By Gwladys Fouche
OSLO (Reuters) -Norway’s Equinor said on Wednesday it booked a $955 million impairment on an offshore wind project in the United States, despite the lifting of an earlier ban on its construction by President Donald Trump’s administration.
In April, Interior Secretary Doug Burgum said the administration of former President Joe Biden had failed to conduct enough environmental analysis ahead of approving the Empire Wind development in New York state.
He shut down the project, dealing a blow to the U.S. offshore wind industry.
But a month later, Burgum lifted the stop-work order on the project, in a compromise with the state that could also see cancelled plans for a gas pipeline revived.
On Wednesday, Equinor’s reported net operating income for the second quarter fell due to having to book a near-billion dollar impairment on its U.S. offshore wind projects.
“This is impacted by an impairment of $955 million due to regulatory changes causing loss of synergies from future offshore wind projects and increased exposure to tariffs,” Equinor said in a statement on Wednesday.
“Of this, $763 million is related to Empire Wind 1/South Brooklyn Marine Terminal project and the remainder is related to the Empire Wind 2 lease.”
Equinor, majority-owned by the Norwegian state, had won a federal lease for Empire Wind in 2017 under Trump’s first administration and secured approval for its investment plans during Biden’s time in the White House in 2023.
But on the first day of his second term in January this year, Trump ordered a review of offshore wind permitting and leasing, although many analysts had still believed fully-permitted projects to ultimately be safe.
The total book value after the latest impairments was $2.3 billion, it said on Wednesday.
With a planned installed capacity of 810 megawatts, the project could generate enough electricity to power half a million homes a year and was expected to begin operating in 2027.
Equinor on Wednesday reported declining core second-quarter results, as expected, due to lower oil prices.
(Reporting by Gwladys Fouche; Editing by Terje Solsvik and Jacqueline Wong)
Comments