Equinor (EQNR) Receives Production Licenses in Barents Sea
Equinor ASA EQNR has been awarded two operated production licenses on the 25th licensing round in the Barents Sea by the Ministry of Petroleum and Energy of Norway.
The 25th licensing round, which was announced in November 2020, involves 136 blocks in nine areas, including eight in the Barents Sea and one in the Norwegian Sea. Notably, the licensing round was announced, following the approval of the Norwegian parliament on an updated plan for the Barents Sea development.
The Norwegian Ministry of Petroleum and Energy awarded four exploration licenses to seven oil companies, of which Equinor obtained stakes in two licenses and will be the operator for both. Notably, the company received ownership interests in production licenses (“PL”) 1133 and PL 1134 in the Hoop area of the Barents Sea.
The remaining production licenses, in which the companies received ownership interests, include PL 1055 B and PL 1072 B. Notably, Vaar Energi, a majority-owned unit of Eni E, and Ineos E&P Norge will each operate one license. Royal Dutch Shell Plc RDS.A, Idemitsu Petroleum Norge, Lundin Energy and OMV AG OMVJF received stakes in the same blocks but will not be operators.
Norway’s plan to continue with exploration in the Arctic has been criticized by environmental activists. In early June, environmentalists urged the European Court of Human Rights to discard the country's plan of drilling in the Arctic in search of oil. Despite this, Norway went ahead with the licensing round to continue with the exploration in the Arctic.
Importantly, the award brings opportunities for Equinor to explore volumes near planned infrastructure. The company pledged to explore sites for resources in order to address its needs for profitability and reduced emissions.
Company Profile & Price Performance
Headquartered in Stavanger, Norway, Equinor is one of the leading integrated energy companies in the world.
Shares of the company have outperformed the industry in the past three months. Its stock has gained 9.5% compared with the industry’s 8% growth.
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Zacks Rank & Stocks to Consider
The company currently has a Zack Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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