Equinor is no stranger to Latin America, where its oil and gas projects in Brazil and Argentina have long been a concern for environmentalists. However, the company’s 2022 financial report, released on February 8, came as a surprise to many. Despite the ongoing climate crisis, Equinor reported a record-breaking total annual revenue of $74.9 billion, the highest in its 51-year history.
More precisely, it’s important to note that out of the $74.9 billion, net profits (without taxes and other costs) were $28.7 billion. This may seem like considerably less, but there are two important points to keep in mind:
- Equinor’s net profit for 2021 was $10 billion, which means that the company almost tripled its income compared to the previous year.
- What is paid in taxes in some countries, can be collected as fossil fuel subsidies in others.
Unfortunately, Equinor is not alone in posting record profits. Other major oil and gas corporations such as ExxonMobil, Shell, and British Petroleum (BP) have also reported significant financial gains.
How was Equinor able to achieve record-breaking profits?
In its latest financial report, Equinor boasts about bringing seven new oil and gas projects online in 2022, adding around 200,000 barrels of oil equivalent per day to its production capacity. The company continues to prioritize fossil fuel projects and claims to be making progress in an already oversaturated and highly competitive market. Furthermore, Equinor has plans to submit 13 additional development and operations proposals by 2023.
However, the massive earnings of Equinor cannot be justified by their so-called progress alone. The Russian war in Ukraine can easily explain those gains. World energy prices reached their highest since the outbreak of the war last year, when Putin decided to close the Russian gas tap with which he supplied many European countries. The war increased concerns about oil and gas supplies, and started an energy crisis that began with an impact in Europe but has negative repercussions around the world. Many were affected, especially during the winter. Those who fully benefited were the oil and gas companies, which today proudly show off their record profit reports.
Equinor in Latin America
The company operates oil, gas, wind, and solar projects in 30 countries around the world. Within Latin America, Equinor is present in Argentina and Brazil.
Equinor established a presence in Argentina in 2017, and the following year, it inaugurated an office in Buenos Aires.
In the Argentinian Neuquén province, the company has a stake and operates two fracking licenses in the Vaca Muerta project. :
- Equinor holds a 50% stake in Bajo del Toro, with the remaining 50% owned by YPF.
- The Bandurria Sur producing block is jointly owned by Equinor and Shell, with a 60% interest split evenly between them. They formed a partnership called Bandurria Sur Investments for this purpose. YPF, the operator, owns the remaining 40%.
Equinor has held a stake in the 117-megawatt Guañizuil 2A solar park in the San Juan province since June 2018.
In the Argentine Sea, Equinor holds exploration rights in eight blocks, with six as the operator and two as a partner, spread across the north and south basins. Since the announcement of its activities, the company has been met with activism as the first three blocks to begin exploring were awarded to Equinor. These blocks are located only 300 kilometers from the coastal town of Mar del Plata, a popular tourist attraction and home to a thriving fishing and port industry.
In 2021, environmental activists successfully pressured the courts to temporarily suspend Equinor’s explorations in the Argentine Sea. However, in early 2022, the court lifted the suspension and allowed the company to proceed with its plans.
Equinor has been present in Brazil since 2001, with a focus on oil and gas exploration and production, as well as renewable energy.
Equinor’s first project in Brazil was Peregrino, an oil production field located in the Campos Basin off the coast of Rio de Janeiro. This field is the largest operated by Equinor outside of the Norwegian continental shelf.
Subsequently, Equinor added new oil and gas assets to its project portfolio, including the Pão de Açúcar, Gávea, and Seat, fields, which were discovered in the BM-C-33 block in the Campos Basins; as well as the Bacalhau, field in Santos, where drilling operations commenced at the end of 2022.
Despite companies like Equinor setting all-time profit records, it is the citizens of the countries in which they operate who bear the environmental, social, and economic costs. It’s time to hold these companies accountable and demand changes.