Equinor ASA (EQNR) Earnings Call Transcript

Good afternoon. It's my pleasure to wish you welcome to this year's launch of Equinor's Energy Perspectives. Today, we present the 10th Edition of Energy Perspectives. We're doing it in unprecedented times, and therefore, also in an unusual format. For years, we have been in a situation where the impact of climate change becomes more visible and the need for action ever more imminent. On top, we are now in the second wave of an unfolding pandemic with further major consequences for people, business and politics, which again, creates uncertainty and volatility in the energy markets. My name is Reidar Gjaerum. I'm heading up corporate communication in Equinor, and I have the pleasure of being your host through the next hour. Today's program starts with our Chief Economist, Eirik Waerness, presenting this year's version of Energy Perspectives that was made public this morning. Following Eirik, we will be joined by Executive Vice President for Marketing and Processing area in Equinor, Irene Rummelhoff. Irene will speak to how analysis, like the Energy Perspectives, is used as part of informing and shaping Equinor's strategy. But first, some practical issues. After the 2 presentations, we will have a dialogue session. For that part, you have the opportunity to ask questions to Eirik and Irene via Slido. Further, we also have a poll in which we would love to get your answers to 3 questions. Underneath the video stream you're now watching, you'll find both the Q&A and poll. You can also visit Slido.com and enter the code EP2020 as shown on the screen now. I encourage you to submit your questions and respond to the poll during Eirik's and Irene's presentations. But to kick it all off, let's hear from Equinor's new CEO, Anders Opedal, sharing his perspectives 2 weeks into his tenure at the top of Equinor.

2020 has been a year of unprecedented uncertainty in the energy industry. While the humanitarian cost of the COVID-19 pandemic are still being counted, the world is suffering a global economic downturn and an increase in geopolitical uncertainty. The energy market turmoil we have seen this year far outweighs anything else I have experienced through my career in Equinor. The pandemic is still affecting societies and markets. Uncertainty is high, and no one can predict what the short and long-term effects will be. There are many important questions with no clear answer at present. What effect will lower oil and gas prices have on supply? How will setbacks in the global trade affect the map? What impact will the pandemic have on the energy transition? Attempting to answer these questions make scenario thinking more important than ever. We always develop our business plans to cater for different future scenarios, and as company, we must navigate the uncertainties in the best way we can for our employess, our owners and the societies where we operate. Our strategy remains firm, always safe, high value and low carbon. And we are inspired by our vision of shaping the future of energy. Rooted in Energy Perspectives is the recognition of the massive changes the global energy mix must go through for the world to reach the climate targets set out in the Paris Agreement. During the last year, we have set clear actions and targets for emission reduction in our operations and the carbon intensity of our products. We have decided to invest in the Northern Lights carbon storage projects and further matured our large offshore wind portfolio. To become a leading company in the energy transition, we will leverage technology and innovation at scale to further optimize our oil and gas portfolio, accelerate profitable renewable energy projects and increase our effort to develop new low-carbon solutions. We are transitioning towards becoming a broad energy company. Our success rests on our people, managing risk and staying competitive in a continuously changing business and policy environment. Energy perspectives provides me and my colleagues with important insight that help us make sound decisions. I hope you will enjoy this 10th addition of the Energy Perspectives report.

Thank you, Anders. I'm sure we will enjoy it, and then time has come to call up Stavanger and our Chief Economist, Eirik Waerness. Hello, Eirik. Great to have you with us.

Hello, Reidar. Great to be with you digitally from Stavanger.

Next time, it will be different. But I think we should go straight to it. And let's get the report that was launched this morning and hear your presentation. So the floor is yours, Eirik.

Thank you, Reidar. It's good to be back and present Energy Perspectives. Good afternoon, Europe and Africa, and good morning, America, and good evening, Asia. I'm proud to welcome you to the launch of the 10th Edition of the Energy Perspectives report, our long-term energy and macro outlook. This year's launch is special in many ways, primarily due to COVID, but I hope it will be well received and that it contributes to good discussions as normal, also, in the new normal. Since we presented our first Energy Perspectives report back in 2011, we have seen enormous changes in energy markets, just a few of which are listed here. World energy demand has grown by some 11%, while the economy is almost 30% larger. The shale revolution, supported by ever-increasing oil and gas demand, has shaken both oil and gas markets. Ever cheaper renewable electricity signals the start of the energy transition. And CO2 emissions have unfortunately continued to grow, despite massive attention on the issue and the need for dramatic changes. Back in 2011, we only made one forecast. And surprisingly, given all these changes, the forecast was not too bad with a few exceptions. Fortunately, we were much too bullish on the development in coal demand, which peaked in 2013 and not in 2030 as we predicted. We missed on oil demand by a margin on the downside. We were too optimistic on electrification and energy efficiency. But then we got it right this year, but for the wrong reasons, namely COVID. However, and probably a surprise to many, including us, we did very well in predicting the growth in wind and solar electricity generation. And of course, 2020 has seen the impacts of the COVID pandemic, a humanitarian and economic disaster that will affect all our lives for years to come. In addition to the humanitarian roles, its impact has been profound in energy markets with crashing oil demand and even negative prices. These kind of unprecedented events are difficult to put into any forecast or scenario. Here, you can see the global fuel mix through the previous energy transitions. For most of human history, biomass and mainly wood has been the main source of energy. This all changed with the industrial revolution. And in the late 19th century, we transformed into the coal age. Then in the mid-20th century, the most recent energy transition to the oil age happened. And we've also seen rapid growth in natural gas as well as in nuclear and hydro playing important roles. And we can, if we look hard, see the result of the very rapid growth in new renewables over the last decade. But were these truly energy transitions or were they energy additions. When we look at the same data in absolute terms, we see that there's far more coal used today than any time during the coal age. Even biomass is still growing as a fuel source. The only thing that has been consistent is that the world demands more and more energy. And we just find new ways to meet that demand. How much longer can energy demand keep growing? How much longer can we depend on nonrenewable and CO2-emitting resources for that energy demand? And then let us look at the recent history in a bit more detail. The story over the last 30 years has been all about the rapid growth of wind and solar. Look at the left chart. However, in absolute terms, they still make up a very small share of the fuel mix, and all fuels have grown in absolute terms. We still live in a heavily fossil fuel-dominated economy and demand continue to grow until COVID hit. What is driving that demand? Looking across regions. We can see that the industrialized economies in Europe, North America and Asia Pacific, have had relatively stable energy demand. And within that, some countries, even with declining demand. Almost all the growth comes from the emerging economies, with a clear standout being China's incredible growth since 2000, becoming the world's largest source of energy demand around 2010. Split by sector, in the right chart, manufacturing and transport have seen the most rapid growth as economic development brings demand for goods, car ownership and domestic and international travel. But this rapid development and increased consumption comes with a price in the form of CO2 emissions. CO2 emissions, along with other greenhouse gases, have continued to rise. To reach a sustainable path, these emissions must eventually be net zero, so this line must go down to almost zero. After decades of global efforts, the only things that have resulted in significant emission reductions are the global financial crisis more than a decade ago and the COVID pandemic. It was the reduction in consumption and energy demand that caused this, not changes in the fuel mix, not energy efficiency, nor any other energy transition trend. And when we break these emissions down by region again, we see that emissions have been flat, not surprisingly, in the industrialized countries and grown significantly in the emerging economies and particularly in China. And at the moment, just 2 regions, North America and China combined, make up 47% of the global emissions, almost half. So that's the current situation. Where do we go from here? What are the long-term trends in the energy markets? When we look at different drivers, such as growth, energy efficiency, technology, climate policies, market regulations and geopolitics, we see many signposts for where the world might be heading, but they're pointing in different directions. How can we make sense of them all? And how is the development going forward affected by the disastrous COVID pandemic? We're still in the middle of the COVID pandemic and the line of sight to its end is not clear. Even if news about a possible vaccine being around the corner, or actually 2 possible vaccines were significant positive surprises last week and this week. Many outcomes are possible. As are the long-term impact of the virus and its impact on consumer behavior and energy demand. We've chosen to establish what we think is the likely path in terms of GDP growth and energy demand development over the next couple of years. You can see that in the right chart. And these are based on assumptions on the implementation of the vaccine, its impact, policy measures like continued lockdowns and not continued lockdowns, and the impact of stimulus packages to the global economy before we see possible different long-term trajectories for the energy sector emerging. With all the uncertainty we need scenarios, as it was said in the video in the beginning of this presentation, we need scenarios to describe possible development paths. Stories about the future. And our scenarios are assumed to start diverging around 2022/'23. As before, we have 3 scenarios in Energy Perspectives. Two showing where the world could be heading, depending on the strength of different drivers we observe today. In the reform scenario, economic growth is prioritized and driven by technological advancement in a setting of geopolitical cooperation and friendly competition. That's one possibility. Another one is rivalry, in which the current momentum towards unilateralism and isolationism continues, with impacts on protectionism and reduced international trade and technology exchange. Or we could end up in a third alternative. A new scenario for this 10th edition. It's called rebalance. It points as a normative scenario to where the world needs to go, where we must go to achieve the targets in the Paris Agreement and progress towards delivering on the UN sustainable goals at the same time. Rebalance requires unprecedented changes in the global economy as well as international collaboration and technological progress. Why rebalance? We currently live in a very unbalanced world where 15% of the world's population have almost 2/3 of the income and use more than 1/3 of energy. If the remaining 85% of the global population aspire to copy the economies and lifestyles of these countries -- of our countries, then there's no chance for a sustainable future. But how can we expect the people in the 85% to be happy with not having the kind of lives that those -- that us in the richest countries currently have? So a sustainable future requires a rebalanced world, therefore rebalance. The world must drastically change course if we are to reach the 2-degree target. We need to rebalance the global economy, both between industrialized and emerging economies, as well as internally in different regions and countries. Focus must turn to sustainable economic development in emerging economies and well-being reduced waste and less excess consumption in the industrialized economies. We need coordinated policies across the board in a setting of trust and cooperation to correct incentives and promote investments and change. And we need changes in behavior that move us in the right direction. And do not forget, if we are to reach the targeted emission reductions, we need all of these changes fast. So what do the 3 scenarios then deliver in terms of economic growth and CO2 emissions? The pendulum of geopolitics has recently swung towards the more populist than protectionist path. Continuing on this path takes us on the rivalry trajectory that we show in the chart now, where the world economy grows moderately at 1.8% per year, along with CO2 emissions until they peak around 2040. This is not a sustainable development, but it's possible. Or the pendulum could swing towards our reform scenario, characterized by less conflict and more cooperation, in which economies are optimized for GDP growth, and there are constructive market conditions. GDP growth here is 2.1% per year, so that we're almost twice as rich, if you like, the global economy is twice as large as today by 2050. In this world, CO2 emissions begin to decrease, but not nearly enough to stay below 2-degree warming, in spite of significant tightening of energy and climate policies in line with the national commitments in the Paris Agreement. Or the pendulum could swing further towards our rebalance scenario. A world where CO2 emissions reductions are on course for a well below 2-degree world. Here, the industrialized world, the industrialized countries, we forego GDP growth and move towards a more balanced, stable and green economy while the emerging economies start closing the income gap and embark on a sustainable path according to the UN Sustainable Development Goals. Overall, GDP growth here is a little lower than in Reform at 2% per year. And in order to deliver on the emission reductions in rebalance, look at the green line in the right chart. We need massive growth in carbon capture and storage, removing 2 billion tons of CO2 annually by 2050. While rebalance delivers on the well below 2-degree target in the Paris Agreement, going to net 0 by 2050 would require even more ambitious assumptions on CCS and renewable electricity in combination with hydrogen and also natural things and potentially sources of negative emissions to make room for the necessary gross emissions. Rebalance is a massive challenge and even more would be needed if global net 0 by 2050 were to be realized. Let's examine rebalance a bit more in detail. A key difference between rebalance and reform is that the former contains significant convergence between rich and poor parts of the world in terms of energy use and income growth per capita. We illustrate this here showing how energy use goes down in the left chart, and income growth slows down in the 3 richest regions at the top of these charts compared with the reform. While the development in the 3 poorest regions is the opposite. We believe that any possible and credible path to achieving Paris targets and the UN Sustainable Development Goals simultaneously must deliver on this convergence. What will the scenarios bring in terms of energy demand and mix? Well, they all contain energy transitions and significant fuel mix changes, but reform and rivalry entail growth in energy demand as well by 10% or 21%, respectively. Only rebalance delivers on the need to reduce overall energy demand and move out of fossil fuels. So 15% reduction in overall energy demand, more than 50% reduction in fossil fuel demand by 2050. And that is by design. That's what we have to do. Rebalance delivers the biggest increase in electricity generation, plus 80%. Renewables and nuclear increase sufficiently fast to deliver not only on the increase in electricity demand, but also on the need to get fossil fuels out of the power generation mix as soon as possible. The largest changes take place in the transport sector, where both reform and in particular, rebalance, deliver much lower fuel demand and a massive increase in electrification. This is driven by changing transport patterns and transport modes as well as energy efficiency and electrification. What about hydrogen, you might ask. The big buzz word of 2020 in addition to COVID. Well, first, hydrogen is not an energy source, but an energy carrier that must be produced from something. That something could be hydrocarbons or electricity, but it requires energy and brings with it an energy efficiency penalty when produced and transformed back to heat or electricity. Secondly, hydrogen currently is not a commoditized energy product, lacking a clear path to an upstream and midstream system of a scale that would significantly influence the end-use energy mix in addition to that of dedicated production capacity for refineries and ammonia plants. However, being CO2 emission-free, when used for heat as a fuel or feedstock or for electricity production, hydrogen certainly holds potential as a widely used decarbonized alternative and especially in relation to net-zero emission ambitions. We will mature our thinking around hydrogen as an end-use energy commodity. But thus far, we've not modeled hydrogen specifically at a global level. Meanwhile, more electricity from renewables and more gas with CCS are good proxies for what could be the landscape of a net-zero energy economy compared to our rebalance scenario. Nevertheless, we believe the primary usage of hydrogen will be in the hard-to-decarbonize sectors, such as feedstock-to-chemical processes, heat and molecules in the industry and on shipping fuel. Taking a closer look at oil demand, we see why the COVID lockdowns were especially visible in terms of oil markets. More than half of oil demand comes from the transport sector. Out of this, 3/4 is road transport. Aviation, which was particularly hard hit by the COVID restrictions, only constitutes 7% of oil demand, around 7 million barrels per day. The scenarios describe a very different and a very wide outcome space for oil demand, ranging from 47 million, slightly below 50 million barrels to more than 110 million barrels per day. That's not a very precise forecast from a group of analysts, but they're all possible trajectories. Given the importance of transport in oil demand, delivering on the rebalance scenario, therefore, depends on massive changes in the transport sector, as I just mentioned. As you can see in the chart to the right, oil demand declines in all other sectors as well with one exception, the petrochemical sector. In this sector, we see a moderate increase in demand for oil as feedstock, despite a significant -- despite of significant recycling efforts and very high focus on reducing plastic waste. Turning to natural gas. The story today is that of a versatile fuel serving multiple demand sectors in tough competition. The power and heat sector is the largest source of gas demand, 40%, the red area in the left chart. But in this sector, to the right, gas competes with a lot of other energy sources. If gas were to replace all the coal currently used in the power and heat sector, total gas demand would increase by some 80%, with power and heat then constituting 2/3 of gas demand. And CO2 emissions would be significantly reduced. However, unfortunately, the competition for gas in the power sector from new renewables is high, which is good. The outlook for gas in our 3 scenarios is also very different, but less so than in the case of oil. Demand continues to increase in all scenarios beyond 2030, in rebalance, until decarbonization of the power sector starts to bite into gas demand. The regional developments in rebalance are interesting. Where there's a considerable reduction in gas demand in the industrialized countries, some of which have surplus gas like North America, while emerging economies and in particular, China and India will experience growth in gas demand to 2050, partly to facilitate the massive reduction in coal demand needed to deliver on emission reductions. So what do these trajectories entail for new oil and gas investments? The demand ranges are wide. But in all cases, if we were to stop all investments, supply from legacy reserves would decline every year faster than the decline in rebalance, which is at the lower end of the blue and green ranges. In order to satisfy demand in all scenarios, therefore, there is a need for new investments to develop resources into reserves and potentially also to find new energy and carbon-efficient reserves. Of course, the need for new investments would be much higher in reform and rivalry than in rebalance. The supply gap for oil in 2050 in rebound would be around 24 million barrels per day or roughly 50% of the level of demand by then. The total supply gap for oil over the next 30 years, in the a rebalance case amounts to some 260 billion barrels, which to put into perspective is more than OPEC has delivered over the last 20 years. For gas, the total supply gap, the white area in the right chart is 62 trillion cubic meters, which is much more than North America, Russia and the Middle East combined have delivered over the last 30 years. So we not only need to deliver on the energy transition through massive investments and changes in behavior, we also have to continue to invest in oil and gas to satisfy demand. Turning back to the energy addition since the beginning of the last century, from the coal age to the oil age. We conclude that a sustainable development in line with rebalance, requires a massive energy transition for the first time in human history, where energy demand starts to decline, while the new sources of energy replace the use of a lot of the old sources of energy. Also in reform, global energy demand ultimately peaks and goes into decline. But this and the fuel mix change that we have in that scenario is not sufficient to deliver on the Paris climate targets. In summary then, it is possible to deliver on a sustainable energy transition in line with the Paris targets and the UN Sustainable Development Goals. It's a unique challenge that most likely requires a fundamental change in policies across several dimensions to deliver a balanced outcome. The need for investments under conditions of uncertainty is large across the energy system, which again requires clear policies, the right framework conditions and benign cooperation. There's ample need for different actors to shape our energy future, and we must do it together. So we value your opinions and appreciate your input on how we might improve our efforts of describing possible long-term future scenarios for the global energy sector. Please do not hesitate to give us your feedback. And thank you for listening, and I turn this back to Oslo and you, Reidar.

Thank you so far, Eirik, and thank you for a great introduction, packed with information, as always. I'm sure your presentation has spurred a lot of curiosity in the audience. So please come forward with your questions by using Slido. You'll find Slido right beneath the video window that you're watching right now. We'll get to that in a few minutes. But now it's my pleasure to welcome our next speaker of the day, Irene Rummelhoff, Executive Vice President of Marketing, Midstream and Processing in Equinor. And Irene, you're also joining us from Stavanger today. Hello.

Hi there Reidar. How are you?

I'm good, and it's good to have both you and Eirik with us here. Sorry, we can't be together, but we're looking forward to another opportunity. So let's hear your views around what has been discussed so far and the perspectives that this report gives. So please, Irene.

Thank you, Reidar, and thank you, Eirik, for a very interesting and engaging presentation, as always, I have to say. And good afternoon to all of you. I'm extremely pleased to be here today, and I'm also excited that so many of you have chosen to join us virtually for this event. Energy Perspectives is celebrating its 10th anniversary in the year of unprecedented change and uncertainty, particularly for the global energy business. Within the next few minutes I will share with you why I believe the Energy Perspectives report is so important, not only for Equinor, but as a source of insights and facts and as a contribution to engagement and discussions throughout a wide range of shareholders. I will also elaborate on the following 2 questions. How should Equinor navigate within all this uncertainty? And how could and should Equinor use such an outlook to inform our strategy and vision going forward? So let's start with why I think Energy Perspectives is such an important report for us. It is a unique product. It's developed in-house by a highly competent market analysis team, which I'm sure now are eagerly waiting for me to finish up so we can get into the more exciting Q&A session. It is developed on a ground term and on arm's length basis. And I can assure you that no business decision-makers like myself, have been involved, had the chance to influence this before the publication. The report is shared publicly and debated, hopefully, in a constructive manner to benefit both Equinor and the public and a whole range of other stakeholders. It does examine 3 different paths or scenarios, as Eirik has talked about, shaped and emphasized by different drivers with different rates. There are all 3 scenarios possible and plausible futures and the reception of their probability varies, but the outcome space also varies significantly. There are quite a few technologies that are impacting the future of the global energy space. The most important ones, I would argue, are energy and climate policies cannot be underestimated, technology, geopolitics, economic growth that Eirik has talked a lot about and then also consumer preferences and behaviors. I would argue that no one can say for sure exactly how things will develop. But the chances of making better decisions if informed by Energy Perspectives or similar analysis are uncontested. So then too, how should Equinor navigate within all this uncertainty? Navigating uncertainty is not an exact science, and we all have to find our own approach to it. In Equinor, we have, for quite some time now developed ourselves into a broad energy company. One reason for that is exactly to handle the uncertainty we're experiencing. It's all about creating optionalities for a future that is extremely hard to predict. Another one is of course to take advantage of the opportunity that comes with energy transition. I can tell you that we're experiencing every single day that the competence and skill set that we have developed over the last 5 decades is easily transferable and applicable also to new technologies and regions. As Anders said in the introductory video, our strategy is firm, always safe, high-value, low carbon. But we are constantly looking for ways to improve our portfolio. We're optimizing our oil and gas assets, we are accelerating our renewable investments and projects and we are increasing our efforts to develop new low-carbon solutions. We do this to make sure that we're not putting all our eggs in one basket and to maintain the ability to change course when needed. Towards the end of this presentation, I'd like to share with you how the scenarios in Energy Perspectives inform and influence our strategy. Over the past few years, we've seen tremendous changing in the patterns of where capital is rooted within the energy space. And there's no doubt the energy transition has started, but the massive changes that the global energy systems needs to go through to reach the desired climate targets cannot and must not be underestimated. There will not be a silver bullet, I'm sorry. No one can precisely be sure of the path of the transition and it will be a marathon rather than a sprint. So it is important that we make sure that decisions we're making today will have the intended long-term effects. Success, in most cases, starts with clear targets and objectives. In this case, I would argue for nations, regions, companies and also individuals like you and me. Equinor has an extremely important role to play in the upcoming or ongoing, I should say, energy transition, and we want to contribute proactively to development aligned with the goals of Paris Agreement. We are already one of the most carbon efficient producers of oil and gas, about 55% less emissions than the average. And we have a target to increase -- decrease the intensity down to 8-kilos per barrel in 2025. We have recently forcefully, I would say, strengthened our long-term ambitions and said that we will actually, as a company, be net-zero in 2050, including the emissions from the use of our products, the so-called Scope 3 emissions. We've also set our ambitions to grow our renewables tenfold within 2026. So targets are important, but they have to be accompanied by actions. And in 2020, we sanctioned the first full-scale carbon capture and storage project, capturing CO2 from industrial sources, the Northern Light project. We sanctioned the largest floating offshore wind park in the world called Hywind Tampen. In the U.K., we made significant progress on our hydrogen project called Humber Saltend and also, of course, important steps with respect to further develop the world's largest offshore wind park, Dogger Bank. As we see Equinor's oil and gas production fall after 2030. And also demand for products will fall in that same period. We will and intend to develop a new foundation for growth in a world that is going through the largest energy transition ever. Achieving the ambitions of the Paris Agreement will require significant effort across society, from policymakers to consumers, from individuals to companies to industrial associations. Energy Perspectives is providing us with an understanding of the scope and range of such effort. And I would like to close my reflections by saying that we believe our broad set of climate ambitions and actions demonstrate that our strategy is consistent with the ambitions of the Paris Agreement. So thank you all for your attention, and over to you, Reidar.

Thank you so much, Irene. You will soon be back for the dialogue session with Eirik, where we will take questions that you out there have asked through Slido, and there is a lot of interest out there. But before we go to the questions, let's have a look at the results of the poll that we introduced at the beginning of the program. The first question is how likely do you think it is for the world to develop in a way consistent with the climate targets in the Paris Agreement? So here, 55% says unlikely, 31% likely and then a mix between vary of the either 2. We'll get back to that questions. So let's look at the next one. Do you think the world has passed the point of peak oil demand? No, says 61%. Yes, says 39%. And the final question we asked was this. Will you make lasting changes in your work habits and lifestyle because of COVID-19? 68%, yes some; 25%, yes many; and only 7% no. So we will not return to what we were used to. Let's have some reflections around the results. So again, I call upon Stavanger.

Thanks to everyone who has responded, and I think we should start with a question regarding the likelihood of reaching the Paris agreement goals. I guess, highly relevant to both of you, but could we have the results up on the screen so that we see it? I think -- yes, there it is. So more people tend to say unlikely than likely. Eirik, in the press release that went out this morning and through your presentation, you said there is an opportunity to reach the goal of the Paris Agreement, not the majority is supporting that, but what's your thought around the response we've had here?

No, I think it reflects the opinion of the listeners that achieving these targets is a massive challenge. That doesn't mean it's impossible. And it can still be possible, but it reflects the massive challenges, both in terms of achieving necessary development and delivering on sustainable development goals and at the same time, making sure that we change the energy systems efficiently to avoid sufficient amounts of emissions to actually reach those targets. I took comfort in quite a few respondents also think it's likely. And that means that there is this potential for each and every one of us to try and move the needle in the right direction, to call on politicians to put in place the right targets, to push us as an industry to also try and do our stuff. And even if we don't reach all the way, getting quite a bit further is also good. So I think it's -- it looks like the reform case is what most of the responders think is more likely. Than a rebalance case.

Thanks, Eirik. And following up on that. Irene, do you see signals out there that believes? You think that it is likely that we will reach the targets of the Paris Agreement.

I personally am much more optimistic now than I was only a few years ago. And a few points -- a few things I would point to. We're seeing now post COVID a lot of governments coming out saying we're going to put in place green stimulus packages. Still remains to be seen. They're putting the targets out there, but they need to follow-up with actions. I think maybe the most important trend that I'm seeing is that we see capital starting to speak up. We see investors putting a lot of emphasis on whether companies like ourselves have climate targets, whether we risk our investments towards different scenarios, et cetera. And I think when money talks, then a lot of people tend to line up. Another interesting and exciting development is within consumer, I guess, behaviors and preferences. We see signs, I would say, more than weak signs that they will -- starting to develop these green marketplaces where actually people are paying a premium for products that are produced with the lower carbon emissions. We're seeing it happening within aluminum. We see it happening within steel. We have customers come to us and ask for the CO2 footprint of our methanol that we produce up at Tjeldbergodden. We have seen LNG cargoes being sold with a premium because they have lower CO2 emissions. So getting the consumers to act is also a very, very important signal and signpost, I think.

So you believe that low carbon can be a competitive edge in the markets that you just described?

I'm convinced it will be in the future.

Good. Thanks. Eirik, from the report and kind of the massive material that now is accessible at equinor.com, so people can go in and look for more. But briefly from the report to this question, do you see any facts supporting or contradicting, in a way? What is the main view of the people out there?

No, I think it's clear that we see many signals of change that could speed up the energy transition and make it more likely that we reach these targets, the growth in electric vehicles, the growth in renewables, the signals that people are willing to pay a price and actually change their behavior. Some of the developments on the hydrogen scene, the growth in batteries. So there are many of those that if they are allowed to grow sufficiently fast, it will increase the chance of making sure that we get the energy transition right. So we don't not only increase energy demand, but also shift out of fossil fuels. On the other hand, the climate for political cooperation, if you like, at the global scene is a clear indicator that this is going to be very, very difficult because this is about acting together. This is about putting in place measures and stop talking about targets. We're long on targets and short on measures in global politics in this area. So we need politicians that have a sufficient mandate from their voters to take on some of these costs sort of for the course of the greater good, which is the global climate challenge in this case. Now we see that in other challenges as well, global challenges. We know that we have to cooperate to eradicate poverty. We haven't been able to do it. And things are going in the wrong direction in many countries in that respect as well. So you can -- and that's what -- so that's the point here is that looking out there, there are many signals that go in different directions, and you have to be an optimist in one dimension to make sure we deliver on the targets. And you have to hope that some of the signposts that go in the wrong direction, move to the backseat.

Both of you follow geopolitics closely, and you touched upon it now. The recent result of the U.S. presidential election, could that change kind of your view as to the opportunity of getting the world politicians to work even more closely together? Irene?

Well, I think our experience in the U.S., which I'm sure you're alluding to is that the guy on top is important but not that important. We see that the different states have a lot of freedom with respect to setting their own climate targets. We're operating with our offshore wind business in northeastern U.S., lots of new targets have come out within Trump's period at the reign. So -- and we're also seeing that the companies are setting targets independent of who's leading or the politicians in the country. So it is important, of course, and I think the result, if finalized, I guess, will take us in the right direction, but it's not absolutely essential is what we have experienced over the last 4 years.

Okay. Thank you. Let's move to the second question related to an old topic. Have we had peak oil demand? And I guess we should have had it or we need to have it very soon to be able at all to reach the goals of the Paris Agreement. This is something that you have studied for years, Eirik, what's your thought? Have we had peak oil demand?

Well, in what we think is the most likely path out of the COVID pandemic, the answer to that is no. We will come back to the level of oil demand in 2019 around 2023, so the most likely path is no. But if we were to see rebalance coming a little bit sooner, then the answer is yes. But most likely, no. Because of the growth in the energy demand, the growth in transport, the new car sales in emerging economies, we're not able to keep up sufficiently fast with the fast electrification that is going on, in particular in Norway, but in a few other countries as well. So that's the most likely response.

Okay. Let's take the last question from the poll, which was about whether people would change lifestyle following COVID-19. I'll pass that on to you, Irene. Do we have the results on the screen for Irene as well? We could get it up. Yes. And yes, so many; yes, many, total dominating. So I take it for granted, not only you personally, Irene, but that also Equinor is preparing for kind of a different corporate lifestyle when COVID-19 is not as dominating as it is today. What's going on within the company?