Equinor’s investment in Orsted and their Empire Wind project in the US Atlantic are featured in this DN article (translated to English). Excerpts follow:
Equinor’s investment of over 26 billion kroner in the Danish wind power company Ørsted has so far been a financial disaster – and now it’s going from bad to worse.
“We are very negative about the whole green initiative, as the return on the investments they make is far too low. When they also buy minority stakes in other green companies that we cannot count on, such as Ørsted, it means that we would rather own other oil companies.” Gaute Eie, Eika Kapitalforvaltning
The market has long been concerned that Equinor will throw money at renewable projects with low or no profitability.
In a recent note, Pareto analysts Tom Erik Kristiansen and Olav Haugerud point out that the Ørsted writedown does not bode well for Equinor’s own US projects either. They foresee a writedown of up to $1.1 billion, given that Equinor faces the same type of challenges as Ørsted.
Eie believes there is no reason why Equinor in particular should have a green initiative:
Aker BP is not doing green, Vår Energi is not doing green, and all the big oil companies are going back on this. Then we’ll see if Equinor has the guts to buy even more Ørsted shares, because now it’s 35 percent cheaper. If they do, we’ll have even fewer Equinor shares.
Sissener believes Equinor should rather focus on dividends and concentrate on oil and gas projects.
– We generally stay away from companies where the state is a major owner, because there you have to be so politically correct all the time. What we need are shareholder-friendly board representatives who know how to run a business and maintain control. In a broader perspective, this helps to destroy trust in Norwegian business.
Bud's Offshore Energy (BOE) 