castberg field coming on stream in 2024, we will continue to explore, and we will further develop the Barents Sea.”
“We will now, together with partners and suppliers, mature a profitable Wisting project that will have ripple effects in the North within the ordinary tax regime.
“We have previously successfully improved projects facing challenging cost developments prior to final investment decision. We will aim to do the same with the Wisting project.”
Protestors hail ‘ victory for the climate’
Director of Uplift, Tessa Khan, said: “Even if Equinor puts the decision down to rising costs, this is a victory for the climate.
“Equinor spends a lot on PR telling people that it is transitioning away from oil and gas, but in reality it is planning to develop huge new oil and gas projects. With the climate crisis worsening every year – and with both the International Energy Agency and the UN saying we cannot afford new oil fields if we are to achieve the targets in the Paris Agreement – these projects demand far more attention than they are getting.
“Equinor needs to plough the billions it is making from the gas crisis into renewables. Instead, last year it spent more than 90% of its total capital spending on oil and gas. Equinor’s net zero plan on emissions is also meaningless while it still invests new in fossil fuel projects. As the UN’s High Level Expert group has made clear, a company can’t credibly aim for net zero while expanding oil and gas production.”
Other climate protestors also voice their opinions:
Silje Ask Lundberg, senior campaigner at Oil Change International said: “This is the beginning of the end for the Wisting oil field. Climate science is very clear that fossil fuels are driving the climate crisis and new projects anywhere in the world are a threat to people everywhere.
“The Wisting oil field will never see the light of day”
Truls Gulowsen, leader of Friends of the Earth Norway added: “This is a huge victory for everyone who cares about the climate and vulnerable nature in the Arctic.
“The time to build new oil fields has passed, and we are certain that Equinor’s reckless plans for Wisting will never be realized.
“This should be the start of Equinor moving away from destructive projects all over the world, like Rosenbank in the UK and Bay du Nord in Canada, and the first step towards a just transition in Norway.”
Karoline Andaur, secretary general of WWF Norway commented: “Equinor argues that the postponement is due to inflation and rising costs, however, it is clear that the massive opposition from the public has influenced the decision.
“This is a major win for the environmental movement, both in Norway and abroad.”
Gina Gylver, leader of Nature and Youth (Young Friends of the Earth Norway) stated: “This victory should give hope to the youth climate movement all over the world who constantly is calling for action – in the streets, in the media, outside COP – so often without being heard.
“This is a day for young people to celebrate as we take a step towards securing green jobs in the future and keeping 1,5 alive! Now the Norwegian government has to make sure that this marks a new direction for Norwegian oil politics”
Frode Pleym, head of Greenpeace Norway also provided comment, saying: “This victory shows that it is worth fighting for the environment.
“This means that 200 million tons of CO2 will stay in the ground. It means that vulnerable and valuable nature is left alone and that Norway can focus on a green, just transition.
“The fact that Equinor is postponing the plans for Wisting is incredible news for the climate, nature and the green transition. The next step must be for the project to be scrapped entirely.”