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ENERGY NEWS
By Tsvetana Paraskova
Europe
Energy Review
The largest oil companies in Europe reported in the past month strong first-quarter results thanks to higher oil prices, some of those firms increased their commitment to alternative energy sources and solutions, while many other companies announced new hydrogen and wind power projects across Europe.
Oil Majors Report Strong Q1 Results as Commodity Prices Rise Norway’s Equinor reported strong earnings for the first quarter, driven by higher oil and gas prices, capital discipline, and sustained cost improvements. Equinor’s renewables division also delivered strong financial results with a capital gain from farm downs of around US$1.4 billion, due to the divestment of a 50% non-operated interest in the offshore wind projects Empire Wind and Beacon Wind in the US to bp, and to the sale to Eni of a 10% equity interest in the Dogger Bank A and B in the UK. Equinor also boosted its cash flows and reduced net debt during Q1. Italy’s Eni also raised its adjusted net profit for Q1, thanks to the higher oil and gas prices which boosted the upstream business. Net cash from operations jumped by 41%. “With the pandemic situation gradually improving, and a broadening economic recovery looking more likely, we have been able to improve our outlook for the coming months, forecasting free cash flow generation in 2021 of more than €3 billion under a Brent scenario of 60 $/bbl. In this environment, we will continue implementing our decarbonisation and energy transition strategy, maintaining a strong focus
www.ogv.energy I June 2021
on the robustness of the balance sheet and targeting a competitive distribution policy to our shareholders,” Eni CEO Claudio Descalzi said. France’s Total reported adjusted net income of $3 billion, a level above the pre-crisis first quarter of 2019, also thanks to higher oil and gas prices, and to the group’s focus on LNG and renewable electricity generation. “Cash flow (DACF) increased to $5.8 billion and gearing already decreased to less than 20% in the first quarter of 2021, validating the strategy of resilience and maintaining the dividend driven by the Board of Directors during the 2020 crisis,” CEO Patrick Pouyanné said, adding that the group’s organic cash breakeven was less than $25 a barrel in the first quarter. Lundin Energy said at the end of April that it had sold the world’s first-ever certified carbon neutrally produced oil from its Edvard Grieg field offshore Norway to Italian refiner Saras SpA. Edvard Grieg field is the first oil field in the world to be independently certified by Intertek Group plc under its CarbonClear certification, the Sweden-based energy firm said. “The provenance of a barrel and how it is produced is increasingly important, as society and industry require lower carbon feedstocks to achieve emission reduction targets and meet the goals of the Paris Agreement,” said Nick Walker, President and CEO of Lundin Energy.
Renewables and LowCarbon Energy Solutions In its ninth Offshore Wind Operational Report, The Crown Estate notes that the UK’s offshore wind sector is a mature, robust, and healthy market which is progressing to deliver a strong and sustainable pipeline in support of the nation’s net-zero ambitions. The UK offshore wind sector generated enough green electricity for 39% of UK homes (40.7 TWh) in 2020, up from 30% (32TWh) in 2019, the report showed. “The sector has stepped up admirably during an exceptionally difficult year caused by the global pandemic, demonstrating its resilience and ability to reliably deliver clean energy to millions of homes,” Adrian Fox, Head of Offshore Assets at The Crown Estate, said. Provisional data from National Grid ESO showed that in the early hours on 21 May wind power was meeting 62.5% (16.3 GW) of Britain’s electricity demand, beating last August’s record. RenewableUK urged the government in early May to commit to specific deployment targets for onshore wind, floating wind, renewable hydrogen, and marine energy by 2030, to meet the new UK target of slashing emissions by 78% by 2035, and reaching net-zero emissions by 2050. The recommendations include reaching 30 GW of onshore wind, 2 GW of floating wind, a minimum target of 5 GW of green hydrogen electrolyser capacity, and a 1 GW target for marine energy by 2030. In projects and deals, bp and EnBW of Germany launched in May a bespoke online portal for the Scottish engineering and supply sector, as the companies aim to expand their partnership’s offshore wind portfolio by taking part in the upcoming ScotWind leasing round. Companies based in Scotland, with significant operations in Scotland or that have plans to relocate their base or operations to Scotland are encouraged to register interest for future opportunities. “Scotland has a world-class supply chain with decades of experience in offshore energy – that deep skillset can be readily applied to offshore wind,” Dev Sanyal, bp’s executive vice president of gas and low carbon energy, said. Perpetuus Tidal Energy Centre (PTEC) has signed an agreement with Orbital Marine Power, developers of the Orbital O2 tidal turbine, to bring the Isle of Wight a step closer to producing tidal energy. PTEC has obtained consents to place tidal turbines in the sea off the south coast of the Isle of Wight, and Orbital is the first company to sign up, with an initial target deployment of up to 15 MW by the end of 2025. UK gas company IOG plc has signed a collaboration agreement with GeoNetZero CDT, Heriot-Watt University’s Centre for Doctoral Training, under which IOG will support research into carbon capture and storage (CCS) and other renewable opportunities in the Bacton area in the UK Southern North Sea.
