Equinor cuts buybacks by 70% and flags sharp drop in capital expenditure next year

By Nerijus Adomaitis and Nora Buli

OSLO, Feb 4 (Reuters) - Equinor EQNR.OL will cut share buybacks by 70% and trim renewables and low-emissions energy investment, it said on Wednesday as it posted a 22% drop in fourth-quarter profit, hit by weaker oil and gas prices.

Share buybacks and hefty dividends have supported share prices of global oil majors in recent years, with many analysts saying such shareholder returns are unsustainable in the face of low oil prices.

"We are taking steps to strengthen free cash flow," Equinor CEO Anders Opedal told reporters. "This makes us even more robust against lower prices and allows us to maintain a strong balance sheet in turbulent times."

Equinor shares were up 0.6% by 1258 GMT.

The Norwegian energy group's adjusted earnings before tax in the last three months of 2025 fell to $6.2 billion but were still above the $5.93 billion consensus analyst poll compiled by the company.

Share buybacks will be cut to $1.5 billion this year, from $5 billion last year, and the quarterly cash dividend has been raised to $0.39 per share from $0.37 previously, it said.

The total planned distribution to shareholders would amount to about $5.5 billion in 2026, down from $9 billion last year and less than the $5.8 billion expected by analysts, broker Berenberg said.

Analysts have said that Equinor's rivals Shell SHEL.L and BP BP.L, which are due to report fourth-quarter results on February 5 and February 10 respectively, could also cut shareholder distributions due to lower prices.

Equinor, which is majority owned by the state, said it will maintain capital expenditure of $13 billion in 2026 but cut this to $9 billion next year, primarily through lower spending on renewables and low-carbon solutions.

The 2027 spending guidance includes U.S. investment tax credits for Equinor's Empire Wind project. Excluding those, spending is seen at about $11 billion.

Capital spending will be focused on maintaining steady petroleum production in Norway towards 2035 and growth in its international petroleum output while taking a "disciplined" approach to building its integrated power business, the company added.

Equinor expects about 3% production growth this year, up from record levels in 2025, helped by increased international output.

At home, output from the Equinor-operated Johan Sverdrup oilfield is expected to decline by more than 10%, Opedal said.