Equinor (EQNR) Q2 2022 Earnings Call Transcript

For the period ending December 31, 2021

July 27, 2022 5:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the Equinor Analyst Q2 Call. Throughout today’s presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over to Mads Holm, Senior Vice President. Please go ahead.

Mads Holm

Thank you, operator. Ladies and gentlemen, welcome to the Equinor result call for the second quarter of 2022 and thank you for the participation. I’m Mads Holm, Head of Investor relations. This call will be led by Ulrica Fearn, Chief Financial Officer. Ulrica will present the results and then we’ll open up for questions as usual. We aim to complete the call within the hour. Also on the call today we’re joined by Svein Skeie, who is now SVP, New Value Chain; and also [indiscernible], who is the SVP, Group Accounting.

So with that, let me pass straight over to Ulrica for the presentation. Thank you.

Ulrica Fearn

Thank you very much Mads and good morning everyone. Today we present continued strong financial results against the dark backdrop of the war in Ukraine and an energy crisis in Europe. The war continues to influence an already tight energy market and energy prices started to climb already last year and European gas prices reached record levels. This was driven by demand coming back off the pandemic lower than expected production of renewable energy combined with a tight supply side in oil and gas.

Energy markets are also closely linked to the global economy. With energy prices at a high level, we see inflationary pressures. Central banks are raising interest rates and there’s increased uncertainty for global economic development going forward.

On the other hand, when Asia and especially China comes out of COVID, this is expected to drive growth in energy demand. How these and other macroeconomic forces play out is uncharted territory.

On the supply side, we do know that there is limited free capacity of supply. OPEC has increased their quotas; however, several countries do not have the capacity to deliver on these. It underscores the importance of more investment in energy production and the infrastructure to reestablish a balance between the cost of energy, security of supply, whilst decarbonizing the energy sector.