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Equinor Awards $10B in Maintenance Contracts to Supplier Companies
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Key Takeaways
EQNR awards a NOK100B, five-year maintenance and modification contract for its assets starting in 1H26.
EQNR states ageing NCS assets need upgrades to support production and energy supply to Europe by 2035.
EQNR expects 4,000 man-years of work, with suppliers supporting long-term efficiency and production goals.
Equinor ASA (EQNR - Free Report) awarded a contract worth around NOK 100 billion ($9.9 billion) to seven supplier companies for maintenance and modification of its offshore installations and onshore plants.
The contract is for five years with two extension options, one for two years and the other for three years. The contract will be in effect in the first half of 2026.
According to EQNR, the Norwegian Continental Shelf (NCS) will remain EQNR’s main source of energy production, and will need maintenance and upgradation to lower costs, as NCS is ageing. This maintenance and modification work aligns with Equinor’s aim to continue daily production of 1.2 million barrels of oil and gas to reliably supply Europe until at least 2035.
To achieve its goal, EQNR is partnering with Norwegian suppliers to adopt smarter, more efficient ways of working through long-term partnerships. EQNR expects this contract to generate 4,000 man-years of work.
However, to support its goal, Equinor will invest around NOK 60-70 billion annually while planning to drill 250 exploration wells for discoveries, along with 600 wells to enhance production from its active fields.
EQNR plans to conduct annual repair and maintenance on 300 wells, while modifying 2,500 projects, and developing more than 75 subsea projects and connecting them to existing platforms and pipelines.
Aibel AS, Aker Solutions and Wood Group Norway AS are the three newcomers among the seven suppliers who have been allocated responsibility for installations on the NCS. However, the final portfolio allocation will be made upon the signing of the contracts, which is scheduled for week four.
This maintenance and upgradation work, which comprises planning, engineering, installation and execution, will allow Equinor to generate predictable and enhanced cash flow. With the West Texas Intermediate crude prices trailing below $60 per barrel, the upstream business of EQNR is under pressure. The U.S. Energy Information Administration predicts the crude price to decrease further, implying that EQNR’s upstream business will remain under pressure in the coming days.
Equinorcurrently carries a Zacks Rank #5 (Strong Sell).
Some other key players in the integrated oil and gas space whose business models are vulnerable to crude price volatility are Chevron Corporation (CVX - Free Report) , Exxon Mobil Corporation (XOM - Free Report) and BP p.l.c. (BP - Free Report) . CVX, XOM and BP, each carrying a Zacks Rank #3 (Hold) at present.
Chevron, headquartered in Houston, TX, extracted oil for the first time from its South N’dola platform in Angola in December.
With around 100,500 employees, integrated energy giant BP operates across 61 countries and has a daily upstream production of 2.4 million oil-equivalent barrels.
Like CVX, XOM is an integrated energy giant that engages across the entire energy chain, from extraction and refining to its final products.
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Equinor Awards $10B in Maintenance Contracts to Supplier Companies
Key Takeaways
Equinor ASA (EQNR - Free Report) awarded a contract worth around NOK 100 billion ($9.9 billion) to seven supplier companies for maintenance and modification of its offshore installations and onshore plants.
The contract is for five years with two extension options, one for two years and the other for three years. The contract will be in effect in the first half of 2026.
According to EQNR, the Norwegian Continental Shelf (NCS) will remain EQNR’s main source of energy production, and will need maintenance and upgradation to lower costs, as NCS is ageing. This maintenance and modification work aligns with Equinor’s aim to continue daily production of 1.2 million barrels of oil and gas to reliably supply Europe until at least 2035.
To achieve its goal, EQNR is partnering with Norwegian suppliers to adopt smarter, more efficient ways of working through long-term partnerships. EQNR expects this contract to generate 4,000 man-years of work.
However, to support its goal, Equinor will invest around NOK 60-70 billion annually while planning to drill 250 exploration wells for discoveries, along with 600 wells to enhance production from its active fields.
EQNR plans to conduct annual repair and maintenance on 300 wells, while modifying 2,500 projects, and developing more than 75 subsea projects and connecting them to existing platforms and pipelines.
Aibel AS, Aker Solutions and Wood Group Norway AS are the three newcomers among the seven suppliers who have been allocated responsibility for installations on the NCS. However, the final portfolio allocation will be made upon the signing of the contracts, which is scheduled for week four.
This maintenance and upgradation work, which comprises planning, engineering, installation and execution, will allow Equinor to generate predictable and enhanced cash flow. With the West Texas Intermediate crude prices trailing below $60 per barrel, the upstream business of EQNR is under pressure. The U.S. Energy Information Administration predicts the crude price to decrease further, implying that EQNR’s upstream business will remain under pressure in the coming days.
Equinorcurrently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some other key players in the integrated oil and gas space whose business models are vulnerable to crude price volatility are Chevron Corporation (CVX - Free Report) , Exxon Mobil Corporation (XOM - Free Report) and BP p.l.c. (BP - Free Report) . CVX, XOM and BP, each carrying a Zacks Rank #3 (Hold) at present.
Chevron, headquartered in Houston, TX, extracted oil for the first time from its South N’dola platform in Angola in December.
With around 100,500 employees, integrated energy giant BP operates across 61 countries and has a daily upstream production of 2.4 million oil-equivalent barrels.
Like CVX, XOM is an integrated energy giant that engages across the entire energy chain, from extraction and refining to its final products.