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MarketScreener Homepage  >  Equities  >  Oslo Bors  >  Equinor ASA    EQNR   NO0010096985

EQUINOR ASA

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$30,000 turkey highlights Equinor's 'control problems' in U.S.

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10/09/2020 | 11:37am EDT
Press conference at Equinor

LONDON (Reuters) - A report on Norwegian energy firm Equinor's loss-making investments in the United States detailed significant problems the state-controlled company should have dealt with faster, its chair and chief executive said on Friday.

Equinor made a series of acquisitions of onshore and offshore petroleum reserves in the United States in the years before the 2014-2016 oil price crash, eventually leading to accumulated losses and write-offs of $20.4 billion dollars.

In June, Norway's energy minister said Equinor must be more transparent about its foreign businesses.

"Equinor has recorded large financial losses in the US. These were mainly driven by an ambitious growth strategy and investments that were based on overly optimistic price assumptions," Equinor's chairman Jon Erik Reinhardsen said.

"Rapid growth for a period led to significant control problems. The board and management should have seen and addressed this sooner."

The review, led by a PWC accountant Eli Moe-Helgesen, was based on more than 120 interviews and documents dating back to 2005, Equinor said.

It revealed, among many things, that Equinor bought a turkey at a charity rodeo in Houston for $30,000; just one of many decisions the report criticised.

It referred to Equinor's "limited onshore competence experience in senior leadership". It said the company did not properly check if assets would make money at lower prices and key risks were "not sufficiently understood and challenged by decision makers".

"We still see room for improvement, and the recommendations reflect this. They primarily cover how Equinor acquires and integrates assets and companies outside its core business," said Moe-Helgesen.

"This is tough reading for many. We made investments that were no longer robust when the markets turned, and we should have seen the control problems in the onshore business earlier," said Equinor CEO Eldar Saetre.

Norway's Petroleum Minister Tina Bru said the report was thorough and "paints a picture of a company that underestimated the task they took on, overestimated their own abilities, took too high a risk and reacted too late to address the problems."

(Reporting by Shadia Nasralla, additional reporting by Nerijus Adomaitis, editing by Louise Heavens and Elaine Hardcastle)


Stocks mentioned in the article
ChangeLast1st jan.
EQUINOR ASA -1.37% 122.45 Delayed Quote.-29.32%
LONDON BRENT OIL -1.33% 40 Delayed Quote.-37.71%
NORWEGIAN ENERGY COMPANY ASA -0.79% 125 Delayed Quote.-44.12%
US DOLLAR / TURKISH LIRA (USD/TRY) 0.82% 8.26099 Delayed Quote.37.82%
WTI -1.81% 38.09 Delayed Quote.-36.11%
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Financials (USD)
Sales 2020 45 185 M - -
Net income 2020 -274 M - -
Net Debt 2020 18 396 M - -
P/E ratio 2020 -224x
Yield 2020 3,91%
Capitalization 43 885 M 44 222 M -
EV / Sales 2020 1,38x
EV / Sales 2021 1,09x
Nbr of Employees 21 412
Free-Float 31,9%
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Technical analysis trends EQUINOR ASA
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Mean consensus OUTPERFORM
Number of Analysts 25
Average target price 16,88 $
Last Close Price 13,48 $
Spread / Highest target 67,5%
Spread / Average Target 25,3%
Spread / Lowest Target -13,4%
EPS Revisions
Managers
NameTitle
Eldar Sśtre President & Chief Executive Officer
Jon Erik Reinhardsen Chairman
Jannicke Nilsson Chief Operating Officer
Lars Christian Bacher Chief Financial Officer & Executive Vice President
Anders Opedal Executive VP-Technology, Projects & Drilling
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