Norwegian state-owned energy giant Equinor has struck a value-neutral asset swap deal with Petoro, a compatriot player, in a bid to harmonize equity interests in the Haltenbanken area on the Norwegian Continental Shelf (NCS).
Thanks to the value-neutral asset swap agreement, Equinor will increase its ownership in the Heidrun field and Noatun discovery and reduce its ownership in the Tyrihans field and the Johan Castberg field, as well as the Carmen and Beta discoveries. Currently, Equinor holds a low equity interest in the Heidrun field of 13.0%, while Petoro has an equity interest of 57.8%. Regarding Tyrihans, Equinor’s ownership is high, at 58.8%, while Petoro does not hold any equity.
Kjetil Hove , Equinor’s Executive Vice President for Exploration and Production Norway, noted: “We have a strategy to continue the development and the value creation on the Norwegian continental shelf and expect to maintain a high production with lower emissions towards 2035. Alignment of ownership around the larger production hubs are important enablers for long-term value creation.”
After the completion of the transaction, Equinor will own 34.4% of Heidrun and 36.3% of Tyrihans, while Petoro will own 36.4% of Heidrun and 22.5% of Tyrihans. Equinor ownership of Johan Castberg will be 46.3%. The effective date of the agreement is January 1, 2025, however, this swap deal is subject to various regulatory approvals and approval by the Norwegian Parliament.
“Although this is a value-neutral swap, this alignment of ownership will add more value to all parties from the Halten-area over time. Balanced partnerships will simplify commercial agreements, lower operating costs, and accelerate new developments with added production at a lower cost,” added Hove.
According to Equinor, Heidrun and Tyrihans are two of the largest producing fields in the Halten area in the Norwegian Sea. The first field is said to be among the ones with the longest remaining life on the NCS. The company revised its cost estimate for its Johan Castberg project in the Barents Sea last year due to the rise in cost within the industry. The production start-up is scheduled for the fourth quarter of 2024.
The Norwegian state-owned giant is also pursuing decarbonization, aiming to curb carbon emissions from the Norwegian Continental Shelf by 160,000 tons of CO2 per year with onshore power.