Norway’s Equinor saw its profits slide by 98% – a drop of £3.8billion – year-on-year as the Covid-19 pandemic and oil price crash took effect.
The energy giant is the latest in a line of oil majors to be struck by the commodity price drop, which saw the firm take write-downs of £1.9bn for its assets, a large chunk being in Norway and onshore US.
Despite achieving record high production in the first quarter of 2020, partly due to the Mariner field in the UK, chief executive Eldar Saetre said Equinor will “prioritise value over volume” going forward.
Equinor has already started activity reductions, particularly in the US onshore, and will consider more as necessary.
Pre-tax profits in Q1 were £65.7million, down from £3.9billion in the same period last year, while daily production was up 3% to 2.2million barrels of oil equivalent per day.
The firm has scrapped any further production guidance for the rest of the year due to the crisis, but said it expects annual growth of 3% on average between 2019 and 2026.
Equinor already announced a $3billion (£2.4bn) “action plan” to deal with the economic crisis, including cancelling its share buyback programme and cutting the shareholder dividend by two-thirds.
Mr Saetre said: “Our financial results in the quarter were impacted by the lower commodity prices. However, we delivered strong operational performance with record high production and solid cash flow under these market conditions.
“Uncertainty remains high with very low commodity prices and increased differentials towards the end of first quarter and in the start of the second quarter.
“We will continue to prioritise value over volume and have already reduced activity, particularly in the US onshore. We will consider further activity reductions and use the flexibility we have in our portfolio as necessary.”
