World Courant
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It has been a troublesome few months for Equinor’s prestigious offshore wind challenge off the coast of New York. Earlier this month it emerged that authorities rejected a plea from Equinor and accomplice BP for higher phrases on three initiatives hit by big value will increase.
Now the Norwegian oil large is taking the implications of the setback and writing down the worth of the initiatives by 300 million {dollars}, equal to three.4 billion kroner. That is evident from Equinor’s third-quarter report, which was printed early Friday morning.
“Offshore wind initiatives on the US Northeast coast are being negatively impacted by value inflation and provide chain bottlenecks. The New York Public Service Fee lately rejected requests for value will increase from Equinor and different firms, and Equinor is now assessing the impression on the corporate’s initiatives,” the press launch mentioned.
Larger guide worth
It must be famous that the USD 300 million depreciation doesn’t represent the whole guide worth of the initiatives. In September, Equinor’s renewable vitality supervisor, Pål Eitrheim, advised us it was round $400 million. This issues the prices incurred by the corporate for the realm, in addition to the investments made to this point within the initiatives, which haven’t but reached the development section and the place no last funding determination has but been taken. As well as, there shall be varied obligations in the direction of suppliers primarily based on concluded contracts.
The article continues beneath the commercialEquinor is in a greater place than its accomplice: the corporate offered half its possession to BP in 2020 for effectively over a billion {dollars}. However the firm has not but given a transparent reply as as to if which means Equinor is within the crimson in New York.
Nonetheless, Equinor and BP have made it clear that the initiatives, Empire Wind 1 and a pair of and Beacon Wind 1, are not worthwhile after inflation, increased rates of interest and issues in provide chains hit full power. When the businesses despatched a proper request to state authorities in June for a major improve within the assured value for the facility they are going to promote from the initiatives, they made it clear that it is perhaps applicable to withdraw in the event that they had been refused.
Value explosion
Subsequently, paperwork on this case have additionally revealed that the businesses’ estimates of complete investments within the three initiatives have exploded to greater than 20 billion {dollars}, or 220 billion kroner. By the businesses’ personal calculations, the extra income they requested and deemed essential to revive profitability quantities to greater than $8 billion in current worth.
This week it additionally emerged that Equinor and BP haven’t acquired approval for his or her software to develop a fourth challenge, Beacon Wind 2. This implies they could be left with out initiatives in New York, which has been a showcase for Equinor’s essential offshore wind challenge. , if the businesses withdraw.
Within the third quarter report, Equinor experiences internet write-downs totaling USD 943 million. Most of it will come from the Norwegian continental shelf and is because of lower-than-expected reserves in one of many firm’s fields, the corporate says. A few of it is usually as a consequence of decrease refinery margins.
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Equinor writes down the offshore wind initiatives in New York by 3.4 billion
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