SerpApi.Org
Norway’s North Sea drilling operations were boosted as the country’s national oil company doubled profits to $11.5bn (£8.5bn).
Equinor, which is 67pc owned by the Norwegian government, delivered the higher earnings after the Iran war drove up global prices for oil and gas.
It meant the state-controlled energy giant was well-placed to fill the shortages created by the conflict, with quarterly profits surging to $11.5bn from $6.5bn last year because of higher levels of oil production and rising prices.
Brent crude prices frequently rose to more than $100 a barrel between April and June this year, well above the $60-$70 during the same period last year.
Norway’s ability to extract maximum income from its oil and gas in the North Sea contrasts sharply with the UK.
Britain has licensed its North Sea resources to mainly overseas companies, which pay tax but which retain all the profits for their own shareholders.
It means Equinor, which is still Britain’s biggest gas supplier, is a major income generator for the Norwegian government.
The company operates globally, but the bulk of its oil and gas still comes from its North Sea and wider continental shelf, the profits from which are subject to Norwegian taxes.
Its results showed it paid taxes to the Norwegian government totalling about $6.6bn. Additionally the government’s 67pc stake gives it a significant share of the post-tax profits.
Anders Opedal, the chief executive of Equinor, said: “Strong production in the second quarter enabled us to capture value from higher prices, contributing to strong cash flow and financial results.
“Reliable energy is important in a volatile world marked by heightened geopolitical tension. Our role is to deliver energy safely and efficiently every day.”
RBC Capital Markets said Equinor had performed much as expected given the price surges caused by the Iran conflict.
“This was a solid operational quarter, with most divisions reporting underlying earnings relatively close to market expectations,” its analysts said.
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The profits of energy giants such as Equinor, Shell and BP are set to remain high as the Iran conflict threatens to expand, with Yemen’s Houthis threatening a blockade of the Red Sea export route.
This coincides with disruption to Russian exports linked to the Ukraine conflict.
However, Equinor’s profit surge angered environmental groups, especially over the company’s involvement in UK oil and gas projects.
Equinor faces growing controversy over its involvement in the Rosebank oil field and Jackdaw gas field projects, where it holds a 50pc share of operator Adura.
One of the first tasks of Miatta Fahnbulleh, the new Energy Secretary, will be to take a decision on whether Jackdaw and Rosebank should be allowed to go ahead.
She has previously expressed strong support for the climate change lobby but refusing the two projects could cause significant tensions with the Norwegian government.
Tessa Khan, the founder of Uplift, a group that calls for a transition away from oil and gas, said: “The UK’s biggest gas supplier, Equinor, is yet again raking in billions in profits while millions of people across the UK are struggling with unaffordable energy bills.
“Now it’s pushing the UK Government to approve the huge Rosebank oil field to keep those profits flowing. Rosebank won’t cut our bills – it’s overwhelmingly oil for export – but it will make Equinor and its part-owner, the Norwegian government, even richer.”
