Equinor warns of $1.8B impairment charge for UK North sea mariner oil field

Equinor

Norwegian energy major Equinor said on Wednesday it had cut the resource estimates for its Mariner oilfield in the British North Sea, triggering an impairment charge of around $1.8 billion.

Total recoverable reserves from the field, which is operated by Equinor with a 65.1% stake, is now estimated to be about 180 million barrels of oil equivalent, sharply down from 275 million barrels seen earlier, it said in a statement.

The impairment will be booked in Equinor’s earnings report for the final quarter of 2021, which is due on Feb. 9, it added.

Equinor co-owns the Mariner oilfield with JX Nippon, holding 20%, Siccar Point, 8.9%, and ONE-Dyas with the remaining 6%.

“We are committed to working with our Mariner joint venture partners to identify opportunities to improve recovery and production. We plan to continue drilling on the field to prolong cash flow into the future,” said Al Cook, Equinor’s head of international production and exploration.

The Mariner field began producing oil in 2019 and consists of two reservoirs, Heimdal and Maureen, and estimates of the resources in place had been subject to uncertainty due to a high degree of subsurface complexity.

“The reserve revision is linked to an updated seismic interpretation and experience from production of the Maureen reservoir which led to a revised reservoir model,” Equinor said.

“This revised reservoir model is further supported by results from the first well into the Heimdal reservoir, drilled in (the fourth quarter of) 2021.”

On Tuesday, Equinor flagged a loss on natural gas derivatives of up to $1.5 billion, which will also be booked in the fourth-quarter earnings report. 

Terje Solsvik

Gh Extractives

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