Norway cash offsets wind and decline risks
- Equinor still makes most of its money from oil and gas, especially offshore Norway.
- Management is cutting $4B of power and low-carbon CapEx for 2026 and 2027 to protect cash returns.
- The Johan Sverdrup field is now a real watch item, with production expected to fall more than 10% in 2026.
- Empire Wind is the main sore spot after stop-work orders and total expected CapEx of about $7.5B.
- The story is balanced: strong cash and buybacks, but weaker growth, impairments, and political risk.
Cash machine with tougher edges
Equinor is still one of Europe's key oil and gas companies. The bull case starts in Norway, where fields like Troll, Oseberg, Johan Castberg, and Johan Sverdrup give the company deep production, high tax payments, and large cash flow. Management is also targeting a $1.5B share buyback for 2026.
The company has been cutting away lower-return parts of the portfolio. It exited Nigeria and Azerbaijan, sold Peregrino in Brazil for $3.5B, and agreed to sell Argentina onshore assets for $1.1B. In the UK, the Adura venture with Shell moves the region from heavy spending to cash received through dividends.
The bear case is not small. Johan Sverdrup, the most important oil field in the portfolio, has entered decline and is expected to drop more than 10% in 2026. E&P International took $851M of impairment losses in 2025, mainly from UK and Brazil assets. Midstream, Marketing and Processing also looks less special than during the gas crisis, with guidance now around $400M of adjusted operating income per quarter.
Renewables remain the hardest part of the story. Equinor is cutting $4B of power and low-carbon capital spending for 2026 and 2027, which protects cash but lowers the growth story. Empire Wind could still improve if legal fights clear and $2.5B of US investment tax credits are realized, but the project has already faced stop-work orders and higher costs.
Oil funds the transition
Equinor finds, produces, transports, trades, and sells energy. The company earns the bulk of its profit from oil and gas production, then uses trading, pipelines, refineries, and power projects to move and sell that energy.
The center of the model is E&P Norway. These are offshore assets on the Norwegian Continental Shelf. They have high taxes, but they also carry big scale and long operating history. In 2025, E&P Norway produced 1,410 thousand barrels of oil equivalent per day and delivered $24.1B of net operating income.
Management has made a clear choice: returns come before growth targets. That is why Equinor is cutting low-return renewables spending, canceling early hydrogen projects, and using its Ørsted stake as a lower-CapEx way to stay exposed to offshore wind.
Where it breaks is also clear. Oil and gas prices can move fast. European gas is tied to weather, Asian LNG demand, and politics. At the same time, offshore wind can absorb billions before producing cash, and governments can change the rules after a project has started.
What Equinor sells
Norwegian offshore oil and gas
This is the heart of the company. Troll, Oseberg, Johan Castberg, and Johan Sverdrup drive most of the profit, although Sverdrup is now moving into decline.
International oil and gas
Equinor is shrinking and upgrading this portfolio. Bacalhau started production in October 2025, while Nigeria, Azerbaijan, Peregrino, and Argentina onshore have been sold or agreed for sale.
US oil and gas
The US business includes Appalachia gas and offshore assets. In 2025, entitlement production rose 27%, helped by higher Appalachia output.
Midstream, Marketing and Processing
This unit sells and trades gas, liquids, LNG, power, and refined products. It is still important, but management now guides to about $400M of adjusted operating income per quarter.
Renewables
The portfolio includes onshore power in Brazil and Poland and offshore wind in the UK and US. Empire Wind is the key project, but it has faced stop-work orders and expected total CapEx of about $7.5B.
Carbon capture and low carbon
Northern Lights is ready to receive CO2, giving Equinor a real carbon storage platform. The company is still moving carefully because low-carbon markets are developing more slowly than expected.
The reported mix
Mix uses 2025 total revenues and other income by reported segment before Other and eliminations, from the 2025 Form 20-F. MMP looks very large because trading records big sales and purchases, while E&P Norway carries most operating profit.
What can go wrong
Johan Sverdrup decline
High impact · High oddsJohan Sverdrup is a major profit driver and is now past its peak. Management expects lower production in 2026, with the internal view pointing to a drop of more than 10%. Infill drilling may help, but the full decline curve after 2026 is still an open question.
Empire Wind cost and legal risk
High impact · Medium oddsEmpire Wind has already received two stop-work orders. A preliminary injunction allowed construction to resume, but total expected CapEx has risen to about $7.5B. Future tariffs, legal rulings, or supply chain problems could still hurt returns.
European gas price swings
High impact · Medium oddsEquinor sells a lot of gas into Europe. Prices can swing on weather, European demand, Asian LNG buying, and Russian gas transit politics. That can move cash flow faster than normal operating changes.
Portfolio cleanup costs
Medium impact · Medium oddsSelling lower-return assets improves the future portfolio, but it can create near-term losses. In 2025, E&P International recorded $851M of impairment losses, mainly $650M for UK assets held for sale and $201M for Brazil assets. More exits could bring more write-downs.
UK tax pressure
Medium impact · High oddsThe UK raised the Energy Profits Levy to 38% and removed the 29% Investment Allowance. That makes new UK spending harder to justify. The Adura venture with Shell helps by changing the cash profile, but the tax backdrop is still heavy.
In one breath
Is Equinor mainly an oil and gas company?
Yes. Equinor has renewables and low-carbon projects, but oil and gas still drive the cash. Norway is the core profit engine.
Why is Empire Wind so important for the stock story?
Empire Wind is Equinor's big US offshore wind project. It matters because expected total CapEx is about $7.5B, and the project has faced stop-work orders and legal risk.
What is the biggest near-term risk for Equinor?
The biggest company-specific risk is the decline of Johan Sverdrup, because it is one of the key assets in the Norway portfolio. The biggest outside risk is a sharp move in oil or European gas prices.
Why is Equinor cutting renewables spending?
Management says power and low-carbon markets are moving slower than expected. The company is cutting about $4B of CapEx for 2026 and 2027 so it can protect free cash flow and shareholder returns.