BAKU, Azerbaijan, Feb.10
By Leman Zeynalova – Trend:
Total equity liquids and gas production of Norway’s Equinor was 2,043 mboe per day in the fourth quarter of 2020, down 7 percent compared to 2,198 mboe per day in the fourth quarter of 2019, Trend reports citing the company.
It was mainly due to expected natural decline, turnarounds for several fields especially on the Norwegian continental shelf (NCS) and the shutdown at the Hammerfest LNG plant. Production halt in Brazil and the divestment of the Eagle Ford asset in the E&P USA segment in the fourth quarter of 2019 contributed to the decrease. New fields on the NCS, higher flexible gas offtake and new wells in the US onshore partially offset the decrease.
Total entitlement liquids and gas production was 1,912 mboe per day in the fourth quarter of 2020, down 7 percent compared to 2,056 mboe per day in the fourth quarter of 2019. The production was negatively influenced by the factors mentioned above, partially offset by lower effects from production sharing agreements (PSA), and lower US royalty volumes. The net effect of PSA and US royalties was 131 mboe per day in total in the fourth quarter of 2020 compared to 142 mboe per day in the fourth quarter of 2019.
Net operating income was negative USD 989 million in the fourth quarter of 2020, compared to positive USD 1,516 million in the fourth quarter of 2019. The decrease was mainly due to lower liquids and gas prices and write down of previously capitalised well costs of USD 982 million related to the Tanzania LNG project. Lower production for liquids and gas in addition to weak refinery margins contributed to the decrease. Lower depreciation expenses and operating expenses partially offset the decrease.
In the fourth quarter of 2020, net operating income was negatively impacted by impairments of USD 1,299 million and inventory hedging effects of USD 315 million. In the fourth quarter of 2019, net operating income was negatively impacted mainly by net impairments of USD 1,425 million which includes USD 23 million related to associated companies, changes in fair value of derivatives and inventory hedge contracts of USD 282 million and higher volumes in inventory with unrealised profit written down to production cost of USD 591 million. Net operating income was positively affected by a net gain from the sale of assets of USD 185 million.
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