Torgrim Reitan: So, on your first question, on the balance sheet and capital distribution going forward. Yes, we are in a situation where we have a negative net debt of minus 22.9%. And we have a sort of a long-term guiding, which is sort of 15% to 30% net debt, which is sort of mathematically what is solidly supporting a strong single A category credit rating on a standalone basis. We have a higher rating than that currently. So that’s you should read that as sort of a range that we will sort of find as a more optimal capital structure of the company. And from time to time, we are above and then also below as such. So that is sort of a long-term aspiration. We are, and I have said earlier that capital distribution is something that we are using currently to distribute cash that we have on the balance sheet to drive a more efficient capital structure of the company.
And I’ve also said that we will continue to use that as one of our tools to achieve that going forward. It is, of course, nothing that I can go into any details on in this call, but clearly, we will come back to that in our fourth quarter call and capital markets update. On your second question, Peter, NCS impairment. Yes. That is Martin Linge. It is an asset that we took over from total many years ago. And we have issues with that asset repeatedly, as well. So, this time around, it is, related to the reservoir where we see that production is postponed to come towards later in the production life of the field, meaning that the discounted value of the asset is going down. So that’s Martin Linge. This is not a broader concern at all on the NCS.
This is isolated to these assets. Yes. And then we talked about the reversal, in the U.S. that is related to an asset in Gulf of Mexico, $290 million. So, thanks, Peter.
Bard Glad Pedersen: Thank you, Peter. And Anders Rosenlund from SEB is the next question. So, Anders please go ahead.
Anders Rosenlund: It feels like repeating almost the first of the previous question, but I’d like to revert to the overcapitalization situation, and, the path you are pursuing is not remedying the situation. So, what’s the natural consequence of that? Is that more aggressive dealers and buybacks, or are you happy with the development that you’re seeing?
Torgrim Reitan: Yes. So, yes, Anders, thanks. Yeah. I thought that I think it’s important for me to reflect upon the volatility the uncertainty that we are facing as an industry. In 2020, we had the weakest result in history for Equinor. In 2022, we had the highest and strongest results. So, within two years, we went to worst to best as such. And that is the volatility and exposure that we need to manage. Meaning that we will have to and we shall run with a solid balance sheet to be able to weather any storms that is ahead of us. And then we are, of course, in an extraordinary situation now, where, capital distribution gives room for additional capital distribution as you have seen this year. And then we said again, we will continue to use capital distribution as one of the tools to bring this back to a more efficient in capital structure. So, but we’ll speak much more to this in our Capital Markets in February. So, looking forward to see you then.
Bard Glad Pedersen: Next one is Michele Della Vigna from Goldman Sachs.
Michele Della Vigna: Thank you very much and congratulations again on the strong delivery this quarter. My question really is about the security of your Norwegian pipeline infrastructure. We’ve seen issues in Sweden, in Finland, Estonia. I was just wondering over the last couple of years what has changed in terms of the focus on guaranteeing the security of those pipelines and that would make you comfortable that such an issue would not take place on the Norwegian continental shelf? Thank you.
Torgrim Reitan: Thanks, Michele. It’s a very, very important question, so thank you very much. Clearly, this is front and center for us these days. After the terrible attack on Ukraine. We are seen as the most important energy company in Europe. And clearly, we will do or utmost to serve Europe with natural gas and other energy sources as well. We have increased the security levels on all our installations and infrastructure on the shelf, and we had taken many measures. As you would understand, we have a very good dialogue with security institutions and safety. And also, international organizations, so to understand. And we have a lot of support from those institutions and also from support from military organizations as well.
What we have done over the last year is that we have mapped all our pipelines. We have screen them with sort of underwater equipment to all of them, and we are monitoring closely the situation. So, this is front and center and top attention to the company. And we are doing everything we can together with Norwegian and international authorities to safeguard energy deliveries to Europe.
Bard Glad Pedersen: Next is, Henry Tarr from Berenberg.
Henry Tarr : Thanks, so much for taking my question. Two, please. One is just on the, to come back again to the offshore winds and the RFP process, et cetera. I guess, as you’ve said, you’re looking at the opportunities going forward and that you need an economic return on those. Would it be right then to look at the request you put in, for the uplift and think that’s the kind of level that you’re going to want to see to get an economic return on those assets, on Beacon and Empire? And then the second question is just on the cost inflation you’re seeing on the portfolio on the non-sanctioned assets. Is there a difference, are there any hotspots particularly, either in Norway or outside that we should watch? Thank you.
Torgrim Reitan: So offshore wind, yes. So very important for me. I can say that for us to move forward with these projects, we need to have a, they need to be profitable, and the returns need to match the risk that we are facing. It is too early to conclude, but we put forward a request in the petition, and that clearly illustrates changes that needs to happen. I mean, we have communicated that we would like to see 4% to 8% real unlevered return from our businesses in within renewables. And that still is the case. On cost inflation, and that is the way I understood your question, that is more general, not only related to renewables. So, I would say that across the supplier base, it is still a challenge. We see that within the raw materials in the situation is easing, driven by sort of global growth actually, it is easing, but we see a continued tightening in the supply market.
That is driven by energy prices, but also the activity level. And if I should go into more on your hotspots, let me pick a few on the rigs. We see that as a challenging environment. 50% of the fleet has been scrapped since 2015. And no or hardly any new builds as such. NCS will be strained, but as you have seen, we have taking on capacity with the coastal rigs, so we are in good shape there. Then if you talk about engineering and construction, we see short-term, high utilization in yards in Norway. That is probably going to last a couple of more years until sort of the wave of new project on NCS has come in production. Internationally driven very much by LNG new builds and FPSOs as such, so we see a tight situation there as well. But there are opportunities.
