6-K 1 eqnr4q20_6k.htm EQUINOR FOURTH QUARTER 2020 REPORT
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON,
DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE
ISSUER
PURSUANT TO RULE 13a
-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT
OF 1934
10 February 2021
Commission File Number 1-
15200
Equinor ASA
(Translation of registrant’s
name into English)
FORUSBEEN 50, N-4035, STAVANGER,
NORWAY
(Address of principal executive offices)
Indicate by check mark whether the
registrant files or will file annual
reports under cover of Form 20
-F
or Form 40-F:
Form 20-F
X
Form 40-F
Indicate by check mark if the registrant
is submitting the Form 6-K in
paper as permitted by Regulation S
-T Rule 101(b)(1):_____
Indicate by check mark if the registrant
is submitting the Form 6-K in
paper as permitted by Regulation S
-T Rule 101(b)(7):_____
This Report on Form 6-K
contains a report of the fourth
quarter 2020 results of Equinor
ASA.
Equinor fourth quarter 2020
2
Equinor fourth quarter 2020
and year end results
Equinor reports adjusted earnings of positive USD 0.76 billion and negative USD 0.55 billion
after tax in the fourth quarter of 2020.
IFRS net operating income was negative USD 0.99
billion and the IFRS net income was negative USD 2.41 billion, following net impairments of
USD 1.30 billion and a write down of USD 0.98 billion related to the Tanzania
LNG project.
2020 was characterised
by:
●
Results impacted by
low oil and gas prices
●
Solid operational
performance during extraordinary
circumstances
●
Positive cash flow in
a low-price environment
●
Delivering USD 3.7
billion in capex and
cost reductions,
well above ambition for
the action plan to strengthen
financial resilience
●
Progressing and
capturing value within
renewables
●
Setting ambition to
be a net-zero energy company
by 2050 to create value
as a leader in the energy
transition
“Our results are impacted
by the market turmoil
during the year,
but with strong cost
improvements and capital
discipline we delivered
positive net cash
flow for the quarter
and the full year.
During 2020 we have
delivered more than 3.7
billion dollars in savings,
well
above our ambition
for the action plan we laun
ched in March to strengthen
financial resilience.
We are well position
ed for value
creation and strong cash
flow in 2021 and the coming
years,” says Anders
Opedal,
President and CEO of Equinor
ASA.
“I am impressed
by how the organisation
has responded, delivering
strong operational
performance and production
growth in a long-
lasting challenging situation
during the pandemic. We
are increasing production
volumes from Johan Sverdrup
even further,
and we
used our flexibility to
have high gas production
as
gas prices increased in
the quarter. In addition
,
we have
started production from
Snorre Expansion ahead
of time and
well below cost estimates
,” says Opedal.
“Equinor is committed
to ensuring long-term competitiveness
and creating value as
a leader in the energy
transition, setting an
ambition to be a net-zero
energy company by 2050.
During 2020 we delivered
significant progress
in our renewables portfolio
,
taking the investment
decision for Dogger Bank
A and B, winning the
largest ever offshore
wind award in the US,
starting construction
at Hywind Tampen
and capturing value from transactions.
We are also taking action
s
to optimise within oil and gas,
building a more
robust portfolio for the
future, but resulting in
a write down in Tanzania
and an impairment
related to an operated
US onshore asset in
the quarter,” says Opedal
.
Adjusted earnings [5]
were USD 0.76
billion in the fourth quarter,
down from USD 3.55
billion in the same period
in 2019.
Adjusted
earnings after tax [5]
were negative USD 0.55 billion,
down from USD 1.19
billion in the same period
last year.
Low prices for liquids
impacted the earnings
for the quarter.
Equinor launched an
action plan of USD 3 billion
in March 2020 to strengthen
financial resilience, including
a reduction in operating
costs of USD 0.70 billion.
Delivery on the plan resulted
in savings of more than
USD 3.7
billion, including a reduction
in fixed operating
costs of around USD 1 b
illion. Unit production
costs are reduced by
5%
since 2019, realising the
2021 ambition already in
2020.
In the E&P Norway segment
,
Equinor realised weaker
liquids prices and the
production was reduced
mainly as a result of turnarounds
moved to fourth quarter
due to the ongoing pandemic.
Results in the E&P International
segment were impacted
by low prices and the
impairment of the Tanzania
LNG project of
USD 0.98 billion.
The E&P USA
segment was also
impacted by weak prices,
partially offset by significant
reductions in operating
costs.
The Marketing, midstream
and processing segment
captured value from
strong trading results from
gas to Europe, partially offset
by
low refinery margins
and shutdown of production
at Hammerfest
LNG plant.
New energy solutions
delivered high availability
on offshore wind assets.
A capital gain of around
USD 1 billion is expected to
be
booked from the
divestment of a 50% non
-operated interest of the
offshore wind projects
Empire Wind and Beacon
Wind in the US.
A
Equinor fourth quarter 2020
3
capital gain from the
farm down of 10% equity interest
in Dogger Bank A and
B in the UK is expected
to be booked in the first
quarter
of 2021.
IFRS net operating
income was negative
USD 0.99 billion in the fourth
quarter, down from
positive USD 1.52 billion
in the same period
in 2019.
IFRS net income was negative
USD 2.42 billion in the fourth
quarter, compared
to negative USD 0.23
billion in the fourth
quarter of 2019.
Net operating income was
negatively impacted by
net impairments of
USD 1.30 billion,
mainly relating to a refinery
as
a result of reduced
margin assumptions and
some increase in cost
estimates,
and to an operated
unconventional onshore
asset in
North America due
to reclassification as
held for sale.
Equinor
delivered total equity
production of 2,043
mboe per day in the fourth
quarter, down from
2,198 mboe per day in the
same
period in 2019, with
a minor increase in gas
share due to high flexible
production in gas field
s.
Adjusting for portfolio transactions
the
production growth for
2020 was 2.4%.
In 2020, Equinor
completed 34 exploration
wells with 16
commercial discoveries
and 1 well under evaluation.
At year end, 12 wells
were ongoing. Adjusted
exploration expenses in
the fourth quarter were USD 1.25
billion,
compared to USD 0.44 billion
in the same
quarter in 2019.
The proved reserves
replacement ratio (RRR) was
negative 5%
in 2020,
following capital discipline
and the prioritisation of financial
flexibility during market
uncertainty,
with a three-year average of
95%. With 5.26 billion
barrels in proved reserves,
Equinor’s reserves
to production ratio (R/P)
was 7.4 years.
Cash flows provided
by operating activities
before taxes paid and changes
in working capital amounted
to USD 14.0
billion in 2020,
compared to USD 21.8
billion in 2019.
Organic capital expenditure
[5] was USD 7.8 billion
for 2020.
At year end, net debt to
capital
employed
(1)
was 31.7%, stable from 31.6
%
at the end of the third
quarter of 2020.
Following the implementation
of IFRS 16, net debt
to capital employed
(1)
was 37.3%.
The board of directors
proposes to the annual general
meeting a cash dividend
of USD 0.12 per share
for the fourth quarter 2020.
Average CO2-emissions
from Equinor’s operated
upstream production,
on a 100% basis, was 8.0
kg per barrel in 2020.
The twelve-month average
Serious Incident Frequency
(SIF) for 2020 was 0.
5,
down from 0.6
in 2019. The twelve-month
average
Recordable Injury Frequency
(TRIF) was 2.3 for
2020, compared to
2.5 in 2019.
Quarters
Change
Full year
Q4 2020
Q3 2020
Q4 2019
Q4 on Q4
(in USD million, unless stated otherwise)
2020
2019
Change
(989)
(2,019)
1,516
N/A
Net operating income/(loss)
(3,423)
9,299
N/A
756
780
3,550
(79%)
Adjusted earnings [5]
3,938
13,484
(71%)
(2,416)
(2,124)
(230)
>(100%)
Net income/(loss)
(5,496)
1,851
N/A
(554)
271
1,186
N/A
Adjusted earnings after tax [5]
924
4,925
(81%)
2,043
1,994
2,198
(7%)
Total equity
liquids and gas production (mboe
per day) [4]
2,070
2,074
(0%)
40.6
38.3
56.5
(28%)
Group average liquids price (USD/bbl)
[1]
36.5
56.0
(35%)
1
This is a non-GAAP figure. Comparison
numbers and reconciliation to IFRS
are presented in the table Calculation
of capital employed and
net debt to capital employed ratio as
shown under the Supplementary
section in the report.
Equinor fourth quarter 2020
4
GROUP REVIEW
Fourth quarter 2020
Total equity
liquids and gas production
[4] was 2,043 mboe
per day in the fourth quarter
of 2020,
down 7%
compared to 2,198
mboe per day in the
fourth quarter of 2019 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 off
-take and new wells in
the US onshore partially
offset the decrease.
Total entitlement
liquids and gas production
[3] was 1,912 mboe
per day in the fourth quarter
of 2020,
down 7%
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) [4],
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.
Quarters
Change
Condensed income statement under IFRS
Full year
Q4 2020
Q3 2020
Q4 2019
Q4 on Q4
(unaudited, in USD million)
2020
2019
Change
11,746
11,339
15,169
(23%)
Total revenues
and other income
45,818
64,357
(29%)
(5,533)
(5,307)
(6,603)
(16%)
Purchases [net of inventory variation]
(20,986)
(29,532)
(29%)
(2,156)
(2,368)
(2,405)
(10%)
Operating and administrative expenses
(9,537)
(10,469)
(9%)
(3,478)
(4,798)
(4,165)
(17%)
Depreciation, amortisation and net
impairment losses
(15,235)
(13,204)
15%
(1,569)
(886)
(480)
>100%
Exploration expenses
(3,483)
(1,854)
88%
(989)
(2,019)
1,516
N/A
Net operating income/(loss)
(3,423)
9,299
N/A
(2,416)
(2,124)
(230)
>(100%)
Net income/(loss)
(5,496)
1,851
N/A
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
2
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.
2
For more information, see note 2
Segments to the Condensed
interim financial statements.
Equinor fourth quarter 2020
5
Quarters
Change
Adjusted earnings
Full year
Q4 2020
Q3 2020
Q4 2019
Q4 on Q4
(in USD million)
2020
2019
Change
11,985
10,909
15,336
(22%)
Adjusted total revenues and other
income
45,908
63,335
(28%)
(5,298)
(5,203)
(6,048)
(12%)
Adjusted purchases [6]
(21,154)
(29,024)
(27%)
(2,184)
(2,179)
(2,496)
(13%)
Adjusted operating and administrative
expenses
(9,159)
(9,850)
(7%)
(2,495)
(2,445)
(2,806)
(11%)
Adjusted depreciation, amortisation
and net impairment
losses
(9,520)
(9,775)
(3%)
(1,252)
(302)
(437)
>100%
Adjusted exploration expenses
(2,138)
(1,203)
78%
756
780
3,550
(79%)
Adjusted earnings [5]
3,938
13,484
(71%)
(554)
271
1,186
N/A
Adjusted earnings after tax [5]
924
4,925
(81%)
For items impacting net
operating income/(loss),
see Use and reconciliation
of non-GAAP financial
measures in the Supplementary
disclosures.
Adjusted total revenues
and other income
were USD 11,985
million in the fourth
quarter of 2020 compared
to USD 15,336 million
in the fourth quarter
of 2019.
The decrease was mainly
due to lower average prices
for liquids and gas and lower
production,
especially for liquids.
Adjusted purchases
[6] were USD 5,298 million
in the fourth quarter
of 2020,
compared to USD 6,048
million in the fourth quarter
of
2019. The decrease
was mainly due to lower
average prices for liquids
and gas,
partially offset by higher
third-party volumes for
liquids.
Adjusted operating and administrative
expenses
were USD 2,184 million
in the
fourth quarter of 2020
,
compared to USD 2,496
million in the fourth
quarter of 2019. The decrease
was mainly due to lower
transportation costs, especially
in the MMP segment,
primarily due to lower
freight rates on shipping
of liquids in addition to
decreased production
in the E&P International
segment. Lower
operation and maintenance
costs due to reduced
activity in the E&P International
and E&P USA segments,
the divestment of the
Eagle Ford asset
in the E&P USA segment,
and a settlement with
COSL in the fourth
quarter of 2019 contributed
to the decrease.
Increased Gassled
removal cost in the E&P Norway
segment partially
offset the decrease.
Adjusted depreciation, amortisation
and net impairment
losses
were USD 2,495 million
in the fourth quarter of 2020,
compared
to USD 2,806 million
in the fourth quarter
of 2019. The decrease
was mainly due to lower
production in all segments
and higher
proved reserves estimates
especially in the E&P International
and E&P USA segments. Lower
depreciation basis
resulting from net
impairments in previous
periods contributed
to the decrease. Higher
investments partially offset
the decrease.
Adjusted exploration expenses
were USD 1,252
million in the fourth quarter
of 2020,
compared to USD 437 million
in the fourth
quarter of 2019.
The increase was mainly due
to write down of previously
capitalised well costs
of USD 982 million related
to the
Tanzania
LNG project and a lower
portion of exploration
expenditures being
capitalised. Lower drilling,
seismic and field development
costs partially offset
the increase. For more information,
see the table titled Adjusted
exploration expenses
in the Supplementary
disclosures.
After total adjustments
3
of USD 1,746 million
to net operating income,
Adjusted earnings
[5] were USD 756 million
in the fourth
quarter of 2020,
a 79%
decrease from USD 3,550
million in the fourth
quarter of 2019.
Adjusted earnings after
tax
[5] were negative USD 554
million in the fourth quarter
of 2020,
which reflects an effective
tax rate on
adjusted earnings of
173.2%, compared
to 66.6%
in the fourth quarter
of 2019. The increase
in the effective tax rate
was mainly due
to decreased adjusted
earnings in the fourth
quarter of 2020 in entities
with lower than average
tax rates, and in entities
without
recognised taxes, partially
offset by the temporary
changes to Norway’s
petroleum tax system as
described in note 8
Impact of
pandemic and oil
price decline to the
Condensed interim financial
statements.
Cash flows provided by operating
activities
increased by USD 570 million
compared to the fourth
quarter of 2019. The increase
was mainly due to decreased
tax payments, partially
offset by
lower liquids and gas
prices and a change in working
capital.
3
For items impacting net operating income,
see Use and reconciliation
of non-GAAP financial measures
in the Supplementary disclosures.
Equinor fourth quarter 2020
6
Cash flows used in investing
activities
increased by USD 577 million
compared to the fourth quarter
of 2019. The increase
was
mainly due to reduced
proceeds from sale of
assets, increased derivative
payments and increased
financial investments,
partially
offset by lower capital
expenditures.
Cash flows provided by financing
activities
increased by USD 379 million
compared to the fourth quarter
of 2019. The increase
was mainly due to decreased
dividend paid, increased
collateral received and
increased short-term
debt,
partially offset by no
new
finance debt in the quarter.
Total cash
flows
increased by USD 370 million
compared to the fourth
quarter of 2019.
Free cash flow
[5] in the fourth quarter of 2020
was USD 1,363 million compared
to negative USD 513 million
in the fourth quarter of
2019. The increase
was mainly due to decreased
tax payments and decreased
dividend paid,
partially offset by lower
liquids and gas
prices and reduced
proceeds from sale of assets.
Full year 2020
Net operating income
was negative USD 3,423
million in 2020 compared
to positive USD 9,299
million in 2019. The decrease
was
mainly due to lower
liquids and gas prices, net
impairments
4
primarily related to
reduced price assumptions
5
in addition to negative
reserve updates
and write down of previously
capitalised well costs of
USD 982 million related
to the Tanzania
LNG project.
In 2020, net operating
income was negatively impacted
mainly by net impairments
4
of USD 7,053
million
and provisions of
USD 296 million.
In 2019, net operating
income was negatively affected
mainly by net impairments
of USD 4,103 million which
includes USD 23 million
related to associated
companies, provisions
of USD 485 million
and a change in accounting
policy of USD 123 million
and net overlift
effect of USD 134
million. Net operating income
was positively impacted by a
net gain on the sale of assets
of USD 1,184 million and
operational storage
effects of USD 121 million
in 2019.
Adjusted total revenues
and other income
were USD 45,908
million in 2020 compared
to USD 63,335 million
in 2019.
The
decrease was mainly
due to lower average
prices for liquids and
gas.
Adjusted purchases
[6] were USD 21,154
million in 2020 compared
to USD 29,024 million in 2019.
The decrease was mainly
due to
lower average prices
for liquids and gas,
partially offset by higher
volumes for liquids.
Adjusted operating and administrative
expenses
were
USD 9,159
million in 2020, a decrease
of USD 691
million compared to
2019. The decrease
was mainly due to the NOK/USD exchange
rate development and
the divestment of the
Eagle Ford asset in the
E&P USA segment in
the fourth quarter of 2019.
Lower royalties and
production fees driven by lower
volumes and prices in addition
to
lower activity level contributed
to the decrease. Higher
transportation cost for
liquids mainly due to higher
freight rates on shipping in
the MMP segment partially
offset the decrease.
Adjusted depreciation, amortisation
and net impairment
losses
were
USD 9,520 million in 2020
,
down USD 255 million c
ompared
to 2019. The decrease
was mainly due to higher
proved reserves estimates
for several fields and
lower depreciation basis
resulting
from net impairments
in previous periods. Lower
field specific production
especially in the E&P International
segment contributed to
the decrease. Higher
investments mainly
in the US in addition to
ramp-up of new fields
especially on the NCS partially
offset the
decrease.
Adjusted exploration expenses
increased by USD 936
million to USD 2,138 million
in 2020,
primarily due to write
down of
previously capitalised
well costs of USD 982 million
related to the Tanzania
LNG project and a lower
portion of exploration
expenses
being capitalised
this year.
Lower seismic,
drilling,
field development and
other costs partially offset
the increase. For more
information, see table
titled Adjusted exploration
expenses in the Supplementary
disclosures.
After total adjustments
6
of USD 7,361 million
to net operating income,
Adjusted earnings
[5] were USD 3,938
million in 2020,
down
71%
from USD
13,484 million in
2019.
Adjusted earnings aft
er tax
[5] were USD 924
million in full year of 2020,
compared to USD 4,925
million in the full year
of 2019.
The effective
tax rate on adjusted earnings
was 76.5% in full year of
2020, compared to an effective
tax rate of 63.5%
in full year of
2019. The increase
in the effective tax rate
was mainly due to decreased
adjusted earnings in 2020
in entities with lower than
average
tax rates, and in entities
without recognised taxes,
partially offset by the
temporary changes to
Norway’s petroleum tax system
as
4
For more information, see note 2
Segments to the Condensed
interim financial statements.
5
For more information, see note 6
Property, plant
and equipment and intangible assets
to the Condensed interim financial
statements.
6
For items impacting net operating
income, see Use and reconciliation
of non-GAAP financial measures
in the Supplementary disclosures
.
Equinor fourth quarter 2020
7
described in note
8 Impact of pandemic
and oil price decline to the
Condensed interim financial
statements, in addition
to changes in
provision for best estimates
for uncertain
tax positions.
Equinor fourth quarter 2020
8
Based on adjusted earnings
after tax and average capital
employed, calculated
return on average capital
employed (ROACE)
[5]
was 1.8% for the
12-month period ended
31 December 2020
and 9.0%
for the 12-month period
ended 31 December 2019.
Organic capital expenditures
[5] amounted to USD 7.8
billion for the year ended
2020, compared to
guidance for 2020 of
USD 8.5 billion. Total
capital expenditures were
USD 9.8 billion in 2020.
Estimated
Proved reserves
at the end of 2020 were
5.260 billion barrels
of oil equivalent (boe),
a net decrease of 744 million
boe
compared to 6.004
billion boe at the end of 2019.
The decrease was mainly
due to negative revisions
of net 171 million boe
,
strongly influenced
by the reduction in commodity
prices in
2020.
Negative revisions totaled
388 million boe,
of which 194 million
boe was due to the reduction
in prices. Positive reserves
revisions and improved
oil recovery (IOR) efforts
of 217 million boe,
extensions and discoveries
of 131 million boe and purchases
of 6
million boe added to
proved reserves in
2020.
The negative effect
of the entitlement production
was 710 million boe in 2020,
compared to 698 million
boe in 2019.
The reserve replacement
ratio (RRR)
was negative 5
%
in 2020 compared to
positive 76% in 2019
.
The RRR measures the
estimated proved reserves
added to the reserve base
,
including the effects
of sales and purchases,
relative to the amount
of oil and
gas produced. The
reduction in RRR from last
year was primarily due
to
negative revisions caused
by lower prices and less
proved
reserves added from new
projects sanctioned. The
average three-year replacement
ratio (including the effects
of sales and
purchases), was
95%
at the end of 2020 compared
to 147%
at the end of 2019.
All numbers are preliminary
and including equity accounted
entities.
Cash flows provided by operating
activities
decreased by USD 3,362 million
compared to 2019. The
decrease was mainly
due to
lower liquids and
gas prices and a change in
working capital, partially
offset by decreased
tax payments and increased
cash flow from
derivatives.
Cash flows used in investing
activities
increased by USD 1,498 million
compared to 2019.
The increase was mainly due
to
increased financial
investments, reduced
proceeds from sale
of assets and increased
derivative payments
,
partially offset by lower
cash flow used for business
combinations and capital expenditures.
Cash flows provided by financing
activities
increased by USD 8,487 million
compared to 2019.
The increase was mainly due
to
bond issues, increased
short-term debt, decreased
dividend paid and increased
collateral payments related
to derivatives, partially
offset by increased
repayment of
finance debt and increased
payments related to
the share buy-back programme.
Total cash
flows
increased by USD 3,627
million compared to 2019.
Free cash flow
[5] for 2020 was USD 85 million
including USD 332 million
received from the Lundin
divestment included in the
line
item (Increase)/decrease
in the Consolidated statement
of cash flow, compared
to negative USD 175 million
in
2019. The increase
was mainly due to decreased
tax payments, lower cash
flow used for business combinations,
lower capital
expenditures, decreased
dividend paid and increased
cash flow from derivatives,
partially offset
by lower liquids and gas
prices, reduced proceeds
from sale of assets and
increased payments related
to the share buy-back
programme.
Equinor fourth quarter 2020
9
OUTLOOK
●
Organic capital expenditures
[5] are estimated
at an annual average
of USD 9-10 billion for
2021-2022
7
●
Equinor intends to continue
to mature its attractive portfolio
of exploration assets and
estimates a total
exploration activity
level
of around USD 0.9 billion
for 2021,
excluding signature bonuses,
accruals and field development
costs
●
Equinor’s ambition is
to keep the
unit of production cost
in the top quartile of
its peer group
●
For the period 2020
–2026,
production growth
[7] is expected
to come from new projects
resulting in around
3% CAGR
(Compound Annual
Growth Rate) based on
current forecast
●
Scheduled maintenance
activity
is estimated to reduce
equity production by around
50 mboe per day for the
full year of 2021
●
Production
[7] for 2021 is estimated
to be around 2% above
2020 level
These forward-looking
statements reflect current
views about future events
and are, by their nature,
subject to significant risks
and uncertainties
because they relate to
events and depend on circumstances
that will occur in the future.
We continue to
monitor the
impact of Covid-19
on our operations. Deferral
of production to create
future value, production
cuts, gas off-take,
timing of new
capacity coming on
stream, operational regularity,
the ongoing impact of
Covid-19 and activity level
in the US onshore represent
the
most significant risks
related to the foregoing production
guidance. There has been
considerable uncertainty
created by the Covid-19
pandemic and we are
still unable to predict the
ultimate impact of this
event,
including impact on general
economic conditions
worldwide. Our future
financial performance,
including cash flow and
liquidity, will
be impacted by the
extent and duration
of the
current market conditions,
the development in realised
prices, including price
differentials and the
effectiveness of actions
taken in
response to the pandemic.
For further information,
see section Forward-looking
statements.
7
USD/NOK exchange rate assumption
of 9.0
Equinor fourth quarter 2020
10
EXPLORATION & PRODUCTION NORWAY
Fourth quarter 2020 review
Average daily production
of liquids and gas
decreased by 2% to
1,314 mboe per day in the
fourth quarter of 2020,
compared to
1,346 mboe per day
in the fourth quarter of 2019.
The decrease was mainly
due to turnarounds, natural
decline on Equinor operated
assets and shutdown
at the Hammerfest
LNG plant,
partially offset by
ramp-up of new fields
and increased flexible gas
outtake.
Net operating income
was USD 1,803 million
in the fourth quarter of 2020 compared
to USD 1,476 million in
the fourth quarter of
2019.
The increase was mainly
due to lower impairments,
partially offset by lower
liquids price.
In the fourth quarter
of 2020, net operating income
was negatively impacted
by impairment of goodwill
of USD 41 million. In the
fourth
quarter of 2019, net
operating income was negatively
impacted by impairment
of assets of USD 1,284
million.
Adjusted operating
and administrative expenses
decreased mainly due
to a settlement with COSL in
the fourth quarter of
2019 in
addition to reduced
transportation cost in
the fourth quarter of 2020
.
Adjusted depreciation, amortisation
and net impairment losses
decreased mainly due
to lower field specific
production and lower depreciation
basis resulting from net
impairments in previous
periods. Ramp-up of
new fields and higher
investments partially offset
the decrease. Adjusted
exploration expenses
decreased mainly
due to lower drilling and
seismic costs. Lower portion
of exploration expenditure
being capitalised partially
offset the decrease.
After total adjustments
of USD 38 million to net
operating income,
Adjusted
earnings
[5] were USD 1,841
million in the fourth quarter
of 2020, compared
to USD 2,738 million in the
fourth quarter of 2019.
Quarters
Change
Adjusted earnings
Full year
Q4 2020
Q3 2020
Q4 2019
Q4 on Q4
(in USD million)
2020
2019
Change
3,891
2,763
4,944
(21%)
Adjusted total revenues and other
income
11,962
17,951
(33%)
(770)
(699)
(852)
(10%)
Adjusted operating and administrative
expenses
(2,867)
(3,274)
(12%)
(1,187)
(1,126)
(1,210)
(2%)
Adjusted depreciation, amortisation
and net impairment
losses
(4,286)
(4,155)
3%
(94)
(165)
(142)
(34%)
Adjusted exploration expenses
(418)
(478)
(12%)
1,841
773
2,738
(33%)
Adjusted earnings/(loss) [5]
4,391
10,043
(56%)
For comparable IFRS figures,
see note 2 Segments
to the Condensed interim financial
statements. For items
impacting net operating
income/(loss), see Use
and reconciliation of non
-GAAP financial measures
in the Supplementary
disclosures.
Full year 2020
Net operating income
for E&P Norway was USD
3,097 million
in 2020 compared to USD 9
,631 million in 2019.
The decrease was
mainly due to lower
liquids and gas transfer
prices in the full year of
2020.
Higher liquids volumes partially
offset the decrease.
In 2020, net operating
income was negatively impact
ed by impairments of
USD 1,265 million and underlifted
volumes of USD 26
million.
In 2019, net operating income
was negatively impacted
by impairment of assets
of USD 1,284 million,
a negative impact of
USD 81 million from underlifted
volumes in the period and
an implementation effect
of USD 42 million from a
change in accounting
policy for lifting imbalances,
partially offset by gain
on sale of assets of USD 977
million.
Adjusted operating
and administrative expenses
decreased mainly due
to the NOK/USD exchange
rate development,
a settlement
Equinor fourth quarter 2020
11
with COSL in the
fourth quarter of 2019
in addition to reduced transportation
cost including the reduction
in Gassled removal costs.
Adjusted depreciation,
amortisation and net impairment
losses increased mainly
due to ramp-up of new fields
and higher investments.
The NOK/USD exchange
rate development, lower
field specific production
and lower depreciation
basis resulting from net
impairments in previous
periods partially offset
the increase. Adjusted
exploration expenses
decreased mainly due
to lower drilling,
seismic and other costs.
Lower portion of exploration
expenditure being capit
alised and a higher portion
of exploration expenditure
capitalised in earlier
years being expensed this
period partially offset
the decrease.
After total adjustments
of USD 1,294 million to net
operating income,
Adjusted earnings
[5] were USD 4,391
million in 2020, a
decrease of 56% from
USD 10,043
million in 2019.
Equinor fourth quarter 2020
12
EXPLORATION & PRODUCTION INTERNATIONAL
In the second quarter
of 2020, Equinor changed
its internal reporting to management,
impacting the composition
of Equinor's
operating and reporting
segments. Equinor’s
upstream activities
in the USA are now reported
separately to management,
and such
information is also considered
to be useful to the users
of the financial statements,
resulting in the exploration
and production activities
in the USA being considered
a separate operating-
and reporting segment as
of the second quarter
of 2020. Previously these
activities were included
in the DPI operating segment
and presented as part
of the E&P International
reporting segment. Prior
segment results have
been restated to reflect this
change.
Fourth quarter 2020 review
Average daily equity production
of liquids and gas
was 340 mboe per day
in the fourth quarter of
2020 compared to 415
mboe per
day in the fourth quarter
of 2019. The decrease was
primarily due to natural decline
in mature fields
and repairs on Peregrino
(Brazil)
resulting in a production
halt.
Average daily entitlement
production of liquids
and gas
was 267 mboe per day
in the fourth quarter of
2020 compared to 336
mboe per day in the
fourth quarter of 2019. The
decrease was due to lower
equity production partially
offset by lower effects
from
production sharing agreements
(PSA). The net effects
from PSA were 73 mboe
per day in the fourth quarter
of 2020 compared to 78
mboe per day in the
fourth quarter of 2019.
Net operating income
was negative USD 1,376
million in the fourth
quarter of 2020 compared
to positive USD 53 million
in the fourth
quarter of 2019. The
decrease was mainly
due to write down of previously
capitalised well costs
of USD 982 million related
to the
Tanzania
LNG project and lower
liquids and gas prices. Lower
entitlement productio
n
in the fourth quarter of
2020 contributed to the
decrease. Lower
depreciation in addition
to lower operating and administrative
expenses partially offset
the decrease.
In the fourth quarter
of 2020,
net operating income
was negatively impacted
by impairments of USD 229
million. In the fourth
quarter
of 2019,
net operating income was
negatively impacted by impairments
of USD 98 million.
Adjusted operating
and administrative expenses
decreased mainly due
to lower operation, maintenance
and transportation expenses
in addition to lower
royalties primarily driven
by reduced activities and
lower production. Adjusted
depreciation, amortisation
and net
impairment losses decreased
mainly due to higher proved
reserves estimates, lower
production from mature
fields in addition to lower
depreciation basis resulting
from net impairments
in previous periods. Increased
production from certain
fields partially offset
the
decrease. Adjusted
exploration expenses increased
mainly due to write down
of previously capitalised
well costs of USD 982 million
related to the Tanzania
LNG project and a lower
portion of exploration
expenditure being capitalised
this quarter. Lower
drilling and
seismic costs partially
offset the increase.
After total adjustments
of USD 161 million to
net operating income,
Adjusted earnings
[5] were negative
USD 1,215 million in the
fourth quarter of 2020,
down from positive USD 192
million in the fourth
quarter of 2019.
Quarters
Change
Adjusted earnings
Full year
Q4 2020
Q3 2020
Q4 2019*
Q4 on Q4
(in USD million)
2020
2019*
Change
706
820
1,554
(55%)
Adjusted total revenues and other
income
3,295
6,130
(46%)
(16)
12
(26)
(39%)
Adjusted purchases
(72)
(34)
>100%
(317)
(306)
(396)
(20%)
Adjusted operating and administrative
expenses
(1,313)
(1,623)
(19%)
(516)
(511)
(682)
(24%)
Adjusted depreciation, amortisation
and net impairment
losses
(2,045)
(2,233)
(8%)
(1,072)
(119)
(258)
>100%
Adjusted exploration expenses
(1,560)
(625)
>100%
(1,215)
(104)
192
N/A
Adjusted earnings/(loss) [5]
(1,695)
1,616
N/A
Equinor fourth quarter 2020
13
* Restated to reflect
change to segment
For comparable IFRS figures,
see note 2 Segments
to the Condensed interim financial
statements. For items
impacting net operating
income/(loss), see Use
and reconciliation of non
-GAAP financial measures
in the Supplementary
disclosures.
Equinor fourth quarter 2020
14
Full year 2020
Net operating income
for E&P International
was negative USD 3,565
million in 2020,
compared to positive
USD 1,471 million in
2019. The negative
development was mainly
due to lower liquids and
gas prices,
higher impairments in 2020
,
write down of previously
capitalised well costs
of USD 982 million
related to the Tanzania
LNG project and
lower entitlement production
in 2020.
In 2020, net operating
income was negatively impacted
by net impairments of
USD 1,933 million. In 2019,
net operating income
was
negatively impacted
by net impairments of USD 38
million and an implementation
effect of USD 63 million
from a change in
accounting policy for
lifting imbalances.
Adjusted operating
and administrative expenses
decreased mainly due
to lower royalties and
production fees primarily
driven by lower
volumes and prices.
Lower operation and maintenance
expenses contributed
to the decrease. Adjusted
depreciation, amortisation
and net impairment
losses decreased due to
higher proved reserves
estimates and lower production
from mature fields.
New fields
on
stream partially offset
the decrease.
Adjusted exploration expenses
increased mainly due
to write down of previously
capitalised well
costs of USD 982 million
related to the Tanzania
LNG project and a lower
portion of exploration
expenditure being capitalised
this
period.
Lower seismic, drilling and
field development costs
partially offset the
increase.
After total adjustments
of USD 1,870 million to net
operating income,
Adjusted
earnings
[5] were negative
USD 1,695 million in 2020,
down from positive
USD 1,616 million in 2019.
Equinor fourth quarter 2020
15
EXPLORATION & PRODUCTION USA
In the second quarter
of 2020, Equinor changed
its internal reporting to management,
impacting the composition
of Equinor's
operating and reporting
segments. Equinor’s
upstream activities
in the USA are now reported
separately to management,
and such
information is also considered
to be useful to the users
of the financial statements,
resulting in the exploration
and production activities
in the USA being considered
a separate operating-
and reporting segment as
of the second quarter
of 2020. Previously these
activities were included
in the DPI operating segment
and presented as part
of the E&P International
reporting segment.
Fourth quarter 2020 review
Average daily equity production
of liquids and gas
was 390 mboe per day
in the fourth quarter of
2020 compared to 437
mboe per
day in the fourth quarter
of 2019. The decrease was
mainly due to the divestment
of the Eagle Ford asset
in 2019, planned
maintenance and
weather shutdowns in the
US offshore.
Average daily entitlement
production of liquids
and gas
decreased slightly to
332 mboe per day in the
fourth quarter of 2020
compared to 374
mboe per day in the fourth
quarter of 2019. The decrease
was due to lower equity
production,
slightly offset by lower
effects from US onshore
royalty volumes after
the divestment of the
Eagle Ford asset. The net
effects from US royalties
were 58
mboe per day in the
fourth quarter of 2020 compared
to 64 mboe per day
in the fourth quarter of 2019.
Net operating income
was negative USD 559
million in the
fourth quarter of 2020
compared to positive
USD 7 million in the fourth
quarter of 2019. The
decrease was mainly
due to impairments of
assets in the fourth
quarter of 2020 in addition
to lower production
and lower commodity
prices.
Lower operating costs
due to the divestment
of the Eagle Ford asset
in the fourth quarter of
2019 in
addition to lower
depreciation cost partially
offset the decrease.
In the fourth quarter
of 2020,
net operating income
was negatively impacted
by net impairments of USD 369
million, with the largest
effect from unconventional
US onshore assets. In the
fourth quarter of 2019
,
net operating income
was negatively impacted by loss
on
the divestment of
unconventional US onshore
asset of USD 27 million.
Adjusted operating
and administrative expenses
decreased mainly due
to the divestment of the
Eagle Ford asset in the
fourth quarter
of 2019. Lower transportation
cost due to reduced production
volumes in addition
to lower production fees
driven by lower prices
contributed to the decrease.
Adjusted depreciation, amortisation
and net impairment
losses decreased mainly
due to lower
depreciation basis resulting
from net impairments
in previous periods in addition
to higher proved reserves
estimates in US offshore.
Adjusted exploration
expenses increased
mainly due to a lower portion
of exploration expenditure
being capitalised. Lower
field costs
partially offset the
increase.
After total adjustments
of USD 387 million to
net operating income,
Adjusted earnings
[5] were negative
USD 172 million in the
fourth quarter of 2020,
down from USD 54 million
in the fourth quarter
of 2019.
Quarters
Change
Adjusted earnings
Full year
Q4 2020
Q3 2020
Q4 2019*
Q4 on Q4
(in USD million)
2020
2019*
Change
644
611
1,060
(39%)
Adjusted total revenues and other
income
2,615
4,229
(38%)
(287)
(315)
(395)
(27%)
Adjusted operating and administrative
expenses
(1,263)
(1,538)
(18%)
(442)
(469)
(575)
(23%)
Adjusted depreciation, amortisation
and net impairment
losses
(1,886)
(2,209)
(15%)
(87)
(20)
(37)
>100%
Adjusted exploration expenses
(161)
(101)
60%
(172)
(193)
54
N/A
Adjusted earnings/(loss) [5]
(696)
381
N/A
Equinor fourth quarter 2020
16
* Restated to reflect
this segment
For comparable IFRS figures,
see note 2 Segments
to the Condensed interim
financial statements. For
items impacting net operating
income/(loss), see Use
and reconciliation of non
-GAAP financial measures
in the Supplementary.
Equinor fourth quarter 2020
17
Full year 2020
Net operating income
for E&P USA was negative
USD 3,512 million in 2020
compared to negative USD 2,27
1
million in 2019. The
negative development
was mainly due to higher
net impairments in 2020
in addition to lower liquids
and gas prices. This was
partially
offset by lower operating
and administrative expenses
in addition to lower
depreciation expenses.
In 2020, net operating
income was negatively impacted
by net impairment losses
of USD 2,760 million, mainly
due to reduced price
assumptions with the
largest effect being on
an unconventional US onshore
asset. In 2019, net operating
income was negatively
impacted by net impairments
of USD 2,532 million,
with the largest effect
on unconventional US onshore
assets.
Adjusted operating
and administrative expenses
decreased mainly due
to the divestment of the
Eagle Ford asset in the
fourth quarter
of 2019. Reduced severance
taxes due to lower prices
contributed to the decrease.
Adjusted depreciation,
amortisation and net
impairment losses decreased
mainly due to lower depreciation
basis resulting from net
impairments in previous
periods in addition to
higher proved reserves
estimates in US offshore.
Increased investments
and acquired interest in
the Caesar Tonga
field during 2019
partially offset the
decrease. Adjusted exploration
expenses increased
mainly due to higher drilling costs.
Lower seismic, field
development and
other costs partially offset
the increase.
After total adjustments
of USD 2,816 million to net
operating income.
Adjusted
earnings
[5] were negative
USD 696 million in
2020,
down from positive
USD 381 million in 2019.
Equinor fourth quarter 2020
18
MARKETING, MIDSTREAM &
PROCESSING
Fourth quarter 2020 review
Natural gas sales
volumes
amounted to 15.0
billion standard cubic
meters (bcm) in the fourth
quarter of 2020, decrease
of 0.9 bcm
compared to the
fourth quarter of 2019. Of the
total gas sales in the fourth
quarter of 2020, entitlement
gas was 13.2 bcm,
down 0.4 bcm from
the fourth quarter of 2019.
The decrease was mainly
due to the absence of equity
LNG volumes as a
result of the
outage at the Hammerfest
LNG plant due to shutdown
.
Liquids sales volumes
amounted to 184.1
million barrels (mmbl) in the
fourth quarter of 2020
,
up 12.8 mmbl compared
to the fourth
quarter of 2019
mainly due to increased
purchase from third party.
Average invoiced European
natural gas sales price
was 5%
lower in the fourth quarter
of 2020 compared to the
fourth quarter of
2019 mainly due
to change in gas sales strategy
.
Average invoiced
North American piped gas
sales price
decreased by 11
%
in
the same period mainly
due to weakening prices
in the US gas sales areas.
Net operating income
was negative USD 480
million in the fourth quarter
of 2020 compared to positive
USD 360 million in the fourth
quarter of 2019.
The decrease was mainly
due to impairments of
USD 638 million mostly
related to refinery asset
in addition to
inventory hedging effects
of USD 315 million
in the fourth quarter of
2020, compared to inventory
hedging effects of USD 180
million
in the fourth quarter
of 2019. Negative results from
weak refinery margin and
the absence of LNG sales
due to the outage at the
Hammerfest LNG plant
contributed to the decrease
of net operating income
in the fourth quarter of 2020.
Unrealised gain on
derivatives of USD 50 million
positively impacted net
operating income in
the fourth quarter of 2020,
compared to a loss on derivatives
of USD 111
million in the fourth
quarter of 2019.
Adjusted purchases
[6] decreased mainly due to
lower prices for all
products, partially offset
by higher third-party volumes
for
liquids.
Adjusted operating
and administrative expenses
decreased mainly due
to lower freight rates on
shipping of liquids.
Adjusted
depreciation, amortisation
and net impairment losses
slightly increased.
After total adjustments
of USD 832 million to
net operating income,
Adjusted earnings
[5] were USD 352 million
in the fourth quarter
of 2020, compared
to USD 524 million in
the fourth quarter of 2019.
The decrease was mainly
due to negative results
from weak
refinery margins
and the absence of
LNG sales due to the
outage at the Hammerfest
LNG plant,
partially offset by
piped gas activity.
Quarters
Change
Adjusted earnings
Full year
Q4 2020
Q3 2020
Q4 2019
Q4 on Q4
(in USD million)
2020
2019
Change
11,866
10,704
14,766
(20%)
Adjusted total revenues and other
income
45,158
60,989
(26%)
(10,342)
(9,174)
(12,909)
(20%)
Adjusted purchases [6]
(37,944)
(54,574)
(30%)
(1,064)
(1,167)
(1,237)
(14%)
Adjusted operating and administrative
expenses
(4,816)
(4,479)
8%
(107)
(102)
(96)
11%
Adjusted depreciation, amortisation
and net impairment
losses
(394)
(394)
0%
352
262
524
(33%)
Adjusted earnings [5]
2,004
1,541
30%
For comparable IFRS figures,
see note 2 Segments
to the Condensed interim financial
statements. For items
impacting net operating
income/(loss), see Use
and reconciliation of non
-GAAP financial measures
in the Supplementary
disclosures.
Full year 2020
Equinor fourth quarter 2020
19
Net operating income
for MMP was positive
USD 359 million in 2020
compared to positive USD 1,004
million in 2019. The decrease
was mainly due to impairments
of USD 1,060 million mostly
related to refinery asset
s
in 2020, compared to impairments
of USD 206
million related to
damage to the South Riding
Point oil terminal in the
Bahamas in 2019. Negative
results from weak refinery
margin
and the absence
of LNG sales due to
the outage at the Hammerfest
LNG plant contributed to
the decrease of net operating
income in
2020. Lower provisions
of USD 245 million in 2020
compared to USD 418 million
in 2019 partially offset
the decrease.
Adjusted total revenues
and other income and Adjusted
purchases [6] decreased
mainly due to lower prices
for all products, partially
offset by
higher volumes for
liquids.
Adjusted operating and administrative
expenses increased mainly
due to higher freight rates
on
shipping of liquids. Adjusted
depreciation, amortisation
and net impairment losses
were stable.
After total net adjustments
of USD 1,645
million,
Adjusted earnings
[5] were USD 2,004
million in 2020, an
increase from
USD 1,541 million in
2019,
mainly due to increased
results from piped gas and
liquids trading.
Equinor fourth quarter 2020
20
CONDENSED INTERIM FINANCIAL
STATEMENTS
Fourth quarter 2020
CONSOLIDATED
STATEMENT
OF INCOME
Quarters
Full year
Q4 2020
Q3 2020
Q4 2019
(unaudited, in USD million)
Note
2020
2019*
11,876
11,250
14,900
Revenues
45,753
62,911
(137)
86
14
Net income/(loss) from equity accounted
investments
53
164
7
3
255
Other income
12
1,283
11,746
11,339
15,169
Total revenues
and other income
2
45,818
64,357
(5,533)
(5,307)
(6,603)
Purchases [net of inventory variation]
(20,986)
(29,532)
(2,005)
(2,187)
(2,238)
Operating expenses
(8,831)
(9,660)
(151)
(181)
(167)
Selling, general and administrative
expenses
(706)
(809)
(3,478)
(4,798)
(4,165)
Depreciation, amortisation and net
impairment losses
6
(15,235)
(13,204)
(1,569)
(886)
(480)
Exploration expenses
6
(3,483)
(1,854)
(12,735)
(13,359)
(13,653)
Total operating
expenses
2
(49,241)
(55,058)
(989)
(2,019)
1,516
Net operating income/(loss)
2
(3,423)
9,299
(326)
(343)
(421)
Interest expenses and other financial
expenses
(1,392)
(1,450)
(84)
142
(74)
Other financial items
556
1,443
(410)
(201)
(495)
Net financial items
4
(836)
(7)
(1,400)
(2,220)
1,020
Income/(loss) before tax
(4,259)
9,292
(1,016)
95
(1,250)
Income tax
5
(1,237)
(7,441)
(2,416)
(2,124)
(230)
Net income/(loss)
(5,496)
1,851
(2,421)
(2,127)
(236)
Attributable to equity holders of the company
(5,510)
1,843
Equinor fourth quarter 2020
21
6
3
6
Attributable to non-controlling interests
14
8
(0.75)
(0.65)
(0.07)
Basic earnings per share (in USD)
(1.69)
0.55
(0.75)
(0.65)
(0.07)
Diluted earnings per share (in USD)
(1.69)
0.55
3,247
3,248
3,313
Weighted average number of ordinary
shares outstanding (in millions)
3,269
3,326
3,257
3,257
3,322
Weighted average number of ordinary
shares outstanding diluted (in millions)
3,277
3,334
* Audited
Equinor fourth quarter 2020
22
CONSOLIDATED
STATEMENT
OF COMPREHENSIVE INCOME
Quarters
Full year
Q4 2020
Q3 2020
Q4 2019
(unaudited, in USD million)
2020
2019*
(2,416)
(2,124)
(230)
Net income/(loss)
(5,496)
1,851
(303)
34
63
Actuarial gains/(losses) on defined
benefit pension plans
(106)
427
75
(6)
(12)
Income tax effect on income and
expenses recognised in OCI
1)
19
(98)
(228)
27
51
Items that will not be reclassified to
the Consolidated statement
of income
(87)
330
2,798
888
1,203
Currency translation adjustments
1,064
(51)
0
0
0
Share of OCI from equity accounted
investments
0
44
2,798
888
1,203
Items that may be subsequently reclassified
to the Consolidated statement
of
income
1,064
(7)
2,570
915
1,253
Other comprehensive income/(loss)
977
323
154
(1,209)
1,023
Total comprehensive
income/(loss)
(4,519)
2,174
149
(1,212)
1,017
Attributable to the equity holders of the
company
(4,533)
2,166
6
3
6
Attributable to non-controlling interests
14
8
* Audited
1) Other comprehensive income (OCI).
Equinor fourth quarter 2020
23
CONSOLIDATED
BALANCE SHEET
At 31 December
At 30 September
At 31 December
(unaudited, in USD million)
Note
2020
2020
2019*
ASSETS
Property, plant and
equipment
6
65,672
62,988
69,953
Intangible assets
6
8,148
9,667
10,738
Equity accounted investments
2,262
1,650
1,442
Deferred tax assets
4,974
4,251
3,881
Pension assets
1,310
1,103
1,093
Derivative financial instruments
2,476
1,964
1,365
Financial investments
4,083
3,437
3,600
Prepayments and financial receivables
861
1,240
1,214
Total non-current
assets
89,786
86,300
93,285
Inventories
3,084
2,860
3,363
Trade and other receivables
8,232
6,108
8,233
Derivative financial instruments
886
570
578
Financial investments
11,865
10,563
7,426
Cash and cash equivalents
6,757
7,844
5,177
Total current
assets
30,824
27,944
24,778
Assets classified as held for sale
3
1,362
188
0
Total assets
121,972
114,432
118,063
EQUITY AND LIABILITIES
Shareholders' equity
33,873
34,084
41,139
Non-controlling interests
19
24
20
Total equity
33,892
34,108
41,159
Finance debt
4
32,338
32,193
24,945
Equinor fourth quarter 2020
24
Deferred tax liabilities
11,224
9,451
9,410
Pension liabilities
4,292
3,705
3,867
Provisions and other liabilities
7
19,731
19,191
17,951
Derivative financial instruments
676
787
1,173
Total non-current
liabilities
68,260
65,328
57,346
Trade, other payables
and provisions
10,510
8,118
10,450
Current tax payable
5
1,148
543
3,699
Finance debt
4
5,777
5,277
4,087
Dividends payable
357
292
859
Derivative financial instruments
1,710
765
462
Total current
liabilities
19,502
14,996
19,557
Liabilities directly associated with the
assets classified as held for
sale
3
318
0
0
Total liabilities
88,081
80,324
76,904
Total equity
and liabilities
121,972
114,432
118,063
* Audited
Equinor fourth quarter 2020
25
CONSOLIDATED
STATEMENT
OF CHANGES IN EQUITY
(unaudited, in USD million)
Share
capital
Additional
paid-in
capital
Retained
earnings
Currency
translation
adjustments
OCI from
equity
accounted
investments
Share-
holders'
equity
Non-
controlling
interests
Total equity
At 31 December 2018*
1,185
8,247
38,790
(5,206)
(44)
42,970
19
42,990
Net income/(loss)
1,843
1,843
8
1,851
Other comprehensive income/(loss)
330
(51)
44
323
323
Total comprehensive
income/(loss)
2,174
Dividends
(3,453)
(3,453)
(3,453)
Share buy-back
1)
(500)
(500)
(500)
Other equity transactions
(15)
(29)
(44)
(7)
(52)
At 31 December 2019*
1,185
7,732
37,481
(5,258)
0
41,139
20
41,159
At 31 December 2019*
1,185
7,732
37,481
(5,258)
0
41,139
20
41,159
Net income/(loss)
(5,510)
(5,510)
14
(5,496)
Other comprehensive income/(loss)
(87)
1,064
0
977
977
Total comprehensive
income/(loss)
(4,519)
Dividends
(1,833)
(1,833)
(1,833)
Share buy-back
1)
(21)
(869)
(890)
(890)
Other equity transactions
(11)
0
(11)
(15)
(25)
At 31 December 2020
1,164
6,852
30,050
(4,194)
0
33,873
19
33,892
* Audited
1) In September 2019
Equinor launched a USD 5
billion share buy-back programme,
where the first tranche of the
programme of around
USD 1.5 billion has been finalis
ed. A proportionate share of 67%
from the Norwegian State was
redeemed in accordance with an
agreement with the Ministry of Petroleum
and Energy for the Norwegian State
to maintain their ownership percentage
in Equinor.
The
redemption was approved by the
annual general meeting held
14 May 2020.
The first tranche of USD 500 million
acquired in the market has been
recognised as a reduction in equity
as treasury shares in third
quarter 2019.
The State’s share including
interest and dividends has been
recognised as a short-term obligation
and as a reduction in
equity as treasury shares, subsequent
to the decision at the annual
general meeting held on 14 May
2020. The liability of USD 0.9
billion
(NOK 9.1 billion) was settled 23 July
2020. The corresponding shares
of the first tranche of the buy-back
programme were cancelled
on 16 July 2020.
Equinor has suspended the remaining
share buy-back programme until
further notice. The announced
second tranche of around
USD 675 million, including the Norwegian
State share, will under the current
market conditions not be executed
as previously
announced
and planned.
Equinor fourth quarter 2020
26
CONSOLIDATED
STATEMENT
OF CASH FLOWS
Quarters
Full year
Q4 2020
Q3 2020
Q4 2019
(unaudited, in USD million)
Note
2020
2019*
(1,400)
(2,220)
1,020
Income/(loss) before tax
(4,259)
9,292
3,478
4,798
4,165
Depreciation, amortisation and net
impairment losses
6
15,235
13,204
1,284
662
104
Exploration expenditures written
off
2,506
777
491
131
(23)
(Gains)/losses on foreign currency
transactions and balances
4
646
(224)
20
(1)
(193)
(Gains)/losses on sale of assets
and businesses
3
18
(1,187)
168
258
(143)
(Increase)/decrease in other items
related to operating activities
918
1,016
(5)
(182)
393
(Increase)/decrease in net derivative
financial instruments
(451)
(595)
12
41
49
Interest received
162
215
(204)
(146)
(197)
Interest paid
(730)
(723)
3,843
3,342
5,175
Cash flows provided by operating activities
before taxes paid and working
capital items
14,045
21,776
(393)
(110)
(2,651)
Taxes paid
(3,134)
(8,286)
(1,107)
(600)
(751)
(Increase)/decrease in working capital
(524)
259
2,343
2,632
1,774
Cash flows provided by operating activities
10,386
13,749
0
0
(0)
Cash used in business combinations
1)
3
0
(2,274)
(2,504)
(1,723)
(2,700)
Capital expenditures and investments
(8,476)
(10,204)
(538)
(1,034)
(212)
(Increase)/decrease in financial investments
2)
(3,703)
(1,012)
(288)
(261)
3
(Increase)/decrease in derivatives financial
instruments
(620)
298
218
(18)
(18)
(Increase)/decrease in other interest-
bearing items
202
(10)
490
14
882
Proceeds from sale of assets and
businesses
3
505
2,608
(2,623)
(3,023)
(2,045)
Cash flows used in investing activities
(12,092)
(10,594)
0
0
984
New finance debt
8,347
984
(1,066)
(1,642)
(1,029)
Repayment of finance debt
(3,332)
(2,419)
Equinor fourth quarter 2020
27
(292)
(287)
(850)
Dividends paid
(2,330)
(3,342)
(0)
(1,001)
(351)
Share buy-back
3)
(1,059)
(442)
254
1,308
(237)
Net current finance debt and other
financing activities
1,365
(277)
(1,104)
(1,623)
(1,483)
Cash flows provided by/(used in)
financing activities
2,991
(5,496)
(1,383)
(2,014)
(1,755)
Net increase/(decrease) in cash and
cash equivalents
1,285
(2,341)
296
158
115
Effect of exchange rate changes
on cash and cash equivalents
294
(38)
7,844
9,700
6,816
Cash and cash equivalents at the beginning
of the period (net of overdraft)
5,177
7,556
6,757
7,844
5,177
Cash and cash equivalents at the end
of the period (net of overdraft)
4)
6,757
5,177
* Audited
1) Net after cash and
cash equivalents acquired.
2) Includes sale of Lundin
shares in the second quarter
of 2020.
For more information,
see note 3 Acquisition
and disposals.
3) For more information,
see Consolidated statement of
changes in equity.
4) At 31
December 2020 and at 31
December 2019 cash and
cash equivalents net overdraft were
zero.
Equinor fourth quarter 2020
28
Notes to the Condensed interim
financial statements
1 Organisation and basis of preparation
Organisation and principal
activities
Equinor ASA, originally
Den Norske Stats Oljeselskap
AS, was founded in 1972 and
is incorporated and domiciled
in Norway.
The
address of its registered
office is Forusbeen
50, N-4035 Stavanger,
Norway.
The Equinor group’s
(Equinor’s) business consists
principally of the exploration,
production, transportation,
refining and marketing of
petroleum and petroleum
-derived products, and
other forms of energy.
Equinor ASA is listed
on the Oslo Børs (Norway)
and the New
York
Stock Exchange (USA).
All of Equinor's oil and
gas activities and net
assets on the Norwegian continental
shelf are owned by Equinor
Energy AS, a 100%
owned operating subsidiary
of Equinor ASA. Equinor Energy
AS is co-obligor or guarantor
of certain debt obliga
tions of Equinor ASA.
Following changes
in Equinor's internal reporting
to management the
composition of Equinor's operating
and reporting segments
has
changed as of the second
quarter of 2020. Segment
information for prior
periods has been restated
to align with the new segment
presentation. For
further information see
note 2 Segments to
these Condensed interim
financial statements.
Equinor's Condensed
interim financial statements
for the fourth quarte
r
of 2020 were authorised
for issue by the board
of directors on
9 February 2021.
Basis of preparation
These Condensed interim
financial statements are
prepared in accordance
with International Accounting
Standard 34 Interim
Financial Reporting as
issued by the International
Accounting Standards
Board (IASB) and as adopted
by the European Union (EU).
The Condensed interim
financial statements do
not include all the information
and disclosures required
by International Financial
Reporting Standards
(IFRS) for a complete
set of financial statements,
and these Condensed interim
financial statements should
be
read in conjunction
with the Consolidated
annual financial statements
for 2019. IFRS as adopted
by the EU differs
in certain respects
from IFRS as issued
by the IASB, but the differences
do not impact Equinor's
financial statements for
the periods presented. A
description of the
significant accounting policies
applied in preparing these
Condensed interim financial
statements is included
in
Equinor's Consolidated
annual financial statements
for 2019.
On 1 January 2020,
Equinor implemented amendments
to IFRS 3 Business Combinations,
which apply to relevant
transactions that
occur on or after
the implementation date. The
amendments introduce
clarification to the definition
of a business, and also
establish
an optional test to identify
a concentration of fair
value that, if applied and
met, will lead to the conclusion
that an acquired set of
activities and assets
is not a business.
There have been
no other changes to the
significant accounting policies
during 2020 compared to the
Consolidated annual financial
statements for 2019.
The Condensed interim
financial statements reflect
all adjustments which
are, in the opinion of management,
necessary for a fair
presentation of the
financial position, results
of operations and cash
flows for the dates and interim
periods presented.
Interim period
results are not necessarily
indicative of results of
operations or cash flows
for an annual period. Certain
amounts in the comparable
periods in the note disclosures
have been reclassified to
conform to current period
presentation. The subtotals
and totals in some of
the tables may not equal
the sum of the amounts
shown due to rounding.
The Condensed interim
financial statements are
unaudited.
Use of estimates
The preparation of financial
statements in conformity
with IFRS requires management
to make judgments, estimates
and assumptions
that affect the application
of policies and reported
amounts of assets,
liabilities, income and expenses.
The estimates and associated
assumptions are
based on historical
experience and various
other factors that
are believed to be reasonable
under the circumstances,
the results of which
form the basis for making the
judgments about carrying
values of assets and liabilities
that are not readily
apparent from other
sources. Actual results may
differ from these estimates.
The estimates and underlying
assumptions are reviewed
on an on-going basis,
considering current and
expected future market
conditions. A change in
an accounting estimate
is recognised in
the period in which
the estimate is revised if
the revision affects only
that period, or in the period
of the revision and future
periods if
the revision affects
both current and future periods.
The ongoing Covid-19
pandemic and the significant
effects it has had on
the oil
price during 2020, in
addition to the increasing
momentum towards a
transition into a low carbon
future,
create additional estimation
uncertainties and
impact key assumptions
applied by Equinor in
the valuation of our asse
ts and the measurement
of our liabilities, and
related sensitivities.
Reference is made to n
ote 8 Impact of the Covid
-19 pandemic and oil price
decline for further information.
Equinor fourth quarter 2020
29
2 Segments
Equinor’s operations
are managed through
the following operating segments
(business areas): Development
& Production Norway
(DPN), Development
& Production International
(DPI), Development & Production
Brazil (DPB), Development
& Production USA
(DPUSA), Marketing,
Midstream & Processing (MMP),
New Energy Solutions
(NES), Technology,
Projects & Drilling (TPD),
Exploration (EXP) and
Global Strategy & Business
Development (GSB).
The reporting segments
Exploration & Production Norway
(E&P Norway),
Exploration & Production
USA (E&P USA) and MMP consist
of the business areas
DPN,
DPUSA and MMP respectively.
The operating segments
DPI and DPB are aggregated
into the reporting
segment Exploration
& Production
International (E&P International).
The aggregation has its
basis in similar economic
characteristics,
such as similar revenue
growth, net operating income,
the assets’ long term and
capital-intensive nature
and exposure to volatile
oil
and gas commodity
prices, the nature of products,
service and production
processes, the type
and class of customers,
the methods of
distribution and regulatory
environment. The operating
segments NES, GSB, TPD,
EXP and corporate
staffs and support
functions
are aggregated into
the reporting segment “Other”
due to the immateriality
of these operating segments.
The majority of the costs
within the operating segments
GSB, TPD and EXP are allocated
to the E&P Norway,
E&P USA, E&P International
and MMP reporting
segments.
In the second quarter
of 2020, Equinor
changed its internal reporting
to management, impacting
the composition of Equinor's
operating and reporting
segments. Equinor’s
upstream activities
in the USA is as from the
second quarter reported
separately to
management. The fact
that such information
is also considered to be
useful to the users of
the financial statements,
resulted in the
exploration and production
activities in the USA as of
the second quarter
of 2020 were considered
a separate operating-
and reporting
segment. Previously
these activities were included
in the DPI operating segment
and presented as part
of the E&P International
reporting segment.
The new structure has been
reflected retrospectively
with restated comparable
figures.
Inter-segment sales
and related unrealised profits,
mainly from the sale of
crude oil and products,
are eliminated in the
Eliminiations
column below.
Inter-segment revenues
are based upon estimated
market prices.
Segment data for the
fourth quarter of 2020
and 2019 is presented below.
The reported measure
of segment profit is net operating
income/(loss)
.
Deferred tax assets, pension
assets and non-current financial
assets are not allocated
to the segments.
The measurement basis
for segments is IFRS as applied
by the group with the exception
of IFRS 16 Leases
and the line item
Additions to PP&E, intangibles
and equity accounted
investments. All IFRS 16 leases
are presented within the
Other segment. The
lease costs for the period
are allocated to the
different segments
based on underlying lease
payments, with a corresponding
credit in
the Other segment.
Lease costs allocated to
licence partners are recognised
as other revenues
in the Other segment. Additions
to
PP&E, intangible assets
and equity accounted
investments in the E&P and
MMP segments include
the period’s allocated
lease costs
related to activity
being capitalised with
a corresponding negative addition
in the Other segment. The
line item Additions to PP&E,
intangibles and equity
accounted investments excludes
movements related to
changes in asset retirement
obligations.
Fourth quarter 2020
E&P
Norway
E&P
Internationa
l
E&P
USA
MMP
Other
Eliminations
Total
(in USD million)
Revenues third party,
other revenues and other income
58
143
83
11,519
80
0
11,883
Revenues inter-segment
3,819
771
561
77
1
(5,229)
0
Net income/(loss) from equity accounted
investments
0
(168)
0
5
26
0
(137)
Total revenues
and other income
3,877
747
644
11,601
107
(5,229)
11,746
Purchases [net of inventory variation]
(0)
(16)
(0)
(10,273)
0
4,756
(5,533)
Operating, selling, general and administrative
expenses
(753)
(288)
(305)
(1,062)
83
170
(2,156)
Depreciation, amortisation and net
impairment losses
(1,227)
(588)
(653)
(745)
(264)
0
(3,478)
Exploration expenses
(94)
(1,231)
(244)
0
0
0
(1,569)
Equinor fourth quarter 2020
30
Total operating
expenses
(2,074)
(2,123)
(1,202)
(12,081)
(181)
4,926
(12,735)
Net operating income/(loss)
1,803
(1,376)
(559)
(480)
(75)
(303)
(989)
Additions to PP&E, intangibles
and equity accounted
investments
1,340
1,026
123
47
277
0
2,813
Equinor fourth quarter 2020
31
Fourth quarter 2019
E&P
Norway
E&P
Internationa
l
E&P
USA
MMP
Other
Eliminations
Total
(in USD million)
(restated)
(restated)
Revenues third party,
other revenues and other income
22
375
122
14,342
293
0
15,154
Revenues inter-segment
4,934
1,105
938
127
1
(7,104)
0
Net income/(loss) from equity accounted
investments
0
(3)
1
5
11
0
14
Total revenues
and other income
4,956
1,477
1,060
14,474
305
(7,104)
15,169
Purchases [net of inventory variation]
(2)
(26)
1
(12,873)
(0)
6,297
(6,603)
Operating, selling, general and administrative
expenses
(842)
(360)
(442)
(1,145)
169
215
(2,405)
Depreciation, amortisation and net
impairment losses
(2,494)
(737)
(575)
(96)
(262)
0
(4,165)
Exploration expenses
(142)
(301)
(37)
0
0
0
(480)
Total operating
expenses
(3,480)
(1,424)
(1,053)
(14,114)
(93)
6,511
(13,653)
Net operating income/(loss)
1,476
53
7
360
211
(593)
1,516
Additions to PP&E, intangibles
and equity accounted
investments
1,455
561
518
114
227
0
2,875
Full year 2020
E&P
Norway
E&P
Internationa
l
E&P
USA
MMP
Other
Eliminations
Total
(in USD million)
Revenues third party,
other revenue and other income
91
452
368
44,605
249
0
45,765
Revenues inter-segment
11,804
3,183
2,247
309
4
(17,547)
0
Net income/(loss) from equity accounted
investments
0
(146)
0
31
168
0
53
Total revenues
and other income
11,895
3,489
2,615
44,945
421
(17,547)
45,818
Purchases [net of inventory variation]
(0)
(72)
0
(38,072)
1
17,157
(20,986)
Operating, selling, general and administrative
expenses
(2,829)
(1,440)
(1,313)
(5,060)
419
685
(9,537)
Depreciation, amortisation and net
impairment losses
(5,546)
(3,471)
(3,824)
(1,453)
(940)
0
(15,235)
Exploration expenses
(423)
(2,071)
(990)
0
1
0
(3,483)
Total operating
expenses
(8,798)
(7,054)
(6,127)
(44,586)
(519)
17,842
(49,241)
Equinor fourth quarter 2020
32
Net operating income/(loss)
3,097
(3,565)
(3,512)
359
(98)
296
(3,423)
Additions to PP&E, intangibles
and equity accounted
investments
4,851
2,608
1,068
190
1,044
0
9,761
Balance sheet information
Equity accounted investments
3
1,125
0
92
1,042
0
2,262
Non-current segment assets
35,833
17,329
12,376
4,147
4,135
0
73,820
Non-current assets not allocated to
segments
13,704
Total non-current
assets
89,786
Equinor fourth quarter 2020
33
Full year 2019
E&P
Norway
E&P
Internationa
l
E&P
USA
MMP
Other
Eliminations
Total
(in USD million)
(restated)
(restated)
Revenues third party,
other revenue and other income
1,048
1,685
441
60,491
527
0
64,194
Revenues inter-segment
17,769
4,376
3,792
439
4
(26,379)
0
Net income/(loss) from equity accounted
investments
15
24
6
25
93
0
164
Total revenues
and other income
18,832
6,085
4,239
60,955
624
(26,379)
64,357
Purchases [net of inventory variation]
(1)
(34)
0
(54,454)
(1)
24,958
(29,532)
Operating, selling, general and administrative
expenses
(3,284)
(1,684)
(1,668)
(4,897)
272
793
(10,469)
Depreciation, amortisation and net
impairment losses
(5,439)
(2,228)
(4,133)
(600)
(804)
0
(13,204)
Exploration expenses
(478)
(668)
(709)
0
0
0
(1,854)
Total operating
expenses
(9,201)
(4,614)
(6,510)
(59,951)
(533)
25,750
(55,058)
Net operating income/(loss)
9,631
1,471
(2,271)
1,004
92
(629)
9,299
Additions to PP&E, intangibles
and equity accounted
investments
7,316
2,851
3,004
788
823
0
14,782
Balance sheet information
Equity accounted investments
3
321
0
90
1,028
0
1,442
Non-current segment assets
33,795
20,784
16,774
5,124
4,214
0
80,691
Non-current assets not allocated to
segments
11,152
Total non-current
assets
93,285
In the fourth quarter
of 2020,
Equinor recognised net
impairment of USD 1,302 million
of which USD 315 million
was acquisition cost
and signature bonuses
classified as exploration
expenses. The line item
Exploration expenses in
the Consolidated statement
of
income also includes
impairment of capitali
sed exploration well cost
.
For information regarding impairment
of capitalised exploration
cost,
see note 6 Property,
plant and equipment and
intangible assets.
In the E&P International
segment the impairments
were USD 229 million
of which USD 157 million was
classified as exploration
expenses and related
to an exploration asset
in South America.
The impairment of other
assets was mainly caused
by reduced
reserve estimates in
the Europe
and Asia area.
In the E&P USA segment the
impairments were USD 369
million of which USD 158 million
was classified as exploration
expenses.
The impairment was
mainly related to an
Equinor-operated North America
unconventional asset
measured at fair value less
cost of
disposal in connection
with reclassification to
held for sale.
In the E&P Norway segment
the impairment was
USD
41 million and related
to goodwill.
Equinor fourth quarter 2020
34
In the MMP segment the
impairments were USD 638
million, mainly related to
a refinery caused by reduced
margin assumptions and
increased cost
estimates.
Most of the renewable
assets in Equinor Group
are accounted for using
equity method and the results
are presented in the Other
reporting segment.
The net income from the
equity accounted investments
within the operating segment
NES was USD 21 million in
the fourth quarter of
2020 and USD 163 million
in the full
year 2020, which compares
to USD 13 million in the
fourth quarter of 2019
and
USD 95 million in the
full year 2019.
For information regarding
acquisition and disposal
of interests, see note
3 Acquisitions and disposals.
See also note 8 Impact
of the Covid-19 pandemic
and oil price decline.
Equinor fourth quarter 2020
35
Revenues from contract
s
with customers
by geographical areas
When attributing the
line item Revenues third party,
other revenues and other
income to the country of the
legal entity executing
the
sale for the fourth quarter
of 2020, Norway constitutes
79%
and USA constitutes 13
%
of such revenues. For
the fourth quarter of
2019,
Norway and USA
constituted 78%
and 15%
of such revenues,
respectively.
For the full year of 2020,
Norway constitutes 80%
and USA
constitutes 1
4%
of such revenues. For
the full year of 2019, Norway
and
USA constituted 75
%
and 18%
of such revenues,
respectively.
Non-current assets
by country
At 31 December
At 30 September
At 31 December
(in USD million)
2020
2020
2019
Norway
41,054
37,327
40,292
USA
13,172
14,858
17,776
Brazil
9,341
8,752
8,724
UK
4,398
4,175
5,657
Azerbaijan
1,683
1,684
1,598
Canada
1,527
1,468
1,672
Russia
973
429
447
Denmark
953
911
984
Algeria
808
845
915
Angola
725
1,270
1,564
Other countries
1,447
2,587
2,504
Total non-current
assets
1)
76,082
74,305
82,133
1) Excluding deferred
tax assets, pension assets
and non-current financial
assets.
Revenues from contracts
with customers and other revenues
Quarters
Full Year
Q4 2020
Q3 2020
Q4 2019
(in USD million)
2020
2019
6,015
6,635
7,837
Crude oil
24,509
33,505
2,503
1,351
2,642
Natural gas
7,213
11,281
2,100
1,048
2,154
- European gas
5,839
9,366
295
229
354
- North American gas
1,010
1,359
108
74
134
- Other incl. LNG
363
556
1,687
1,560
2,879
Refined products
6,534
10,652
1,499
1,282
1,548
Natural gas liquids
5,069
5,807
172
295
295
Transportation
1,083
967
365
91
27
Other sales
681
445
12,242
11,215
15,229
Revenues from contracts with customers
45,088
62,657
28
27
73
Taxes paid
in-kind
93
344
(27)
(16)
(110)
Physically settled commodity derivatives
209
(1,086)
(442)
(44)
(354)
Gain/(loss) on commodity derivatives
108
732
74
70
62
Other revenues
256
265
(367)
36
(329)
Total other
revenues
665
254
11,876
11,250
14,900
Revenues
45,753
62,911
Equinor fourth quarter 2020
36
3 Acquisitions and disposals
Acquisition onshore Russia
On 11
December 2020 Equinor
closed a transaction with
Rosneft to acquire a 49% interest
in the limited liability company
LLC
KrasGeoNaC (KGN) which
holds twelve conventional
onshore exploration
and production licences
in Eastern Siberia. The
cash
consideration at closing,
including interim period
adjustment, was around
USD 384 million. In addition
to the cash consideration
Equinor recognised
a contingent consideration
of USD 145 million related
to future exploration expenses.
The total consideration for
the acquisition of
USD 529 million has been
accounted using equity
method in the line item Equity
accounted investment
and reported
in the E&P International
segment.
As part of this agreement,
Equinor extinguished
its exploration commitments
offshore in the Sea
of Okhotsk and as such
has no
outstanding obligations
in that area. The previous
commitment in the Sea
of Okhotsk has been charged
to profit and loss at estimat
ed
fair value of USD 166
million. The charge has
been accounted as Net
income/(loss) from equity
accounted investments
in the E&P
International segment.
Divestment of 10% of Dogger
Bank Farm A and B
On 4 December 2020
Equinor entered into an
agreement with Eni to
sell a 10% equity interest
in the Dogger Bank Wind
Farm A and
B assets in the UK for
a total consideration of around
GBP 202.5 million (USD 273
million).
The carrying amount of
the interests to be
disposed of
is insignificant and is
classified as held for sale.
Once the transaction
s
are closed,
the new overall shareholding
in Dogger
Bank A and Dogger Bank
B will be – SSE (40%), Equinor
(40%) and Eni (20%).
Upon transaction closing, the
gain will be presented
in the line item Other
income in the Consolidated
statement of income in
the operating segment NES included
in the Other segment.
Divestment of non-operated
interest in the Empire
Wind and Beacon Wind assets
on the US east coast
On 10 September 2020
Equinor entered into an
agreement with BP to sell
50% of the non-operated
interests in the Empire Wind
and
Beacon Wind assets
for a total consideration
before adjustments
of USD 1.1 billion whereas
USD 500 million has been
prepaid at the
end of December 2020,
presented in the line items
Cash and cash equivalents
and Trade, other
payables and provisions
in the
Consolidated balance
sheet.
Through this transaction, the
two companies have establis
hed a strategic partnership
for further growth
within offshore wind
in the US. Following the transaction,
Equinor will remain the operator
with a 50% interest.
The 100% interest
share has been reclassified
as held for sale. After the transaction
Equinor will account
for the assets as a joint
venture using equity
accounting. The transaction
was closed
29 January 2021 where
the gain related to the
disposed interests was
recognised. For further
information see note
9 Subsequent events.
Upon transaction closing,
the gain will be presented
in the line item Other
income in the
Consolidated statement
of income in the operating
segment NES included
in the Other segment.
North America unconventional
onshore assets
In addition to the
Empire Wind and Beacon
Wind assets and the Dogger
Bank Farm A and B a
disposal group of assets
has been
classified as held
for sale. The disposal
group consists of an Equinor
-operated North America
unconventional onshore
asset included
in the reporting segment
E&P USA. Equinor has
together with a deal advisor
actively marketed the
disposal group. Equinor
is
expecting a divestment
during 2021. Equinor has
impaired the asset to
estimated fair value see
note 2 Segments.
Divestment of remaining shares
in Lundin
On 8 May 2020 Equinor
closed the divestment of
its remaining (4.9%) financial
shareholding in Lundin
Energy AB (formerly Lundin
Petroleum AB). The consideration
is SEK 3.3 billion (USD 0.3
billion). The impact on the
Consolidated statement
of income in the
second quarter was
a loss of USD 0.1 billion
and was recognised in
the line item Interest income
and other financial items.
Investment in interest
onshore Argentina
On 30 January 2020
Equinor closed a transaction
to acquire a 50% ownership
share in SPM Argentina
S.A (SPM) from Schlumberger
Production Management
Holding Argentina B.V.
Shell acquired the remaining
50% ownership share
of SPM.
SPM holds a 49%
interest in the Bandurria
Sur onshore block in Argentina,
and the
block is in the pilot phase
of development. The consideration
including final adjustments
is USD 187 million. In
the second quarter
,
Equinor increased its shareholding
in the Bandurria Sur
by 5.5%
to 30% for a final
consideration of USD 44 million.
The investment in SPM is
accounted for as
a joint venture using the
equity method
and reported in the
E&P International segment.
Equinor fourth quarter 2020
37
4 Financial items
Quarters
Full year
Q4 2020
Q3 2020
Q4 2019
(in USD million)
2020
2019
(491)
(131)
23
Gains/(losses) on net foreign exchange
(646)
224
379
235
210
Interest income and other financial
items
754
746
27
39
(308)
Gains/(losses) on derivative financial
instruments
448
473
(326)
(343)
(421)
Interest and other finance expenses
(1,392)
(1,450)
(410)
(201)
(495)
Net financial items
(836)
(7)
Gains/(losses) on derivative
financial instruments is
a gain of USD 448 million
in 2020
compared to a gain
of USD 473 million
in 2019,
mainly due to decreased
interest rates.
Equinor has a US Commercial
paper programme available
with a limit of USD 5 billion
of which USD 903 million
has been
utilised as
of
31 December 2020.
During 2020, Equinor
recorded total lease payments
of USD 1,405 million,
of which USD 128 million
were payment of interests
and
USD 1,277 million were
payment of lease liabilities.
Lease liabilities as at 31
December 2020 were USD 4,406
million, presented in
the Consolidated
balance sheet within the
line items Current and
Non-current finance
debt with USD 1,186 million
and USD 3,220
million, respectively.
In the second quarter
of 2020 Equinor ASA issued
bonds with maturities
from 5 to 30 years for a
total amount of USD 8.3 billion.
The
bonds were issued
in USD and EUR, amounting
to USD 6.5 billion and
EUR 1.75 billion, and
are fully and unconditionally
guaranteed
by Equinor Energy AS.
5 Income taxes
Quarters
Full year
Q4 2020
Q3 2020
Q4 2019
(in USD million)
2020
2019
(1,400)
(2,220)
1,020
Income/(loss) before tax
(4,259)
9,292
(1,016)
95
(1,250)
Income tax
(1,237)
(7,441)
(72.6%)
4.3%
>100%
Effective tax rate
(29.0%)
80.1%
The tax rate for the
fourth quarter of 2020 and
for the full year 2020 was
primarily influenced by losses
including net impairments
recognised in countries
with unrecognised deferred
taxes or in countries with
lower than average tax rates
.
The tax rate was also
influenced by currency
effects in entities that
are taxable in other
currencies than the
functional currency,
partially offset by the
temporary changes
to Norway’s petroleum
tax system and changes
in best estimates for uncertain
tax positions. See also
note 8
Impact of the Covid
-19 pandemic and oil price
decline.
The tax rate for the
fourth quarter of 2019 and
for the full year 2019 was
primarily influenced by losses
recognised in countries with
unrecognised deferred
tax assets or in countries
with lower than average
tax rates, partially offset
by the tax exempted gains
on
divestments. The tax
rate for the fourth quarter
of 2019 was also influenced
by currency effects in
entities that are taxable
in other
currencies than the
functional currency.
Equinor fourth quarter 2020
38
6 Property, plant and equipment and intangible assets
(in USD million)
Property, plant and
equipment
Intangible
assets
Balance at 31 December 2019
69,953
10,738
Additions
10,339
491
Transfers
89
(89)
Disposals and reclassifications
(17)
(14)
Transferred to assets classified
as held for sale
(810)
(516)
Expensed exploration expenditures
and net impairment losses
-
(2,506)
Depreciation, amortisation and net
impairment losses
(15,158)
(77)
Effect of foreign currency translation
adjustments
1,276
120
Balance at 31 December 2020
65,672
8,148
Right-of-use (RoU)
assets are included within
property,
plant and equipment with
a net book value of USD 4,119
million per
31
December 2020. Additions
to RoU assets amount
to USD 1,326 million.
Gross depreciation and
impairment of RoU assets
amount
to USD 1,254 million
for the full year 2020,
of which depreciation
costs of USD 359 million
have been allocated to
exploration and
development activities
and are presented net
on the Depreciation, amortisation
and net impairment losses
and Additions lines
in the
table above.
In the fourth quarter
of 2020 it was decided to impair
capitalised well costs
of USD 982 related to
Equinor’s Block 2 exploration licen
ce
in Tanzania,
included in intangible assets,
because overall project
economics have not yet
improved sufficiently
to justify keeping it on
the balance sheet. The
impairment is presented
in the line item Exploration
expenses in the Consolidated
statement of income.
Impairments and impairment
reversals
For information on impairment
losses and reversals per
reporting segment, see note
2 Segments.
For the quarter
Property, plant and
equipment
Intangible assets
Total
(in USD million)
2020
2019
2020
2019
2020
2019
Producing and development assets
938
1,199
91
0
1,030
1,199
Goodwill
-
-
41
164
41
164
Other intangible assets
-
-
8
0
8
0
Acquisition costs related to oil and gas
prospects
-
-
224
43
224
43
Total net
impairment loss/(reversal)
recognised
938
1,199
363
208
1,302
1,407
Full year
Property, plant and
equipment
Intangible assets
Total
(in USD million)
2020
2019
2020
2019
2020
2019
Producing and development assets
5,671
3,230
680
608
6,351
3,838
Goodwill
-
-
42
164
42
164
Other intangible assets
-
-
8
41
8
41
Acquisition costs related to oil and gas
prospects
-
-
657
49
657
49
Total net
impairment loss/(reversal)
recognised
5,671
3,230
1,386
863
7,057
4,093
Equinor fourth quarter 2020
39
The net impairments
have been recognised
in the Consolidated statement
of income as Depreciation,
amortisation and net
impairment losses and
Exploration expenses
based on the impaired
assets’ nature of property,
plant and equipment and
intangible
assets, respectively.
The recoverable
amounts in the fourth
quarter of 2020 were mainly
discounted cash flows
based on value in use,
except for one held
for sale assessment
as described in Note 2
Segment note.
Value in
use estimates and discounted
cash flows used to determine
the recoverable amount
of assets tested for impairment
are
based on internal
forecasts on costs,
production profiles and
commodity prices.
Changes to accounting assumptions
Management’s
future commodity price assumptions
and currency assumptions
are used for value-in-use
impairment testing. The
same assumptions
are also used for evaluating
investment opportunities,
together with other relevant
criteria, including among others
robustness targets
(value creation in lower
commodity price scenarios).
While there are inherent
uncertainties in the assumptions,
the
commodity price
assumptions as well as
currency assumptions
reflect management’s
best estimate of the price
and currency
development over the
life
of the Group’s assets
based on its view of relevant
current circumstances and
the likely future development
of such circumstances,
including energy demand
development, energy
and climate change policies
as well as the speed of the
energy
transition, population
and economic growth,
geopolitical risks, technology
and cost development, and
other factors. Management’s
best estimate also takes
into consideration a range
of external forecasts.
Equinor has performed
a thorough and broad
analysis of the expected
development in drivers
for the different
commodity markets and
exchange rates, following
the recent and ongoing Covid
-19 situation and management
has gained more insight
into the development
of the different markets
in which Equinor operates.
Significant uncertainty
continues to exist regarding
future commodity price
development due
to the potential long-term
impact on demand resulting
from the ongoing Covid
-19 pandemic and the
measures taken
to contain it, energy
investments in the transition
to a lower carbon economy
and future supply actions
by OPEC+ and other factors.
The management’s
analysis of the expected
development in drivers
for the different commodity
markets and exchange rates
resulted
in changes in the
long-term price assumptions
as from the third quarter
of 2020. The following price
assumptions have been
the basis
for the impairment calculations
.
All commodity prices
are on a real 2020 basis,
and comparables as per
fourth quarter 2019 and
up to the third quarter
of 2020 are
given in brackets
.
For Brent-blend,
compared to current prices,
we expect a strengthening
of the prices through the
2020s.
In 2025,
the assumption is 65
USD/bbl (78 USD/bbl)
,
with a further increase towards
2030. Beyond 2030
,
we expect a gradual decline
with an estimate of 64
USD/bbl in 2040
(82 USD/bbl),
which approximates the
average price level for the
period 2021-2050. In 2050,
the
oil prices are
expected to be below
60 USD/bbl.
For natural gas in the
UK (NBP), we expect
some volatility,
where the trend is a gradual
increase in prices from today’s
current prices
up to 6.5 USD/mmBtu in
2030 (7.7 USD/mmBtu).
From 2030, we expect
prices at levels sufficient
to incentivise the next
LNG
investment cycle
and a flatter price-curve,
with the price gradually
increasing to 7.8
USD/mmBtu close to
2040 (7.7 USD/mmBtu).
Beyond 2040, a declining
price trend is foreseen
as the energy transition
is expected to impact the demand
side. For 2050, the price
has been set at the
pre-2035 level. Henry Hub
follows the same pattern,
gradually increasing from
today’s current prices
to 3.3
USD/mmBtu in 2030
(3.7 USD/mmBtu) and
gradually increasing to 3
.7 USD/mmBtu in 2040 (3.7
USD/mmBtu) before gradually
declining through the
2040s.
Equinor has performed
analyses of the NOK currency
exchange rates, which
suggests that a return
to a previously assumed
long-
term equilibrium is less
likely. This
conclusion is supported
by the historical 5-year average
and spot prices in the
currency market, as
well as an expected
lower oil price and increased
market uncertainty.
In the third quarter of 2020,
Equinor therefore implemented
new
long-term exchange
rates from 2023 onwards.
The NOK/USD rate has
been revised to 8.5
(previously 7.0), while
the NOK/EUR rate
has been revised
to 10.0 (from previously
9.0).
During 2020, risk-free
interest rates continued
to drop for the first three
quarters, and long-term
risk-free interest rates
(10 years)
decreased by approximately
1.3 percentage points
in the period from year
-end 2019 to 30 September
2020. The stock market
recovery after the in
itial Covid-19 impact in March,
and despite lower expectations
of future cash flows, is
indicating a lower market
risk premium. The low
interest rates combined
with lack of good alternative
investment opportunities,
channels more funds
towards
the equity market resulting
in investors accepting lower
returns on investments,
and we see a downward
shift in the estimated equity
risk premium. Taking
this into account, even
though interest rates have
rebounded somewhat
during the fourth quarter
,
Equinor has
adjusted the Weighted
Average Cost of Capital
(WACC) for accounting
purposes, real post-tax,
down from 6% to 5% with
effect from
the third quarter of 2020.
Please refer to note
8 Impact of the Covid-19
pandemic and oil price.
Equinor fourth quarter 2020
40
Sensitivities
Commodity prices have
historically been volatile. Significant
downward adjustments
of Equinor’s commodity price
assumptions would
result in impairment
losses on certain producing and
development assets
in Equinor’s portfolio, while
an opposite adjustment
could
lead to impairment
-reversals. If a decline
in commodity price
forecasts over the lifetime
of the assets were 30%,
considered to
represent a reasonably
possible change, the impairment
amount to be recognised
could illustratively be
in the region of USD 12 billion
before tax effects.
This illustrative impairment
sensitivity,
based on a simplified method
,
assumes no changes
to input factors other
than prices; however,
a price reduction of 30%
is likely to result in changes
in business plans as well
as other factors used when
estimating an asset’s
recoverable amount. These
associated changes reduce
the stand-alone impact on
commodity price sensitivity.
Changes in such
input factors would
likely include a reduction in
the cost level in the oil and
gas industry as well as offsetti
ng currency
effects, both of which
have historically occurred
following significant changes
in commodity prices. The
illustrative sensitivity is
therefore not considered
to represent a best estimate
of an expected impairment
impact, nor an estimated impact
on revenues or
operating income in
such a scenario. In comparison,
following the amended assumptions
and the decline in commodity
prices
presently disclosed
for this quarter,
the impairment impact recognised
is considerably lower.
A significant and prolon
ged reduction in
oil and gas prices would
also result in mitigating
actions by Equinor and
its licence partners, as a
reduction of oil and gas
prices would
impact drilling plans
and production profiles for
new and existing assets.
Quantifying such impacts
is considered impracticable,
as it
requires detailed
technical, geological and
economical evaluations
based on hypothetical
scenarios and not based
on existing
business or development
plans.
7 Provisions, commitments, contingent liabilities and contingent
assets
Contingent consideration
In the fourth quarter
of 2020 Equinor recognised
a contingent consideration
of USD 145 million related
to the acquisition of 49%
interest in the limited
liability company LLC
KrasGeoNac (KGN). For further
information see note 3 Acquisition
and disposals.
Asset retirement obligation
Equinor’s estimated asset
retirement obligations
(ARO) have increased
by USD 2,572 million
to USD 17,292 million compared
to
year-end 2019,
mainly due to the decrease
in discount rates which are
reflected within Property,
plant and equipment and
Provisions
and other liabilities
in the Consolidated balance
sheet
Onerous contract
Due to significant
ly reduced expected use of
a transportation agreement
,
Equinor provided in the second
quarter USD 154 million
as
an onerous contract.
In the fourth quarter the
provision has increased
to USD 166 million.
The provision is recognised in
the MMP
segment as an operating
expense in the Consolidated
statement of income and
has been included in the
line item Provisions and
other liabilities in
the Consolidated balance
sheet.
Price review arbitration
Some long-term gas sales
agreements contain price
review clauses, which in
certain cases lead to claims
subject to arbitration.
The exposure related
to price reviews has been
reduced by approximately
USD 1.3 billion due to
settlements
in the second quarter.
The remaining exposure
for gas delivered prior to year
-end is immaterial.
Price review related changes
in the second quarter
represent an income
of approximately USD 150
million before tax and
USD 30 million after tax
.
The amounts have
been reflected in
the Consolidated
statement of income as
revenues
and income tax, respectively.
A dispute between the
Federal Government of Nigeria
and the Governments of Rivers,
Bayelsa and Akwa Ibom States
in
Nigera
In October 2018,
the Supreme Court
of Nigeria rendered
a judgement in a dispute
between the Federal Government
of Nigeria and
the Governments of
Rivers, Bayelsa and Akwa
Ibom States in favour
of the latter.
The Supreme Court judgement
provides for
potential retroactive
adjustment of certain production
sharing contracts in
favour of the Federal Government,
including OML 128
(Agbami). This case
has been withdrawn by
the plaintiff in the second
quarter of 2020 with no impact
on Equinor’s Interim financial
statements.
Dispute with Brazilian
tax authorities
Brazilian tax authorities
issued an updated tax assessment
for 2011
for Equinor’s Brazilian subsidiary
which was party to Equinor’s
divestment of 40%
of the Peregrino field to
Sinochem at that time. The
assessment disputed
Equinor’s allocation of the sale
proceeds
between entities and
assets involved, resulting
in a significantly higher assessed
taxable gain and related
taxes payable in Brazil.
Equinor disagreed with
the assessment and had
the case brought forward
to the second instance
of the Administrative Court
in Brazil
which decided the case
in Equinor’s favour.
Equinor has received confirmation
that the decision is considered
final and non-
appealable. The final
ruling did not have any
impact on Equinor’s Interim
Financial statements.
KKD Oil Sands Partnership
Equinor fourth quarter 2020
41
Canadian tax authorities
have issued a proposal
of re-assessment for
2014 for Equinor’s Canadian
subsidiary which was
party to
Equinor’s divestment
of 40% of the KKD Oil Sands
partnership at that
time. The proposal disputes
the partners allocation
between
entities and assets
involved. Maximum exposure
is estimated to be approximately
USD 396 million.
The ongoing
process of formal
communication with
the Canadian tax authorities,
as well as any subsequent
litigation that may become
necessary,
may take several
years. No taxes will
become payable until the matter
has been finally settled.
Equinor is of the view that
all applicable tax regulations
have been applied in
the case and that Equinor
has a strong position.
No amounts have consequently
been provided for in
Equinor’s
Interim financial statements.
Deviation notices from Norwegian
tax authorities
In respect of the previously
disclosed tax dispute
in Norway regarding the
level of Research & Development
cost to be allocated to
the offshore tax
regime, a Norwegian supreme
court ruling announced
in second quarter and
Equinor’s subsequent correspondence
with the Norwegian
tax authorities in third quarter
has resulted in a reduced
maximum exposure in
this matter to approximately
USD
220 million. Equinor
provides for its best estimate
in the matter.
Suit for an annulment of Petrobras'
sale of the interest
in BM-S-8 to Equinor
In March 2017, the
Union of Workers of
Oil Tankers
of Sergipe (Sindipetro)
filed a class action suit against
Petrobras, Equinor and
ANP - the Brazilian
Regulatory Agency - to seek
annulment of Petrobras'
sale of the interest and operatorship
in BM-S-8 to Equinor,
a
transaction which closed
in November 2016.
There was also an injunction
request aiming to suspend
the assignment, which first
was
granted in April 2017
by a federal
judge, but subsequently
lifted by the federal
court. The injunction request
has now been finally
dismissed by the
courts.
Claim from Petrofac regarding
multiple variation order
requests performed in Algeria
(In Salah)
Petrofac International
(UAE) LLC (PIUL) was awarded
the EPC Contract to execute
the ISSF Project (the In
Salah Southern
Fields Project which
has finalised the development
of four gas fields in
central Algeria). Following
suspension of activity
after the
terrorist attack at
another field in Algeria
(In Amenas) in 2013, PIUL issued
multiple Variation
Order Requests (VoRs)
related to the
costs incurred for stand
-by and remobilisation costs
after the evacuation
of expatriates. Several VoRs
have been paid, but
settlement
of the remaining VoRs
has been unsuccessful.
PIUL initiated arbitration
on 7 August 2020 claiming
an estimated amount
of USD 533
million, of which Equinor
In Salah AS holds a 31,85
%
share. Equinor's maximum
exposure amounts
to USD 170 million. Equinor
provides for its best
estimate in the matter.
During the normal course
of its business Equinor
is involved in legal and
other proceedings, and several
claims are unresolved and
currently outstanding.
The ultimate liability or
asset, respectively,
in respect of such litigation
and claims cannot be
determined now.
Equinor has provided
in its Condensed interim
financial statements for
probable liabilities related
to litigation and claims based
on the
company's best judgement.
Equinor does not expect
that its financial position,
results of operations or
cash flows will be materially
affected by the resolution
of these legal proceedings.
8 Impact of the Covid-19 pandemic and oil price decline
During 2020, the
Covid-19 pandemic has
slowed economic growth
and had dramatic consequences
for energy demand, particularly
mobility fuels. The collapse
in commodity prices seen
in the first half of 2020,
though followed by a partial
rebound in the second half,
significantly impacted
the energy industry and
Equinor by an unprecedented
decrease in short term demand
and increased
uncertainty with regards
to the phase of recovery
and future oil and gas
demand. The increasing momentum
and commitment towards
a transition into a
low carbon future aided
by technological advances
and decreasing cost of renewable
energy has also increased
the
uncertainty in estimating
the future development
in supply and demand. According
to the International
Energy Agency (IEA), Global
energy demand in 2020
was estimated to drop by 5
-6%. The OPEC+ agreement
to continue production
cuts of some 7 mmboe per
day into in the first quarter
of 2021 to clear surpluses
built up over the pandemic
has supported prices
to levels not seen since
January 2020. But second
and third-wave Covid
-19 lockdowns which continue
to dampen demand
are likely to put a cap
on prices in
the short-term. The
successful development
of vaccines and the
ongoing widespread
vaccination effort is
expected to increase
demand as countries
become able to reduce
measures implemented
to eliminate the spread of the
virus, for which we have
observed
new waves of outbreak
of more contagious mutant
versions late in 2020 and
the first quarter of 2021.
The negative impact
of the global pandemic
with the resulting decline
in commodity prices and a
renewed view on effects
expected
from the energy transition
resulted in updates to
Equinor’s view on key financial
assumptions in the third
quarter of 2020, including the
related key sources
of estimation uncertainty,
impacting the financial
statements. These assumptions
continue to apply for the
fourth
quarter of 2020. The
decline in the updated
future commodity price
estimates made in the third
quarter of 2020, and particularly
with
regards to oil, negatively
impacted the estimated
recoverable amount
of several assets in
our portfolio, and impairments
were
recognised for assets
for which the book value
no longer could be supported.
The negative impact was reduced
by the USD 3 billion
action plan implemented
in the spring of 2020 to strengthen
the financial resilience of
the company.
More details on the impairments
recognised and an overview
of Equinor’s price assumptions
have been provided in
note 6 Property,
plant and equipment and
intangible assets.
Equinor fourth quarter 2020
42
Equinor has also
evaluated the reasonable
possible changes in certain
assumptions as of 31
December 2020. The reasonable
possible change in
prices is deemed to be -30%/+30%
for short-term contracts,
and -30%/+30% for the
long-term derivatives,
based
on their duration.
The table below contains the
price risk sensitivities
of Equinor's commodity
-based derivatives contracts.
Equinor
enters into commodity
-based derivative contracts
mainly to manage short
-term commodity risk. However,
since none of the derivative
financial instruments
included in the table below
are part of formal hedging
relationships, any changes
in their fair values would be
recognised in the
Consolidated statement of
income
.
Commodity price sensitivity
31 December 2020
31 December 2019
(in USD million)
- 30%
+ 30%
- 30%
+ 30%
Crude oil and refined products net gain/(losses)
1,025
(1,025)
569
(563)
Natural gas and electricity net gains/(losses)
184
(94)
(33)
49
Due to market developments
and related consequences,
certain Equinor suppliers
and customers have indicated
that contractual
clauses such as those
involving force majeure
are being explored. The
potential impact for Equinor,
if any, is
currently uncertain.
Apart from the financial
impact, Equinor has only
experienced immaterial
effects on production
from assets in operation,
due to
actions taken to maintain
and secure safe production
during the pandemic.
Minor virus outbreaks
at some of our facilities
have
occurred, but effective
measures such as isolat
ion and quarantines combined
with social distancing and
increased sanitation
requirements have
prevented production
shutdown, and operations
have not been significantly
impacted. For projects
under
development, the
Covid-19 pandemic has impacted
progress due to personnel
limitations on offshore
and onshore facilities
/ yards
due to infection control
measures and associated
travel restrictions for migrant
workforce. The situation
is still unpredictable and
may
have additional consequences
for the progress and costs
of our projects.
Actions taken to mitigate
the impact of the pandemic
and commodity price
decline, including the
USD 3 billion action plan
implemented in the
spring of 2020, have had
consequences on investment
level and activity level
in general. Capital expenditure
has
been reduced during 2020,
representing both final reductions
(stopped projects i.e.
based on updated future
price estimates and
break-even levels) and
changes with regards
to scope and timing. As
a result, some value
creation has been cut
or delayed. Part of
cost improvements
and cost cuts identified and
implemented during 2020
as part of the action plan are
expected to be of a
sustainable nature and
impact future cost levels.
Cost related to activities
postponed from 2020
due to the pandemic will
impact cost
when these activities
are carried out.
Equinor complies with
the revised production
permits issued by the
authorities and the unilateral
oil production cuts portioned
out to
relevant fields via their
production licenses, however
these cuts did not have
significant impact on the
total production. As a measure
to maintain activity
in the oil and gas related
industry, the
Norwegian Government
on 19 June 2020 enacted
temporary targeted
changes to Norway’s
petroleum tax system
for investments incurred in
2020 and 2021 and
for new projects with final
investment
decisions submitted
by end of 2022. The changes
are effective from 1 January
2020 and provide companies
with a direct tax
deduction in the special
petroleum tax (56% tax
rate) instead of tax depreciation
over 6 years. One of the
changes is that the
tax uplift
benefit, which has increased
from 20.8%. to 24% will be
recognised over one year
instead of four years.
Tax
depreciation towards the
ordinary corporate tax
(22% tax rate) will continue
with a six-year depreciation
profile. The totality
of the petroleum tax
changes will
increase the profitability
for investments and strengthen
Equinor’s’ liquidity.
9 Subsequent events
On 9 February 202
1,
the board of directors
proposed to declare a dividend
for the fourth quarter of
2020 of USD 0.12 per
share
(subject to annual general
meeting approval). The
Equinor share will trade
ex-dividend 12 May 2021
on the Oslo Børs and
for ADR
holders on the New York
Stock Exchange. Record
date will be 14 May 2021
and payment date will be 27
May 2021.
On 16 November 2020,
Equinor communicated
a new organisational corporate
structure, which will come
into effect on 1 June
2021.
The main change
is that the operating segment
Development & Production
Brazil will be merged
into the operating segment
Exploration & Production
International. In addition,
the operating segments
Exploration will be divided
and merged into Exploration
&
Production Norway
and Exploration & Production
International. Global
Strategy & Business development
will be divided and merged
into the functions
for Chief Financial Officer
and Safety,
Security and Sustainability.
The operating segment
Technology,
Projects &
Drilling will be split
into Technology,
Digital & Innovation and
Projects, Drilling & Procurement.
The current organisational
structure will
remain in place until
the planned implementation
takes effect. The new organisational
corporate structure
will not imply any changes
in the reportable segments.
From the first quarter
of 2021, Equinor will start
reporting Renewables (previously
New Energy Solutions) as
a separate reportable
segment due to the
strategic importance of the
operating segment.
Equinor fourth quarter 2020
43
On 8 January 2021,
The Norwegian Government
announced a new climate
action plan. One proposed
measure to reduce CO2
emissions is to increase
the CO2 tax on offshore
oil and gas production
gradually and with full effect
from 2030. The plan also
proposes increased
offshore methane tax.
Compared to Equinor’s estimates
at 31 December 2020, it
is expected that the cost
increase for Equinor
for the year 2030 will be
approximately USD 0
.4 billion pre-tax. This
is not expected to significantly
impact
impairment assessments
in E&P Norway as of the
first quarter of 2021. The climate
action plan is expected to
be approved by the
Parliament in the
spring of 2021.
On 29 January 2021
,
Equinor closed the agreement
with BP to sell a 50% non
-operated interest in the
Empire Wind and Beacon
Wind
assets for a total
preliminary consideration
USD 1.2 billion,
including USD 0.1 billion
in interim period adjustments
,
with remaining
cash consideration
after the prepayment in 2020
paid at closing.
On 9 February 2021,
Equinor has agreed to divest
its interests in the Bakken
field in the US states of
North Dakota and Montana
to
Grayson Mill Energy,
backed by EnCap Investments,
for a total consideration
of around USD 900 million.
The effective date of the
transaction is 1 January
2021. Closing is subject
to the satisfaction of
customary conditio
ns, including authority approvals.
Equinor fourth quarter 2020
44
Supplementary disclosures
Operational data
Quarters
Change
Full year
Q4 2020
Q3 2020
Q4 2019
Q4 on Q4
Operational data
2020
2019
Change
Prices
44.2
43.0
63.3
(30%)
Average Brent oil price (USD/bbl)
41.7
64.3
(35%)
42.1
39.6
59.3
(29%)
E&P Norway average liquids price
(USD/bbl)
37.4
57.4
(35%)
41.3
39.1
56.1
(26%)
E&P International average liquids price
(USD/bbl)
38.1
59.1
(35%)
34.5
32.2
48.0
(28%)
E&P USA average liquids price (USD/bbl)
31.3
48.4
(35%)
40.6
38.3
56.5
(28%)
Group average liquids price (USD/bbl)
[1]
36.5
56.0
(35%)
367
349
516
(29%)
Group average liquids price (NOK/bbl)
[1]
343
493
(30%)
3.88
1.45
3.88
0%
E&P Norway average internal gas
price (USD/mmbtu) [9]
2.26
4.46
(49%)
1.34
1.13
1.82
(26%)
E&P USA average internal gas price
(USD/mmbtu) [9]
1.32
2.34
(44%)
5.04
2.72
5.31
(5%)
Average invoiced gas prices - Europe
(USD/mmbtu) [8]
3.58
5.79
(38%)
1.99
1.53
2.23
(11%)
Average invoiced gas prices - North
America (USD/mmbtu) [8]
1.72
2.43
(29%)
0.4
(0.1)
3.0
(87%)
Refining reference margin (USD/bbl)
[2]
1.5
4.1
(64%)
Entitlement production (mboe per day)
616
619
619
(0%)
E&P Norway entitlement liquids production
630
535
18%
222
220
273
(19%)
E&P International entitlement liquids
production
236
267
(12%)
145
151
185
(22%)
E&P USA entitlement liquids production
163
181
(10%)
983
991
1,077
(9%)
Group entitlement liquids production
1,029
983
5%
698
654
727
(4%)
E&P Norway entitlement gas production
685
700
(2%)
45
35
64
(30%)
E&P International entitlement gas
production
42
50
(17%)
187
185
188
(1%)
E&P USA entitlement gas production
181
178
2%
930
874
979
(5%)
Group entitlement gas production
908
928
(2%)
1,912
1,865
2,056
(7%)
Total entitlement
liquids and gas production [3]
1,938
1,911
1%
Equity production (mboe per day)
616
619
619
(0%)
E&P Norway equity liquids production
630
535
18%
286
283
350
(18%)
E&P International equity liquids
production
303
354
(14%)
166
173
214
(22%)
E&P USA equity liquids production
187
210
(11%)
1,068
1,076
1,182
(10%)
Group equity liquids production
1,120
1,099
2%
698
654
727
(4%)
E&P Norway equity gas production
685
700
(2%)
Equinor fourth quarter 2020
45
53
40
65
(18%)
E&P International equity gas production
49
62
(21%)
224
224
223
0%
E&P USA equity gas production
216
213
1%
975
918
1,015
(4%)
Group equity gas production
950
975
(3%)
2,043
1,994
2,198
(7%)
Total equity
liquids and gas production [4]
2,070
2,074
(0%)
NES power production
480
319
476
1%
Power generation (GWh)
1,662
1,754
(5%)
Exchange rates
Quarters
Change
Full year
Q4 2020
Q3 2020
Q4 2019
Q4 on Q4
Exchange rates
2020
2019
Change
0.1108
0.1095
0.1097
1%
NOK/USD average daily exchange rate
0.1064
0.1136
(6%)
0.1172
0.1055
0.1139
3%
NOK/USD period-end exchange
rate
0.1172
0.1139
3%
9.0279
9.1321
9.1177
(1%)
USD/NOK average daily exchange rate
9.4006
8.8037
7%
8.5326
9.4814
8.7803
(3%)
USD/NOK period-end exchange
rate
8.5326
8.7803
(3%)
1.1920
1.1685
1.1071
8%
EUR/USD average daily exchange
rate
1.1405
1.1192
2%
1.2271
1.1708
1.1234
9%
EUR/USD period-end exchange rate
1.2271
1.1234
9%
Equinor fourth quarter 2020
46
Health, safety and the
environment
Full year
Full year
Health, safety and the environment
2020
2019
Injury/incident frequency
Total recordable
injury frequency (TRIF)
2.3
2.5
Serious Incident Frequency (SIF)
0.5
0.6
Oil spills
Accidental oil spills (number of)
135
219
Accidental oil spills (cubic metres)
162
8,983
Full year
Full year
Climate
2020
2019
Upstream CO2 intensity (kg CO2/boe)
1)
8.0
9.5
1) Total
scope 1 emissions
of CO2 (kg CO2) from exploration
and production, divided by
total production (boe).
Equinor fourth quarter 2020
47
Reconciliation of net operating income/(loss) to
adjusted earnings
The table specifies
the adjustments made to
each of the profit and loss
line item included in the
net operating income/(loss)
subtotal.
Items impacting net operating income/(loss) in the fourth
quarter of 2020
Equinor
group
Exploration
&
Production
Norway
Exploration
&
Production
Internationa
l
Exploration
&
Production
USA
Marketing,
Midstream
&
Processing
Other
(in USD million)
Net operating income/(loss)
(989)
1,803
(1,376)
(559)
(480)
(378)
Total revenues
and other income
240
15
(41)
-
265
1
Changes in fair value of derivatives
(50)
-
-
-
(50)
-
Periodisation of inventory hedging effect
315
-
-
-
315
-
Impairment from associated companies
1
-
-
-
-
1
Over-/underlift
(24)
17
(41)
-
-
-
Gain/loss on sale of assets
(3)
(3)
-
-
-
-
Purchases [net of inventory variation]
234
-
-
-
(69)
303
Operational storage effects
(69)
-
-
-
(69)
-
Eliminations
303
-
-
-
-
303
Operating and administrative expenses
(28)
(18)
(29)
18
(2)
3
Over-/underlift
(53)
(18)
(35)
-
-
-
Other adjustments
1
-
1
(0)
-
-
Gain/loss on sale of assets
21
-
-
18
-
3
Provisions
3
-
5
-
(2)
0
Depreciation, amortisation and net
impairment losses
983
41
72
211
638
22
Impairment
983
41
72
211
638
22
Exploration expenses
317
-
160
158
-
-
Impairment
315
-
157
158
-
-
Provisions
3
-
3
-
-
-
Sum of adjustments to net operating
income/(loss)
1,746
38
161
387
832
329
Adjusted earnings/(loss) [5]
756
1,841
(1,215)
(172)
352
(49)
Tax on adjusted
earnings
(1,310)
(1,133)
38
(0)
(215)
1
Adjusted earnings/(loss) after tax
[5]
(554)
707
(1,178)
(172)
137
(48)
Equinor fourth quarter 2020
48
Items impacting net operating income/(loss) in the fourth
quarter of 2019
Equinor
group
Exploration &
Production
Norway
Exploration &
Production
International*
Exploration
& Production
USA*
Marketing,
Midstream &
Processing
Other
(in USD million)
Net operating income/(loss)
1,516
1,476
53
7
360
(382)
Total revenues
and other income
168
(12)
77
(0)
291
(189)
Changes in fair value of derivatives
102
(9)
-
-
111
-
Periodisation of inventory hedging effect
180
-
-
-
180
-
Impairment
23
-
-
-
-
23
Over-/underlift
74
(3)
77
(0)
-
-
Gain/loss on sale of assets
(212)
-
-
-
-
(212)
Purchases [net of inventory variation]
556
-
-
-
(36)
591
Operational storage effects
(36)
-
-
-
(36)
-
Eliminations
591
-
-
-
-
591
Operating and administrative expenses
(91)
(10)
(36)
47
(92)
-
Over-/underlift
(46)
(10)
(36)
(0)
-
-
Gain/loss on sale of assets
27
-
-
27
-
-
Provisions
(72)
-
-
20
(92)
-
Depreciation, amortisation and net
impairment losses
1,359
1,284
55
-
-
20
Impairment
1,359
1,284
55
-
-
20
Exploration expenses
43
-
43
-
-
-
Impairment
43
-
43
-
-
-
Sum of adjustments to net operating
income/(loss)
2,034
1,262
140
47
164
422
Adjusted earnings/(loss) [5]
3,550
2,738
192
54
524
41
Tax on adjusted
earnings
(2,364)
(1,979)
(112)
(0)
(233)
(41)
Adjusted earnings/(loss) after tax
[5]
1,186
759
79
55
291
1
* Restated to reflect change to segment
Equinor fourth quarter 2020
49
Items impacting net operating income/(loss) in the full
year
of 2020
Equinor
group
Exploration
&
Production
Norway
Exploration
&
Production
Internationa
l
Exploration
&
Production
USA
Marketing,
Midstream
&
Processing
Other
(in USD million)
Net operating income/(loss)
(3,423)
3,097
(3,565)
(3,512)
359
198
Total revenues
and other income
90
68
(194)
-
213
3
Changes in fair value of derivatives
2
6
-
-
(5)
-
Periodisation of inventory hedging effect
224
-
-
-
224
-
Impairment from associated companies
3
-
-
-
-
3
Over-/underlift
(130)
64
(194)
-
-
-
Gain/loss on sale of assets
(9)
(3)
-
-
(6)
-
Purchases [net of inventory variation]
(168)
-
-
-
127
(296)
Operational storage effects
127
-
-
-
127
-
Eliminations
(296)
-
-
-
-
(296)
Operating and administrative expenses
378
(39)
127
50
245
(4)
Over-/underlift
70
(39)
108
-
-
-
Other adjustments
1
-
1
(0)
-
-
Gain/loss on sale of assets
23
-
-
20
-
3
Provisions
285
-
17
30
245
(7)
Depreciation, amortisation and net
impairment losses
5,715
1,260
1,426
1,938
1,060
32
Impairment
5,934
1,260
1,473
2,109
1,060
32
Reversal of impairment
(218)
-
(47)
(171)
-
-
Exploration expenses
1,345
5
511
829
-
-
Impairment
1,397
5
508
885
-
-
Reversal of impairment
(63)
-
-
(63)
-
-
Provisions
11
-
4
7
-
-
Sum of adjustments to net operating
income/(loss)
7,361
1,294
1,870
2,816
1,645
(265)
Adjusted earnings/(loss) [5]
3,938
4,391
(1,695)
(696)
2,004
(67)
Tax on adjusted
earnings
(3,014)
(2,397)
347
(0)
(1,187)
223
Adjusted earnings/(loss) after tax
[5]
924
1,994
(1,348)
(696)
817
156
Equinor fourth quarter 2020
50
Items impacting net operating income/(loss) in the full
year
of 2019
Equinor
group
Exploration
&
Production
Norway
Exploration
& Production
International*
Exploration
&
Production
USA*
Marketing,
Midstream
&
Processing
Other
(in USD million)
Net operating income/(loss)
9,299
9,631
1,471
(2,271)
1,004
(537)
Total revenues
and other income
(1,022)
(881)
45
(10)
33
(209)
Changes in fair value of derivatives
(291)
(18)
-
-
(273)
-
Periodisation of inventory hedging effect
306
-
-
-
306
-
Impairment
23
-
-
-
-
23
Over-/underlift
166
114
62
(10)
-
-
Gain/loss on sale of assets
(1,227)
(977)
(17)
-
-
(232)
Purchases [net of inventory variation]
508
-
-
-
(121)
628
Operational storage effects
(121)
-
-
-
(121)
-
Eliminations
628
-
-
-
-
628
Operating and administrative expenses
619
9
62
130
418
-
Over-/underlift
(32)
(33)
(2)
3
-
-
Change in accounting policy
1)
123
42
63
18
-
-
Gain/loss on sale of assets
43
-
-
43
-
-
Provisions
485
-
-
66
418
-
Depreciation, amortisation and net
impairment losses
3,429
1,284
(5)
1,924
206
20
Impairment
3,549
1,284
115
1,924
206
20
Reversal of impairment
(120)
-
(120)
-
-
-
Exploration expenses
651
-
43
608
-
-
Impairment
651
-
43
608
-
-
Sum of adjustments to net operating
income/(loss)
4,185
412
145
2,652
537
439
Adjusted earnings/(loss) [5]
13,484
10,043
1,616
381
1,541
(98)
Tax on adjusted
earnings
(8,559)
(7,200)
(633)
(0)
(729)
2
Adjusted earnings/(loss) after tax
[5]
4,925
2,844
982
382
813
(96)
* Restated to reflect change to segment
1) Change in accounting policy for lifting
imbalances.
Equinor fourth quarter 2020
51
Items impacting net operating income/(loss) in the third
quarter of 2020
Equinor
group
Exploration
&
Production
Norway
Exploration
&
Production
Internationa
l
Exploration
&
Production
USA
Marketing,
Midstream
&
Processing
Other
(in USD million)
Net operating income/(loss)
(2,019)
431
(1,328)
(1,606)
551
(67)
Total revenues
and other income
(431)
(59)
(20)
-
(352)
0
Changes in fair value of derivatives
(37)
-
-
-
(37)
-
Periodisation of inventory hedging effect
(315)
-
-
-
(315)
-
Over-/underlift
(79)
(59)
(20)
-
-
-
Purchases [net of inventory variation]
104
-
-
-
(2)
107
Operational storage effects
(2)
-
-
-
(2)
-
Eliminations
107
-
-
-
-
107
Operating and administrative expenses
189
36
67
29
64
(7)
Over-/underlift
90
36
54
-
-
-
Gain/loss on sale of assets
(1)
-
-
(1)
-
-
Provisions
100
-
12
30
64
(7)
Depreciation, amortisation and net
impairment losses
2,353
360
992
990
-
10
Impairment
2,524
360
992
1,162
-
10
Reversal of Impairment
(171)
-
(0)
(171)
-
-
Exploration expenses
583
5
185
393
-
-
Impairment
638
5
183
449
-
-
Reversal of Impairment
(63)
-
-
(63)
-
-
Provisions
8
-
2
7
-
-
Sum of adjustments to net operating
income/(loss)
2,799
342
1,224
1,413
(289)
110
Adjusted earnings/(loss) [5]
780
773
(104)
(193)
262
43
Tax on adjusted
earnings
(509)
(358)
87
0
(240)
2
Adjusted earnings/(loss) after tax
[5]
271
414
(17)
(193)
22
45
Equinor fourth quarter 2020
52
Adjusted earnings after
tax by reporting segment
Quarters
Q4 2020
Q3 2020
Q4 2019*
(in USD million)
Adjusted
earnings
Tax on
adjusted
earnings
Adjusted
earnings
after tax
Adjusted
earnings
Tax on
adjusted
earnings
Adjusted
earnings
after tax
Adjusted
earnings
Tax on
adjusted
earnings
Adjusted
earnings
after tax
E&P Norway
1,841
(1,133)
707
773
(358)
414
2,738
(1,979)
759
E&P International
(1,215)
38
(1,178)
(104)
87
(17)
192
(112)
79
E&P USA
(172)
(0)
(172)
(193)
0
(193)
54
(0)
55
MMP
352
(215)
137
262
(240)
22
524
(233)
291
Other
(49)
1
(48)
43
2
45
41
(40)
1
Total Equinor
consolidation
756
(1,310)
(554)
780
(509)
271
3,550
(2,364)
1,186
Effective tax rates on adjusted
earnings
173.2%
65.3%
66.6%
* E&P International and E&P USA have
been restated to reflect change to segments
Full year
2020
2019*
(in USD million)
Adjusted
earnings
Tax on
adjusted
earnings
Adjusted
earnings
after tax
Adjusted
earnings
Tax on
adjusted
earnings
Adjusted
earnings
after tax
E&P Norway
4,391
(2,397)
1,994
10,043
(7,200)
2,844
E&P International
(1,695)
347
(1,348)
1,616
(633)
982
E&P USA
(696)
(0)
(696)
381
(0)
382
MMP
2,004
(1,187)
817
1,541
(729)
813
Other
(67)
223
156
(98)
2
(96)
Total Equinor
consolidation
3,938
(3,014)
924
13,484
(8,559)
4,925
Effective tax rates on adjusted
earnings
76.5%
63.5%
* E&P International and E&P USA have
been restated to reflect change to segment
Equinor fourth quarter 2020
53
Reconciliation of adjusted
earnings after tax
to net income
Quarters
Reconciliation of adjusted earnings after tax to net income
Full year
Q4 2020
Q3 2020
Q4 2019
(in USD million)
2020
2019
(989)
(2,019)
1,516
Net operating income/(loss)
A
(3,423)
9,299
844
(72)
1,258
Income tax less tax on net financial
items
B
1,552
7,611
(1,834)
(1,947)
257
Net operating income after tax
C = A-B
(4,975)
1,688
1,746
2,799
2,034
Items impacting net operating income
1)
D
7,361
4,185
466
582
1,106
Tax on items
impacting net operating income
E
1,462
948
(554)
271
1,186
Adjusted earnings after tax [5]
F = C+D-E
924
4,925
(410)
(201)
(495)
Net financial items
G
(836)
(7)
(171)
23
8
Tax on net
financial items
H
315
170
(2,416)
(2,124)
(230)
Net income/(loss)
I = C+G+H
(5,496)
1,851
1) Represents the total adjustments to
net operating income made to
arrive at adjusted earnings (i.e. adjusted
purchases, adjusted operating
and administrative expenses, adjusted
depreciation, amortisation and
impairment expenses and adjusted
exploration expenses, each of which
are presented and reconciled to the
relevant related IFRS figure for
the periods presented in this
report).
Adjusted earnings Marketing,
Midstream & Processing
(MMP) break down
Quarters
Change
Adjusted earnings break down
Full year
Q4 2020
Q3 2020
Q4 2019
Q4 on Q4
(in USD million)
2020
2019
Change
226
292
262
(14%)
Natural Gas Europe
1,199
801
50%
22
7
35
(39%)
Natural Gas US
10
(27)
N/A
107
38
96
12%
Liquids
891
538
66%
(3)
(75)
131
N/A
Other
(96)
229
N/A
352
262
524
(33%)
Adjusted earnings MMP
2,004
1,541
30%
Equinor fourth quarter 2020
54
Adjusted exploration expenses
Quarters
Change
Adjusted exploration expenses
Full year
Q4 2020
Q3 2020
Q4 2019*
Q4 on Q4
(in USD million)
2020
2019*
Change
101
142
180
(44%)
E&P Norway exploration expenditures
470
617
(24%)
94
143
242
(61%)
E&P International exploration expenditures
692
821
(16%)
25
65
57
(56%)
E&P USA exploration expenditures
211
147
43%
220
349
479
(54%)
1)
Group exploration expenditures
1,371
1,584
(13%)
2)
969
87
61
>100%
Expensed, previously capitalised
exploration expenditures
1,169
120
>100%
65
(125)
(103)
N/A
Capitalised share of current period's
exploration activity
(394)
(507)
(22%)
315
575
43
>100%
Impairment (reversal of impairment)
1,337
657
>100%
1,569
886
480
>100%
Exploration expenses according
to IFRS
3,483
1,854
88%
(317)
(583)
(43)
>100%
Items impacting net operating income/(loss)
3)
(1,345)
(651)
>100%
1,252
302
437
>100%
Adjusted exploration expenses
2,138
1,203
78%
* E&P International and E&P USA have
been restated to reflect change to segments
1) 20 wells with activity with 8 completed
in the fourth quarter of 2020
compared to 26 wells with 10 completed
in the fourth quarter of 2019.
2) 46 wells with activity with 34 completed
in 2020 compared to 58
wells with 42 completed in 2019.
3) For items impacting net operating
income/(loss), see Reconciliation
of net operating income/(loss)
to adjusted earnings in
the
Supplementary disclosures.
Calculated ROACE
Calculated ROACE based on Adjusted earnings after tax and capital
employed [5]
31 December
(in USD million, except percentages)
2020
2019
Adjusted earnings after tax (A)
924
4,925
Average capital employed (B)
51,823
54,637
Calculated ROACE based on Adjusted
earnings after tax and capital
employed (A/B)
1.8%
9.0%
Equinor fourth quarter 2020
55
Calculation of capital employed
and net debt to capital
employed ratio
The table below reconciles
the net interest-bearing
debt adjusted, the capital
employed, the net debt to
capital employed ratio
adjusted including lease
liabilities and the net debt
to capital employed adjusted
ratio with the most directly
comparable financial
measure or measures
calculated in accordance
with IFRS.
Calculation of capital employed and net debt to capital employed
ratio
At 31
December
At 30
September
At 31
December
(in USD million)
2020
2020
2019
Shareholders' equity
33,873
34,084
41,139
Non-controlling interests
19
24
20
Total equity
A
33,892
34,108
41,159
Current finance debt
5,777
5,277
4,087
Non-current finance debt
32,338
32,193
24,945
Gross interest-bearing debt
B
38,115
37,471
29,032
Cash and cash equivalents
6,757
7,844
5,177
Current financial investments
11,865
10,563
7,426
Cash and cash equivalents and financial
investment
C
18,621
18,407
12,604
Net interest-bearing debt [10]
B1 = B-C
19,493
19,064
16,429
Other interest-bearing elements
1)
627
669
791
Normalisation for cash-build up
before tax payment (50% of Tax
Payment)
2)
-
259
-
Net interest-bearing debt adjusted normalised
for tax payment, including lease
liabilities
[5]
B2
20,121
19,992
17,219
Lease liabilities
4,405
4,218
4,339
Net interest-bearing debt adjusted [5]
B3
15,716
15,774
12,880
Calculation of capital employed [5]
Capital employed
A+B1
53,385
53,172
57,588
Equinor fourth quarter 2020
56
Capital employed adjusted, including
lease liabilities
A+B2
54,012
54,100
58,378
Capital employed adjusted
A+B3
49,608
49,883
54,039
Calculated net debt to capital employed
[5]
Net debt to capital employed
(B1)/(A+B1)
36.5%
35.9%
28.5%
Net debt to capital employed adjusted,
including lease liabilities
(B2)/(A+B2)
37.3%
37.0%
29.5%
Net debt to capital employed adjusted
(B3)/(A+B3)
31.7%
31.6%
23.8%
1) Cash
and cash equivalents
adjustments regarding collateral
deposits classified as cash
and cash equivalents
in the Consolidated
balance sheet but considered
as non-cash in the non
-GAAP calculations as well
as financial investments
in Equinor Insurance
AS classified as current
financial investments.
2) Adjustment
to net interest-bearing debt
for cash build-up in the first
quarter and the third quarter
before tax payment on 1
April
and 1 October.
This is to exclude 50% of
the cash build-up to h
ave a more even allocation
of tax payments between
the four
quarters and hence
a more representative net
interest-bearing debt.
Equinor fourth quarter 2020
57
Net adjusted financial
items 2020
Interest
income
and other
financial
items
Net
foreign
exchange
gains
(losses)
Gains
(losses)
derivative
financial
instrument
s
Interest
and other
finance
expenses
Net before
tax
Estimated
tax effect
Net after
tax
Net adjusted financial items in the fourth quarter of 2020
(in USD million)
Financial items according to IFRS
379
(491)
27
(326)
(410)
(171)
(581)
Foreign exchange (FX) impacts (incl.
derivatives)
19
491
0
0
510
2
0
Interest rate (IR) derivatives
0
0
(27)
0
(27)
0
0
Fair value adjustment financial investments
and other
(272)
0
0
0
(272)
0
0
Subtotal
(253)
491
(27)
0
211
2
212
Adjusted financial items
126
0
0
(326)
(200)
(170)
(369)
Interest
income
and other
financial
items
Net
foreign
exchange
gains
(losses)
Gains
(losses)
derivative
financial
instruments
Interest
and other
finance
expenses
Net before
tax
Estimated
tax effect
Net after
tax
Net adjusted financial items in the full year of 2020
(in USD million)
Financial items according to IFRS
754
(646)
448
(1,392)
(836)
315
(521)
Foreign exchange (FX) impacts (incl.
derivatives)
(10)
646
-
-
636
-
-
Interest rate (IR) derivatives
-
-
(448)
-
(448)
-
-
Fair value adjustment financial investment
and other
(282)
-
-
-
(282)
-
-
Subtotal
(292)
646
(448)
-
(93)
-
(93)
Adjusted financial items
462
-
-
(1,392)
(929)
315
(614)
Net adjusted financial
items 2019
Interest
income
and other
financial
items
Net
foreign
exchange
gains
(losses)
Gains
(losses)
derivative
financial
instrument
s
Interest
and other
finance
expenses
Net before
tax
Estimated
tax effect
Net after
tax
Net adjusted financial items in the fourth quarter of 2019
(in USD million)
Financial items according to IFRS
210
23
(308)
(421)
(495)
8
(487)
Foreign exchange (FX) impacts (incl.
derivatives)
1
(23)
0
0
(22)
0
0
Interest rate (IR) derivatives
0
0
308
0
308
0
0
Fair value adjustment financial investment
(44)
0
0
0
(44)
0
0
Adjusted financial items excluding FX
and IR derivatives
167
0
0
(421)
(254)
8
(246)
Equinor fourth quarter 2020
58
USE AND RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
Non-GAAP financial
measures are defined as numerical
measures that either exclude
or include amounts or
certain accounting items
that are not excluded
or included in the comparable
measures calculated and
presented in accordance with
GAAP (i.e. IFRS).
Management considers
adjusted earnings and adjusted
earnings after tax together
with other non-GAAP financial
measures as
defined below,
to provide a better indication
of the underlying operational
and financial performance
in the period (excluding
financing), and therefore
better facilitate comparison
s
between periods.
The following financia
l
measures may be considered
non-GAAP financial
measures:
●
Adjusted earnings
are based on net
operating income/(loss)
and adjusts for certain
items affecting the income
for the period in
order to separate
out effects that management
considers may not be
well correlated to Equinor’s
underlying operational
performance in the
individual reporting period.
Management considers
adjusted earnings to be
a supplemental measure
to
Equinor’s IFRS measures,
which provides an indication
of Equinor’s underlying operational
performance in the peri
od and
facilitates an alternative
understanding of operational
trends between the
periods. Adjusted earnings
include adjusted revenues
and other income, adjusted
purchases, adjusted operating
expenses and selling,
general and administrative
expenses, adjusted
depreciation expenses
and adjusted exploration
expenses
●
Adjusted earnings after
tax
– equals the sum of net
operating income/(loss)
less income tax in business
areas and adjustments
to operating income
taking the applicable marginal
tax into consideration.
Adjusted earnings after
tax excludes net financial
items
and the associated
tax effects on net financial
items. It is based on adjusted
earnings less the tax effects
on all elements included
in adjusted earnings
(or calculated tax on operating
income and on each
of the adjusting items using an
estimated marginal tax
rate). In addition,
tax effect related to
tax exposure items
not related to the
individual reporting period
is excluded from adjusted
earnings after tax. Management
considers adjusted earnings
after tax, which reflects
a normalised tax charge associated
with its
operational performance
excluding the impact of
financing, to be a supplemental
measure to Equinor’s net
income. Certain net
USD denominated financial
positions are held by group
companies that have
a USD functional curr
ency that is different
from the
currency in which the
taxable income is measured.
As currency exchange rates
change between periods,
the basis for measuring
net financial items for
IFRS will change disproportionally
with taxable income which
includes exchange gains
and losses from
translating the net USD denominated
financial positions into
the currency of the applicable
tax return. Therefore,
the effective tax
rate may be significantly
higher or lower than
the statutory tax rate for
any given period.
Adjusted taxes included
in adjusted
earnings after tax should
not be considered indicative
of the amount of cu
rrent or total tax expense (or
taxes payable) for the
period
Adjusted earnings and
adjusted earnings after tax
should be considered
additional measures rather
than substitutes for net operating
income/(loss) and net
income/(loss),
which are the most directly
comparable IFRS measures.
There are material limitations
associated with the
use of adjusted earnings and
adjusted earnings after
tax compared with the IFRS measures
as such non-GAAP
measures do not
include all the items of
revenues/gains or expenses/losses
of Equinor that are needed
to evaluate its profitability
on
an overall basis.
Adjusted earnings and adjusted
earnings after tax are
only intended to be indicative
of the underlying developments
in trends of our on-going
operations for the production,
manufacturing and
marketing of our products
and exclude pre-and post-tax
impacts of net financial
items. Equinor reflects
such underlying development
in our operations by eliminating
the effects of certain
items that may not be
directly associated
with the period's operations
or financing. However,
for that reason, adjusted
earnings and
adjusted earnings after
tax are not complete measures
of profitability.
These measures should therefore
not be used in isolation.
●
Return
on average capital employed
after tax (ROACE)
– this measure
provides useful information
for both the group and
investors about performance
during the period under
evaluation. Equinor uses
ROACE to measure the return
on capital employed,
regardless of whether
the financing is through
equity or debt. The use
of ROACE should not
be viewed as an alternative
to income
before financial items,
income taxes and minority
interest, or to net income,
which are measures calculated
in accordance with
GAAP or ratios based
on these figures. For
a reconciliation for adjusted
earnings after tax, see Reconciliation
of net operating
income/(loss) to adjusted
earnings as presented
earlier in this report
●
Capital employed adjusted
–
this measure is defined
as Equinor's total equity (including
non-controlling interests)
and net
interest-bearing debt
adjusted
●
Net interest-bearing debt adjusted
– this measure is
defined as Equinor's interest
bearing financial liabilities
less cash and cash
equivalents and current
financial investments, adjusted
for collateral deposits
and balances held by
Equinor's captive insurance
company and balances
related to the SDFI
●
Net debt to capital employed
,
Net debt to capital
employed adjusted, including
lease liabilities
and
Net debt to capital
employed ratio adjusted
– Following implementation
of IFRS 16 Equinor present
s
a “net debt to capital employed
adjusted”
excluding lease liabilities
from the gross interest
-bearing debt.
Comparable numbers
are presented in
the table Calculation of
capital employed
and net debt to capita
l
employed ratio in the report
include Finance lease according
to IAS17, adjusted for
marketing instruction
agreement
●
Organic capital expenditures
– Capital expenditures,
defined as Additions to PP&E,
intangibles and
equity accounted
investments in note
2 Segments to the Condensed
financial interim statements
,
amounted to USD 2.8 billion
in the fourth quarter
of 2020. Organic
capital expenditures are
capital expenditures excluding
acquisitions, recognised
lease assets (RoU assets)
and
other investments with
significant different cash
flow pattern. In the fourth
quarter of 2020, a total of USD 0.9
billion are excluded
in the organic capital
expenditures. Forward
-looking organic capital expenditures
included in this report are not
reconcilable to its
Equinor fourth quarter 2020
59
most directly comparable
IFRS measure without
unreasonable effo
rts, because the amounts
excluded from such IFRS measure
to
determine organic capital
expenditures cannot be
predicted with reasonable
certainty
●
Free cash flow for
the fourth quarter 2020
includes the following line
items in the Consolidated
statement of cash flows:
Cash
flows provided by operating
activities before taxes
paid and working capital
items (USD 3.8
billion), taxes paid (negative
USD 0.4
billion),
cash used in business combinations
(USD 0.0 billion), capital
expenditures and investments
(negative USD 2.5 billion),
(increase)/decrease
in other items interest-bearing
(USD 0.2
billion), proceeds from
sale of assets and businesses
(USD 0.5
billion), dividend paid
(negative USD 0.3
billion) and share buy
-back (USD 0.0 billion),
resulting in a free cash
flow of USD 1.4
billion in the fourth quarter
of 2020
●
Free cash flow for
the full year of 2020
includes the following line
items in the Consolidated
statement of cash flows:
Cash flows
provided by operating
activities before taxes
paid and working capital
items (USD 14.0 billion), taxes
paid (negative USD 3.1
billion), cash used in
business combinations
(USD 0.0
billion), capital expend
itures and investments (negative
USD 8.5 billion),
(increase)/decrease
in other items interest-bearing
(USD 0.2
billion),
proceeds from sale of assets
and businesses, including
USD
0.3 billion received
from the Lundin divestment
included in (increase)/decrease
in financial investments
(USD 0.8 billion), dividend
paid (negative USD 2.3
billion) and share buy
-back (negative USD 1.1
billion), resulting in
a free cash flow of USD 0
.1 billion in the
full year of 2020
Adjusted earnings
adjust for the following
items:
●
Changes in fair value of
derivatives:
Certain gas contracts
are, due to pricing or delivery
conditions, deemed to
contain
embedded derivatives,
required to be carried
at fair value. Also, certain
transactions related to
historical divestments
include
contingent consideration,
are carried at fair value.
The accounting impacts
of changes in fair value
of the aforementioned
are
excluded from adjusted
earnings. In addition,
adjustments are also made
for changes in the unrealised
fair value of derivatives
related to some natural
gas trading contracts. Due
to the nature of these
gas sales contracts, these
are classified as financial
derivatives to be
measured at fair value at the
balance sheet date. Unrealised
gains and losses on these
contracts reflect the
value of the difference
between current market
gas prices and the actual
prices to be realised under
the gas sales contracts.
Only
realised gains and losses
on these contracts are
reflected in adjusted
earnings. This presentati
on best reflects the
underlying
performance of the
business as it replaces the
effect of temporary timing
differences associated
with the re-measurements
of the
derivatives to fair value
at the balance sheet date
with actual realised gains and
losses for the period
●
Periodisation of inventory
hedging effect:
Commercial storage is hedged
in the paper market and
is accounted for using the
lower of cost or market
price. If market prices increase
above cost price, the inventory
will not reflect this increase
in value. There
will be a loss on the
derivative hedging the inventory
since the derivatives
always reflect changes
in the market price. An
adjustment is made
to reflect the unrealised
market increase of the commercial
storage. As a result, loss
on derivatives is
matched by a similar
adjustment for the exposure
being managed. If market
prices decrease below cost
price, the write-down of
the inventory and
the derivative effect
in the IFRS income statement
will offset each other
and no adjustment is
made
●
Over/underlift
: Over/underlift is
accounted for using the
sales method and therefore
revenues were reflected
in the period the
product was sold
rather than in the period
it was produced. The
over/underlift position
depended on a number
of factors related to
our lifting programme
and the way it corresponded
to our entitlement share
of production. The effect
on income for the period
is
therefore adjusted,
to show estimated revenues
and associated costs
based upon the production
for the period to reflect
operational perform
ance and comparability
with peers. Following the
first quarter of 2019, Equinor
changed the accounting
policy
for lifting imbalances.
Adjusted earnings now include
the over/underlift adjustment
●
The
operational storage
is not hedged and
is not part of the trading portfolio.
Cost of goods sold
is measured based
on the
FIFO (first-in, first-out)
method, and includes
realised gains or losses
that arise due to changes in
market prices. These gains
or
losses will fluctuate
from one period to another
and are not considered part
of the underlying operation
s
for the period
●
Impairment and reversal
of impairment
are excluded from adjusted
earnings since they
affect the economics
of an asset for
the lifetime of that asset,
not only the period in
which it is impaired or
the impairment is reversed.
Impairment and reversal of
impairment can impact
both the exploration expenses
and the depreciation,
amortisation and impairment
line items
●
Gain or loss from sales
of assets
is eliminated from the me
asure since the gain or loss
does not give an indication
of future
performance or periodic
performance; such
a gain or loss is related
to the cumulative value creation
from the time the asset is
acquired until it is sold
●
Eliminations (Internal
unrealised profit on inventories)
:
Volumes derived
from equity oil inventory will
vary depending on
several factors and
inventory strategies, i.e.
level of crude oil in inventory,
equity oil used in the refining
process and level of in-
transit cargoes. Internal
profit related to volumes
sold between entities
within the group, and still
in inventory at period end,
is
eliminated according to
IFRS (write down to production
cost). The proportion
of realised versus unrealised
gain will fluctuate from
one period to another
due to inventory strategies
and consequently impact
net operating income
/(loss).
Write-down to production
cost is not assessed
to be a part of the underlying
operational performance,
and elimination of internal
profit related to equity
volumes is excluded
in adjusted earnings
●
Other items of income and
expense
are adjusted when the
impacts on income in the period
are not reflective of
Equinor’s
underlying operational
performance in the reporting
period. Such items
may be unusual or infrequent
transactions but they may
also include transactions
that are significant which
would not necessarily
qualify as either unusual
or infrequent. Other
items are
carefully assessed
and can include transactions
such as provisions related
to reorganisation, early retirement,
etc.
●
Change in accounting policy
are adjusted
when the impacts on income
in the period are unusual or
infrequent, and not
reflective of Equinor’s underlying
operational performance
in the reporting period
For more information
on our use of non-GAAP financial
measures, see section 5.2
Use and reconciliation
of non-GAAP financial
measures in Equinor's
2019 Annual Report and
Form 20-F.
Equinor fourth quarter 2020
60
FORWARD-LOOKING STATEMENTS
This report contains
certain forward-looking statements
that involve risks and
uncertainties. In some
cases, we use words
such as
"ambition", "continue",
"could", "estimate", “intend”,
"expect", "believe", "likely",
"may", "outlook", "plan", "strategy",
"will", "guidance",
“targets”, and similar
expressions to identify
forward-looking statements.
Forward-looking statements
include all statements other
than
statements of historical
fact, including, among others,
statements regarding
Equinor’s plans, intentions,
aims, ambitions and
expectations, includi
ng with respect to the Covid
-19 pandemic including its
impacts, consequences
and risks; Equinor’s response
to
the Covid-19 pandemic,
including measures to protect
people, operations and
value creation, operating
costs and assumptions;
the
commitment to dev
elop as a broad energy company;
the ambition to be a
net-zero energy company
by 2050; future financial
performance, including
cash flow and liquidity; accounting
policies; production
cuts, including their
impact on the level
and timing of
Equinor’s production;
plans to develop fields;
the climate action plan
announced by the Norwegian
government; market outlook
and
future economic projections
and assumptions, including commodity
price assumptions; organic
capital expenditures through
2022;
intention to optimis
e
and mature its portfolio;
estimates regarding exploration
activity levels; ambition
to keep unit of production cost
in
the top quartile of its
peer group; scheduled
maintenance activity and
the effects on equity
production thereof;
completion and results
of acquisitions and
disposals; expected amount
and timing of dividend
payments; and provisions
and contingent liabilities.
You should
not place undue reliance
on these forward-looking
statements. Our actual
results could differ
materially from those anticipated
in the
forward-looking statements
for many reasons.
These forward-looking
statements reflect current
views about future eve
nts and are, by their nature,
subject to significant risks
and
uncertainties because
they relate to events and
depend on circumstances
that will occur in the future.
There are a number of
factors
that could cause
actual results and developments
to differ materially
from those expressed or
implied by these forward-looking
statements, including
levels of industry product
supply, demand
and pricing, in particular
in light of recent significant
oil price volatility
triggered, among other
things, by the changing dynamic
among OPEC+ members
and the uncertainty regarding
demand created by
the Covid-19 pandemic;
the impact of Covid-19;
levels and calculations of
reserves and material
differences from reserves
estimates;
unsuccessful drilling;
operational problems;
health, safety and environmental
risks; natural disasters,
adverse weather conditions,
climate change, and
other changes to business
conditions; the effects
of climate change; regulations
on hydraulic fracturing; security
breaches, including breaches
of our digital infrastructure
(cybersecurity); ineffectiveness
of crisis management systems;
the actions of
counterparties and
competitors; the development
and use of new technology,
particularly in the renewable
energy sector; inability
to
meet strategic object
ives; the difficulties involving
transportation infrastructure;
political and social stability
and economic growth
in
relevant areas of
the world; an inability
to attract and retain personnel;
inadequate insurance
coverage; changes or uncertainty
in or
non-compliance with
laws and governmental regulations;
the actions of the Norwegian
state as majority shareholder;
failure to meet
our ethical and social
standards; the political
and economic policies
of Norway and other oil-producing
countries; non-complianc
e
with
international trade sanctions;
the actions of field partners;
adverse changes in
tax regimes; exchange
rate and interest rate
fluctuations; factors
relating to trading, supply and
financial risk; general
economic conditions; and
other factors discussed
elsewhere
in this report. Additional
information, including information
on factors that may
affect Equinor’s business,
is contained in Equinor’s
Annual Report on Form
20-F for the year
ended December 31,
2019, filed with the U.S. Securities
and Exchange
Commission
(including section 2.11
Risk review - Risk factors
thereof). Equinor’s 2019 Annual
Report and Form 20-F is available
at Equinor’s
website www.equinor.com.
Although we believe that
the expectations reflected
in the forward-looking statements
are reasonable, we
cannot assure you that
our future results, level of
activity, performance
or achievements will meet
these expectations. Moreover,
neither we nor any other
person assume responsibility
for the accuracy and completeness
of these forward-looking
statements. Any
forward-looking statement
speaks only as of the
date on which such
statement is made, and,
except as required
by applicable law, we
undertake no obligation
to update any of these statements
after the date of this report,
whether to make them either
conform to actual
results or changes in
our expectations or
otherwise.
We use certain
terms in this document,
such as “resource” and
“resources” that the SEC’s rules
prohibit us from including in
our filings
with the SEC. U.S. investors
are urged to closely consider
the disclosures in our Form 20
-F, SEC File
No. 1-15200. This
form is
available on our website
or by calling 1-800-SEC-0330
or logging on to www.sec.gov.
Although we believe
that the expectations reflected
in the forward-looking statements
are reasonable, we cannot
assure you that our
future results, level
of activity, performance
or achievements will meet
these expectations.
Moreover, neither
we nor any other person
assumes responsibility
for the accuracy and completeness
of the forward-looking statements.
Unless we are required
by law to update
these statements, we
will not necessarily update
any of these statements
after the date of this
report, either to make
them conform to
actual results or changes
in our expectations.
Equinor fourth quarter 2020
61
END NOTES
1.
The group's
average liquids price
is a volume-weighted
average of the segment
prices of crude oil, condensate
and natural gas
liquids (NGL).
2.
The
refining reference
margin
is a typical average gross
margin of our two refineries,
Mongstad and Kalundborg.
The reference
margin will differ
from the actual margin,
due to variations in
type of crude and other feedstock,
throughput, product yields,
freight
cost, inventory,
etc.
3.
Liquids volumes
include oil, condensate
and NGL, exclusive of
royalty oil.
4.
Equity volumes
represent produced
volumes under a
production sharing agreement
(PSA)
that correspond to
Equinor’s
ownership share
in a field.
Entitlement volumes
, on the other hand,
represent Equinor’s share of the
volumes distributed to
the
partners in the field,
which are subject to deductions
for, among other
things, royalty and the
host government's share of
profit oil.
Under the terms
of a PSA, the amount
of profit oil deducted from
equity volumes will
normally increase with the
cumulative return
on investment to
the partners and/or production
from the licence. Consequently,
the gap between entitlement
and equity volumes
will likely increase in
times of high liquids prices.
The distinction between equity
and entitlement is relevant
to most PSA regimes,
whereas it is not
applicable in most concessionary
regimes such as those
in Norway,
the UK, the US, Canada
and Brazil.
5.
These are
non-GAAP figures.
See Use and reconciliat
ion of non-GAAP financial
measures in the report
for more details. For
ROACE, see table Calculated
ROACE in the Supplementary
disclosures for more
details.
6.
Transactions
with the
Norwegian State.
The Norwegian State,
represented by the Ministry
of Petroleum and Energy (MPE),
is
the
majority shareholder of
Equinor and it also holds
major investments in other
entities. This ownership
structure means that
Equinor participates
in transactions with many
parties that are under
a common ownership structure
and therefore meet the
definition
of a related party.
Equinor purchases liquids
and natural gas from the
Norwegian State, represented
by SDFI (the
State's Direct Financial
Interest). In addition, Equinor
sells the State's natural
gas production in its own name,
but for the
Norwegian State's
account and risk as well
as related expenditures
are refunded by the State.
7.
The production guidance
reflects our estimates
of
proved reserves
calculated in accordance
with US Securities and Exchange
Commission (SEC) guidelines
and additional production
from other reserves not
included in proved reserves
estimates. The
growth percentage
is based on historical
production numbers, adjusted
for portfolio measures.
8.
The group's
average invoiced gas prices
include volumes sold
by the MMP segment.
9.
The internal
transfer price
paid from the MMP segment
to the E&P Norway and
E&P USA segments.
10.
Since different legal
entities in the group lend
to projects and others
borrow from banks, project
financing through external
bank
or similar institutions
is not netted in the balance
sheet and results in
over-reporting of the debt
stated in the balance sheet
compared to the
underlying exposure in
the group. Similarly,
certain net interest-bearing
debt incurred from activities
pursuant to
the Marketing Instruction
of the Norwegian government
are off-set against
receivables on the SDFI. Some
interest-bearing
elements are classified
together with non-interest
bearing elements, and
are therefore included when
calculating the net interest-
bearing debt.
Signatures
Pursuant to the requirements of the
Securities Exchange Act of 1934,
the registrant has duly caused this
report to be signed on its behalf
by
the undersigned, thereunto duly authoris
ed.
EQUINOR ASA
(Registrant)
Dated: 10 February, 2021
By: ___/s/ Svein Skeie
Name: Svein Skeie
Title:
Chief Financial Officer