Equinor announces a sharp fall in capital spending next year and cuts back on buybacks by 70 percent
The company said that it would cut back on share buybacks to 70%, and reduce investment in renewables and low emissions energy. This was announced as the company reported a 22% decline in its fourth-quarter profits, due to lower oil and gas prices.
Analysts say that share buybacks and dividends are unsustainable due to low oil prices.
Equinor CEO Anders Opedal said to reporters that the company was taking steps to improve its free cash flow. This makes us more resilient against lower prices, and allows us maintain a strong balance sheet in turbulent times.
Equinor's shares rose 0.6% at 1258 GMT. The Norwegian energy company's adjusted earnings prior to tax in the third quarter of 2025 dropped from $6.2 billion to $6.2 billion, but still exceeded the $5.93 million consensus analyst poll that was compiled by the company.
The company said that the share buybacks would be reduced to $1.5 billion from $5 billion in previous years, and that the quarterly cash dividend will now increase to $0.39 per shares from $0.37.
Broker Berenberg stated that the total distribution planned to shareholders in 2026 would be about $5.5 billion, down from the $9 billion of last year, and less than analysts' expectations of $5.8 billion.
Analysts say that Equinor rivals Shell, BP and BP could reduce shareholder distributions as a result of lower prices. Equinor is owned by the state and will continue to spend $13 billion on capital expenditures in 2026. However, this amount will be reduced to $9 billion for next year. This reduction is primarily due to lower spending on low-carbon solutions and renewables.
The guidance for 2027 includes U.S. tax credits on investment in Equinor's Empire Wind Project. Spending without them is estimated at around $11 billion.
The company said that capital spending would be directed at maintaining "steady" petroleum production in Norway by 2035, and increasing its international oil output. It will also take a "disciplined approach" to developing its integrated power business.
Equinor anticipates a 3% increase in production this year, compared to the record levels of 2025. This is due to increased output from international markets.
Opedal stated that the oil production from Equinor's Johan Sverdrup field is expected to drop by over 10% at home.
(source: Reuters)
