BAKU, Azerbaijan, October 27. In the third quarter of 2023, Equinor showcased a strong production performance, with credit going to the exceptional production efficiency at the Peregrino field, Trend reports.
The recent acquisition of the Buzzard field in the UK, following Suncor's involvement in July 2023, also made a favorable contribution to this success. Notably, production for this quarter, as well as the cumulative production for the first nine months of the year, exceeded the previous year's figures. The boost can be primarily attributed to the restart of production at the Peregrino field in mid-July 2022 and the launch of phase 2 in October 2022.
Despite these achievements, the impact of natural production decline in several mature fields, coupled with the prior divestment of the Corrib field, partly offset the overall production increase. Additionally, the effects of production sharing agreements (PSAs) dwindled, primarily due to lower oil and gas prices, coupled with reduced production from various fields under PSAs.
However, the decline in adjusted revenues for the third quarter and the first nine months of 2023 was primarily a result of decreased prices for liquid and gas products. This decline was partially offset by the increase in equity and entitlement production, along with the positive influence of derivatives, which contributed USD 99 million to revenues in the first nine months of 2023.
Examining operating expenses and financial results, Equinor reported an increase in adjusted operating and administrative expenses for the third quarter and the first nine months of 2023, compared to the same periods in the prior year. This was mainly driven by elevated production and maintenance costs associated with turnarounds across various fields. Increased royalties and production fees were linked to the restart of production at the Peregrino field. Furthermore, the upsurge in production at Peregrino and other fields, combined with new investments, contributed to the rise in depreciation expenses. These cost increases were partially mitigated by reduced exploration expenses, where year-on-year figures were influenced by the recapitalization of previously expensed exploration wells in Brazil, amounting to USD 227 million and recorded in the second quarter of 2023.
Equinor's net operating income in 2022 was impacted by impairments totaling USD 1,095 million, primarily associated with the company's exit from its operations in Russia.
---
Follow the author on X: @Lyaman_Zeyn