Equinor’s new international director is cleaning up the international portfolio. At the same time, efforts remain to be made and Al Cook wants to bring to light major discoveries that Equinor has buried for years.
After two weeks in his new role as Executive Vice President for International Oil and Gas Operations at Equinor, Al Cook came out with a clear message:
– If you look at our last quarterly reports, the international business was not profitable. I’m very clear that we need to come back to this, Cook tells E24.
The company has launched a comprehensive review of all the countries and investments it sits on globally – a task led by Cook.
The full updated plan will be presented at the annual Capital Markets Day, which has been postponed until June 15, but some things are already clear:
- The goal is a “narrower, deeper portfolio” – this means you should be in fewer countries and have a bigger presence where you actually are
- Onshore oil and gas business must adopt new approach after, among other things, major losses suffered in the United States
Cook’s New Rhythms, and Equinor stepping up the transition to renewable energydoes not mean that the international oil and gas activity is in a downsizing phase:
– On the contrary. I feel a great responsibility to deliver shareholder value and utilize the knowledge of the organization, says Cook.
– So it’s not a story of decline, but the focus is on value and not on volume in isolation, he continues.
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Invest massively in Brazil
Brazil continues to soar in Equinor’s list of most important countries.
Former CEO Eldar Sætre appointed the experienced Margareth Øvrum to lead the company in 2018, and Brazil was spun off from international business and given its own place in the group’s leadership.
Øvrum retired at New Years and from June 1, the Brazil division will be placed back under international operations led by Cook.
That doesn’t mean Brazil is any less important and it will be one of his heaviest investment areas going forward, we have to believe Cook.
– We have the start of the second phase of Peregrino later this year and before the summer we expect to make an investment decision on the Bacalhau field, which is Equinor’s largest self-operated field in the world. stranger, Cook said.
– In addition, we are doing more exploration, and the development of the BM-C-33 gas project is also constantly advancing, he continues.
In addition to the fields in Brazil, Cook mentions both the Rosebank discovery in Britain, which Equinor purchased from Chevron, and the North Platte discovery in the US Gulf of Mexico.
– So we have enough good projects to defend some growth, but we also have to recognize that many of the places that have generated cash for us are in a downtrend, says Cook.
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You want big hubs
In 2017, Lars Christian Bacher, a former chief financial officer and one of Cook’s predecessors as international director, came out and said the company wanted to create more overseas investment zones – beyond Norway, Brazil and the United States.
– Is this still the plan, and in addition to Brazil, are there countries like Canada, Great Britain, Russia and Argentina that are interesting to develop?
– For me, it is important to have a few posts less, but significant. So I think we need to make sure we have regions and countries where we have the scale to make a difference. Simply put, we need to have the organization, the relationships, the technology and the competitiveness everywhere, says Cook.
Cook says the mentioned list “is good, but doesn’t exclude other areas.” He also points out that the company’s exploration area gives a clue as to what’s interesting and he highlights recent investments in Russia.
In December, it became clear that Equinor is shelling out $4.9 billion to embark on conventional oil and gas operations in Eastern Siberia in conjunction with Rosneft — that is, not shale resources.
– Brazil is an area where we are and will remain an operator. It is in other regions that we must ask ourselves the question of knowing if we should be, or if we work better through the others, further specifies Cook.
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Always hope for Africa
Those who have followed Equinor for a long time know that the company is sitting on huge discoveries around the world. Although the Bacalhau field in Brazil is currently under development, there are discoveries where there has been little or no progress for a number of years.
Cook is also affected by this:
– The focus will be on transforming volumes into value, he says and continues:
– We have some very good discoveries, like Bay du Nord and recent discoveries in Canada from last year. There are perfect examples where we find good volumes of oil, but also need to be transformed into turnover and profitability.
– You have not yet mentioned Africa, where you have, among other things, major gas discoveries in Tanzania. What do you want in the area?
– Above all, that we can demonstrate our purpose as a company. I want to believe that we can show that where we invest, we help the country develop and improve the quality of life in society and business,” Cook says and continues:
– We will continue to search and Angola is an example. Hopefully there will be more, but one of the challenges is that a lot is mature, so we need to look at how we can create value, says Cook.
In Tanzania, Cook’s predecessor, Torgrim Reitan, personally tried to negotiate with the country’s politicians to reach a political agreement on development.
– Tanzania is a challenge. What we need to do is convert volume to value. So far we have not been able to do this in Tanzania.
The control commission takes over the Angola file
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