Kicking off AGM Season, Eni and Equinor Are Fueling Oil and Gas Expansion, Not Clean Energy Transition

FOR IMMEDIATE RELEASE

May 10, 2023

Contact:
Valentina Stackl, Oil Change International Media Officer, valentina@priceofoil.org

Kicking off AGM Season, Eni and Equinor Are Fueling Oil and Gas Expansion, Not Clean Energy Transition 
Eni and Equinor are on track to rank as the world’s third and eighth worst upstream oil and gas expanders, respectively, in 2023
WASHINGTON, DC — The urgent need to transition to clean, renewable energy is becoming more apparent every day. However, companies like Equinor and Eni, partially state-owned, partially privatized Norwegian and Italian oil and gas companies respectively, continue to prioritize oil and gas investments that fuel the climate crisis.

Ahead of the companies’ shareholder meetings on May 10th, Oil Change International released two briefings exposing the clash between their fossil-fuel dominated energy strategies and claims of climate action, Big Oil Reality Check: Eni and Big Oil Reality Check: Equinor.

The science is clear: Existing oil and gas fields and coal mines globally already contain more fossil fuels than the world can extract and burn under the Paris Agreement.The International Energy Agency (IEA) found in 2021 that approving new fields and mines for construction is inconsistent with the 1.5 degrees Celsius (ºC) global warming limit, given already developed fields hold enough reserves to fulfill demand as oil and gas use is phased out. The Intergovernmental Panel on Climate Change’s (IPCC) Sixth Assessment Report (AR6) on the climate crisis also affirms that the world has already built too much fossil fuel infrastructure and that global fossil fuel use must decline substantially by 2030 to limit warming to 1.5ºC. Yet, as the new analysis shows, these companies do not seem to get the message.

The Oil Change International analysis reveals that both companies are on the cusp of approving a surge of new oil and gas development. If Eni and Equinor proceed with all the projects in their anticipated pipeline for 2023, Eni could rank as the world’s third worst oil and gas expander this year and Equinor as the world’s eighth worst by the total volume of new reserves approved for extraction.

Furthermore, both Eni and Equinor plan to increase their oil and gas production in the near term. Equinor plans to increase extraction by 3 percent in 2023, and for its 2030 production “to be on par with today,” according to CEO Anders Opedal. Similarly, Eni plans to increase extraction by 3 to 4 percent per year through 2026 and then sustain that level of production to 2030.

In February 2023, both Eni and Equinor announced record 2022 profits (of USD 14 and USD 28.7 billion, respectively) more than tripling their 2021 income. The companies primarily used these profits to increase investments in fossil fuels and payouts to shareholders, rather than accelerate a just transition towards renewable energy.

In keeping with a capex program described as “driven by oil and gas,” Equinor directed 28 times more capex into its exploration and production segments than its renewable energy segment in 2022. Eni invested 15 times more in primarily fossil fuel business segments than in its “Plenitude” segment that includes renewable energy in 2022.

These profit announcements made no mention of the millions of tonnes of climate pollution generated from the companies’ oil and gas production. As companies, Equinor and Eni each reported causing more greenhouse gas pollution in 2022 than their respective home countries of Norway and Italy.

David Tong, Oil Change International Global Industry Campaign Manager, said:

“Both Equinor and Eni continue to put forward new exploration and production projects for approval, despite the IPCC’s findings that immediate and rapid action to phase out fossil fuels is necessary to hold global warming to 1.5ºC. Eni, for instance, has plans to expand oil and gas production in several countries, including Libya and Nigeria.

“The case for keeping oil, fossil gas, and coal in the ground and transitioning to clean, renewable energy is clear. Companies like Equinor and Eni must recognize the urgency of the climate crisis and commit to a just transition away from oil and gas production.”

Kelly Trout, Oil Change International Research Co-Director, said: 

“We cannot overlook the fact that both Eni and Equinor are among the world’s largest fossil fuel companies, contributing to the climate crisis we face today. Yet, rather than take responsibility for the damage caused by their pollution, they keep adding more fuel to the fire.”

Luca Iacoboni, ECCO Head of Outreach and Strategy for Decarbonisation, said: 

“Eni is emerging globally as one of the main oil and gas companies still heavily focused on fossil activities with a high climate and environmental impact. The company plays on the misconception of gas as a transition fuel, continuing to invest in the fossil sector, often exploiting the guarantees and diplomatic role offered by the Italian state, which is its largest shareholder.

“Fossil fuel giants like Eni must radically transform themselves to survive the transition and make it an opportunity for growth. To do so, it is necessary to rapidly shift investments from fossil fuels to technologies compatible with climate goals. The risk goes much beyond climate. Demand for gas in Europe, according to estimates by the European Commission and the International Energy Agency, will fall by 40% between 2019 and 2030. According to Snam-Terna and RSE, Italy’s demand will drop by 21% and 34% respectively. We wonder to whom will ENI sell gas in 2030?  Will Descalzi’s confirmation at the helm of Eni be a continuation of risky and dangerous fossil investments – perhaps supported by public guarantees -, or will it be the chance to make the energy transition a driver of growth and innovation?”

Antonio Tricarico, Programs Director at ReCommon, said: 

“The decarbonisation of Eni’s business remains a mirage and the sustainability-linked bond recently issued by the company is just smoke and mirrors. The Italian government, which still controls 30 percent of Eni, has chosen the confirmation for another three years of a CEO whose priority is to increase oil and gas production until at least 2030 and push for fossil gas expansion for the next decades. Despite the highest record profits ever, the company will invest 80 per cent in new oil and gas, selling the fairy tales of carbon capture and nuclear fusion that are unlikely to see reality.

“Because of this, the government and the company have decided to blatantly violate the goals of the Paris Agreement. It is time for investors who want to act against the climate crisis to make their voices heard before it is too late.”

Note to Editors

The two briefings can be found here: https://oilchange.org/big-oil-reality-check-2023.