Major ripple effects of Equinor’s exploration and operations activities in Norway
A new report shows that deliveries to exploration, operation and modification of Equinor-operated fields and onshore plants in Norway exceeded 93 billion NOK in 2022, an increase of approximately 13 percent from the previous year. Over 90 percent went to Norwegian suppliers.
The report was presented at Equinor’s autumn conference by the company’s executive vice president for Exploration and Production Norway (EPN), Kjetil Hove, together with the five trade unions in Equinor: Industri Energi, SAFE, the Norwegian union of managers and executives (Lederne), NITO and Tekna.
“Our activities create substantial national and local ripple effects. Equinor’s exploration, operations and maintenance activities generated 63,000 person-years of employment last year across the country. More than 1700 Norwegian enterprises invoiced a total of 87 billion NOK in these segments. Norwegian suppliers accounting for more than 90 percent demonstrates the capacity, competence and competitiveness of the Norwegian oil and gas hub,” says Hove.
The report is done by Bodø Science Park (KPB) through analyses of supplier lists and actual purchases of goods and services for Equinor-operated fields and onshore plants operated by Equinor, from Hammerfest LNG in the north to the Sleipner field in the south.
This is the first time exploration activities are included, and the second time KPB has delivered this report.
“This report demonstrates what the oil and gas industry means for Norwegian employment. Substantial value is created, and many people are involved in the work. The industry employs people, develops expertise and maintains activity across the country, and we want this to continue. We must keep exploring and producing oil and gas on the Norwegian continental shelf (NCS). At the same time, we will cut emissions and develop new value chains on the shoulders of the oil and gas industry,” says Per Steinar Stamnes of Industri Energi on behalf of the five trade unions in Equinor.
Equinor bought goods and services from the Norwegian supplier industry for operation of NCS fields for 70.6 billion NOK in 2022. Exploration activities generated Norwegian supplies worth 6.1 billion NOK.
Supplies from the Norwegian supplier industry to onshore plants operated by Equinor amounted to 10.2 billion NOK. International supplies to NCS fields and onshore plants totalled 6.5 billion NOK.
The petroleum sector’s supply industry is Norway’s second largest industry in terms of turnover, after the oil and gas operators, and is therefore of significant importance to the Norwegian economy.
According to Statistics Norway, the national turnover of the industry supplying the petroleum sector was 293.8 billion NOK for 2022, an increase of 11 percent from the previous year. We have reason to believe that much of this increase is due to a rise in prices, but also higher activity. Suppliers with direct deliveries to Equinor-operated fields, onshore plants and exploration activities account for around 30 percent of this turnover.
Equinor’s operations and exploration activity has strong ripple effects. A total of 63,000 person-years of employment are associated with this activity, either by Equinor employment (9,800), jobs in Norwegian supplier companies (20,900), or as a result of sub-supplies and consumer effects (32,300).
The report is limited to ripple effects of exploration, operation and modification of Equinor-operated fields and onshore plants in Norway. The total societal ripple effects and value created by Equinor’s Norwegian activities are even higher.
The value realized for owners and society when field products are sold, as well as tax payments, are not included. This year Equinor stands to pay more than 280 billion NOK in tax to the Norwegian state. Environmental and property taxes are not included in the report. The strong ripple effects of field developments in Norway are also excluded.
