UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a -16 OR 15d-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

10 February 2021

Commission File Number 1- 15200

Equinor ASA

(Translation of registrant’s name into English)

FORUSBEEN 50, N-4035, STAVANGER, NORWAY

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20 -F or Form 40-F:

Form 20-F

X

 Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S -T Rule 101(b)(1):_____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S -T Rule 101(b)(7):_____

This Report on Form 6-K contains a report of the fourth quarter 2020 results of Equinor ASA.

Equinor fourth quarter 2020 2

Equinor fourth quarter 2020 

and year end results

Equinor reports adjusted earnings of positive USD 0.76 billion and negative USD 0.55 billion

after tax in the fourth quarter of 2020. IFRS net operating income was negative USD 0.99

billion and the IFRS net income was negative USD 2.41 billion, following net impairments of

USD 1.30 billion and a write down of USD 0.98 billion related to the Tanzania LNG project. 

2020 was characterised by:

●

 Results impacted by low oil and gas prices 

●

 Solid operational performance during extraordinary circumstances

●

 Positive cash flow in a low-price environment

●

 Delivering USD 3.7 billion in capex and cost reductions, well above ambition for the action plan to strengthen financial resilience

●

 Progressing and capturing value within renewables

●

 Setting ambition to be a net-zero energy company by 2050 to create value as a leader in the energy transition

“Our results are impacted by the market turmoil during the year, but with strong cost improvements and capital discipline we delivered

positive net cash flow for the quarter and the full year. During 2020 we have delivered more than 3.7 billion dollars in savings, well

above our ambition for the action plan we laun ched in March to strengthen financial resilience. We are well position ed for value

creation and strong cash flow in 2021 and the coming years,” says Anders Opedal, President and CEO of Equinor ASA.

“I am impressed by how the organisation has responded, delivering strong operational performance and production growth in a long-

lasting challenging situation during the pandemic. We are increasing production volumes from Johan Sverdrup even further, and we

used our flexibility to have high gas production as gas prices increased in the quarter. In addition , we have started production from

Snorre Expansion ahead of time and well below cost estimates ,” says Opedal.

“Equinor is committed to ensuring long-term competitiveness and creating value as a leader in the energy transition, setting an 

ambition to be a net-zero energy company by 2050. During 2020 we delivered significant progress in our renewables portfolio , 

taking the investment decision for Dogger Bank A and B, winning the largest ever offshore wind award in the US, starting construction 

at Hywind Tampen and capturing value from transactions. We are also taking action s to optimise within oil and gas, building a more

robust portfolio for the future, but resulting in a write down in Tanzania and an impairment related to an operated US onshore asset in

the quarter,” says Opedal .

Adjusted earnings [5] were USD 0.76 billion in the fourth quarter, down from USD 3.55 billion in the same period in 2019. Adjusted

earnings after tax [5] were negative USD 0.55 billion, down from USD 1.19 billion in the same period last year. Low prices for liquids

impacted the earnings for the quarter.

Equinor launched an action plan of USD 3 billion in March 2020 to strengthen financial resilience, including a reduction in operating

costs of USD 0.70 billion. Delivery on the plan resulted in savings of more than USD 3.7 billion, including a reduction in fixed operating

costs of around USD 1 b illion. Unit production costs are reduced by 5% since 2019, realising the 2021 ambition already in 2020.

In the E&P Norway segment , Equinor realised weaker liquids prices and the production was reduced mainly as a result of turnarounds

moved to fourth quarter due to the ongoing pandemic.

Results in the E&P International segment were impacted by low prices and the impairment of the Tanzania LNG project of 

USD 0.98 billion. The E&P USA segment was also impacted by weak prices, partially offset by significant reductions in operating

costs.

The Marketing, midstream and processing segment captured value from strong trading results from gas to Europe, partially offset by

low refinery margins and shutdown of production at Hammerfest LNG plant.

New energy solutions delivered high availability on offshore wind assets. A capital gain of around USD 1 billion is expected to be

booked from the divestment of a 50% non -operated interest of the offshore wind projects Empire Wind and Beacon Wind in the US. A

Equinor fourth quarter 2020 3

capital gain from the farm down of 10% equity interest in Dogger Bank A and B in the UK is expected to be booked in the first quarter

of 2021.

IFRS net operating income was negative USD 0.99 billion in the fourth quarter, down from positive USD 1.52 billion in the same period

in 2019. IFRS net income was negative USD 2.42 billion in the fourth quarter, compared to negative USD 0.23 billion in the fourth

quarter of 2019. Net operating income was negatively impacted by net impairments of USD 1.30 billion, mainly relating to a refinery as

a result of reduced margin assumptions and some increase in cost estimates, and to an operated unconventional onshore asset in

North America due to reclassification as held for sale. 

Equinor delivered total equity production of 2,043 mboe per day in the fourth quarter, down from 2,198 mboe per day in the same

period in 2019, with a minor increase in gas share due to high flexible production in gas field s. Adjusting for portfolio transactions the

production growth for 2020 was 2.4%.

In 2020, Equinor completed 34 exploration wells with 16 commercial discoveries and 1 well under evaluation. At year end, 12 wells

were ongoing. Adjusted exploration expenses in the fourth quarter were USD 1.25 billion, compared to USD 0.44 billion in the same

quarter in 2019.

The proved reserves replacement ratio (RRR) was negative 5% in 2020, following capital discipline and the prioritisation of financial

flexibility during market uncertainty, with a three-year average of 95%. With 5.26 billion barrels in proved reserves, Equinor’s reserves

to production ratio (R/P) was 7.4 years.

Cash flows provided by operating activities before taxes paid and changes in working capital amounted to USD 14.0 billion in 2020,

compared to USD 21.8 billion in 2019. Organic capital expenditure [5] was USD 7.8 billion for 2020. At year end, net debt to capital

employed

 (1)

 was 31.7%, stable from 31.6 % at the end of the third quarter of 2020. Following the implementation of IFRS 16, net debt

to capital employed

(1)

 was 37.3%.

The board of directors proposes to the annual general meeting a cash dividend of USD 0.12 per share for the fourth quarter 2020.

Average CO2-emissions from Equinor’s operated upstream production, on a 100% basis, was 8.0 kg per barrel in 2020.

The twelve-month average Serious Incident Frequency (SIF) for 2020 was 0. 5, down from 0.6 in 2019. The twelve-month average

Recordable Injury Frequency (TRIF) was 2.3 for 2020, compared to 2.5 in 2019.

Quarters

Change

Full year

Q4 2020

Q3 2020

Q4 2019

Q4 on Q4

(in USD million, unless stated otherwise)

2020

2019

Change

(989)

(2,019)

1,516

N/A

Net operating income/(loss)

(3,423)

9,299

N/A

756

780

3,550

(79%)

Adjusted earnings [5]

3,938

13,484

(71%)

(2,416)

(2,124)

(230)

>(100%)

Net income/(loss)

(5,496)

1,851

N/A

(554)

271

1,186

N/A

Adjusted earnings after tax [5]

924

4,925

(81%)

2,043

1,994

2,198

(7%)

Total equity liquids and gas production (mboe per day) [4]

2,070

2,074

(0%)

40.6

38.3

56.5

(28%)

Group average liquids price (USD/bbl) [1]

36.5

56.0

(35%)

1

 This is a non-GAAP figure. Comparison numbers and reconciliation to IFRS are presented in the table Calculation of capital employed and

net debt to capital employed ratio as shown under the Supplementary section in the report.

Equinor fourth quarter 2020 4

GROUP REVIEW

Fourth quarter 2020

Total equity liquids and gas production

 [4] was 2,043 mboe per day in the fourth quarter of 2020, down 7% compared to 2,198

mboe per day in the fourth quarter of 2019 mainly due to expected natural decline, turnarounds for several fields especially on the

Norwegian continental shelf (NCS) and the shutdown at the Hammerfest LNG plant . Production halt in Brazil and the divestment of

the Eagle Ford asset in the E&P USA segment in the fourth quarter of 2019 contributed to the decrease. New fields on the NCS,

higher flexible gas off -take and new wells in the US onshore partially offset the decrease. 

Total entitlement liquids and gas production

[3] was 1,912 mboe per day in the fourth quarter of 2020, down 7% compared to 

2,056 mboe per day in the fourth quarter of 2019 . The production was negatively influenced by the factors mentioned above, partially

offset by lower effects from production sharing agreements (PSA) [4], and lower US royalty volumes. The net effect of PSA and US

royalties was 131 mboe per day in total in the fourth quarter of 2020 compared to 142 mboe per day in the fourth quarter of 2019.

Quarters

Change

Condensed income statement under IFRS

Full year

Q4 2020

Q3 2020

Q4 2019

Q4 on Q4

(unaudited, in USD million)

2020

2019

Change

11,746

11,339

15,169

(23%)

Total revenues and other income

45,818

64,357

(29%)

(5,533)

(5,307)

(6,603)

(16%)

Purchases [net of inventory variation]

(20,986)

(29,532)

(29%)

(2,156)

(2,368)

(2,405)

(10%)

Operating and administrative expenses

(9,537)

(10,469)

(9%)

(3,478)

(4,798)

(4,165)

(17%)

Depreciation, amortisation and net impairment losses

(15,235)

(13,204)

15%

(1,569)

(886)

(480)

>100%

Exploration expenses

(3,483)

(1,854)

88%

(989)

(2,019)

1,516

N/A

Net operating income/(loss)

(3,423)

9,299

N/A

(2,416)

(2,124)

(230)

>(100%)

Net income/(loss)

(5,496)

1,851

N/A

Net operating income

was negative USD 989 million in the fourth quarter of 2020, compared to positive USD 1,516 million in the

fourth quarter of 2019. The decrease was mainly due to lower liquids and gas prices and write down of previously capitalised well

costs of 

USD 982 million related to the Tanzania LNG project. Lower production for liquids and gas in addition to weak refinery margins

contributed to the decrease . Lower depreciation expenses and operating expenses partially offset the decrease.

In the fourth quarter of 2020, net operating income was negatively impacted by impairments

2

 of USD 1,299 million and inventory

hedging effects of USD 315 million.

In the fourth quarter of 2019, net operating income was negatively impacted mainly by net impairments of USD 1,425 million which

includes USD 23 million related to associated companies, changes in fair value of derivatives and inventory hedge contracts of 

USD 282 million and higher volumes in inventory with unrealised profit written down to production cost of USD 591 million. Net

operating income was positively affected by a net gain from the sale of assets of USD 185 million.

2

 For more information, see note 2 Segments to the Condensed interim financial statements.

Equinor fourth quarter 2020 5

Quarters

Change

Adjusted earnings

Full year

Q4 2020

Q3 2020

Q4 2019

Q4 on Q4

(in USD million)

2020

2019

Change

11,985

10,909

15,336

(22%)

Adjusted total revenues and other income

45,908

63,335

(28%)

(5,298)

(5,203)

(6,048)

(12%)

Adjusted purchases [6]

(21,154)

(29,024)

(27%)

(2,184)

(2,179)

(2,496)

(13%)

Adjusted operating and administrative expenses

(9,159)

(9,850)

(7%)

(2,495)

(2,445)

(2,806)

(11%)

Adjusted depreciation, amortisation and net impairment

losses

(9,520)

(9,775)

(3%)

(1,252)

(302)

(437)

>100%

Adjusted exploration expenses

(2,138)

(1,203)

78%

756

780

3,550

(79%)

Adjusted earnings [5]

3,938

13,484

(71%)

(554)

271

1,186

N/A

Adjusted earnings after tax [5]

924

4,925

(81%)

For items impacting net operating income/(loss), see Use and reconciliation of non-GAAP financial measures in the Supplementary

disclosures.

Adjusted total revenues and other income

were USD 11,985 million in the fourth quarter of 2020 compared to USD 15,336 million

in the fourth quarter of 2019. The decrease was mainly due to lower average prices for liquids and gas and lower production,

especially for liquids.

Adjusted purchases

 [6] were USD 5,298 million in the fourth quarter of 2020, compared to USD 6,048 million in the fourth quarter of

2019. The decrease was mainly due to lower average prices for liquids and gas, partially offset by higher third-party volumes for

liquids.

Adjusted operating and administrative expenses

were USD 2,184 million in the fourth quarter of 2020 , compared to USD 2,496

million in the fourth quarter of 2019. The decrease was mainly due to lower transportation costs, especially in the MMP segment,

primarily due to lower freight rates on shipping of liquids in addition to decreased production in the E&P International segment. Lower

operation and maintenance costs due to reduced activity in the E&P International and E&P USA segments, the divestment of the

Eagle Ford asset in the E&P USA segment, and a settlement with COSL in the fourth quarter of 2019 contributed to the decrease.

Increased Gassled removal cost in the E&P Norway segment partially offset the decrease. 

Adjusted depreciation, amortisation and net impairment losses

were USD 2,495 million in the fourth quarter of 2020, compared

to USD 2,806 million in the fourth quarter of 2019. The decrease was mainly due to lower production in all segments and higher

proved reserves estimates especially in the E&P International and E&P USA segments. Lower depreciation basis resulting from net

impairments in previous periods contributed to the decrease. Higher investments partially offset the decrease. 

Adjusted exploration expenses

were USD 1,252 million in the fourth quarter of 2020, compared to USD 437 million in the fourth

quarter of 2019. The increase was mainly due to write down of previously capitalised well costs of USD 982 million related to the

Tanzania LNG project and a lower portion of exploration expenditures being capitalised. Lower drilling, seismic and field development

costs partially offset the increase. For more information, see the table titled Adjusted exploration expenses in the Supplementary

disclosures.

After total adjustments

3

 of USD 1,746 million to net operating income,

Adjusted earnings

 [5] were USD 756 million in the fourth

quarter of 2020, a 79% decrease from USD 3,550 million in the fourth quarter of 2019.

Adjusted earnings after tax

 [5] were negative USD 554 million in the fourth quarter of 2020, which reflects an effective tax rate on

adjusted earnings of 173.2%, compared to 66.6% in the fourth quarter of 2019. The increase in the effective tax rate was mainly due

to decreased adjusted earnings in the fourth quarter of 2020 in entities with lower than average tax rates, and in entities without

recognised taxes, partially offset by the temporary changes to Norway’s petroleum tax system as described in note 8 Impact of

pandemic and oil price decline to the Condensed interim financial statements.

Cash flows provided by operating activities

increased by USD 570 million compared to the fourth quarter of 2019. The increase

was mainly due to decreased tax payments, partially offset by lower liquids and gas prices and a change in working capital.

3

For items impacting net operating income, see Use and reconciliation of non-GAAP financial measures in the Supplementary disclosures.

Equinor fourth quarter 2020 6

Cash flows used in investing activities

increased by USD 577 million compared to the fourth quarter of 2019. The increase was

mainly due to reduced proceeds from sale of assets, increased derivative payments and increased financial investments, partially

offset by lower capital expenditures. 

Cash flows provided by financing activities

increased by USD 379 million compared to the fourth quarter of 2019. The increase

was mainly due to decreased dividend paid, increased collateral received and increased short-term debt, partially offset by no new

finance debt in the quarter. 

Total cash flows

increased by USD 370 million compared to the fourth quarter of 2019.

Free cash flow

 [5] in the fourth quarter of 2020 was USD 1,363 million compared to negative USD 513 million in the fourth quarter of

2019. The increase was mainly due to decreased tax payments and decreased dividend paid, partially offset by lower liquids and gas

prices and reduced proceeds from sale of assets.

Full year 2020

Net operating income

was negative USD 3,423 million in 2020 compared to positive USD 9,299 million in 2019. The decrease was

mainly due to lower liquids and gas prices, net impairments

4

 primarily related to reduced price assumptions

5

in addition to negative

reserve updates

and write down of previously capitalised well costs of USD 982 million related to the Tanzania LNG project. 

In 2020, net operating income was negatively impacted mainly by net impairments

4

 of USD 7,053 million

and provisions of 

USD 296 million.

In 2019, net operating income was negatively affected mainly by net impairments of USD 4,103 million which includes USD 23 million

related to associated companies, provisions of USD 485 million and a change in accounting policy of USD 123 million and net overlift

effect of USD 134 million. Net operating income was positively impacted by a net gain on the sale of assets of USD 1,184 million and

operational storage effects of USD 121 million in 2019.

Adjusted total revenues and other income

were USD 45,908 million in 2020 compared to USD 63,335 million in 2019. The

decrease was mainly due to lower average prices for liquids and gas.

Adjusted purchases

[6] were USD 21,154 million in 2020 compared to USD 29,024 million in 2019. The decrease was mainly due to

lower average prices for liquids and gas, partially offset by higher volumes for liquids.

Adjusted operating and administrative expenses

were

USD 9,159 million in 2020, a decrease of USD 691 million compared to

2019. The decrease was mainly due to the NOK/USD exchange rate development and the divestment of the Eagle Ford asset in the

E&P USA segment in the fourth quarter of 2019. Lower royalties and production fees driven by lower volumes and prices in addition to

lower activity level contributed to the decrease. Higher transportation cost for liquids mainly due to higher freight rates on shipping in

the MMP segment partially offset the decrease. 

Adjusted depreciation, amortisation and net impairment losses

were

USD 9,520 million in 2020 , down USD 255 million c ompared

to 2019. The decrease was mainly due to higher proved reserves estimates for several fields and lower depreciation basis resulting

from net impairments in previous periods. Lower field specific production especially in the E&P International segment contributed to

the decrease. Higher investments mainly in the US in addition to ramp-up of new fields especially on the NCS partially offset the

decrease.

Adjusted exploration expenses

increased by USD 936 million to USD 2,138 million in 2020, primarily due to write down of

previously capitalised well costs of USD 982 million related to the Tanzania LNG project and a lower portion of exploration expenses

being capitalised this year. Lower seismic, drilling, field development and other costs partially offset the increase. For more

information, see table titled Adjusted exploration expenses in the Supplementary disclosures.

After total adjustments

6

 of USD 7,361 million to net operating income,

Adjusted earnings

 [5] were USD 3,938 million in 2020, down

71% from USD 13,484 million in 2019.

Adjusted earnings aft er tax

 [5] were USD 924 million in full year of 2020, compared to USD 4,925 million in the full year of 2019.

The effective tax rate on adjusted earnings was 76.5% in full year of 2020, compared to an effective tax rate of 63.5% in full year of

2019. The increase in the effective tax rate was mainly due to decreased adjusted earnings in 2020 in entities with lower than average

tax rates, and in entities without recognised taxes, partially offset by the temporary changes to Norway’s petroleum tax system as

4

 For more information, see note 2 Segments to the Condensed interim financial statements.

5

 For more information, see note 6 Property, plant and equipment and intangible assets to the Condensed interim financial statements.

6

 For items impacting net operating income, see Use and reconciliation of non-GAAP financial measures in the Supplementary disclosures .

Equinor fourth quarter 2020 7

described in note 8 Impact of pandemic and oil price decline to the Condensed interim financial statements, in addition to changes in

provision for best estimates for uncertain tax positions.

Equinor fourth quarter 2020 8

Based on adjusted earnings after tax and average capital employed, calculated

return on average capital employed (ROACE)

 [5]

was 1.8% for the 12-month period ended 31 December 2020 and 9.0% for the 12-month period ended 31 December 2019. 

Organic capital expenditures

 [5] amounted to USD 7.8 billion for the year ended 2020, compared to guidance for 2020 of 

USD 8.5 billion. Total capital expenditures were USD 9.8 billion in 2020. 

Estimated

Proved reserves

at the end of 2020 were 5.260 billion barrels of oil equivalent (boe), a net decrease of 744 million boe

compared to 6.004 billion boe at the end of 2019.

The decrease was mainly due to negative revisions of net 171 million boe , strongly influenced by the reduction in commodity prices in

2020. Negative revisions totaled 388 million boe, of which 194 million boe was due to the reduction in prices. Positive reserves

revisions and improved oil recovery (IOR) efforts of 217 million boe, extensions and discoveries of 131 million boe and purchases of 6

million boe added to proved reserves in 2020.

The negative effect of the entitlement production was 710 million boe in 2020, compared to 698 million boe in 2019.

The reserve replacement ratio (RRR)

was negative 5 % in 2020 compared to positive 76% in 2019 . The RRR measures the

estimated proved reserves added to the reserve base , including the effects of sales and purchases, relative to the amount of oil and

gas produced. The reduction in RRR from last year was primarily due to negative revisions caused by lower prices and less proved

reserves added from new projects sanctioned. The average three-year replacement ratio (including the effects of sales and

purchases), was 95% at the end of 2020 compared to 147% at the end of 2019.

All numbers are preliminary and including equity accounted entities.

Cash flows provided by operating activities

 decreased by USD 3,362 million compared to 2019. The decrease was mainly due to

lower liquids and gas prices and a change in working capital, partially offset by decreased tax payments and increased cash flow from

derivatives. 

Cash flows used in investing activities

 increased by USD 1,498 million compared to 2019. The increase was mainly due to

increased financial investments, reduced proceeds from sale of assets and increased derivative payments , partially offset by lower

cash flow used for business combinations and capital expenditures. 

Cash flows provided by financing activities

 increased by USD 8,487 million compared to 2019. The increase was mainly due to

bond issues, increased short-term debt, decreased dividend paid and increased collateral payments related to derivatives, partially

offset by increased repayment of finance debt and increased payments related to the share buy-back programme. 

Total cash flows

 increased by USD 3,627 million compared to 2019.

Free cash flow

[5] for 2020 was USD 85 million including USD 332 million received from the Lundin divestment included in the line

item (Increase)/decrease in the Consolidated statement of cash flow, compared to negative USD 175 million in

2019. The increase was mainly due to decreased tax payments, lower cash flow used for business combinations, lower capital

expenditures, decreased dividend paid and increased cash flow from derivatives, partially offset by lower liquids and gas

prices, reduced proceeds from sale of assets and increased payments related to the share buy-back programme.

Equinor fourth quarter 2020 9

OUTLOOK 

●

Organic capital expenditures

 [5] are estimated at an annual average of USD 9-10 billion for 2021-2022

7

●

Equinor intends to continue to mature its attractive portfolio of exploration assets and estimates a total

exploration activity

 level

of around USD 0.9 billion for 2021, excluding signature bonuses, accruals and field development costs

●

Equinor’s ambition is to keep the

unit of production cost

 in the top quartile of its peer group

●

For the period 2020 –2026,

production growth

 [7] is expected to come from new projects resulting in around 3% CAGR

(Compound Annual Growth Rate) based on current forecast

●

Scheduled maintenance activity

 is estimated to reduce equity production by around 50 mboe per day for the full year of 2021

●

Production

[7] for 2021 is estimated to be around 2% above 2020 level

These forward-looking statements reflect current views about future events and are, by their nature, subject to significant risks

and uncertainties because they relate to events and depend on circumstances that will occur in the future. We continue to monitor the

impact of Covid-19 on our operations. Deferral of production to create future value, production cuts, gas off-take, timing of new

capacity coming on stream, operational regularity, the ongoing impact of Covid-19 and activity level in the US onshore represent the

most significant risks related to the foregoing production guidance. There has been considerable uncertainty created by the Covid-19

pandemic and we are still unable to predict the ultimate impact of this event, including impact on general economic conditions

worldwide. Our future financial performance, including cash flow and liquidity, will be impacted by the extent and duration of the

current market conditions, the development in realised prices, including price differentials and the effectiveness of actions taken in

response to the pandemic. For further information, see section Forward-looking statements.

7

 USD/NOK exchange rate assumption of 9.0

Equinor fourth quarter 2020 10

EXPLORATION & PRODUCTION NORWAY

Fourth quarter 2020 review

Average daily production of liquids and gas

 decreased by 2% to 1,314 mboe per day in the fourth quarter of 2020, compared to 

1,346 mboe per day in the fourth quarter of 2019. The decrease was mainly due to turnarounds, natural decline on Equinor operated

assets and shutdown at the Hammerfest LNG plant, partially offset by ramp-up of new fields and increased flexible gas outtake.

Net operating income

 was USD 1,803 million in the fourth quarter of 2020 compared to USD 1,476 million in the fourth quarter of

2019. The increase was mainly due to lower impairments, partially offset by lower liquids price.

In the fourth quarter of 2020, net operating income was negatively impacted by impairment of goodwill of USD 41 million. In the fourth

quarter of 2019, net operating income was negatively impacted by impairment of assets of USD 1,284 million.

Adjusted operating and administrative expenses decreased mainly due to a settlement with COSL in the fourth quarter of 2019 in

addition to reduced transportation cost in the fourth quarter of 2020 . Adjusted depreciation, amortisation and net impairment losses

decreased mainly due to lower field specific production and lower depreciation basis resulting from net impairments in previous

periods. Ramp-up of new fields and higher investments partially offset the decrease. Adjusted exploration expenses decreased mainly

due to lower drilling and seismic costs. Lower portion of exploration expenditure being capitalised partially offset the decrease.

After total adjustments of USD 38 million to net operating income,

Adjusted

earnings

[5] were USD 1,841 million in the fourth quarter

of 2020, compared to USD 2,738 million in the fourth quarter of 2019.

Quarters

Change

Adjusted earnings

Full year

Q4 2020

Q3 2020

Q4 2019

Q4 on Q4

(in USD million)

2020

2019

Change

3,891

2,763

4,944

(21%)

Adjusted total revenues and other income

11,962

17,951

(33%)

(770)

(699)

(852)

(10%)

Adjusted operating and administrative expenses

(2,867)

(3,274)

(12%)

(1,187)

(1,126)

(1,210)

(2%)

Adjusted depreciation, amortisation and net impairment

losses

(4,286)

(4,155)

3%

(94)

(165)

(142)

(34%)

Adjusted exploration expenses

(418)

(478)

(12%)

1,841

773

2,738

(33%)

Adjusted earnings/(loss) [5]

4,391

10,043

(56%)

For comparable IFRS figures, see note 2 Segments to the Condensed interim financial statements. For items impacting net operating

income/(loss), see Use and reconciliation of non -GAAP financial measures in the Supplementary disclosures.

Full year 2020

Net operating income

 for E&P Norway was USD 3,097 million in 2020 compared to USD 9 ,631 million in 2019. The decrease was

mainly due to lower liquids and gas transfer prices in the full year of 2020. Higher liquids volumes partially offset the decrease.

In 2020, net operating income was negatively impact ed by impairments of USD 1,265 million and underlifted volumes of USD 26

million. In 2019, net operating income was negatively impacted by impairment of assets of USD 1,284 million, a negative impact of

USD 81 million from underlifted volumes in the period and an implementation effect of USD 42 million from a change in accounting

policy for lifting imbalances, partially offset by gain on sale of assets of USD 977 million.

Adjusted operating and administrative expenses decreased mainly due to the NOK/USD exchange rate development, a settlement

Equinor fourth quarter 2020 11

with COSL in the fourth quarter of 2019 in addition to reduced transportation cost including the reduction in Gassled removal costs.

Adjusted depreciation, amortisation and net impairment losses increased mainly due to ramp-up of new fields and higher investments.

The NOK/USD exchange rate development, lower field specific production and lower depreciation basis resulting from net

impairments in previous periods partially offset the increase. Adjusted exploration expenses decreased mainly due to lower drilling,

seismic and other costs. Lower portion of exploration expenditure being capit alised and a higher portion of exploration expenditure

capitalised in earlier years being expensed this period partially offset the decrease.

After total adjustments of USD 1,294 million to net operating income,

Adjusted earnings

[5] were USD 4,391 million in 2020, a

decrease of 56% from USD 10,043 million in 2019.

Equinor fourth quarter 2020 12

EXPLORATION & PRODUCTION INTERNATIONAL

In the second quarter of 2020, Equinor changed its internal reporting to management, impacting the composition of Equinor's

operating and reporting segments. Equinor’s upstream activities in the USA are now reported separately to management, and such

information is also considered to be useful to the users of the financial statements, resulting in the exploration and production activities

in the USA being considered a separate operating- and reporting segment as of the second quarter of 2020. Previously these

activities were included in the DPI operating segment and presented as part of the E&P International reporting segment. Prior

segment results have been restated to reflect this change.

Fourth quarter 2020 review

Average daily equity production of liquids and gas

 was 340 mboe per day in the fourth quarter of 2020 compared to 415 mboe per

day in the fourth quarter of 2019. The decrease was primarily due to natural decline in mature fields and repairs on Peregrino (Brazil)

resulting in a production halt.

Average daily entitlement production of liquids and gas

was 267 mboe per day in the fourth quarter of 2020 compared to 336

mboe per day in the fourth quarter of 2019. The decrease was due to lower equity production partially offset by lower effects from

production sharing agreements (PSA). The net effects from PSA were 73 mboe per day in the fourth quarter of 2020 compared to 78

mboe per day in the fourth quarter of 2019.

Net operating income

was negative USD 1,376 million in the fourth quarter of 2020 compared to positive USD 53 million in the fourth

quarter of 2019. The decrease was mainly due to write down of previously capitalised well costs of USD 982 million related to the

Tanzania LNG project and lower liquids and gas prices. Lower entitlement productio n in the fourth quarter of 2020 contributed to the

decrease. Lower depreciation in addition to lower operating and administrative expenses partially offset the decrease.

In the fourth quarter of 2020, net operating income was negatively impacted by impairments of USD 229 million. In the fourth quarter

of 2019, net operating income was negatively impacted by impairments of USD 98 million.

Adjusted operating and administrative expenses decreased mainly due to lower operation, maintenance and transportation expenses

in addition to lower royalties primarily driven by reduced activities and lower production. Adjusted depreciation, amortisation and net

impairment losses decreased mainly due to higher proved reserves estimates, lower production from mature fields in addition to lower

depreciation basis resulting from net impairments in previous periods. Increased production from certain fields partially offset the

decrease. Adjusted exploration expenses increased mainly due to write down of previously capitalised well costs of USD 982 million

related to the Tanzania LNG project and a lower portion of exploration expenditure being capitalised this quarter. Lower drilling and

seismic costs partially offset the increase.

After total adjustments of USD 161 million to net operating income,

Adjusted earnings

 [5] were negative USD 1,215 million in the

fourth quarter of 2020, down from positive USD 192 million in the fourth quarter of 2019.

Quarters

Change

Adjusted earnings

Full year

Q4 2020

Q3 2020

Q4 2019*

Q4 on Q4

(in USD million)

2020

2019*

Change

706

820

1,554

(55%)

Adjusted total revenues and other income

3,295

6,130

(46%)

(16)

12

(26)

(39%)

Adjusted purchases

(72)

(34)

>100% 

(317)

(306)

(396)

(20%)

Adjusted operating and administrative expenses

(1,313)

(1,623)

(19%)

(516)

(511)

(682)

(24%)

Adjusted depreciation, amortisation and net impairment

losses

(2,045)

(2,233)

(8%)

(1,072)

(119)

(258)

>100%

Adjusted exploration expenses

(1,560)

(625)

>100%

(1,215)

(104)

192

N/A

Adjusted earnings/(loss) [5]

(1,695)

1,616

N/A

Equinor fourth quarter 2020 13

* Restated to reflect change to segment

For comparable IFRS figures, see note 2 Segments to the Condensed interim financial statements. For items impacting net operating

income/(loss), see Use and reconciliation of non -GAAP financial measures in the Supplementary disclosures.

Equinor fourth quarter 2020 14

Full year 2020

Net operating income

for E&P International was negative USD 3,565 million in 2020, compared to positive USD 1,471 million in

2019. The negative development was mainly due to lower liquids and gas prices, higher impairments in 2020 , write down of previously

capitalised well costs of USD 982 million related to the Tanzania LNG project and lower entitlement production in 2020.

In 2020, net operating income was negatively impacted by net impairments of USD 1,933 million. In 2019, net operating income was

negatively impacted by net impairments of USD 38 million and an implementation effect of USD 63 million from a change in

accounting policy for lifting imbalances.

Adjusted operating and administrative expenses decreased mainly due to lower royalties and production fees primarily driven by lower

volumes and prices. Lower operation and maintenance expenses contributed to the decrease. Adjusted depreciation, amortisation

and net impairment losses decreased due to higher proved reserves estimates and lower production from mature fields. New fields on

stream partially offset the decrease. Adjusted exploration expenses increased mainly due to write down of previously capitalised well

costs of USD 982 million related to the Tanzania LNG project and a lower portion of exploration expenditure being capitalised this

period. Lower seismic, drilling and field development costs partially offset the increase.

After total adjustments of USD 1,870 million to net operating income,

Adjusted

earnings

 [5] were negative USD 1,695 million in 2020,

down from positive USD 1,616 million in 2019.

Equinor fourth quarter 2020 15

EXPLORATION & PRODUCTION USA

In the second quarter of 2020, Equinor changed its internal reporting to management, impacting the composition of Equinor's

operating and reporting segments. Equinor’s upstream activities in the USA are now reported separately to management, and such

information is also considered to be useful to the users of the financial statements, resulting in the exploration and production activities

in the USA being considered a separate operating- and reporting segment as of the second quarter of 2020. Previously these

activities were included in the DPI operating segment and presented as part of the E&P International reporting segment.

Fourth quarter 2020 review

Average daily equity production of liquids and gas

 was 390 mboe per day in the fourth quarter of 2020 compared to 437 mboe per

day in the fourth quarter of 2019. The decrease was mainly due to the divestment of the Eagle Ford asset in 2019, planned

maintenance and weather shutdowns in the US offshore.

Average daily entitlement production of liquids and gas

decreased slightly to 332 mboe per day in the fourth quarter of 2020

compared to 374 mboe per day in the fourth quarter of 2019. The decrease was due to lower equity production, slightly offset by lower

effects from US onshore royalty volumes after the divestment of the Eagle Ford asset. The net effects from US royalties were 58

mboe per day in the fourth quarter of 2020 compared to 64 mboe per day in the fourth quarter of 2019.

Net operating income

was negative USD 559 million in the fourth quarter of 2020 compared to positive USD 7 million in the fourth

quarter of 2019. The decrease was mainly due to impairments of assets in the fourth quarter of 2020 in addition to lower production

and lower commodity prices. Lower operating costs due to the divestment of the Eagle Ford asset in the fourth quarter of 2019 in

addition to lower depreciation cost partially offset the decrease. 

In the fourth quarter of 2020, net operating income was negatively impacted by net impairments of USD 369 million, with the largest

effect from unconventional US onshore assets. In the fourth quarter of 2019 , net operating income was negatively impacted by loss on

the divestment of unconventional US onshore asset of USD 27 million.

Adjusted operating and administrative expenses decreased mainly due to the divestment of the Eagle Ford asset in the fourth quarter

of 2019. Lower transportation cost due to reduced production volumes in addition to lower production fees driven by lower prices

contributed to the decrease. Adjusted depreciation, amortisation and net impairment losses decreased mainly due to lower

depreciation basis resulting from net impairments in previous periods in addition to higher proved reserves estimates in US offshore.

Adjusted exploration expenses increased mainly due to a lower portion of exploration expenditure being capitalised. Lower field costs

partially offset the increase.

After total adjustments of USD 387 million to net operating income,

Adjusted earnings

 [5] were negative USD 172 million in the

fourth quarter of 2020, down from USD 54 million in the fourth quarter of 2019.

Quarters

Change

Adjusted earnings

Full year

Q4 2020

Q3 2020

Q4 2019*

Q4 on Q4

(in USD million)

2020

2019*

Change

644

611

1,060

(39%)

Adjusted total revenues and other income

2,615

4,229

(38%)

(287)

(315)

(395)

(27%)

Adjusted operating and administrative expenses

(1,263)

(1,538)

(18%)

(442)

(469)

(575)

(23%)

Adjusted depreciation, amortisation and net impairment

losses

(1,886)

(2,209)

(15%)

(87)

(20)

(37)

>100%

Adjusted exploration expenses

(161)

(101)

60%

(172)

(193)

54

N/A

Adjusted earnings/(loss) [5]

(696)

381

N/A

Equinor fourth quarter 2020 16

* Restated to reflect this segment

For comparable IFRS figures, see note 2 Segments to the Condensed interim financial statements. For items impacting net operating

income/(loss), see Use and reconciliation of non -GAAP financial measures in the Supplementary.

Equinor fourth quarter 2020 17

Full year 2020

Net operating income

for E&P USA was negative USD 3,512 million in 2020 compared to negative USD 2,27 1 million in 2019. The

negative development was mainly due to higher net impairments in 2020 in addition to lower liquids and gas prices. This was partially

offset by lower operating and administrative expenses in addition to lower depreciation expenses.

In 2020, net operating income was negatively impacted by net impairment losses of USD 2,760 million, mainly due to reduced price

assumptions with the largest effect being on an unconventional US onshore asset. In 2019, net operating income was negatively

impacted by net impairments of USD 2,532 million, with the largest effect on unconventional US onshore assets.

Adjusted operating and administrative expenses decreased mainly due to the divestment of the Eagle Ford asset in the fourth quarter

of 2019. Reduced severance taxes due to lower prices contributed to the decrease. Adjusted depreciation, amortisation and net

impairment losses decreased mainly due to lower depreciation basis resulting from net impairments in previous periods in addition to

higher proved reserves estimates in US offshore. Increased investments and acquired interest in the Caesar Tonga field during 2019

partially offset the decrease. Adjusted exploration expenses increased mainly due to higher drilling costs. Lower seismic, field

development and other costs partially offset the increase.

After total adjustments of USD 2,816 million to net operating income.

Adjusted

earnings

 [5] were negative USD 696 million in 2020,

down from positive USD 381 million in 2019.

Equinor fourth quarter 2020 18

MARKETING, MIDSTREAM & PROCESSING

Fourth quarter 2020 review

Natural gas sales volumes

amounted to 15.0 billion standard cubic meters (bcm) in the fourth quarter of 2020, decrease of 0.9 bcm

compared to the fourth quarter of 2019. Of the total gas sales in the fourth quarter of 2020, entitlement gas was 13.2 bcm, 

down 0.4 bcm from the fourth quarter of 2019. The decrease was mainly due to the absence of equity LNG volumes as a result of the

outage at the Hammerfest LNG plant due to shutdown .

Liquids sales volumes

 amounted to 184.1 million barrels (mmbl) in the fourth quarter of 2020 , up 12.8 mmbl compared to the fourth

quarter of 2019 mainly due to increased purchase from third party.

Average invoiced European natural gas sales price

was 5% lower in the fourth quarter of 2020 compared to the fourth quarter of

2019 mainly due to change in gas sales strategy .

Average invoiced North American piped gas sales price

 decreased by 11 % in

the same period mainly due to weakening prices in the US gas sales areas.

Net operating income

 was negative USD 480 million in the fourth quarter of 2020 compared to positive USD 360 million in the fourth

quarter of 2019. The decrease was mainly due to impairments of USD 638 million mostly related to refinery asset in addition to

inventory hedging effects of USD 315 million in the fourth quarter of 2020, compared to inventory hedging effects of USD 180 million

in the fourth quarter of 2019. Negative results from weak refinery margin and the absence of LNG sales due to the outage at the

Hammerfest LNG plant contributed to the decrease of net operating income in the fourth quarter of 2020. Unrealised gain on

derivatives of USD 50 million positively impacted net operating income in the fourth quarter of 2020, compared to a loss on derivatives

of USD 111 million in the fourth quarter of 2019.

Adjusted purchases [6] decreased mainly due to lower prices for all products, partially offset by higher third-party volumes for liquids.

Adjusted operating and administrative expenses decreased mainly due to lower freight rates on shipping of liquids. Adjusted

depreciation, amortisation and net impairment losses slightly increased.

After total adjustments of USD 832 million to net operating income,

Adjusted earnings

 [5] were USD 352 million in the fourth quarter

of 2020, compared to USD 524 million in the fourth quarter of 2019. The decrease was mainly due to negative results from weak

refinery margins and the absence of LNG sales due to the outage at the Hammerfest LNG plant, partially offset by piped gas activity.

Quarters

Change

Adjusted earnings

Full year

Q4 2020

Q3 2020

Q4 2019

Q4 on Q4

(in USD million)

2020

2019

Change

11,866

10,704

14,766

(20%)

Adjusted total revenues and other income

45,158

60,989

(26%)

(10,342)

(9,174)

(12,909)

(20%)

Adjusted purchases [6]

(37,944)

(54,574)

(30%)

(1,064)

(1,167)

(1,237)

(14%)

Adjusted operating and administrative expenses

(4,816)

(4,479)

8%

(107)

(102)

(96)

11%

Adjusted depreciation, amortisation and net impairment

losses

(394)

(394)

0%

352

262

524

(33%)

Adjusted earnings [5]

2,004

1,541

30%

For comparable IFRS figures, see note 2 Segments to the Condensed interim financial statements. For items impacting net operating

income/(loss), see Use and reconciliation of non -GAAP financial measures in the Supplementary disclosures.

Full year 2020

Equinor fourth quarter 2020 19

Net operating income

for MMP was positive USD 359 million in 2020 compared to positive USD 1,004 million in 2019. The decrease

was mainly due to impairments of USD 1,060 million mostly related to refinery asset s in 2020, compared to impairments of USD 206

million related to damage to the South Riding Point oil terminal in the Bahamas in 2019. Negative results from weak refinery margin

and the absence of LNG sales due to the outage at the Hammerfest LNG plant contributed to the decrease of net operating income in

2020. Lower provisions of USD 245 million in 2020 compared to USD 418 million in 2019 partially offset the decrease. 

Adjusted total revenues and other income and Adjusted purchases [6] decreased mainly due to lower prices for all products, partially

offset by higher volumes for liquids. Adjusted operating and administrative expenses increased mainly due to higher freight rates on

shipping of liquids. Adjusted depreciation, amortisation and net impairment losses were stable.

After total net adjustments of USD 1,645 million,

 Adjusted earnings

 [5] were USD 2,004 million in 2020, an increase from 

USD 1,541 million in 2019, mainly due to increased results from piped gas and liquids trading.

Equinor fourth quarter 2020 20

CONDENSED INTERIM FINANCIAL STATEMENTS

Fourth quarter 2020

CONSOLIDATED STATEMENT OF INCOME

Quarters

Full year

Q4 2020

Q3 2020

Q4 2019

(unaudited, in USD million)

Note

2020

2019*

11,876

11,250

14,900

Revenues

45,753

62,911

(137)

86

14

Net income/(loss) from equity accounted investments

53

164

7

3

255

Other income

12

1,283

11,746

11,339

15,169

Total revenues and other income

2

45,818

64,357

(5,533)

(5,307)

(6,603)

Purchases [net of inventory variation]

(20,986)

(29,532)

(2,005)

(2,187)

(2,238)

Operating expenses

(8,831)

(9,660)

(151)

(181)

(167)

Selling, general and administrative expenses

(706)

(809)

(3,478)

(4,798)

(4,165)

Depreciation, amortisation and net impairment losses

6

(15,235)

(13,204)

(1,569)

(886)

(480)

Exploration expenses

6

(3,483)

(1,854)

(12,735)

(13,359)

(13,653)

Total operating expenses

2

(49,241)

(55,058)

(989)

(2,019)

1,516

Net operating income/(loss)

2

(3,423)

9,299

(326)

(343)

(421)

Interest expenses and other financial expenses

(1,392)

(1,450)

(84)

142

(74)

Other financial items

556

1,443

(410)

(201)

(495)

Net financial items

4

(836)

(7)

(1,400)

(2,220)

1,020

Income/(loss) before tax

(4,259)

9,292

(1,016)

95

(1,250)

Income tax

5

(1,237)

(7,441)

(2,416)

(2,124)

(230)

Net income/(loss)

(5,496)

1,851

(2,421)

(2,127)

(236)

Attributable to equity holders of the company

(5,510)

1,843

Equinor fourth quarter 2020 21

6

3

6

Attributable to non-controlling interests

14

8

(0.75)

(0.65)

(0.07)

Basic earnings per share (in USD)

(1.69)

0.55

(0.75)

(0.65)

(0.07)

Diluted earnings per share (in USD)

(1.69)

0.55

3,247

3,248

3,313

Weighted average number of ordinary shares outstanding (in millions)

3,269

3,326

3,257

3,257

3,322

Weighted average number of ordinary shares outstanding diluted (in millions)

3,277

3,334

* Audited

Equinor fourth quarter 2020 22

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Quarters

Full year

Q4 2020

Q3 2020

Q4 2019

(unaudited, in USD million)

2020

2019*

(2,416)

(2,124)

(230)

Net income/(loss)

(5,496)

1,851

(303)

34

63

Actuarial gains/(losses) on defined benefit pension plans

(106)

427

75

(6)

(12)

Income tax effect on income and expenses recognised in OCI

1)

19

(98)

(228)

27

51

Items that will not be reclassified to the Consolidated statement of income

(87)

330

2,798

888

1,203

Currency translation adjustments

1,064

(51)

0

0

0

Share of OCI from equity accounted investments

0

44

2,798

888

1,203

Items that may be subsequently reclassified to the Consolidated statement of

income

1,064

(7)

2,570

915

1,253

Other comprehensive income/(loss)

977

323

154

(1,209)

1,023

Total comprehensive income/(loss)

(4,519)

2,174

149

(1,212)

1,017

Attributable to the equity holders of the company

(4,533)

2,166

6

3

6

Attributable to non-controlling interests

14

8

* Audited

1) Other comprehensive income (OCI).

Equinor fourth quarter 2020 23

CONSOLIDATED BALANCE SHEET

At 31 December 

At 30 September 

At 31 December

(unaudited, in USD million)

Note

2020

2020

2019*

ASSETS

Property, plant and equipment

6

65,672

62,988

69,953

Intangible assets

6

8,148

9,667

10,738

Equity accounted investments

2,262

1,650

1,442

Deferred tax assets

4,974

4,251

3,881

Pension assets

1,310

1,103

1,093

Derivative financial instruments

2,476

1,964

1,365

Financial investments

4,083

3,437

3,600

Prepayments and financial receivables

861

1,240

1,214

Total non-current assets

89,786

86,300

93,285

Inventories

3,084

2,860

3,363

Trade and other receivables

8,232

6,108

8,233

Derivative financial instruments

886

570

578

Financial investments

11,865

10,563

7,426

Cash and cash equivalents

6,757

7,844

5,177

Total current assets

30,824

27,944

24,778

Assets classified as held for sale

3

1,362

188

0

Total assets

121,972

114,432

118,063

EQUITY AND LIABILITIES

Shareholders' equity

33,873

34,084

41,139

Non-controlling interests

19

24

20

Total equity

33,892

34,108

41,159

Finance debt

4

32,338

32,193

24,945

Equinor fourth quarter 2020 24

Deferred tax liabilities

11,224

9,451

9,410

Pension liabilities

4,292

3,705

3,867

Provisions and other liabilities

7

19,731

19,191

17,951

Derivative financial instruments

676

787

1,173

Total non-current liabilities

68,260

65,328

57,346

Trade, other payables and provisions

10,510

8,118

10,450

Current tax payable

5

1,148

543

3,699

Finance debt

4

5,777

5,277

4,087

Dividends payable

357

292

859

Derivative financial instruments

1,710

765

462

Total current liabilities

19,502

14,996

19,557

Liabilities directly associated with the assets classified as held for sale 

3

318

0

0

Total liabilities

88,081

80,324

76,904

Total equity and liabilities

121,972

114,432

118,063

* Audited

Equinor fourth quarter 2020 25

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(unaudited, in USD million)

Share

capital

Additional

paid-in

capital

Retained

earnings

Currency

translation

adjustments

OCI from

equity

accounted

investments

Share-

holders'

equity

Non-

controlling

interests

Total equity

At 31 December 2018*

1,185

8,247

38,790

(5,206)

(44)

42,970

19

42,990

Net income/(loss)

1,843

1,843

8

1,851

Other comprehensive income/(loss)

330

(51)

44

323

323

Total comprehensive income/(loss)

2,174

Dividends

(3,453)

(3,453)

(3,453)

Share buy-back

1)

(500)

(500)

(500)

Other equity transactions

(15)

(29)

(44)

(7)

(52)

At 31 December 2019*

1,185

7,732

37,481

(5,258)

0

41,139

20

41,159

At 31 December 2019*

1,185

7,732

37,481

(5,258)

0

41,139

20

41,159

Net income/(loss)

(5,510)

(5,510)

14

(5,496)

Other comprehensive income/(loss)

(87)

1,064

0

977

977

Total comprehensive income/(loss)

(4,519)

Dividends

(1,833)

(1,833)

(1,833)

Share buy-back

1)

(21)

(869)

(890)

(890)

Other equity transactions

(11)

0

(11)

(15)

(25)

At 31 December 2020

1,164

6,852

30,050

(4,194)

0

33,873

19

33,892

* Audited

1) In September 2019 Equinor launched a USD 5 billion share buy-back programme, where the first tranche of the programme of around 

USD 1.5 billion has been finalis ed. A proportionate share of 67% from the Norwegian State was redeemed in accordance with an

agreement with the Ministry of Petroleum and Energy for the Norwegian State to maintain their ownership percentage in Equinor. The

redemption was approved by the annual general meeting held 14 May 2020.

 The first tranche of USD 500 million acquired in the market has been recognised as a reduction in equity as treasury shares in third

quarter 2019. The State’s share including interest and dividends has been recognised as a short-term obligation and as a reduction in

equity as treasury shares, subsequent to the decision at the annual general meeting held on 14 May 2020. The liability of USD 0.9 billion 

(NOK 9.1 billion) was settled 23 July 2020. The corresponding shares of the first tranche of the buy-back programme were cancelled 

on 16 July 2020.

Equinor has suspended the remaining share buy-back programme until further notice. The announced second tranche of around 

USD 675 million, including the Norwegian State share, will under the current market conditions not be executed as previously announced

and planned.

Equinor fourth quarter 2020 26

CONSOLIDATED STATEMENT OF CASH FLOWS

Quarters

Full year

Q4 2020

Q3 2020

Q4 2019

(unaudited, in USD million)

Note

2020

2019*

(1,400)

(2,220)

1,020

Income/(loss) before tax

(4,259)

9,292

3,478

4,798

4,165

Depreciation, amortisation and net impairment losses

6

15,235

13,204

1,284

662

104

Exploration expenditures written off

2,506

777

491

131

(23)

(Gains)/losses on foreign currency transactions and balances

4

646

(224)

20

(1)

(193)

(Gains)/losses on sale of assets and businesses

3

18

(1,187)

168

258

(143)

(Increase)/decrease in other items related to operating activities

918

1,016

(5)

(182)

393

(Increase)/decrease in net derivative financial instruments

(451)

(595)

12

41

49

Interest received

162

215

(204)

(146)

(197)

Interest paid

(730)

(723)

3,843

3,342

5,175

Cash flows provided by operating activities before taxes paid and working

capital items

14,045

21,776

(393)

(110)

(2,651)

Taxes paid

(3,134)

(8,286)

(1,107)

(600)

(751)

(Increase)/decrease in working capital

(524)

259

2,343

2,632

1,774

Cash flows provided by operating activities 

10,386

13,749

0

0

(0)

Cash used in business combinations

1)

3

0

(2,274)

(2,504)

(1,723)

(2,700)

Capital expenditures and investments

(8,476)

(10,204)

(538)

(1,034)

(212)

(Increase)/decrease in financial investments

2)

(3,703)

(1,012)

(288)

(261)

3

(Increase)/decrease in derivatives financial instruments

(620)

298

218

(18)

(18)

(Increase)/decrease in other interest- bearing items

202

(10)

490

14

882

Proceeds from sale of assets and businesses

3

505

2,608

(2,623)

(3,023)

(2,045)

Cash flows used in investing activities

(12,092)

(10,594)

0

0

984

New finance debt

8,347

984

(1,066)

(1,642)

(1,029)

Repayment of finance debt

(3,332)

(2,419)

Equinor fourth quarter 2020 27

(292)

(287)

(850)

Dividends paid

(2,330)

(3,342)

(0)

(1,001)

(351)

Share buy-back

3)

(1,059)

(442)

254

1,308

(237)

Net current finance debt and other financing activities

1,365

(277)

(1,104)

(1,623)

(1,483)

Cash flows provided by/(used in) financing activities

2,991

(5,496)

(1,383)

(2,014)

(1,755)

Net increase/(decrease) in cash and cash equivalents

1,285

(2,341)

296

158

115

Effect of exchange rate changes on cash and cash equivalents

294

(38)

7,844

9,700

6,816

Cash and cash equivalents at the beginning of the period (net of overdraft)

5,177

7,556

6,757

7,844

5,177

Cash and cash equivalents at the end of the period (net of overdraft)

4)

6,757

5,177

* Audited

1) Net after cash and cash equivalents acquired.

2) Includes sale of Lundin shares in the second quarter of 2020. For more information, see note 3 Acquisition and disposals.

3) For more information, see Consolidated statement of changes in equity.

4) At 31 December 2020 and at 31 December 2019 cash and cash equivalents net overdraft were zero.

Equinor fourth quarter 2020 28

Notes to the Condensed interim financial statements

1 Organisation and basis of preparation

Organisation and principal activities

Equinor ASA, originally Den Norske Stats Oljeselskap AS, was founded in 1972 and is incorporated and domiciled in Norway. The

address of its registered office is Forusbeen 50, N-4035 Stavanger, Norway.

The Equinor group’s (Equinor’s) business consists principally of the exploration, production, transportation, refining and marketing of

petroleum and petroleum -derived products, and other forms of energy. Equinor ASA is listed on the Oslo Børs (Norway) and the New

York Stock Exchange (USA).

All of Equinor's oil and gas activities and net assets on the Norwegian continental shelf are owned by Equinor Energy AS, a 100%

owned operating subsidiary of Equinor ASA. Equinor Energy AS is co-obligor or guarantor of certain debt obliga tions of Equinor ASA.

Following changes in Equinor's internal reporting to management the composition of Equinor's operating and reporting segments has

changed as of the second quarter of 2020. Segment information for prior periods has been restated to align with the new segment

presentation. For further information see note 2 Segments to these Condensed interim financial statements.

Equinor's Condensed interim financial statements for the fourth quarte r of 2020 were authorised for issue by the board of directors on 

9 February 2021.

Basis of preparation

These Condensed interim financial statements are prepared in accordance with International Accounting Standard 34 Interim

Financial Reporting as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (EU).

The Condensed interim financial statements do not include all the information and disclosures required by International Financial

Reporting Standards (IFRS) for a complete set of financial statements, and these Condensed interim financial statements should be

read in conjunction with the Consolidated annual financial statements for 2019. IFRS as adopted by the EU differs in certain respects

from IFRS as issued by the IASB, but the differences do not impact Equinor's financial statements for the periods presented. A

description of the significant accounting policies applied in preparing these Condensed interim financial statements is included in

Equinor's Consolidated annual financial statements for 2019.

On 1 January 2020, Equinor implemented amendments to IFRS 3 Business Combinations, which apply to relevant transactions that

occur on or after the implementation date. The amendments introduce clarification to the definition of a business, and also establish

an optional test to identify a concentration of fair value that, if applied and met, will lead to the conclusion that an acquired set of

activities and assets is not a business.

There have been no other changes to the significant accounting policies during 2020 compared to the Consolidated annual financial

statements for 2019.

The Condensed interim financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair

presentation of the financial position, results of operations and cash flows for the dates and interim periods presented. Interim period

results are not necessarily indicative of results of operations or cash flows for an annual period. Certain amounts in the comparable

periods in the note disclosures have been reclassified to conform to current period presentation. The subtotals and totals in some of

the tables may not equal the sum of the amounts shown due to rounding.

The Condensed interim financial statements are unaudited.

Use of estimates

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions

that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated

assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances,

the results of which form the basis for making the judgments about carrying values of assets and liabilities that are not readily

apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed

on an on-going basis, considering current and expected future market conditions. A change in an accounting estimate is recognised in

the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if

the revision affects both current and future periods. The ongoing Covid-19 pandemic and the significant effects it has had on the oil

price during 2020, in addition to the increasing momentum towards a transition into a low carbon future, create additional estimation

uncertainties and impact key assumptions applied by Equinor in the valuation of our asse ts and the measurement of our liabilities, and

related sensitivities. Reference is made to n ote 8 Impact of the Covid -19 pandemic and oil price decline for further information. 

Equinor fourth quarter 2020 29

2 Segments

Equinor’s operations are managed through the following operating segments (business areas): Development & Production Norway

(DPN), Development & Production International (DPI), Development & Production Brazil (DPB), Development & Production USA

(DPUSA), Marketing, Midstream & Processing (MMP), New Energy Solutions (NES), Technology, Projects & Drilling (TPD),

Exploration (EXP) and Global Strategy & Business Development (GSB).

The reporting segments Exploration & Production Norway (E&P Norway), Exploration & Production USA (E&P USA) and MMP consist

of the business areas DPN, DPUSA and MMP respectively. The operating segments DPI and DPB are aggregated into the reporting

segment Exploration & Production International (E&P International). The aggregation has its basis in similar economic characteristics,

such as similar revenue growth, net operating income, the assets’ long term and capital-intensive nature and exposure to volatile oil

and gas commodity prices, the nature of products, service and production processes, the type and class of customers, the methods of

distribution and regulatory environment. The operating segments NES, GSB, TPD, EXP and corporate staffs and support functions

are aggregated into the reporting segment “Other” due to the immateriality of these operating segments. The majority of the costs

within the operating segments GSB, TPD and EXP are allocated to the E&P Norway, E&P USA, E&P International and MMP reporting

segments.

In the second quarter of 2020, Equinor changed its internal reporting to management, impacting the composition of Equinor's

operating and reporting segments. Equinor’s upstream activities in the USA is as from the second quarter reported separately to

management. The fact that such information is also considered to be useful to the users of the financial statements, resulted in the

exploration and production activities in the USA as of the second quarter of 2020 were considered a separate operating- and reporting

segment. Previously these activities were included in the DPI operating segment and presented as part of the E&P International

reporting segment. The new structure has been reflected retrospectively with restated comparable figures.

Inter-segment sales and related unrealised profits, mainly from the sale of crude oil and products, are eliminated in the Eliminiations

column below. Inter-segment revenues are based upon estimated market prices. 

Segment data for the fourth quarter of 2020 and 2019 is presented below. The reported measure of segment profit is net operating

income/(loss)

.

 Deferred tax assets, pension assets and non-current financial assets are not allocated to the segments.

The measurement basis for segments is IFRS as applied by the group with the exception of IFRS 16 Leases and the line item

Additions to PP&E, intangibles and equity accounted investments. All IFRS 16 leases are presented within the Other segment. The

lease costs for the period are allocated to the different segments based on underlying lease payments, with a corresponding credit in

the Other segment. Lease costs allocated to licence partners are recognised as other revenues in the Other segment. Additions to

PP&E, intangible assets and equity accounted investments in the E&P and MMP segments include the period’s allocated lease costs

related to activity being capitalised with a corresponding negative addition in the Other segment. The line item Additions to PP&E,

intangibles and equity accounted investments excludes movements related to changes in asset retirement obligations.

Fourth quarter 2020

E&P

Norway 

E&P

Internationa

l

E&P 

USA

MMP

Other

Eliminations 

Total 

(in USD million)

Revenues third party, other revenues and other income

58

143

83

11,519

80

0

11,883

Revenues inter-segment

3,819

771

561

77

1

(5,229)

0

Net income/(loss) from equity accounted investments

0

(168)

0

5

26

0

(137)

Total revenues and other income 

3,877

747

644

11,601

107

(5,229)

11,746

Purchases [net of inventory variation]

(0)

(16)

(0)

(10,273)

0

4,756

(5,533)

Operating, selling, general and administrative

expenses

(753)

(288)

(305)

(1,062)

83

170

(2,156)

Depreciation, amortisation and net impairment losses

(1,227)

(588)

(653)

(745)

(264)

0

(3,478)

Exploration expenses

(94)

(1,231)

(244)

0

0

0

(1,569)

Equinor fourth quarter 2020 30

Total operating expenses

(2,074)

(2,123)

(1,202)

(12,081)

(181)

4,926

(12,735)

Net operating income/(loss)

1,803

(1,376)

(559)

(480)

(75)

(303)

(989)

Additions to PP&E, intangibles and equity accounted

investments

1,340

1,026

123

47

277

0

2,813

Equinor fourth quarter 2020 31

Fourth quarter 2019

E&P

Norway 

E&P

Internationa

l

E&P 

USA

MMP

Other

Eliminations 

Total 

(in USD million)

(restated)

(restated)

Revenues third party, other revenues and other income

22

375

122

14,342

293

0

15,154

Revenues inter-segment

4,934

1,105

938

127

1

(7,104)

0

Net income/(loss) from equity accounted investments 

0

(3)

1

5

11

0

14

Total revenues and other income 

4,956

1,477

1,060

14,474

305

(7,104)

15,169

Purchases [net of inventory variation]

(2)

(26)

1

(12,873)

(0)

6,297

(6,603)

Operating, selling, general and administrative

expenses

(842)

(360)

(442)

(1,145)

169

215

(2,405)

Depreciation, amortisation and net impairment losses

(2,494)

(737)

(575)

(96)

(262)

0

(4,165)

Exploration expenses

(142)

(301)

(37)

0

0

0

(480)

Total operating expenses

(3,480)

(1,424)

(1,053)

(14,114)

(93)

6,511

(13,653)

Net operating income/(loss) 

1,476

53

7

360

211

(593)

1,516

Additions to PP&E, intangibles and equity accounted

investments

1,455

561

518

114

227

0

2,875

Full year 2020

E&P

Norway 

E&P

Internationa

l

E&P 

USA

MMP

Other

Eliminations 

Total 

(in USD million)

Revenues third party, other revenue and other income

91

452

368

44,605

249

0

45,765

Revenues inter-segment

11,804

3,183

2,247

309

4

(17,547)

0

Net income/(loss) from equity accounted investments

0

(146)

0

31

168

0

53

Total revenues and other income 

11,895

3,489

2,615

44,945

421

(17,547)

45,818

Purchases [net of inventory variation]

(0)

(72)

0

(38,072)

1

17,157

(20,986)

Operating, selling, general and administrative

expenses

(2,829)

(1,440)

(1,313)

(5,060)

419

685

(9,537)

Depreciation, amortisation and net impairment losses

(5,546)

(3,471)

(3,824)

(1,453)

(940)

0

(15,235)

Exploration expenses

(423)

(2,071)

(990)

0

1

0

(3,483)

Total operating expenses

(8,798)

(7,054)

(6,127)

(44,586)

(519)

17,842

(49,241)

Equinor fourth quarter 2020 32

Net operating income/(loss)

3,097

(3,565)

(3,512)

359

(98)

296

(3,423)

Additions to PP&E, intangibles and equity accounted

investments

4,851

2,608

1,068

190

1,044

0

9,761

Balance sheet information

Equity accounted investments

3

1,125

0

92

1,042

0

2,262

Non-current segment assets 

35,833

17,329

12,376

4,147

4,135

0

73,820

Non-current assets not allocated to segments 

13,704

Total non-current assets 

89,786

Equinor fourth quarter 2020 33

Full year 2019

E&P

Norway 

E&P

Internationa

l

E&P 

USA

MMP

Other

Eliminations 

Total 

(in USD million)

(restated)

(restated)

Revenues third party, other revenue and other income

1,048

1,685

441

60,491

527

0

64,194

Revenues inter-segment

17,769

4,376

3,792

439

4

(26,379)

0

Net income/(loss) from equity accounted investments

15

24

6

25

93

0

164

Total revenues and other income 

18,832

6,085

4,239

60,955

624

(26,379)

64,357

Purchases [net of inventory variation]

(1)

(34)

0

(54,454)

(1)

24,958

(29,532)

Operating, selling, general and administrative

expenses

(3,284)

(1,684)

(1,668)

(4,897)

272

793

(10,469)

Depreciation, amortisation and net impairment losses

(5,439)

(2,228)

(4,133)

(600)

(804)

0

(13,204)

Exploration expenses

(478)

(668)

(709)

0

0

0

(1,854)

Total operating expenses

(9,201)

(4,614)

(6,510)

(59,951)

(533)

25,750

(55,058)

Net operating income/(loss)

9,631

1,471

(2,271)

1,004

92

(629)

9,299

Additions to PP&E, intangibles and equity accounted

investments

7,316

2,851

3,004

788

823

0

14,782

Balance sheet information

Equity accounted investments 

3

321

0

90

1,028

0

1,442

Non-current segment assets 

33,795

20,784

16,774

5,124

4,214

0

80,691

Non-current assets not allocated to segments 

11,152

Total non-current assets 

93,285

In the fourth quarter of 2020, Equinor recognised net impairment of USD 1,302 million of which USD 315 million was acquisition cost

and signature bonuses classified as exploration expenses. The line item Exploration expenses in the Consolidated statement of

income also includes impairment of capitali sed exploration well cost . For information regarding impairment of capitalised exploration

cost, see note 6 Property, plant and equipment and intangible assets.

In the E&P International segment the impairments were USD 229 million of which USD 157 million was classified as exploration

expenses and related to an exploration asset in South America. The impairment of other assets was mainly caused by reduced

reserve estimates in the Europe and Asia area.

In the E&P USA segment the impairments were USD 369 million of which USD 158 million was classified as exploration expenses.

The impairment was mainly related to an Equinor-operated North America unconventional asset measured at fair value less cost of

disposal in connection with reclassification to held for sale.

In the E&P Norway segment the impairment was USD 41 million and related to goodwill.

Equinor fourth quarter 2020 34

In the MMP segment the impairments were USD 638 million, mainly related to a refinery caused by reduced margin assumptions and

increased cost estimates.

Most of the renewable assets in Equinor Group are accounted for using equity method and the results are presented in the Other

reporting segment. The net income from the equity accounted investments within the operating segment NES was USD 21 million in

the fourth quarter of 2020 and USD 163 million in the full year 2020, which compares to USD 13 million in the fourth quarter of 2019

and 

USD 95 million in the full year 2019.

For information regarding acquisition and disposal of interests, see note 3 Acquisitions and disposals.

See also note 8 Impact of the Covid-19 pandemic and oil price decline.

Equinor fourth quarter 2020 35

Revenues from contract s with customers by geographical areas

When attributing the line item Revenues third party, other revenues and other income to the country of the legal entity executing the

sale for the fourth quarter of 2020, Norway constitutes 79% and USA constitutes 13 % of such revenues. For the fourth quarter of

2019, Norway and USA constituted 78% and 15% of such revenues, respectively.

For the full year of 2020, Norway constitutes 80% and USA constitutes 1 4% of such revenues. For the full year of 2019, Norway and

USA constituted 75 % and 18% of such revenues, respectively.

Non-current assets by country

At 31 December 

At 30 September 

At 31 December 

(in USD million)

2020

2020

2019

Norway

41,054

37,327

40,292

USA

13,172

14,858

17,776

Brazil

9,341

8,752

8,724

UK

4,398

4,175

5,657

Azerbaijan

1,683

1,684

1,598

Canada

1,527

1,468

1,672

Russia

973

429

447

Denmark

953

911

984

Algeria

808

845

915

Angola

725

1,270

1,564

Other countries

1,447

2,587

2,504

Total non-current assets

1)

76,082

74,305

82,133

1) Excluding deferred tax assets, pension assets and non-current financial assets.

Revenues from contracts with customers and other revenues

Quarters

Full Year

Q4 2020

Q3 2020

Q4 2019

(in USD million)

2020

2019

6,015

6,635

7,837

Crude oil

24,509

33,505

2,503

1,351

2,642

Natural gas

7,213

11,281

2,100

1,048

2,154

 - European gas

5,839

9,366

295

229

354

 - North American gas

1,010

1,359

108

74

134

 - Other incl. LNG

363

556

1,687

1,560

2,879

Refined products

6,534

10,652

1,499

1,282

1,548

Natural gas liquids

5,069

5,807

172

295

295

Transportation

1,083

967

365

91

27

Other sales

681

445

12,242

11,215

15,229

Revenues from contracts with customers

45,088

62,657

28

27

73

Taxes paid in-kind

93

344

(27)

(16)

(110)

Physically settled commodity derivatives

209

(1,086)

(442)

(44)

(354)

Gain/(loss) on commodity derivatives

108

732

74

70

62

Other revenues

256

265

(367)

36

(329)

Total other revenues

665

254

11,876

11,250

14,900

Revenues

45,753

62,911

Equinor fourth quarter 2020 36

3 Acquisitions and disposals

Acquisition onshore Russia 

On 11 December 2020 Equinor closed a transaction with Rosneft to acquire a 49% interest in the limited liability company LLC

KrasGeoNaC (KGN) which holds twelve conventional onshore exploration and production licences in Eastern Siberia. The cash

consideration at closing, including interim period adjustment, was around USD 384 million. In addition to the cash consideration

Equinor recognised a contingent consideration of USD 145 million related to future exploration expenses. The total consideration for

the acquisition of USD 529 million has been accounted using equity method in the line item Equity accounted investment and reported

in the E&P International segment.

As part of this agreement, Equinor extinguished its exploration commitments offshore in the Sea of Okhotsk and as such has no

outstanding obligations in that area. The previous commitment in the Sea of Okhotsk has been charged to profit and loss at estimat ed

fair value of USD 166 million. The charge has been accounted as Net income/(loss) from equity accounted investments in the E&P

International segment.

Divestment of 10% of Dogger Bank Farm A and B

On 4 December 2020 Equinor entered into an agreement with Eni to sell a 10% equity interest in the Dogger Bank Wind Farm A and

B assets in the UK for a total consideration of around GBP 202.5 million (USD 273 million). The carrying amount of the interests to be

disposed of is insignificant and is classified as held for sale. Once the transaction s are closed, the new overall shareholding in Dogger

Bank A and Dogger Bank B will be – SSE (40%), Equinor (40%) and Eni (20%). Upon transaction closing, the gain will be presented

in the line item Other income in the Consolidated statement of income in the operating segment NES included in the Other segment.

Divestment of non-operated interest in the Empire Wind and Beacon Wind assets on the US east coast

On 10 September 2020 Equinor entered into an agreement with BP to sell 50% of the non-operated interests in the Empire Wind and

Beacon Wind assets for a total consideration before adjustments of USD 1.1 billion whereas USD 500 million has been prepaid at the

end of December 2020, presented in the line items Cash and cash equivalents and Trade, other payables and provisions in the

Consolidated balance sheet. Through this transaction, the two companies have establis hed a strategic partnership for further growth

within offshore wind in the US. Following the transaction, Equinor will remain the operator with a 50% interest. The 100% interest

share has been reclassified as held for sale. After the transaction Equinor will account for the assets as a joint venture using equity

accounting. The transaction was closed 29 January 2021 where the gain related to the disposed interests was recognised. For further

information see note 9 Subsequent events. Upon transaction closing, the gain will be presented in the line item Other income in the

Consolidated statement of income in the operating segment NES included in the Other segment.

North America unconventional onshore assets

In addition to the Empire Wind and Beacon Wind assets and the Dogger Bank Farm A and B a disposal group of assets has been

classified as held for sale. The disposal group consists of an Equinor -operated North America unconventional onshore asset included

in the reporting segment E&P USA. Equinor has together with a deal advisor actively marketed the disposal group. Equinor is

expecting a divestment during 2021. Equinor has impaired the asset to estimated fair value see note 2 Segments.

Divestment of remaining shares in Lundin

On 8 May 2020 Equinor closed the divestment of its remaining (4.9%) financial shareholding in Lundin Energy AB (formerly Lundin

Petroleum AB). The consideration is SEK 3.3 billion (USD 0.3 billion). The impact on the Consolidated statement of income in the

second quarter was a loss of USD 0.1 billion and was recognised in the line item Interest income and other financial items.

Investment in interest onshore Argentina

On 30 January 2020 Equinor closed a transaction to acquire a 50% ownership share in SPM Argentina S.A (SPM) from Schlumberger

Production Management Holding Argentina B.V.

Shell acquired the remaining 50% ownership share of SPM.

SPM holds a 49%

interest in the Bandurria Sur onshore block in Argentina, and the block is in the pilot phase of development. The consideration

including final adjustments is USD 187 million. In the second quarter , Equinor increased its shareholding in the Bandurria Sur by 5.5%

to 30% for a final consideration of USD 44 million. The investment in SPM is accounted for as a joint venture using the equity method

and reported in the E&P International segment.

Equinor fourth quarter 2020 37

4 Financial items 

Quarters

Full year

Q4 2020

Q3 2020

Q4 2019

(in USD million)

2020

2019

(491)

(131)

23

Gains/(losses) on net foreign exchange

(646)

224

379

235

210

Interest income and other financial items

754

746

27

39

(308)

Gains/(losses) on derivative financial instruments 

448

473

(326)

(343)

(421)

Interest and other finance expenses

(1,392)

(1,450)

(410)

(201)

(495)

Net financial items

(836)

(7)

Gains/(losses) on derivative financial instruments is a gain of USD 448 million in 2020

compared to a gain of USD 473 million in 2019,

mainly due to decreased interest rates.

Equinor has a US Commercial paper programme available with a limit of USD 5 billion of which USD 903 million has been utilised as

of 

31 December 2020.

During 2020, Equinor recorded total lease payments of USD 1,405 million, of which USD 128 million were payment of interests and

USD 1,277 million were payment of lease liabilities. Lease liabilities as at 31 December 2020 were USD 4,406 million, presented in

the Consolidated balance sheet within the line items Current and Non-current finance debt with USD 1,186 million and USD 3,220

million, respectively.

In the second quarter of 2020 Equinor ASA issued bonds with maturities from 5 to 30 years for a total amount of USD 8.3 billion. The

bonds were issued in USD and EUR, amounting to USD 6.5 billion and EUR 1.75 billion, and are fully and unconditionally guaranteed

by Equinor Energy AS. 

5 Income taxes

Quarters

Full year

Q4 2020

Q3 2020

Q4 2019

(in USD million)

2020

2019

(1,400)

(2,220)

1,020

Income/(loss) before tax

(4,259)

9,292

(1,016)

95

(1,250)

Income tax

(1,237)

(7,441)

(72.6%)

4.3%

>100%

Effective tax rate

(29.0%)

80.1%

The tax rate for the fourth quarter of 2020 and for the full year 2020 was primarily influenced by losses including net impairments

recognised in countries with unrecognised deferred taxes or in countries with lower than average tax rates . The tax rate was also

influenced by currency effects in entities that are taxable in other currencies than the functional currency, partially offset by the

temporary changes to Norway’s petroleum tax system and changes in best estimates for uncertain tax positions. See also note 8

Impact of the Covid -19 pandemic and oil price decline.

The tax rate for the fourth quarter of 2019 and for the full year 2019 was primarily influenced by losses recognised in countries with

unrecognised deferred tax assets or in countries with lower than average tax rates, partially offset by the tax exempted gains on

divestments. The tax rate for the fourth quarter of 2019 was also influenced by currency effects in entities that are taxable in other

currencies than the functional currency.

Equinor fourth quarter 2020 38

6 Property, plant and equipment and intangible assets

(in USD million)

Property, plant and

equipment

Intangible

assets

Balance at 31 December 2019

69,953

10,738

Additions 

10,339

491

Transfers 

89

(89)

Disposals and reclassifications 

(17)

(14)

Transferred to assets classified as held for sale

(810)

(516)

Expensed exploration expenditures and net impairment losses

-

(2,506)

Depreciation, amortisation and net impairment losses

(15,158)

(77)

Effect of foreign currency translation adjustments

1,276

120

Balance at 31 December 2020

65,672

8,148

Right-of-use (RoU) assets are included within property, plant and equipment with a net book value of USD 4,119 million per 

31 December 2020. Additions to RoU assets amount to USD 1,326 million. Gross depreciation and impairment of RoU assets amount

to USD 1,254 million for the full year 2020, of which depreciation costs of USD 359 million have been allocated to exploration and

development activities and are presented net on the Depreciation, amortisation and net impairment losses and Additions lines in the

table above.

In the fourth quarter of 2020 it was decided to impair capitalised well costs of USD 982 related to Equinor’s Block 2 exploration licen ce

in Tanzania, included in intangible assets, because overall project economics have not yet improved sufficiently to justify keeping it on

the balance sheet. The impairment is presented in the line item Exploration expenses in the Consolidated statement of income.

Impairments and impairment reversals

For information on impairment losses and reversals per reporting segment, see note 2 Segments.

For the quarter

Property, plant and

equipment

Intangible assets

Total

(in USD million)

2020

2019

2020

2019

2020

2019

Producing and development assets

938

1,199

91

0

1,030

1,199

Goodwill

-

-

41

164

41

164

Other intangible assets

-

-

8

0

8

0

Acquisition costs related to oil and gas prospects

-

-

224

43

224

43

Total net impairment loss/(reversal) recognised

938

1,199

363

208

1,302

1,407

Full year

Property, plant and

equipment

Intangible assets

Total

(in USD million)

2020

2019

2020

2019

2020

2019

Producing and development assets

5,671

3,230

680

608

6,351

3,838

Goodwill

-

-

42

164

42

164

Other intangible assets

-

-

8

41

8

41

Acquisition costs related to oil and gas prospects

-

-

657

49

657

49

Total net impairment loss/(reversal) recognised

5,671

3,230

1,386

863

7,057

4,093

Equinor fourth quarter 2020 39

The net impairments have been recognised in the Consolidated statement of income as Depreciation, amortisation and net

impairment losses and Exploration expenses based on the impaired assets’ nature of property, plant and equipment and intangible

assets, respectively. 

The recoverable amounts in the fourth quarter of 2020 were mainly discounted cash flows based on value in use, except for one held

for sale assessment as described in Note 2 Segment note.

Value in use estimates and discounted cash flows used to determine the recoverable amount of assets tested for impairment are

based on internal forecasts on costs, production profiles and commodity prices. 

Changes to accounting assumptions 

Management’s future commodity price assumptions and currency assumptions are used for value-in-use impairment testing. The

same assumptions are also used for evaluating investment opportunities, together with other relevant criteria, including among others

robustness targets (value creation in lower commodity price scenarios). While there are inherent uncertainties in the assumptions, the

commodity price assumptions as well as currency assumptions reflect management’s best estimate of the price and currency

development over the life of the Group’s assets based on its view of relevant current circumstances and the likely future development

of such circumstances, including energy demand development, energy and climate change policies as well as the speed of the energy

transition, population and economic growth, geopolitical risks, technology and cost development, and other factors. Management’s

best estimate also takes into consideration a range of external forecasts. 

Equinor has performed a thorough and broad analysis of the expected development in drivers for the different commodity markets and

exchange rates, following the recent and ongoing Covid -19 situation and management has gained more insight into the development

of the different markets in which Equinor operates. Significant uncertainty continues to exist regarding future commodity price

development due to the potential long-term impact on demand resulting from the ongoing Covid -19 pandemic and the measures taken

to contain it, energy investments in the transition to a lower carbon economy and future supply actions by OPEC+ and other factors.

The management’s analysis of the expected development in drivers for the different commodity markets and exchange rates resulted

in changes in the long-term price assumptions as from the third quarter of 2020. The following price assumptions have been the basis

for the impairment calculations .

All commodity prices are on a real 2020 basis, and comparables as per fourth quarter 2019 and up to the third quarter of 2020 are

given in brackets .

For Brent-blend, compared to current prices, we expect a strengthening of the prices through the 2020s. In 2025, the assumption is 65

USD/bbl (78 USD/bbl) , with a further increase towards 2030. Beyond 2030 , we expect a gradual decline with an estimate of 64

USD/bbl in 2040 (82 USD/bbl), which approximates the average price level for the period 2021-2050. In 2050, the oil prices are

expected to be below 60 USD/bbl.

For natural gas in the UK (NBP), we expect some volatility, where the trend is a gradual increase in prices from today’s current prices

up to 6.5 USD/mmBtu in 2030 (7.7 USD/mmBtu). From 2030, we expect prices at levels sufficient to incentivise the next LNG

investment cycle and a flatter price-curve, with the price gradually increasing to 7.8 USD/mmBtu close to 2040 (7.7 USD/mmBtu).

Beyond 2040, a declining price trend is foreseen as the energy transition is expected to impact the demand side. For 2050, the price

has been set at the pre-2035 level. Henry Hub follows the same pattern, gradually increasing from today’s current prices to 3.3

USD/mmBtu in 2030 (3.7 USD/mmBtu) and gradually increasing to 3 .7 USD/mmBtu in 2040 (3.7 USD/mmBtu) before gradually

declining through the 2040s. 

Equinor has performed analyses of the NOK currency exchange rates, which suggests that a return to a previously assumed long-

term equilibrium is less likely. This conclusion is supported by the historical 5-year average and spot prices in the currency market, as

well as an expected lower oil price and increased market uncertainty. In the third quarter of 2020, Equinor therefore implemented new

long-term exchange rates from 2023 onwards. The NOK/USD rate has been revised to 8.5 (previously 7.0), while the NOK/EUR rate

has been revised to 10.0 (from previously 9.0).

During 2020, risk-free interest rates continued to drop for the first three quarters, and long-term risk-free interest rates (10 years)

decreased by approximately 1.3 percentage points in the period from year -end 2019 to 30 September 2020. The stock market

recovery after the in itial Covid-19 impact in March, and despite lower expectations of future cash flows, is indicating a lower market

risk premium. The low interest rates combined with lack of good alternative investment opportunities, channels more funds towards

the equity market resulting in investors accepting lower returns on investments, and we see a downward shift in the estimated equity

risk premium. Taking this into account, even though interest rates have rebounded somewhat during the fourth quarter , Equinor has

adjusted the Weighted Average Cost of Capital (WACC) for accounting purposes, real post-tax, down from 6% to 5% with effect from

the third quarter of 2020. 

Please refer to note 8 Impact of the Covid-19 pandemic and oil price.

Equinor fourth quarter 2020 40

Sensitivities 

Commodity prices have historically been volatile. Significant downward adjustments of Equinor’s commodity price assumptions would

result in impairment losses on certain producing and development assets in Equinor’s portfolio, while an opposite adjustment could

lead to impairment -reversals. If a decline in commodity price forecasts over the lifetime of the assets were 30%, considered to

represent a reasonably possible change, the impairment amount to be recognised could illustratively be in the region of USD 12 billion

before tax effects. This illustrative impairment sensitivity, based on a simplified method , assumes no changes to input factors other

than prices; however, a price reduction of 30% is likely to result in changes in business plans as well as other factors used when

estimating an asset’s recoverable amount. These associated changes reduce the stand-alone impact on commodity price sensitivity. 

Changes in such input factors would likely include a reduction in the cost level in the oil and gas industry as well as offsetti ng currency

effects, both of which have historically occurred following significant changes in commodity prices. The illustrative sensitivity is

therefore not considered to represent a best estimate of an expected impairment impact, nor an estimated impact on revenues or

operating income in such a scenario. In comparison, following the amended assumptions and the decline in commodity prices

presently disclosed for this quarter, the impairment impact recognised is considerably lower. A significant and prolon ged reduction in

oil and gas prices would also result in mitigating actions by Equinor and its licence partners, as a reduction of oil and gas prices would

impact drilling plans and production profiles for new and existing assets. Quantifying such impacts is considered impracticable, as it

requires detailed technical, geological and economical evaluations based on hypothetical scenarios and not based on existing

business or development plans. 

7 Provisions, commitments, contingent liabilities and contingent assets

Contingent consideration

In the fourth quarter of 2020 Equinor recognised a contingent consideration of USD 145 million related to the acquisition of 49%

interest in the limited liability company LLC KrasGeoNac (KGN). For further information see note 3 Acquisition and disposals.

Asset retirement obligation

Equinor’s estimated asset retirement obligations (ARO) have increased by USD 2,572 million to USD 17,292 million compared to

year-end 2019, mainly due to the decrease in discount rates which are reflected within Property, plant and equipment and Provisions

and other liabilities in the Consolidated balance sheet

Onerous contract

Due to significant ly reduced expected use of a transportation agreement , Equinor provided in the second quarter USD 154 million as

an onerous contract. In the fourth quarter the provision has increased to USD 166 million. The provision is recognised in the MMP

segment as an operating expense in the Consolidated statement of income and has been included in the line item Provisions and

other liabilities in the Consolidated balance sheet.

Price review arbitration 

Some long-term gas sales agreements contain price review clauses, which in certain cases lead to claims subject to arbitration.

The exposure related to price reviews has been reduced by approximately USD 1.3 billion due to settlements in the second quarter.

The remaining exposure for gas delivered prior to year -end is immaterial. Price review related changes in the second quarter

represent an income of approximately USD 150 million before tax and USD 30 million after tax . The amounts have been reflected in

the Consolidated statement of income as revenues and income tax, respectively.

A dispute between the Federal Government of Nigeria and the Governments of Rivers, Bayelsa and Akwa Ibom States in

Nigera

In October 2018, the Supreme Court of Nigeria rendered a judgement in a dispute between the Federal Government of Nigeria and

the Governments of Rivers, Bayelsa and Akwa Ibom States in favour of the latter. The Supreme Court judgement provides for

potential retroactive adjustment of certain production sharing contracts in favour of the Federal Government, including OML 128

(Agbami). This case has been withdrawn by the plaintiff in the second quarter of 2020 with no impact on Equinor’s Interim financial

statements.

Dispute with Brazilian tax authorities

Brazilian tax authorities issued an updated tax assessment for 2011 for Equinor’s Brazilian subsidiary which was party to Equinor’s

divestment of 40% of the Peregrino field to Sinochem at that time. The assessment disputed Equinor’s allocation of the sale proceeds

between entities and assets involved, resulting in a significantly higher assessed taxable gain and related taxes payable in Brazil.

Equinor disagreed with the assessment and had the case brought forward to the second instance of the Administrative Court in Brazil

which decided the case in Equinor’s favour. Equinor has received confirmation that the decision is considered final and non-

appealable. The final ruling did not have any impact on Equinor’s Interim Financial statements.

KKD Oil Sands Partnership

Equinor fourth quarter 2020 41

Canadian tax authorities have issued a proposal of re-assessment for 2014 for Equinor’s Canadian subsidiary which was party to

Equinor’s divestment of 40% of the KKD Oil Sands partnership at that time. The proposal disputes the partners allocation between

entities and assets involved. Maximum exposure is estimated to be approximately USD 396 million. The ongoing process of formal

communication with the Canadian tax authorities, as well as any subsequent litigation that may become necessary, may take several

years. No taxes will become payable until the matter has been finally settled. Equinor is of the view that all applicable tax regulations

have been applied in the case and that Equinor has a strong position. No amounts have consequently been provided for in Equinor’s

Interim financial statements.

Deviation notices from Norwegian tax authorities

In respect of the previously disclosed tax dispute in Norway regarding the level of Research & Development cost to be allocated to

the offshore tax regime, a Norwegian supreme court ruling announced in second quarter and Equinor’s subsequent correspondence

with the Norwegian tax authorities in third quarter has resulted in a reduced maximum exposure in this matter to approximately USD

220 million. Equinor provides for its best estimate in the matter.

Suit for an annulment of Petrobras' sale of the interest in BM-S-8 to Equinor

In March 2017, the Union of Workers of Oil Tankers of Sergipe (Sindipetro) filed a class action suit against Petrobras, Equinor and

ANP - the Brazilian Regulatory Agency - to seek annulment of Petrobras' sale of the interest and operatorship in BM-S-8 to Equinor, a

transaction which closed in November 2016. There was also an injunction request aiming to suspend the assignment, which first was

granted in April 2017 by a federal judge, but subsequently lifted by the federal court. The injunction request has now been finally

dismissed by the courts.

Claim from Petrofac regarding multiple variation order requests performed in Algeria (In Salah)

Petrofac International (UAE) LLC (PIUL) was awarded the EPC Contract to execute the ISSF Project (the In Salah Southern

Fields Project which has finalised the development of four gas fields in central Algeria). Following suspension of activity after the

terrorist attack at another field in Algeria (In Amenas) in 2013, PIUL issued multiple Variation Order Requests (VoRs) related to the

costs incurred for stand -by and remobilisation costs after the evacuation of expatriates. Several VoRs have been paid, but settlement

of the remaining VoRs has been unsuccessful. PIUL initiated arbitration on 7 August 2020 claiming an estimated amount of USD 533

million, of which Equinor In Salah AS holds a 31,85 % share. Equinor's maximum exposure amounts to USD 170 million. Equinor

provides for its best estimate in the matter.

During the normal course of its business Equinor is involved in legal and other proceedings, and several claims are unresolved and

currently outstanding. The ultimate liability or asset, respectively, in respect of such litigation and claims cannot be determined now.

Equinor has provided in its Condensed interim financial statements for probable liabilities related to litigation and claims based on the

company's best judgement. Equinor does not expect that its financial position, results of operations or cash flows will be materially

affected by the resolution of these legal proceedings.

8 Impact of the Covid-19 pandemic and oil price decline 

During 2020, the Covid-19 pandemic has slowed economic growth and had dramatic consequences for energy demand, particularly

mobility fuels. The collapse in commodity prices seen in the first half of 2020, though followed by a partial rebound in the second half,

significantly impacted the energy industry and Equinor by an unprecedented decrease in short term demand and increased

uncertainty with regards to the phase of recovery and future oil and gas demand. The increasing momentum and commitment towards

a transition into a low carbon future aided by technological advances and decreasing cost of renewable energy has also increased the

uncertainty in estimating the future development in supply and demand. According to the International Energy Agency (IEA), Global

energy demand in 2020 was estimated to drop by 5 -6%. The OPEC+ agreement to continue production cuts of some 7 mmboe per

day into in the first quarter of 2021 to clear surpluses built up over the pandemic has supported prices to levels not seen since

January 2020. But second and third-wave Covid -19 lockdowns which continue to dampen demand are likely to put a cap on prices in

the short-term. The successful development of vaccines and the ongoing widespread vaccination effort is expected to increase

demand as countries become able to reduce measures implemented to eliminate the spread of the virus, for which we have observed

new waves of outbreak of more contagious mutant versions late in 2020 and the first quarter of 2021.

The negative impact of the global pandemic with the resulting decline in commodity prices and a renewed view on effects expected

from the energy transition resulted in updates to Equinor’s view on key financial assumptions in the third quarter of 2020, including the

related key sources of estimation uncertainty, impacting the financial statements. These assumptions continue to apply for the fourth

quarter of 2020. The decline in the updated future commodity price estimates made in the third quarter of 2020, and particularly with

regards to oil, negatively impacted the estimated recoverable amount of several assets in our portfolio, and impairments were

recognised for assets for which the book value no longer could be supported. The negative impact was reduced by the USD 3 billion

action plan implemented in the spring of 2020 to strengthen the financial resilience of the company. More details on the impairments

recognised and an overview of Equinor’s price assumptions have been provided in note 6 Property, plant and equipment and

intangible assets.

Equinor fourth quarter 2020 42

Equinor has also evaluated the reasonable possible changes in certain assumptions as of 31 December 2020. The reasonable

possible change in prices is deemed to be -30%/+30% for short-term contracts, and -30%/+30% for the long-term derivatives, based

on their duration. The table below contains the price risk sensitivities of Equinor's commodity -based derivatives contracts. Equinor

enters into commodity -based derivative contracts mainly to manage short -term commodity risk. However, since none of the derivative

financial instruments included in the table below are part of formal hedging relationships, any changes in their fair values would be

recognised in the Consolidated statement of income

.

Commodity price sensitivity

 31 December 2020

31 December 2019

(in USD million)

- 30%

+ 30%

- 30%

+ 30%

Crude oil and refined products net gain/(losses)

1,025

(1,025)

569

(563)

Natural gas and electricity net gains/(losses)

184

(94)

(33)

49

Due to market developments and related consequences, certain Equinor suppliers and customers have indicated that contractual

clauses such as those involving force majeure are being explored. The potential impact for Equinor, if any, is currently uncertain.

Apart from the financial impact, Equinor has only experienced immaterial effects on production from assets in operation, due to

actions taken to maintain and secure safe production during the pandemic. Minor virus outbreaks at some of our facilities have

occurred, but effective measures such as isolat ion and quarantines combined with social distancing and increased sanitation

requirements have prevented production shutdown, and operations have not been significantly impacted. For projects under

development, the Covid-19 pandemic has impacted progress due to personnel limitations on offshore and onshore facilities / yards

due to infection control measures and associated travel restrictions for migrant workforce. The situation is still unpredictable and may

have additional consequences for the progress and costs of our projects.

Actions taken to mitigate the impact of the pandemic and commodity price decline, including the USD 3 billion action plan

implemented in the spring of 2020, have had consequences on investment level and activity level in general. Capital expenditure has

been reduced during 2020, representing both final reductions (stopped projects i.e. based on updated future price estimates and

break-even levels) and changes with regards to scope and timing. As a result, some value creation has been cut or delayed. Part of

cost improvements and cost cuts identified and implemented during 2020 as part of the action plan are expected to be of a

sustainable nature and impact future cost levels. Cost related to activities postponed from 2020 due to the pandemic will impact cost

when these activities are carried out.

Equinor complies with the revised production permits issued by the authorities and the unilateral oil production cuts portioned out to

relevant fields via their production licenses, however these cuts did not have significant impact on the total production. As a measure

to maintain activity in the oil and gas related industry, the Norwegian Government on 19 June 2020 enacted temporary targeted

changes to Norway’s petroleum tax system for investments incurred in 2020 and 2021 and for new projects with final investment

decisions submitted by end of 2022. The changes are effective from 1 January 2020 and provide companies with a direct tax

deduction in the special petroleum tax (56% tax rate) instead of tax depreciation over 6 years. One of the changes is that the tax uplift

benefit, which has increased from 20.8%. to 24% will be recognised over one year instead of four years. Tax depreciation towards the

ordinary corporate tax (22% tax rate) will continue with a six-year depreciation profile. The totality of the petroleum tax changes will

increase the profitability for investments and strengthen Equinor’s’ liquidity.

9 Subsequent events

On 9 February 202 1, the board of directors proposed to declare a dividend for the fourth quarter of 2020 of USD 0.12 per share

(subject to annual general meeting approval). The Equinor share will trade ex-dividend 12 May 2021 on the Oslo Børs and for ADR

holders on the New York Stock Exchange. Record date will be 14 May 2021 and payment date will be 27 May 2021.

On 16 November 2020, Equinor communicated a new organisational corporate structure, which will come into effect on 1 June 2021.

The main change is that the operating segment Development & Production Brazil will be merged into the operating segment

Exploration & Production International. In addition, the operating segments Exploration will be divided and merged into Exploration &

Production Norway and Exploration & Production International. Global Strategy & Business development will be divided and merged

into the functions for Chief Financial Officer and Safety, Security and Sustainability. The operating segment Technology, Projects &

Drilling will be split into Technology, Digital & Innovation and Projects, Drilling & Procurement. The current organisational structure will

remain in place until the planned implementation takes effect. The new organisational corporate structure will not imply any changes

in the reportable segments.

From the first quarter of 2021, Equinor will start reporting Renewables (previously New Energy Solutions) as a separate reportable

segment due to the strategic importance of the operating segment.

Equinor fourth quarter 2020 43

On 8 January 2021, The Norwegian Government announced a new climate action plan. One proposed measure to reduce CO2

emissions is to increase the CO2 tax on offshore oil and gas production gradually and with full effect from 2030. The plan also

proposes increased offshore methane tax. Compared to Equinor’s estimates at 31 December 2020, it is expected that the cost

increase for Equinor for the year 2030 will be approximately USD 0 .4 billion pre-tax. This is not expected to significantly impact

impairment assessments in E&P Norway as of the first quarter of 2021. The climate action plan is expected to be approved by the

Parliament in the spring of 2021.

On 29 January 2021 , Equinor closed the agreement with BP to sell a 50% non -operated interest in the Empire Wind and Beacon Wind

assets for a total preliminary consideration USD 1.2 billion, including USD 0.1 billion in interim period adjustments , with remaining

cash consideration after the prepayment in 2020 paid at closing.

On 9 February 2021, Equinor has agreed to divest its interests in the Bakken field in the US states of North Dakota and Montana to

Grayson Mill Energy, backed by EnCap Investments, for a total consideration of around USD 900 million. The effective date of the

transaction is 1 January 2021. Closing is subject to the satisfaction of customary conditio ns, including authority approvals.

Equinor fourth quarter 2020 44

Supplementary disclosures

Operational data

Quarters

Change

Full year

Q4 2020

Q3 2020

Q4 2019

Q4 on Q4

Operational data

2020

2019

Change

Prices

44.2

43.0

63.3

(30%)

Average Brent oil price (USD/bbl)

41.7

64.3

(35%)

42.1

39.6

59.3

(29%)

E&P Norway average liquids price (USD/bbl)

37.4

57.4

(35%)

41.3

39.1

56.1

(26%)

E&P International average liquids price (USD/bbl)

38.1

59.1

(35%)

34.5

32.2

48.0

(28%)

E&P USA average liquids price (USD/bbl)

31.3

48.4

(35%)

40.6

38.3

56.5

(28%)

Group average liquids price (USD/bbl) [1]

36.5

56.0

(35%)

367

349

516

(29%)

Group average liquids price (NOK/bbl) [1]

343

493

(30%)

3.88

1.45

3.88

0%

E&P Norway average internal gas price (USD/mmbtu) [9]

2.26

4.46

(49%)

1.34

1.13

1.82

(26%)

E&P USA average internal gas price (USD/mmbtu) [9]

1.32

2.34

(44%)

5.04

2.72

5.31

(5%)

Average invoiced gas prices - Europe (USD/mmbtu) [8]

3.58

5.79

(38%)

1.99

1.53

2.23

(11%)

Average invoiced gas prices - North America (USD/mmbtu) [8]

1.72

2.43

(29%)

0.4

(0.1)

3.0

(87%)

Refining reference margin (USD/bbl) [2]

1.5

4.1

(64%)

Entitlement production (mboe per day)

616

619

619

(0%)

E&P Norway entitlement liquids production

630

535

18%

222

220

273

(19%)

E&P International entitlement liquids production

236

267

(12%)

145

151

185

(22%)

E&P USA entitlement liquids production

163

181

(10%)

983

991

1,077

(9%)

Group entitlement liquids production

1,029

983

5%

698

654

727

(4%)

E&P Norway entitlement gas production

685

700

(2%)

45

35

64

(30%)

E&P International entitlement gas production

42

50

(17%)

187

185

188

(1%)

E&P USA entitlement gas production

181

178

2%

930

874

979

(5%)

Group entitlement gas production

908

928

(2%)

1,912

1,865

2,056

(7%)

Total entitlement liquids and gas production [3]

1,938

1,911

1%

Equity production (mboe per day)

616

619

619

(0%)

E&P Norway equity liquids production

630

535

18%

286

283

350

(18%)

E&P International equity liquids production

303

354

(14%)

166

173

214

(22%)

E&P USA equity liquids production

187

210

(11%)

1,068

1,076

1,182

(10%)

Group equity liquids production

1,120

1,099

2%

698

654

727

(4%)

E&P Norway equity gas production

685

700

(2%)

Equinor fourth quarter 2020 45

53

40

65

(18%)

E&P International equity gas production

49

62

(21%)

224

224

223

0%

E&P USA equity gas production

216

213

1%

975

918

1,015

(4%)

Group equity gas production

950

975

(3%)

2,043

1,994

2,198

(7%)

Total equity liquids and gas production [4]

2,070

2,074

(0%)

NES power production

480

319

476

1%

Power generation (GWh)

1,662

1,754

(5%)

Exchange rates

Quarters

Change

Full year

Q4 2020

Q3 2020

Q4 2019

Q4 on Q4

Exchange rates

2020

2019

Change

0.1108

0.1095

0.1097

1%

NOK/USD average daily exchange rate

0.1064

0.1136

(6%)

0.1172

0.1055

0.1139

3%

NOK/USD period-end exchange rate

0.1172

0.1139

3%

9.0279

9.1321

9.1177

(1%)

USD/NOK average daily exchange rate

9.4006

8.8037

7%

8.5326

9.4814

8.7803

(3%)

USD/NOK period-end exchange rate

8.5326

8.7803

(3%)

1.1920

1.1685

1.1071

8%

EUR/USD average daily exchange rate

1.1405

1.1192

2%

1.2271

1.1708

1.1234

9%

EUR/USD period-end exchange rate

1.2271

1.1234

9%

Equinor fourth quarter 2020 46

Health, safety and the environment

Full year

Full year

Health, safety and the environment

2020

2019

Injury/incident frequency

Total recordable injury frequency (TRIF)

2.3

2.5

Serious Incident Frequency (SIF)

0.5

0.6

Oil spills

Accidental oil spills (number of)

135

219

Accidental oil spills (cubic metres)

162

8,983

Full year

Full year

Climate

2020

2019

Upstream CO2 intensity (kg CO2/boe)

1)

8.0

9.5

1) Total scope 1 emissions of CO2 (kg CO2) from exploration and production, divided by total production (boe). 

Equinor fourth quarter 2020 47

Reconciliation of net operating income/(loss) to adjusted earnings 

The table specifies the adjustments made to each of the profit and loss line item included in the net operating income/(loss) subtotal.

Items impacting net operating income/(loss) in the fourth

quarter of 2020

Equinor

group

Exploration

&

Production

Norway 

Exploration

&

Production

Internationa

l

Exploration

&

Production

USA

Marketing,

Midstream

&

Processing

Other 

(in USD million)

Net operating income/(loss)

(989)

1,803

(1,376)

(559)

(480)

(378)

Total revenues and other income

240

15

(41)

-

265

1

Changes in fair value of derivatives

(50)

-

-

-

(50)

-

Periodisation of inventory hedging effect

315

-

-

-

315

-

Impairment from associated companies

1

-

-

-

-

1

Over-/underlift

(24)

17

(41)

-

-

-

Gain/loss on sale of assets

(3)

(3)

-

-

-

-

Purchases [net of inventory variation]

234

-

-

-

(69)

303

Operational storage effects

(69)

-

-

-

(69)

-

Eliminations

303

-

-

-

-

303

Operating and administrative expenses 

(28)

(18)

(29)

18

(2)

3

Over-/underlift

(53)

(18)

(35)

-

-

-

Other adjustments

1

-

1

(0)

-

-

Gain/loss on sale of assets

21

-

-

18

-

3

Provisions

3

-

5

-

(2)

0

Depreciation, amortisation and net impairment losses

983

41

72

211

638

22

Impairment

983

41

72

211

638

22

Exploration expenses

317

-

160

158

-

-

Impairment

315

-

157

158

-

-

Provisions

3

-

3

-

-

-

Sum of adjustments to net operating income/(loss)

1,746

38

161

387

832

329

Adjusted earnings/(loss) [5]

756

1,841

(1,215)

(172)

352

(49)

Tax on adjusted earnings

(1,310)

(1,133)

38

(0)

(215)

1

Adjusted earnings/(loss) after tax [5]

(554)

707

(1,178)

(172)

137

(48)

Equinor fourth quarter 2020 48

Items impacting net operating income/(loss) in the fourth

quarter of 2019

Equinor

group

Exploration &

Production

Norway

Exploration &

Production

International*

Exploration

& Production

USA*

Marketing,

Midstream &

Processing

Other

(in USD million)

Net operating income/(loss)

1,516

1,476

53

7

360

(382)

Total revenues and other income

168

(12)

77

(0)

291

(189)

Changes in fair value of derivatives

102

(9)

-

-

111

-

Periodisation of inventory hedging effect

180

-

-

-

180

-

Impairment

23

-

-

-

-

23

Over-/underlift

74

(3)

77

(0)

-

-

Gain/loss on sale of assets

(212)

-

-

-

-

(212)

Purchases [net of inventory variation]

556

-

-

-

(36)

591

Operational storage effects

(36)

-

-

-

(36)

-

Eliminations

591

-

-

-

-

591

Operating and administrative expenses 

(91)

(10)

(36)

47

(92)

-

Over-/underlift

(46)

(10)

(36)

(0)

-

-

Gain/loss on sale of assets

27

-

-

27

-

-

Provisions

(72)

-

-

20

(92)

-

Depreciation, amortisation and net impairment losses

1,359

1,284

55

-

-

20

Impairment

1,359

1,284

55

-

-

20

Exploration expenses

43

-

43

-

-

-

Impairment

43

-

43

-

-

-

Sum of adjustments to net operating income/(loss)

2,034

1,262

140

47

164

422

Adjusted earnings/(loss) [5]

3,550

2,738

192

54

524

41

Tax on adjusted earnings

(2,364)

(1,979)

(112)

(0)

(233)

(41)

Adjusted earnings/(loss) after tax [5]

1,186

759

79

55

291

1

* Restated to reflect change to segment

Equinor fourth quarter 2020 49

Items impacting net operating income/(loss) in the full year

of 2020

Equinor

group

Exploration

&

Production

Norway

Exploration

&

Production

Internationa

l

Exploration

&

Production

USA

Marketing,

Midstream

&

Processing

Other

(in USD million)

Net operating income/(loss)

(3,423)

3,097

(3,565)

(3,512)

359

198

Total revenues and other income

90

68

(194)

-

213

3

Changes in fair value of derivatives

2

6

-

-

(5)

-

Periodisation of inventory hedging effect

224

-

-

-

224

-

Impairment from associated companies

3

-

-

-

-

3

Over-/underlift

(130)

64

(194)

-

-

-

Gain/loss on sale of assets

(9)

(3)

-

-

(6)

-

Purchases [net of inventory variation]

(168)

-

-

-

127

(296)

Operational storage effects

127

-

-

-

127

-

Eliminations

(296)

-

-

-

-

(296)

Operating and administrative expenses 

378

(39)

127

50

245

(4)

Over-/underlift

70

(39)

108

-

-

-

Other adjustments

1

-

1

(0)

-

-

Gain/loss on sale of assets

23

-

-

20

-

3

Provisions

285

-

17

30

245

(7)

Depreciation, amortisation and net impairment losses

5,715

1,260

1,426

1,938

1,060

32

Impairment

5,934

1,260

1,473

2,109

1,060

32

Reversal of impairment

(218)

-

(47)

(171)

-

-

Exploration expenses

1,345

5

511

829

-

-

Impairment

1,397

5

508

885

-

-

Reversal of impairment

(63)

-

-

(63)

-

-

Provisions

11

-

4

7

-

-

Sum of adjustments to net operating income/(loss)

7,361

1,294

1,870

2,816

1,645

(265)

Adjusted earnings/(loss) [5]

3,938

4,391

(1,695)

(696)

2,004

(67)

Tax on adjusted earnings

(3,014)

(2,397)

347

(0)

(1,187)

223

Adjusted earnings/(loss) after tax [5]

924

1,994

(1,348)

(696)

817

156

Equinor fourth quarter 2020 50

Items impacting net operating income/(loss) in the full year

of 2019

Equinor

group

Exploration

&

Production

Norway

Exploration

& Production

International*

Exploration

&

Production

USA*

Marketing,

Midstream

&

Processing

Other

(in USD million)

Net operating income/(loss)

9,299

9,631

1,471

(2,271)

1,004

(537)

Total revenues and other income

(1,022)

(881)

45

(10)

33

(209)

Changes in fair value of derivatives

(291)

(18)

-

-

(273)

-

Periodisation of inventory hedging effect

306

-

-

-

306

-

Impairment

23

-

-

-

-

23

Over-/underlift

166

114

62

(10)

-

-

Gain/loss on sale of assets

(1,227)

(977)

(17)

-

-

(232)

Purchases [net of inventory variation]

508

-

-

-

(121)

628

Operational storage effects

(121)

-

-

-

(121)

-

Eliminations

628

-

-

-

-

628

Operating and administrative expenses

619

9

62

130

418

-

Over-/underlift

(32)

(33)

(2)

3

-

-

Change in accounting policy

1)

123

42

63

18

-

-

Gain/loss on sale of assets

43

-

-

43

-

-

Provisions

485

-

-

66

418

-

Depreciation, amortisation and net impairment losses

3,429

1,284

(5)

1,924

206

20

Impairment

3,549

1,284

115

1,924

206

20

Reversal of impairment

(120)

-

(120)

-

-

-

Exploration expenses

651

-

43

608

-

-

Impairment

651

-

43

608

-

-

Sum of adjustments to net operating income/(loss)

4,185

412

145

2,652

537

439

Adjusted earnings/(loss) [5]

13,484

10,043

1,616

381

1,541

(98)

Tax on adjusted earnings

(8,559)

(7,200)

(633)

(0)

(729)

2

Adjusted earnings/(loss) after tax [5]

4,925

2,844

982

382

813

(96)

* Restated to reflect change to segment

1) Change in accounting policy for lifting imbalances.

Equinor fourth quarter 2020 51

Items impacting net operating income/(loss) in the third

quarter of 2020

Equinor

group

Exploration

&

Production

Norway 

Exploration

&

Production

Internationa

l

Exploration

&

Production

USA

Marketing,

Midstream

&

Processing

Other 

(in USD million)

Net operating income/(loss)

(2,019)

431

(1,328)

(1,606)

551

(67)

Total revenues and other income

(431)

(59)

(20)

-

(352)

0

Changes in fair value of derivatives

(37)

-

-

-

(37)

-

Periodisation of inventory hedging effect

(315)

-

-

-

(315)

-

Over-/underlift

(79)

(59)

(20)

-

-

-

Purchases [net of inventory variation]

104

-

-

-

(2)

107

Operational storage effects

(2)

-

-

-

(2)

-

Eliminations

107

-

-

-

-

107

Operating and administrative expenses 

189

36

67

29

64

(7)

Over-/underlift

90

36

54

-

-

-

Gain/loss on sale of assets

(1)

-

-

(1)

-

-

Provisions

100

-

12

30

64

(7)

Depreciation, amortisation and net impairment losses

2,353

360

992

990

-

10

Impairment

2,524

360

992

1,162

-

10

Reversal of Impairment

(171)

-

(0)

(171)

-

-

Exploration expenses

583

5

185

393

-

-

Impairment

638

5

183

449

-

-

Reversal of Impairment

(63)

-

-

(63)

-

-

Provisions

8

-

2

7

-

-

Sum of adjustments to net operating income/(loss)

2,799

342

1,224

1,413

(289)

110

Adjusted earnings/(loss) [5]

780

773

(104)

(193)

262

43

Tax on adjusted earnings

(509)

(358)

87

0

(240)

2

Adjusted earnings/(loss) after tax [5]

271

414

(17)

(193)

22

45

Equinor fourth quarter 2020 52

Adjusted earnings after tax by reporting segment

Quarters

Q4 2020

Q3 2020

Q4 2019*

(in USD million)

Adjusted

earnings

Tax on

adjusted

earnings

Adjusted

earnings

after tax

Adjusted

earnings

Tax on

adjusted

earnings

Adjusted

earnings

after tax

Adjusted

earnings

Tax on

adjusted

earnings

Adjusted

earnings

after tax

E&P Norway

1,841

(1,133)

707

773

(358)

414

2,738

(1,979)

759

E&P International

(1,215)

38

(1,178)

(104)

87

(17)

192

(112)

79

E&P USA

(172)

(0)

(172)

(193)

0

(193)

54

(0)

55

MMP

352

(215)

137

262

(240)

22

524

(233)

291

Other

(49)

1

(48)

43

2

45

41

(40)

1

Total Equinor consolidation

756

(1,310)

(554)

780

(509)

271

3,550

(2,364)

1,186

Effective tax rates on adjusted

earnings

173.2%

65.3%

66.6%

* E&P International and E&P USA have been restated to reflect change to segments

Full year

2020

2019*

(in USD million)

Adjusted

earnings

Tax on

adjusted

earnings

Adjusted

earnings

after tax

Adjusted

earnings

Tax on

adjusted

earnings

Adjusted

earnings

after tax

E&P Norway

4,391

(2,397)

1,994

10,043

(7,200)

2,844

E&P International

(1,695)

347

(1,348)

1,616

(633)

982

E&P USA

(696)

(0)

(696)

381

(0)

382

MMP

2,004

(1,187)

817

1,541

(729)

813

Other

(67)

223

156

(98)

2

(96)

Total Equinor consolidation

3,938

(3,014)

924

13,484

(8,559)

4,925

Effective tax rates on adjusted earnings

76.5%

63.5%

* E&P International and E&P USA have been restated to reflect change to segment

Equinor fourth quarter 2020 53

Reconciliation of adjusted earnings after tax to net income

Quarters

Reconciliation of adjusted earnings after tax to net income 

Full year

Q4 2020

Q3 2020

Q4 2019

(in USD million)

2020

2019

(989)

(2,019)

1,516

Net operating income/(loss)

A

(3,423)

9,299

844

(72)

1,258

Income tax less tax on net financial items

B

1,552

7,611

(1,834)

(1,947)

257

Net operating income after tax

C = A-B

(4,975)

1,688

1,746

2,799

2,034

Items impacting net operating income

1)

D

7,361

4,185

466

582

1,106

Tax on items impacting net operating income 

E

1,462

948

(554)

271

1,186

Adjusted earnings after tax [5]

F = C+D-E

924

4,925

(410)

(201)

(495)

Net financial items

G

(836)

(7)

(171)

23

8

Tax on net financial items

H

315

170

(2,416)

(2,124)

(230)

Net income/(loss)

I = C+G+H

(5,496)

1,851

1) Represents the total adjustments to net operating income made to arrive at adjusted earnings (i.e. adjusted purchases, adjusted operating

and administrative expenses, adjusted depreciation, amortisation and impairment expenses and adjusted exploration expenses, each of which

are presented and reconciled to the relevant related IFRS figure for the periods presented in this report).

Adjusted earnings Marketing, Midstream & Processing (MMP) break down

Quarters

Change

Adjusted earnings break down

Full year

Q4 2020

Q3 2020

Q4 2019

Q4 on Q4

(in USD million)

2020

2019

Change

226

292

262

(14%)

Natural Gas Europe

1,199

801

50%

22

7

35

(39%)

Natural Gas US

10

(27)

N/A

107

38

96

12%

Liquids

891

538

66%

(3)

(75)

131

N/A

Other

(96)

229

N/A

352

262

524

(33%)

Adjusted earnings MMP

2,004

1,541

30%

Equinor fourth quarter 2020 54

Adjusted exploration expenses

Quarters

Change

Adjusted exploration expenses

Full year

Q4 2020

Q3 2020

Q4 2019*

Q4 on Q4

(in USD million)

2020

2019*

Change

101

142

180

(44%)

E&P Norway exploration expenditures

470

617

(24%)

94

143

242

(61%)

E&P International exploration expenditures

692

821

(16%)

25

65

57

(56%)

E&P USA exploration expenditures

211

147

43%

220

349

479

(54%)

1)

Group exploration expenditures

1,371

1,584

(13%)

2)

969

87

61

>100%

Expensed, previously capitalised exploration expenditures

1,169

120

>100%

65

(125)

(103)

N/A

Capitalised share of current period's exploration activity

(394)

(507)

(22%)

315

575

43

>100%

Impairment (reversal of impairment)

1,337

657

>100%

1,569

886

480

>100%

Exploration expenses according to IFRS

3,483

1,854

88%

(317)

(583)

(43)

>100%

Items impacting net operating income/(loss)

3)

(1,345)

(651)

>100%

1,252

302

437

>100%

Adjusted exploration expenses

2,138

1,203

78%

* E&P International and E&P USA have been restated to reflect change to segments

1) 20 wells with activity with 8 completed in the fourth quarter of 2020 compared to 26 wells with 10 completed in the fourth quarter of 2019.

2) 46 wells with activity with 34 completed in 2020 compared to 58 wells with 42 completed in 2019.

3) For items impacting net operating income/(loss), see Reconciliation of net operating income/(loss) to adjusted earnings in the

Supplementary disclosures.

Calculated ROACE

Calculated ROACE based on Adjusted earnings after tax and capital employed [5]

31 December 

(in USD million, except percentages)

2020

2019

Adjusted earnings after tax (A)

924

4,925

Average capital employed (B)

51,823

54,637

Calculated ROACE based on Adjusted earnings after tax and capital employed (A/B)

1.8%

9.0%

Equinor fourth quarter 2020 55

Calculation of capital employed and net debt to capital employed ratio

The table below reconciles the net interest-bearing debt adjusted, the capital employed, the net debt to capital employed ratio

adjusted including lease liabilities and the net debt to capital employed adjusted ratio with the most directly comparable financial

measure or measures calculated in accordance with IFRS.

Calculation of capital employed and net debt to capital employed ratio

At 31

December 

At 30

September 

At 31

December 

(in USD million)

2020

2020

2019

Shareholders' equity

33,873

34,084

41,139

Non-controlling interests

19

24

20

Total equity 

A

33,892

34,108

41,159

Current finance debt

5,777

5,277

4,087

Non-current finance debt

32,338

32,193

24,945

Gross interest-bearing debt

B

38,115

37,471

29,032

Cash and cash equivalents

6,757

7,844

5,177

Current financial investments

11,865

10,563

7,426

Cash and cash equivalents and financial investment 

C

18,621

18,407

12,604

Net interest-bearing debt [10]

B1 = B-C

19,493

19,064

16,429

Other interest-bearing elements

 1)

627

669

791

Normalisation for cash-build up before tax payment (50% of Tax Payment)

 2)

-

259

-

Net interest-bearing debt adjusted normalised for tax payment, including lease liabilities

[5]

B2

20,121

19,992

17,219

Lease liabilities

4,405

4,218

4,339

Net interest-bearing debt adjusted [5]

B3

15,716

15,774

12,880

Calculation of capital employed [5]

Capital employed

A+B1

53,385

53,172

57,588

Equinor fourth quarter 2020 56

Capital employed adjusted, including lease liabilities

A+B2

54,012

54,100

58,378

Capital employed adjusted

A+B3

49,608

49,883

54,039

Calculated net debt to capital employed [5]

Net debt to capital employed

(B1)/(A+B1)

36.5%

35.9%

28.5%

Net debt to capital employed adjusted, including lease liabilities

(B2)/(A+B2)

37.3%

37.0%

29.5%

Net debt to capital employed adjusted

(B3)/(A+B3)

31.7%

31.6%

23.8%

1) Cash and cash equivalents adjustments regarding collateral deposits classified as cash and cash equivalents in the Consolidated

balance sheet but considered as non-cash in the non -GAAP calculations as well as financial investments in Equinor Insurance

AS classified as current financial investments.

2) Adjustment to net interest-bearing debt for cash build-up in the first quarter and the third quarter before tax payment on 1 April

and 1 October. This is to exclude 50% of the cash build-up to h ave a more even allocation of tax payments between the four

quarters and hence a more representative net interest-bearing debt. 

Equinor fourth quarter 2020 57

Net adjusted financial items 2020

Interest

income

and other

financial

items

Net

foreign

exchange

gains

(losses)

Gains

(losses)

derivative

financial

instrument

s

Interest

and other

finance

expenses

Net before

tax

Estimated

tax effect

Net after

tax

Net adjusted financial items in the fourth quarter of 2020

(in USD million) 

Financial items according to IFRS

379

(491)

27

(326)

(410)

(171)

(581)

Foreign exchange (FX) impacts (incl. derivatives)

19

491

0

0

510

2

0

Interest rate (IR) derivatives

0

0

(27)

0

(27)

0

0

Fair value adjustment financial investments and other

(272)

0

0

0

(272)

0

0

Subtotal

(253)

491

(27)

0

211

2

212

Adjusted financial items

126

0

0

(326)

(200)

(170)

(369)

Interest

income

and other

financial

items

Net

foreign

exchange

gains

(losses)

Gains

(losses)

derivative

financial

instruments

Interest

and other

finance

expenses

Net before

tax

Estimated

tax effect

Net after

tax

Net adjusted financial items in the full year of 2020

(in USD million) 

Financial items according to IFRS

754

(646)

448

(1,392)

(836)

315

(521)

Foreign exchange (FX) impacts (incl. derivatives)

(10)

646

-

-

636

-

-

Interest rate (IR) derivatives

-

-

(448)

-

(448)

-

-

Fair value adjustment financial investment and other

(282)

-

-

-

(282)

-

-

Subtotal

(292)

646

(448)

-

(93)

-

(93)

Adjusted financial items 

462

-

-

(1,392)

(929)

315

(614)

Net adjusted financial items 2019

Interest

income

and other

financial

items

Net

foreign

exchange

gains

(losses)

Gains

(losses)

derivative

financial

instrument

s

Interest

and other

finance

expenses

Net before

tax

Estimated

tax effect

Net after

tax

Net adjusted financial items in the fourth quarter of 2019

(in USD million)

Financial items according to IFRS

210

23

(308)

(421)

(495)

8

(487)

Foreign exchange (FX) impacts (incl. derivatives)

1

(23)

0

0

(22)

0

0

Interest rate (IR) derivatives

0

0

308

0

308

0

0

Fair value adjustment financial investment

(44)

0

0

0

(44)

0

0

Adjusted financial items excluding FX and IR derivatives

167

0

0

(421)

(254)

8

(246)

Equinor fourth quarter 2020 58

USE AND RECONCILIATION OF NON-GAAP FINANCIAL

MEASURES

Non-GAAP financial measures are defined as numerical measures that either exclude or include amounts or certain accounting items

that are not excluded or included in the comparable measures calculated and presented in accordance with GAAP (i.e. IFRS).

Management considers adjusted earnings and adjusted earnings after tax together with other non-GAAP financial measures as

defined below, to provide a better indication of the underlying operational and financial performance in the period (excluding

financing), and therefore better facilitate comparison s between periods.

The following financia l measures may be considered non-GAAP financial measures:

●

Adjusted earnings

 are based on net operating income/(loss) and adjusts for certain items affecting the income for the period in

order to separate out effects that management considers may not be well correlated to Equinor’s underlying operational

performance in the individual reporting period. Management considers adjusted earnings to be a supplemental measure to

Equinor’s IFRS measures, which provides an indication of Equinor’s underlying operational performance in the peri od and

facilitates an alternative understanding of operational trends between the periods. Adjusted earnings include adjusted revenues

and other income, adjusted purchases, adjusted operating expenses and selling, general and administrative expenses, adjusted

depreciation expenses and adjusted exploration expenses

●

Adjusted earnings after tax

 – equals the sum of net operating income/(loss) less income tax in business areas and adjustments

to operating income taking the applicable marginal tax into consideration. Adjusted earnings after tax excludes net financial items

and the associated tax effects on net financial items. It is based on adjusted earnings less the tax effects on all elements included

in adjusted earnings (or calculated tax on operating income and on each of the adjusting items using an estimated marginal tax

rate). In addition, tax effect related to tax exposure items not related to the individual reporting period is excluded from adjusted

earnings after tax. Management considers adjusted earnings after tax, which reflects a normalised tax charge associated with its

operational performance excluding the impact of financing, to be a supplemental measure to Equinor’s net income. Certain net

USD denominated financial positions are held by group companies that have a USD functional curr ency that is different from the

currency in which the taxable income is measured. As currency exchange rates change between periods, the basis for measuring

net financial items for IFRS will change disproportionally with taxable income which includes exchange gains and losses from

translating the net USD denominated financial positions into the currency of the applicable tax return. Therefore, the effective tax

rate may be significantly higher or lower than the statutory tax rate for any given period. Adjusted taxes included in adjusted

earnings after tax should not be considered indicative of the amount of cu rrent or total tax expense (or taxes payable) for the

period

Adjusted earnings and adjusted earnings after tax should be considered additional measures rather than substitutes for net operating

income/(loss) and net income/(loss), which are the most directly comparable IFRS measures. There are material limitations

associated with the use of adjusted earnings and adjusted earnings after tax compared with the IFRS measures as such non-GAAP

measures do not include all the items of revenues/gains or expenses/losses of Equinor that are needed to evaluate its profitability on

an overall basis. Adjusted earnings and adjusted earnings after tax are only intended to be indicative of the underlying developments

in trends of our on-going operations for the production, manufacturing and marketing of our products and exclude pre-and post-tax

impacts of net financial items. Equinor reflects such underlying development in our operations by eliminating the effects of certain

items that may not be directly associated with the period's operations or financing. However, for that reason, adjusted earnings and

adjusted earnings after tax are not complete measures of profitability. These measures should therefore not be used in isolation.

●

Return on average capital employed after tax (ROACE)

 – this measure provides useful information for both the group and

investors about performance during the period under evaluation. Equinor uses ROACE to measure the return on capital employed,

regardless of whether the financing is through equity or debt. The use of ROACE should not be viewed as an alternative to income

before financial items, income taxes and minority interest, or to net income, which are measures calculated in accordance with

GAAP or ratios based on these figures. For a reconciliation for adjusted earnings after tax, see Reconciliation of net operating

income/(loss) to adjusted earnings as presented earlier in this report

●

Capital employed adjusted –

this measure is defined as Equinor's total equity (including non-controlling interests) and net

interest-bearing debt adjusted

●

Net interest-bearing debt adjusted

 – this measure is defined as Equinor's interest bearing financial liabilities less cash and cash

equivalents and current financial investments, adjusted for collateral deposits and balances held by Equinor's captive insurance

company and balances related to the SDFI

●

Net debt to capital employed

,

Net debt to capital employed adjusted, including lease liabilities

and

 Net debt to capital

employed ratio adjusted

– Following implementation of IFRS 16 Equinor present s a “net debt to capital employed adjusted”

excluding lease liabilities from the gross interest -bearing debt. Comparable numbers are presented in the table Calculation of

capital employed and net debt to capita l employed ratio in the report include Finance lease according to IAS17, adjusted for

marketing instruction agreement

●

Organic capital expenditures

– Capital expenditures, defined as Additions to PP&E, intangibles and equity accounted

investments in note 2 Segments to the Condensed financial interim statements , amounted to USD 2.8 billion in the fourth quarter

of 2020. Organic capital expenditures are capital expenditures excluding acquisitions, recognised lease assets (RoU assets) and

other investments with significant different cash flow pattern. In the fourth quarter of 2020, a total of USD 0.9 billion are excluded

in the organic capital expenditures. Forward -looking organic capital expenditures included in this report are not reconcilable to its

Equinor fourth quarter 2020 59

most directly comparable IFRS measure without unreasonable effo rts, because the amounts excluded from such IFRS measure to

determine organic capital expenditures cannot be predicted with reasonable certainty

●

Free cash flow for the fourth quarter 2020

 includes the following line items in the Consolidated statement of cash flows: Cash

flows provided by operating activities before taxes paid and working capital items (USD 3.8 billion), taxes paid (negative USD 0.4

billion), cash used in business combinations (USD 0.0 billion), capital expenditures and investments (negative USD 2.5 billion),

(increase)/decrease in other items interest-bearing (USD 0.2 billion), proceeds from sale of assets and businesses (USD 0.5

billion), dividend paid (negative USD 0.3 billion) and share buy -back (USD 0.0 billion), resulting in a free cash flow of USD 1.4

billion in the fourth quarter of 2020

●

Free cash flow for the full year of 2020

 includes the following line items in the Consolidated statement of cash flows: Cash flows

provided by operating activities before taxes paid and working capital items (USD 14.0 billion), taxes paid (negative USD 3.1

billion), cash used in business combinations (USD 0.0 billion), capital expend itures and investments (negative USD 8.5 billion),

(increase)/decrease in other items interest-bearing (USD 0.2 billion), proceeds from sale of assets and businesses, including USD

0.3 billion received from the Lundin divestment included in (increase)/decrease in financial investments (USD 0.8 billion), dividend

paid (negative USD 2.3 billion) and share buy -back (negative USD 1.1 billion), resulting in a free cash flow of USD 0 .1 billion in the

full year of 2020

Adjusted earnings

adjust for the following items:

●

Changes in fair value of derivatives:

 Certain gas contracts are, due to pricing or delivery conditions, deemed to contain

embedded derivatives, required to be carried at fair value. Also, certain transactions related to historical divestments include

contingent consideration, are carried at fair value. The accounting impacts of changes in fair value of the aforementioned are

excluded from adjusted earnings. In addition, adjustments are also made for changes in the unrealised fair value of derivatives

related to some natural gas trading contracts. Due to the nature of these gas sales contracts, these are classified as financial

derivatives to be measured at fair value at the balance sheet date. Unrealised gains and losses on these contracts reflect the

value of the difference between current market gas prices and the actual prices to be realised under the gas sales contracts. Only

realised gains and losses on these contracts are reflected in adjusted earnings. This presentati on best reflects the underlying

performance of the business as it replaces the effect of temporary timing differences associated with the re-measurements of the

derivatives to fair value at the balance sheet date with actual realised gains and losses for the period

●

Periodisation of inventory hedging effect:

Commercial storage is hedged in the paper market and is accounted for using the

lower of cost or market price. If market prices increase above cost price, the inventory will not reflect this increase in value. There

will be a loss on the derivative hedging the inventory since the derivatives always reflect changes in the market price. An

adjustment is made to reflect the unrealised market increase of the commercial storage. As a result, loss on derivatives is

matched by a similar adjustment for the exposure being managed. If market prices decrease below cost price, the write-down of

the inventory and the derivative effect in the IFRS income statement will offset each other and no adjustment is made

●

Over/underlift

: Over/underlift is accounted for using the sales method and therefore revenues were reflected in the period the

product was sold rather than in the period it was produced. The over/underlift position depended on a number of factors related to

our lifting programme and the way it corresponded to our entitlement share of production. The effect on income for the period is

therefore adjusted, to show estimated revenues and associated costs based upon the production for the period to reflect

operational perform ance and comparability with peers. Following the first quarter of 2019, Equinor changed the accounting policy

for lifting imbalances. Adjusted earnings now include the over/underlift adjustment

●

The

operational storage

is not hedged and is not part of the trading portfolio. Cost of goods sold is measured based on the

FIFO (first-in, first-out) method, and includes realised gains or losses that arise due to changes in market prices. These gains or

losses will fluctuate from one period to another and are not considered part of the underlying operation s for the period

●

Impairment and reversal of impairment

are excluded from adjusted earnings since they affect the economics of an asset for

the lifetime of that asset, not only the period in which it is impaired or the impairment is reversed. Impairment and reversal of

impairment can impact both the exploration expenses and the depreciation, amortisation and impairment line items

●

Gain or loss from sales of assets

is eliminated from the me asure since the gain or loss does not give an indication of future

performance or periodic performance; such a gain or loss is related to the cumulative value creation from the time the asset is

acquired until it is sold

●

Eliminations (Internal unrealised profit on inventories)

:

Volumes derived from equity oil inventory will vary depending on

several factors and inventory strategies, i.e. level of crude oil in inventory, equity oil used in the refining process and level of in-

transit cargoes. Internal profit related to volumes sold between entities within the group, and still in inventory at period end, is

eliminated according to IFRS (write down to production cost). The proportion of realised versus unrealised gain will fluctuate from

one period to another due to inventory strategies and consequently impact net operating income /(loss). Write-down to production

cost is not assessed to be a part of the underlying operational performance, and elimination of internal profit related to equity

volumes is excluded in adjusted earnings

●

Other items of income and expense

are adjusted when the impacts on income in the period are not reflective of Equinor’s

underlying operational performance in the reporting period. Such items may be unusual or infrequent transactions but they may

also include transactions that are significant which would not necessarily qualify as either unusual or infrequent. Other items are

carefully assessed and can include transactions such as provisions related to reorganisation, early retirement, etc.

●

Change in accounting policy

 are adjusted when the impacts on income in the period are unusual or infrequent, and not

reflective of Equinor’s underlying operational performance in the reporting period

For more information on our use of non-GAAP financial measures, see section 5.2 Use and reconciliation of non-GAAP financial

measures in Equinor's 2019 Annual Report and Form 20-F.

Equinor fourth quarter 2020 60

FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements that involve risks and uncertainties. In some cases, we use words such as

"ambition", "continue", "could", "estimate", “intend”, "expect", "believe", "likely", "may", "outlook", "plan", "strategy", "will", "guidance",

“targets”, and similar expressions to identify forward-looking statements. Forward-looking statements include all statements other than

statements of historical fact, including, among others, statements regarding Equinor’s plans, intentions, aims, ambitions and

expectations, includi ng with respect to the Covid -19 pandemic including its impacts, consequences and risks; Equinor’s response to

the Covid-19 pandemic, including measures to protect people, operations and value creation, operating costs and assumptions; the

commitment to dev elop as a broad energy company; the ambition to be a net-zero energy company by 2050; future financial

performance, including cash flow and liquidity; accounting policies; production cuts, including their impact on the level and timing of

Equinor’s production; plans to develop fields; the climate action plan announced by the Norwegian government; market outlook and

future economic projections and assumptions, including commodity price assumptions; organic capital expenditures through 2022;

intention to optimis e and mature its portfolio; estimates regarding exploration activity levels; ambition to keep unit of production cost in

the top quartile of its peer group; scheduled maintenance activity and the effects on equity production thereof; completion and results

of acquisitions and disposals; expected amount and timing of dividend payments; and provisions and contingent liabilities. You should

not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the

forward-looking statements for many reasons.

These forward-looking statements reflect current views about future eve nts and are, by their nature, subject to significant risks and

uncertainties because they relate to events and depend on circumstances that will occur in the future. There are a number of factors

that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking

statements, including levels of industry product supply, demand and pricing, in particular in light of recent significant oil price volatility

triggered, among other things, by the changing dynamic among OPEC+ members and the uncertainty regarding demand created by

the Covid-19 pandemic; the impact of Covid-19; levels and calculations of reserves and material differences from reserves estimates;

unsuccessful drilling; operational problems; health, safety and environmental risks; natural disasters, adverse weather conditions,

climate change, and other changes to business conditions; the effects of climate change; regulations on hydraulic fracturing; security

breaches, including breaches of our digital infrastructure (cybersecurity); ineffectiveness of crisis management systems; the actions of

counterparties and competitors; the development and use of new technology, particularly in the renewable energy sector; inability to

meet strategic object ives; the difficulties involving transportation infrastructure; political and social stability and economic growth in

relevant areas of the world; an inability to attract and retain personnel; inadequate insurance coverage; changes or uncertainty in or

non-compliance with laws and governmental regulations; the actions of the Norwegian state as majority shareholder; failure to meet

our ethical and social standards; the political and economic policies of Norway and other oil-producing countries; non-complianc e with

international trade sanctions; the actions of field partners; adverse changes in tax regimes; exchange rate and interest rate

fluctuations; factors relating to trading, supply and financial risk; general economic conditions; and other factors discussed elsewhere

in this report. Additional information, including information on factors that may affect Equinor’s business, is contained in Equinor’s

Annual Report on Form 20-F for the year ended December 31, 2019, filed with the U.S. Securities and Exchange Commission

(including section 2.11 Risk review - Risk factors thereof). Equinor’s 2019 Annual Report and Form 20-F is available at Equinor’s

website www.equinor.com. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we

cannot assure you that our future results, level of activity, performance or achievements will meet these expectations. Moreover,

neither we nor any other person assume responsibility for the accuracy and completeness of these forward-looking statements. Any

forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, we

undertake no obligation to update any of these statements after the date of this report, whether to make them either conform to actual

results or changes in our expectations or otherwise.

We use certain terms in this document, such as “resource” and “resources” that the SEC’s rules prohibit us from including in our filings

with the SEC. U.S. investors are urged to closely consider the disclosures in our Form 20 -F, SEC File No. 1-15200. This form is

available on our website or by calling 1-800-SEC-0330 or logging on to www.sec.gov.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our

future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we nor any other person

assumes responsibility for the accuracy and completeness of the forward-looking statements. Unless we are required by law to update

these statements, we will not necessarily update any of these statements after the date of this report, either to make them conform to

actual results or changes in our expectations.

Equinor fourth quarter 2020 61

END NOTES

1.

The group's

average liquids price

 is a volume-weighted average of the segment prices of crude oil, condensate and natural gas

liquids (NGL).

2.

The

refining reference margin

is a typical average gross margin of our two refineries, Mongstad and Kalundborg. The reference

margin will differ from the actual margin, due to variations in type of crude and other feedstock, throughput, product yields, freight

cost, inventory, etc.

3.

Liquids volumes

 include oil, condensate and NGL, exclusive of royalty oil.

4.

Equity volumes

 represent produced volumes under a

production sharing agreement (PSA)

 that correspond to Equinor’s

ownership share in a field.

Entitlement volumes

, on the other hand, represent Equinor’s share of the volumes distributed to the

partners in the field, which are subject to deductions for, among other things, royalty and the host government's share of profit oil.

Under the terms of a PSA, the amount of profit oil deducted from equity volumes will normally increase with the cumulative return

on investment to the partners and/or production from the licence. Consequently, the gap between entitlement and equity volumes

will likely increase in times of high liquids prices. The distinction between equity and entitlement is relevant to most PSA regimes,

whereas it is not applicable in most concessionary regimes such as those in Norway, the UK, the US, Canada and Brazil.

5.

These are

non-GAAP figures.

 See Use and reconciliat ion of non-GAAP financial measures in the report for more details. For

ROACE, see table Calculated ROACE in the Supplementary disclosures for more details.

6.

Transactions with the

Norwegian State.

 The Norwegian State, represented by the Ministry of Petroleum and Energy (MPE), is

the majority shareholder of Equinor and it also holds major investments in other entities. This ownership structure means that

Equinor participates in transactions with many parties that are under a common ownership structure and therefore meet the

definition of a related party. Equinor purchases liquids and natural gas from the Norwegian State, represented by SDFI (the

State's Direct Financial Interest). In addition, Equinor sells the State's natural gas production in its own name, but for the

Norwegian State's account and risk as well as related expenditures are refunded by the State.

7.

The production guidance reflects our estimates of

proved reserves

 calculated in accordance with US Securities and Exchange

Commission (SEC) guidelines and additional production from other reserves not included in proved reserves estimates. The

growth percentage is based on historical production numbers, adjusted for portfolio measures.

8.

The group's

average invoiced gas prices

include volumes sold by the MMP segment.

9.

The internal

transfer price

 paid from the MMP segment to the E&P Norway and E&P USA segments.

10.

Since different legal entities in the group lend to projects and others borrow from banks, project financing through external bank

or similar institutions is not netted in the balance sheet and results in over-reporting of the debt stated in the balance sheet

compared to the underlying exposure in the group. Similarly, certain net interest-bearing debt incurred from activities pursuant to

the Marketing Instruction of the Norwegian government are off-set against receivables on the SDFI. Some interest-bearing

elements are classified together with non-interest bearing elements, and are therefore included when calculating the net interest-

bearing debt.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by

the undersigned, thereunto duly authoris ed.

EQUINOR ASA

(Registrant)

Dated: 10 February, 2021

By: ___/s/ Svein Skeie

Name: Svein Skeie

Title: Chief Financial Officer