Equinor Bets Big On Wind Energy With Minority Stake In Ørsted

2 minute(s) Read

October 9, 2024

ESG Review Staff

Offshore wind energy farm (Image courtesy of Equinor)

Norwegian oil and gas and renewable energy company Equinor ASA (Equinor) has acquired 41,197,344 shares in Ørsted A/S (Ørsted), corresponding to 9.8% of the shares and votes in the company. The transaction establishes Equinor as the second largest shareholder in Ørsted, after the Danish State, which holds a controlling stake in the company. The Norwegian state has a controlling stake in Equinor.

“Equinor has a long-term perspective and will be a supportive owner in Ørsted. This is a counter-cyclical investment in a leading developer, and a premium portfolio of operating offshore wind assets. The exposure to producing assets complements Equinor’s operated offshore wind portfolio of large projects under development,” said Anders Opedal, chief executive officer of Equinor.

Equinor is supportive of Ørsted’s strategy and management and is not seeking board representation.

“This investment is in line with Equinor’s strategy of value driven growth in renewables. The offshore wind industry is currently facing a set of challenges, but we remain confident in the long-term outlook for the sector, and the crucial role offshore wind will play in the energy transition,” said Opedal.

Ørsted has a net renewable generation capacity of around 10.4 GW, and a gross portfolio of offshore wind projects in execution of around 7 GW. The company’s ambition is to achieve a gross installed renewable capacity of around 35 to 38 GW by 2030. According to Ørsted’s Q2 2024 presentation and asset book, net renewable generation capacity refers to the company’s equity share of offshore wind, onshore wind, and solar generation capacity. Offshore wind projects in execution and the 2030 ambition are gross (100%) numbers. The ambition also includes onshore renewable energy, power-to-X, and bioenergy.

Equinor chief executive officer, Anders Opedal (Image courtesy of Equinor, Ole Jørgen Bratland)

Equinor said that its ownership position has been built over time, through a combination of market purchases and a block trade.

The current market value of Equinor’s holding in Ørsted is around US$2.5 billion, based on Ørsted’s closing price on October 4.

Subject to obtaining regulatory approvals under applicable Foreign Direct Investment regulations, Equinor intends to increase its ownership to 10%. There are currently no plans to further increase the stake.

Equinor said it will execute the transaction within its financial framework.