Norway's Equinor doubles share buyback as Iran war boosts cash flow
Equinor's Strategic Response to Middle East Conflict and Market Dynamics
By Nerijus Adomaitis, Nora Buli and Siddharth Cavale
OSLO/NEW YORK, June 16 (Reuters) - Norway's Equinor said on Tuesday it will increase its share buybacks, returning more cash to owners as the war in the Middle East has boosted the price of oil and gas and sharply lifted the company's earnings.
Share Buyback Expansion and Financial Strategy
Majority state-owned Equinor said in a strategy update it now plans to spend $3 billion on buying back its own shares this year, up from $1.5 billion projected in February before the U.S.-Israeli attack on Iran.
CEO Statement and Company Outlook
"Demand continues to grow and Equinor is uniquely positioned to provide reliable energy," CEO Anders Opedal said in a statement, adding that the company expected to deliver "superior returns" towards 2030.
Production Growth Targets
The company aims to increase its oil and gas output by 150,000 barrels of oil equivalent per day (boed) by 2030 to a total of 2.3 million boed, it said.
It reiterated plans to increase its international output by 30% to some 950,000 boed in 2030, helped by new projects expected to come on stream in Brazil, the UK and the U.S.
International Expansion and Opportunities
Equinor's head of international operations Philippe Mathieu also said the company saw "lots of opportunities" in Angola, where it held a number of exploration prospects.
Opedal told Reuters that Equinor could also consider merger and acquisition opportunities, focusing on core markets such as Brazil, where it fully owns certain exploration blocks and could bring in new partners.
Shareholder Returns and Market Performance
SHAREHOLDER RETURNS
Dividend and Buyback Plans
Going forward the company plans to raise its quarterly cash dividend by 5% per year, it said.
Equinor plans annual share buybacks of between $2 billion and $4 billion from 2027, based on oil prices of $60 to $80 per barrel and European gas prices of $7 to $11 per million British thermal units (MMBtu), balance sheet strength, and the macro economic outlook, it said.
Investor Strategy Update and Financial Results
The group, which is 67% owned by the Norwegian government, is due give a strategy update to investors in New York later on Tuesday, marking the 25th anniversary of its 2001 listing on the New York Stock Exchange.
Equinor's second-quarter pretax profit, due to be released next month, is projected to almost double year-on-year to $12.3 billion, according to analysts polled by LSEG, which would make it the group's strongest result since the third quarter of 2022.
Share Price Reaction and Market Sentiment
The company's share price soared after the outbreak of the Iran war on February 28 and is up 37% year-to-date even after giving up some gains in recent weeks on the prospect of a deal to end hostilities between Washington and Teheran.
On Tuesday, Equinor's Oslo-listed shares closed down 0.6%, as Brent crude futures fell more than 4% on hopes that an interim U.S.-Iran deal could allow oil exports from the Gulf producers via the Strait of Hormuz.
(Reporting by Nerijus Adomaitis and Nora Buli in Oslo and Siddharth Cavale in New York; Editing by Terje Solsvik and David Gregorio)