Peak Oil & Gas, Socialism, and the EU Energy Supply: Despite Staff Increases, Equinor Produces Less

In yet another abject lesson, Norway's state oil & gas company shows the future of work under socialism: if more people share™ less work, everybody loses out in the end

Another day, more troubling admissions from up north. We’ve already noted

Translation of non-English content mine, with emphases and [snark] added.

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5,000 Employees More—Less Production

Equinor is overstaffed, sitting on too much money and making too many bad investments, according to analysts.

By Ole Reinert Omvik and Inger Kristine Lee, NRK, 14 May 2025 [source]

The salvo comes from one of the country’s leading oil analysts, John Olaisen of ABG Sundal Collier. Today, Equinor is holding its annual general meeting in Stavanger.

‘Equinor has increased its workforce from 20,000 to 25,000 employees in seven years, without increasing oil and gas production. On the contrary, production fell by 0.6%. In the same period, the workforce increased by 25%’, says Olaisen.

I think Equinor needs a major overhaul.

That is according to John Olaisen, chief analyst at ABG Sundal Collier.

Equinor Increases Workforce, Others Cut Back

The chief analyst has compared Equinor’s performance with that of five of the largest companies in the world: Exxon, Chevron, Shell, BP, and Total [that doesn’t sound like a good idea: methodically, it’s cherry-picking as ExxonMobile (2), Chevron (3), and Shell (4) are among the top five oil & gas companies worldwide (market cap-wise; source); yet this comparison leaves out SaudiAramco (1) and PetroChina (5)]. It shows that no one else has experienced a similar growth in the number of employees. Several of the competitors have instead reduced their workforce [huhum, do these other companies know something Equinor doesn’t? Perhaps business admin?]

Olaisen particularly emphasises the two American companies Chevron and Exxon, which have managed to streamline their workforce while increasing production.

Since 2007, Exxon and Chevron have had 20-30% fewer employees, while Equinor has had 30% more. That’s a very bad sign.

‘Technology has advanced. Most companies are able to produce more oil with fewer people’, says Olaisen [that is, except for Equinor—care to explore why? Read on—my own take follows below].

We Need New, Young People

NRK presents Equinor CEO Anders Opedal with Olaisen’s point of view. The former believes that Equinor has other challenges than the other oil companies [oh, look at that—he thinks he’s kinda special—how cute]:

You can’t have a direct comparison [because Equinor is special: I told you]. The Norwegian shelf is mature [depletion never occurs elsewhere, it’s all unfair, but we Norwegians will manage]. Many wells are more demanding to drill now than before. In addition, several of our platforms are older and require slightly more employees [so, you could have invested in newer tech and/or platforms but choose to hire more employees?].

[NRK] But what are all these new 5,000 employees doing? [I almost fell off my chair reading this: what a totally un-Norwegian thing to ask]

[Opedal] We have a wave of retirees ahead of us [sure, but that’s the same for every company], and it’s been important for us to hire new young people into the company.

The new employees get good training from those with long experience before they retire [that’s actually a good point—totally lost on the journos™].

In 2018, Equinor acquired Danske Commodities, which is involved in power sales, mainly from Denmark. Around 600 people work here. The company currently generates good revenue for the company [re-read if necessary: Equinor now also includes a middleman company in Denmark selling energy—since Norway is north of Denmark and Germany to the latter’s south, ask yourself where that energy on sale comes from…].

5% Work in the Green Department

When Opedal became CEO in 2020, he promised a major focus on green energy. Since 2017, Equinor has increased its production of renewable energy by more than 250%. A change that Opedal believes explains some of the increase in the number of employees:

We have several projects in Brazil, we have wind projects in Poland, the UK, and the US.

The latter is the giant wind project Empire Wind outside New York, which recently received a stop order from the Trump administration.

Although the company has grown in the renewable energy sector, it had only 1,099 employees at the end of last year, according to the company's annual report. Thus [analyst] Olaisen:

This suggests that the main staff growth has taken place in the oil and gas industry, not renewables [ouch, sayeth me—which also tells you about the integrity of Equinor’s CEO].

Employees Are a Fraction of the Cost

Oil analyst Theodor Sveen-Nilsen at Sparebanken 1 has also seen the increase in the number of employees in Equinor:

There is less oil production per employee in Equinor now than there was ten years ago. The renewables programme can perhaps explain a small part of this, but not very much.

[NRK] How does the market react to this type of development? [lol, it’s a state-owned oil & gas company generating billions in revenue for the gov’t each year—care to guess how much Mr. Market is on anyone’s mind?]

[Sveen-Nilsen] This is not something the market is very concerned about. If you look at the cost per barrel produced in Equinor, labour costs are an extremely small share.

Suggests a New Course for Equinor: Do What You Do Best!

The stock market doesn’t like the green transition of Equinor, according to the analysts NRK has spoken to.

‘Equinor will be investing heavily in renewables going forward. The market places a very low value, or negative value, on this [re-read, if necessary: Mr. Market will force a course correction before too long]. As a result, their shares are trading at lower levels than it would otherwise’, says Sveen-Nilsen at Sparebanken 1.

John Olasien agrees:

Equinor has no competitive advantage in onshore solar or wind, and they haven’t done particularly well with these projects either.

He suggests a new course for the company, a course the company knows well, namely 100% offshore:

[Olaisen] Equinor is one of the best at offshore and deepwater installations. Here they have clear competitive advantages. This applies to both oil and gas installations and offshore wind.

Both analysts believe that Equinor can rise if it returns its focus to that of an offshore company.

‘Equinor is an incredibly attractive partner for other companies operating far offshore’, says Olaisen.

He believes the company can make good money by going this route instead of renewables on land:

[NRK] ‘Anders Opedal, why don’t you focus on what you’re good at, namely offshore oil and gas, and let other companies develop wind and solar?’ [because the elites believe their own agit-prop].

[Opedal] That’s a bigger strategic question. We believe we can create long-term shareholder value by focusing on the energy the world needs. Oil and gas. We are very good at that.

Then we’ve also said we’re going to work on carbon capture and storage, transport, and storage in particular. And potentially hydrogen, and also renewables.

Equinor’s annual general meeting starts at 3 p.m. this afternoon, 14 May.

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Peak Oil & Gas, Norwegian Style

That was painful, I know, in particular these two last quotes by Equinor’s CEO show, quite clearly, why Western companies are failing—they believe their own BS.

The perhaps best illustration of the issue at-hand—the 5,000 new employees over seven years—is the one reproduced below (it’s in the above article):

Analysts to NRK: Equinor should focus on what it knows, namely offshore. Here, CEO Anders Opedal [left] with Prime Minister Støre [right] on their way to the Troll field in 2023.

Just look at the sheer amount of people accompanying the CEO and the PM.

How bad is the situation known colloquially as ‘Peak Oil’?

Well, here’s the summary from the Sokkeldirectoratet (the gov’t agency, Norwegian Offshore Directorate, in charge of the special economic zone offshore managing/administering the oil & gas fields) for 2024:

The Norwegian Offshore Directorate’s summary of activity on the Norwegian continental shelf in 2024 shows that gas production is higher than ever. Exploration and investments are required if we are to delay the anticipated decline in production moving forward.

Not too much about oil, which is understandable once one dives a bit deeper into the report—but before we’ll do that, a few more snippets from the summary:

Overall production will remain at a high and stable level. In 2024, it reached about 240 million standard cubic metres of oil equivalent (mill scm o.e.—1510 barrels oil equivalent). This is the highest level since 2009.

Moving forward, production is expected to remain at a stable, high level before a gradually decrease toward the end of the 2020s.

Exploration activity was also high in 2024. Most of the discoveries are small, but several are being considered for development tied back to existing fields.

Here’s Norway’s cumulative oil & gas production since the mid-1970s (source):

As can be seen, oil production (crude + condensate) peaked in 2001/02 and has halved in the subsequent decade; it has been relatively stable since, although the expectation is a further downward trend.

Believe it or not, the more troubling issue is actually natural gas production. It is higher than it’s ever been, that much is apparently true—but once you reach peak production, there’s but one way to go: down.

2024, as Equinor stated, was a year of record gas production, and if the Norwegian Offshore Directorate’s graph (see above) is to be somewhat accurate in regards to future production estimates, it may very well be the year of Norway’s peak gas production.

Note that in the above-linked 2024 annual report, there’s a ton of interesting information, including official preliminary production figures on a monthly basis.

The most troubling forecast, however, is this:

In 2025, the Norwegian Offshore Directorate is expecting investments on the NCS totalling NOK 264 billion. This is an increase of 2.5 per cent from the previous year…

Higher drilling costs per development well also contributes to a higher level of investment…

We expect exploration activity and exploration costs to remain about the same as in 2024.

Despite the high level of activity in the industry, new investment decisions will be necessary to maintain activity in the future [remember: Equinor is owned by the Norwegian gov’t].

As U2 once sang (not a fan), this is what ‘running to stand still’ means: higher costs for everything related to energy production, which nonetheless flatlines or declines.

The implications are gigantic and point to troubles down the road:

Gas constitutes more than half of all production on the shelf. Most of the oil and gas is exported to Europe.

The Norwegian Offshore Directorate also provides quite helpful information via norskpetroleum.no/en, where the following quotes are found:

Norway is a small player in the global crude market with production covering about 2 per cent of the global demand. Norwegian production of natural gas covers approximately 3 per cent of global demand, however, as an exporter Norway is a significant player. Norway is the fourth largest exporter of natural gas in the world, behind USA, Russia and Qatar. In 2023, Norway exported a gas volume equivalent to more than 30 per cent of the total gas consumption in the EU and the United Kingdom. Nearly all oil and gas produced on the Norwegian shelf is exported. Combined, oil and gas exceeds half of the total value of Norwegian exports of goods. This makes oil and gas the most important export commodities in the Norwegian economy.

Here, we learn the following things:

1. Norway’s oil & gas exports are significant for the heating/electricity production of Europe.

2. Norway isn’t an ‘advanced economy’ as it is typically understood.

3. Given the above consideration of the Norwegian Offshore Directorate, Norway falls into the category of a ‘semi-periphery’, that is, a country that produces primary materials (oil and gas) for export. The difference between cash crops, such as palm oil or cotton vs. oil and gas is linguistic.

There’s also a helpful and very telling illustration:

In 2023, Norwegian gas exports amounted to some 30% of gas consumption in the EU and UK.

In case you’re wondering, Russian gas amounted to 40% of EU consumption in 2021, according to the EU Commission; by 2024, ‘Norway was the top supplier of gas to the EU in 2024 providing over 33% of all gas imports’.

How much longer will (can) that party go on?

Not for much longer, if the Norwegian Offshore Directorate is to be believed:

Given the shitty graphic, my Mark I eyeballs see an estimated decline by 50% over the next decade (‘resources in fields’) with too few new finds (‘discoveries’) to make up for that difference.

Bottom Lines

At this point, it’s useless to note that legacy media journos™ are reliably off target and ignorant.

The main issue isn’t the export value of any cubic unit of gas exported (which changes over time due to wobbling purchasing parity valuations)—but the impending decline of Norwegian gas production has gigantic implications.

First and foremost, here’s what the EU Commission states about the period 2021-24 in terms of changes to gas imports:

Imports from Russia declined from over 150 billion cubic meters (bcm) in 2021 to less than 52 bcm in 2024 [a decline by 2/3]. This was mainly compensated for by growing imports from other partners. Imports from the US increased from 18.9 bcm in 2021 to 45.1 bcm in 2024 [a jump in excess of 100%, mostly LNG]. Imports from Norway grew from 79.5 bcm in 2021 to 91.1 bcm in 2024 [plus 1/4]. Imports from other partners increased from 41.6 bcm in 2021 to 45 bcm in 2024.

Interestingly, the accompanying chart shows the true story:

EU gas imports have declined by more than ten per cent in three years, i.e., if you’re looking for an explanation of the economic (and hence financial) woes, look no further.

There’s also no doubt on my mind that betting the EU’s economic (and financial) future on Norwegian gas imports instead of Russian hydrocarbons is—a pipe dream (pun intended).

Within the next few years, Europe will experience an energy crunch unlike the last such major problem in the 1970s.

Back then, the arrival of peak conventional oil across several producers (notably the US) triggered massive bouts of investments in previously un/der-explored areas, which, as inflation came down in the 1980s, triggered an oil glut.

As the Norwegian example shows, however, there are few such new discoveries to be anticipated. Consequently, throwing more investments at this problem will likely not change the outlook.

In the short run, the turn towards Norwegian gas was quite successful for the EU; in the medium term, however, depletion of Norway’s hydrocarbons suggests this was, at best, an expedient short-term fix.

Combined with the EU’s disastrous energy transition (‘Green Deal’), the consequences are as obvious as they will be bad:

The Lights are Going out Over Europe

Of course, we won’t see rationing like in WW1 or WW2; we’ll have ‘rolling blackouts’ or ‘anticipatory shutdowns’, which amount to the same thing, but since we™ are so advanced, there will have to be someone else to blame.

In addition, there could be two solutions™:

• make up with Russia

• arrange for the laying of a pipeline from the Persian Gulf emirates across Iraq and Syria via Türkiye to Europe

A sane and realist EU leadership would pursue both strategies.

As it happens, neither is transpiring anywhere near the timeframe required to spare the European peoples massive economic and financial pain, to say nothing about the rapidly deteriorating impoverishment of vast segments of the populations.

To the contrary, politicos™, experts™, and journos™ are all pretending that everything’s gonna be alright.

When, not if, these multiple shocks hit home, it will make for a very rude awakening.