Norwegian energy giant Equinor made a net profit of $5.18 billion for the first quarter of 2022, buoyed by soaring energy prices and increased natural gas production.

Oil and gas prices have increased as Russia’s invasion of Ukraine added to the uncertainty in already tight markets, and Equinor said the first-quarter highlights included very strong adjusted earnings and free cash flow of $12.7 billion.

The after-tax adjusted earnings of $5.18 billion were up from $1.29 billion in the same quarter last year.

The company delivered adjusted pre-tax earnings of $18 billion, up from $4.09 billion in the same period of 2021.

The Ukraine invasion has driven a rise in commodity prices and volatility, Equinor noted.

Equinor increased production of gas to Europe by 10% to support energy security, but set out a path for exiting Russian joint ventures, leading to an impairment of $1.08 billion.

Dark moment

“The invasion of Ukraine stands as a dark moment for Europe and our thoughts are with all suffering the consequences of the brutal war. After having been in Russia for three decades, we saw the situation as untenable and acted decisively by stopping new investments into Russia and by starting the process of exiting Equinor’s Russian joint ventures,” Equinor chief executive Anders Opedal said.

“Exiting Russia will heavily impact our employees, and it leads to impairments of our assets in the country this quarter”.

Opedal said a strong operational performance kept oil and gas production above 2.1 million barrels of oil equivalent per day in the quarter, down slightly from 2.2 million boepd in the same period in 2021.

Equinor’s Norwegian upstream division increased production by 4%, including a 10% increase of gas to Europe.

“We have optimised the gas production to deliver higher volumes, and Hammerfest LNG is on track for a safe start-up on 17 May.”

Equinor reported progress on all strategic priorities and a continued focus on costs and capital discipline.

The company highlighted installation of the fifth and final platform of the Johan Sverdrup’s development second phase, ongoing assembly of turbines for the Hywind Tampen floating wind farm, and being awarded the Smeaheia and Polaris carbon dioxide storage licences.

Opedal also noted that production from the first wells for increased recovery at Brazil's Roncador field are on stream.

Production from Martin Linge and increased production from Gina Krog and Gullfaks partially offset the effects of expected decline and sale of Bakken assets in the US, Equinor said.

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