Detailed narrative
Strategic priorities and capital allocation for 2026-27
Equinor set three key messages: positioning for long-term shareholder value, firm action on free cash flow (a ~$4B two-year capex cut and cost discipline), and continued oil-and-gas production growth. Capital is concentrated ~60% to the NCS (16 projects in execution in 2026, many low-breakeven tie-ins), ~30% to international oil and gas (targeting >900,000 boe/d by 2030), and ~10% to an integrated power business focused on delivering sanctioned offshore wind.
Limited investment is expected outside these three areas. A full 2030 strategy will be presented at the June Capital Markets Day.
Empire Wind: execution on track amid legal and tariff uncertainty
Two stop-work orders hit Empire Wind in 2025 (the first lifted in May; a second, citing national security, came just before Christmas). A January preliminary injunction allowed construction to resume, with a continued legal process and a merits hearing expected within a couple of months.
The project is now over 60% complete — all monopiles, the offshore substation and almost 300 km of subsea cables installed. Total capex rose to ~$7.5B (from tariffs and the first stop-work order) with ~$3B remaining and residual tariff exposure.
It qualifies for U.S. tax credits with a ~$2.5B cash effect; $2.7B of project financing has been drawn with $400M remaining this year.
U.S. gas: a strengthened, high-value position
U.S. onshore gas (Marcellus) has become a core value driver, delivering ~$1 billion of cash flow from operations in 2025 as production rose 45% to ~300,000 boe/d on well-timed acquisitions and captured gas prices >50% above 2024. Unit production cost is around $1 per barrel.
Equinor markets the gas itself and adds value through trading, pipeline capacity and access to premium markets (New York City, Toronto). A $2 U.S. gas price move now has a similar after-tax cash effect as in Norway despite U.S. gas being only ~1/3 of the Norwegian gas position — giving Equinor upside leverage to U.S. price spikes.
Transforming how Equinor develops the NCS
With the elephant fields past and smaller discoveries ahead, Equinor is undertaking its largest operating-model change since the 2007-08 StatoilHydro merger. It has redesigned ~70 work processes and is reorganizing project, drilling and onshore operating units along centralized functional lines.
Decision-making moves to grouped, twice-yearly lump approvals rather than 7-8 sequential gates per project. The portfolio holds ~75 subsea tie-in projects over 10 years; the goal is to cut discovery-to-production time from 5-7 years to 2-3 years and drive 200-300% exploration efficiency gains to sustain NCS production well into the next decade.
Portfolio high-grading and divestments
Equinor announced the $1.1B divestment of onshore Argentina assets and completed the Peregrino sale, with combined 2026 proceeds expected above $1.1B. The Adura JV with Shell created a leading, self-funded U.K. continental-shelf operator covering all Rosebank capex, expected to distribute >50% of CFO from H1 2026 and >$1B in dividends to Equinor over 2026-27 — turning the U.K. book cash-positive.
Cumulative divestments exceed $6B since 2024, funding reinvestment into long-life onshore U.S. gas and a lower-carbon, higher-free-cash-flow international portfolio.
Energy-transition reset: CCS and hydrogen markets stall
Management scaled back power and low-carbon capex, reflecting a materially weaker market than assumed 2-3 years ago. Customers who once sought hydrogen and CO2 transport/storage have postponed emissions targets beyond 2030, head-of-terms hydrogen contracts were cancelled, and the Eemshaven hydrogen project was stopped before FEED.
Equinor will keep a high bar on new offshore-wind commitments (including its Ørsted stake), maintain a few low-cost CCS options (building on Northern Lights and Northern Endurance), and invest only when long-term contracts, lower costs and robust returns are in place.
Financial framework, distribution and cost
Equinor prioritizes a robust, growing cash dividend, then investment in a low-breakeven portfolio (average breakeven ~$40, 25% IRR at $65 oil, 2.5-year payback), backed by a strong balance sheet and ~$20B liquidity. It will lean on the balance sheet in 2026 (tax lag, Empire Wind phasing📎) and expects stronger 2027 free cash flow.
Cost actions target a 10% reported OpEx/SG&A cut in 2026 (flat underlying); renewables OpEx/SG&A fell 27% in 2025, and AI already saved ~$130M in 2025 with more expected via NCS 2035 and further AI deployment.