Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the Equinor Analyst Q2 Call. Throughout today’s presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Mads Holm, Senior Vice President. Please go ahead.

So with that, let me pass straight over to Ulrica for the presentation. Thank you.

Thank you very much Mads and good morning everyone. Today we present continued strong financial results against the dark backdrop of the war in Ukraine and an energy crisis in Europe. The war continues to influence an already tight energy market and energy prices started to climb already last year and European gas prices reached record levels. This was driven by demand coming back off the pandemic lower than expected production of renewable energy combined with a tight supply side in oil and gas. Energy markets are also closely linked to the global economy. With energy prices at a high level, we see inflationary pressures. Central banks are raising interest rates and there’s increased uncertainty for global economic development going forward. On the other hand, when Asia and especially China comes out of COVID, this is expected to drive growth in energy demand. How these and other macroeconomic forces play out is uncharted territory. On the supply side, we do know that there is limited free capacity of supply. OPEC has increased their quotas; however, several countries do not have the capacity to deliver on these. It underscores the importance of more investment in energy production and the infrastructure to reestablish a balance between the cost of energy, security of supply, whilst decarbonizing the energy sector. Right now, our most important contribution is to secure stable operations and delivery of energy whilst continuing to invest in energy security and the energy transition. We also need to prepare for high levels of uncertainty in the markets and ensure robustness and resilience and maintain cost and capital discipline. In the quarter, we continued to deliver strong financial results. Cash flow from operations after tax was $10 billion. We have maintained high levels of gas production into the second quarter, a summer quarter in which we normally would have produced less compared to the winter months. Having taken several steps to increase gas deliveries to Europe, we achieved 18% more gas from the NCS compared to the same quarter last year, only 4% down from the first quarter. The higher summer production has been an important contribution to help fill European storages. After extensive repairs, improvements and maintenance, Hammerfest LNG was safely back in production on the 1st of June and has been successfully ramped up since, sending the first cargos to Europe. Recently, the Peregrino field was brought back on stream. It has been a challenging process due to COVID restrictions in Brazil. We've had good industrial progress this quarter, and we are delivering on our strategy. We conducted several value creating transactions, both on the Norwegian continental shelf and internationally. On the NCS we completed the acquisition of interest in Statfjord, increasing our share in the field and as a result, we even received a payment at closing due to price development since the effective date, and the asset continued to deliver good cash flow.

In the U.S. we have acquired East Point Energy, a battery storage developer. Energy storage is an important and necessary part for the transition to more renewable energy and other low carbon value chains.

In the U.S. we have acquired East Point Energy, a battery storage developer. Energy storage is an important and necessary part for the transition to more renewable energy and other low carbon value chains. Smeaheia,: We continue to deliver very strong results, which enable us to invest in the business and build resilience in our balance sheet. The Board has decided on a cash dividend of $0.20 per share for the second quarter and in addition to this, on the back of continued strong financial results, the extraordinary cash dividend is increased from $0.20 to $0.50 per share for the second and the third quarter. Our share buyback program is conditional upon the Brent price, our net debt ratio, and as well as the commodity prices. And on the back of continued supportive conditions, we increased the buyback program from $5 billion to a maximum of up to $6 billion for 2022. The third tranche will be around $1.8 billion with a market share of around $600 million. In total, we increased the capital distribution from $10 billion to up to $13 billion for 2022. In total, this represents a balanced approach where we invest in our competitive portfolio in the energy transition whilst showing a commitment to offer attractive shareholder returns. On safety, the 12 months average serious incident frequency is 0.5 and the total recordable injury frequency for the past 12 months is 2.5 per million hours worked.

Phase 2,: The progress on our offshore wind projects were good, but bottlenecks in global value chains affect the whole industry. For example, we had to adjust the plan for Hywind Tampen due to delays associated with the delivery of steel. Four turbines are already installed on the field and another three will be towed out and come on stream this year. The last four turbines will not make it for this year's weather window and must therefore be installed on the field next spring. However, even with just seven turbines installed, Hywind Tampen will have 60 megawatt capacity and will be the world's largest floating offshore wind farm. This quarter, the average invoice liquids price was around $107, up around $10 from last quarter. The blended price of liquids and gas for Equinor was $117 per barrel of oil equivalent in the quarter. European gas prices have eased off slightly, but are still high, but have still high levels and have started to increase again as we entered the third quarter. In Europe, we have seen an unprecedented divide between NBP and TTF. Continental. Europe is more exposed to Russian gas supply, hence the TTF has reacted more to recent uncertainty. Our adjusted earnings totaled $7.6 billion and $5 billion after tax. Net operating income ended at $17.7 billion and net income after tax was $6.8 billion. The global increase in prices and inflationary pressures also impact us. We see this combined with higher prices of electricity and CO2 starting to impact our costs. We continue our improvement efforts to keep costs under control and to mitigate cost pressures. The tax rate on our adjusted earnings in the quarter was 71.6%. This is thanks to a large part to our earnings being generated on the Norwegian continental shelf. Here, a high tax rate is a clear sign of having delivered strong results. And now onto the segments. Our Norwegian Upstream business has delivered its best second quarter ever with about $14 billion in adjusted earnings and above $3 billion after tax. Stable and good operational performance in addition to high gas production has enabled us to capture high values on the Norwegian continental shelf. In this segment, we see that both electricity prices and higher CO2 prices, in addition to new fields and turnarounds put an upward pressure on costs. This is partially offset by a stronger U.S. dollar exchange rate.

The Midstream and Marketing segment contributed strongly to the Group with adjusted earnings of over $1.3 billion. In particular, optimized sales trading and trading of European gas and power strengthened these results. The price spreads within European gas markets have been record high during the quarter. And Equinor has captured value from the optimization of physical flows towards markets with higher demand and prices. There is a net positive impact from the timing effects from derivatives as mark-to-market has increased the value of the derivatives related to future European gas sales compared to last quarter. The tax rate for this segment is higher than usual due to the earnings composition with a dominant share of the profit coming from NCS. Our Renewables business has as expected negative adjusted earnings of $42 million due to high level of activity progressing our portfolio. Adjusted earnings from our assets in operation was $32 million this quarter. So far this year, we've had cash flow from operations of $38 billion. We have paid $12 billion in taxes and ended up with a cash flow from operations of $26 billion after tax. After proceeds and capital distribution, the net free cash flow is almost $20 billion so far this year, strengthening the balance sheet materially.

And just to remind you that the new tax regime is a cash tax, removing the uplift on petroleum taxes. However, as earnings are strong, the effect of the loss of uplift would be low. In the third quarter, we will pay the first of the three tax installments for the Norwegian continental shelf to be paid in 2022. The August payment is NOK70 billion, around $7.4 billion. The capital distribution in the quarter was $1.6 billion. The buyback of shares from the Norwegian state is conducted on an annual basis and last week we paid for the state's share buybacks made in 2021 and the first quarter, a total of more than NOK13.5 billion or $1.4 billion. This will be part of the cash flow in the third quarter. After tax payments, investments and capital distribution, net free cash flow for second quarter was $7 billion and this further strengthens our balance sheet to an adjusted net debt capital employed of negative 38.6%. With market movements and uncertainty in the energy markets, as well as our upcoming cash tax and capital distribution payments, resilience in the balance sheet is important. Our strategic direction remains firm. We keep investing and progressing on our strategy and make no changes to our guiding. So far this year, we have organic investments of $3.8 billion. We expect to invest around $10 billion on average this year and next; however, this will be backend loaded. So I will round off here and then hand it back to you Mads and then look forward to your questions.

Thank you, Ulrica. Let us pass back over to the operator to open up for questions and please, please keep in mind that no more than two questions should be asked. Thank you.

Thank you. [Operator Instructions] First question is from the line of Giacomo Romeo from Jefferies. Please go ahead.

Thank you, and good morning. First question I have, it's obviously great to see you stepping up the shareholder remuneration. I just wanted to see how you are thinking about putting this in more of a financial frame, sort of consistent with some of your peers in terms of looking at it as a payout of CFFO or surplus cash. Is there a way you can help us sort of understand how you're thinking about distribution distributing the very high cash flow you're generating? And the second question is, just wanting to see, get some of your thoughts about the EU proposal to cut demand by 15% and sort of, if you can talk about sort of the evidence you're seeing at the moment in terms of demand destruction in continental Europe, if you can have any sort of empirical evidence you can bring into our attention, that would be great? Thank you.

Thank you very much again, Giacomo. I -- let's start with your first question around whether we can put more financial frame around our distributions. We have been very clear from last year as to how we reason around our capital distribution. First of all, we always say that the best place for the money is back in the business on good returns in investments. And we clearly have to have a strong balance sheet and we are aiming for a 15% to 30% net debt ratio still. And clearly we're outside of that at the moment, but we've also introduced a flexible part of our share, of our capital distribution framework, which we've said we will enact to about the level of 1.2 billion around a share price of 50 to 60 and a supportive macroeconomic environment and commodity prices. So that's what fits to the basis of what we're doing and we are continuing to execute against that. And what you will have seen us doing since third quarter last year is utilizing that flexibility. So when we continue to have supportive conditions beyond that, we have pushed our share buyback program beyond the 1.2. And also, we are interested in a balanced approach across cash dividends and share buybacks. So we've also tried to keep that fairly balanced between share buybacks and extraordinary dividends and that's what you see us continuing to do. So if you go back over the quarters using this base framework, I think you will see the sort of additional support and the additional cash being distributed in a fairly straightforward way.

This is a complicated picture and you can't really see directly one factor from the other. The sort of Russian gas reply overshadows quite a lot of the other. So that's what we keep on looking at. What we say with the gas market is it's clearly going to continue to be tight, and it's clearly going to continue to be volatile going forward and that's what we prepare for. But, and of course our part in that is to continue our supplies. As you’ve heard, we've increased 18% of our gas supplies from NCS in the quarter and with the Hammerfest being back on stream we are continuing to support that as much as we possibly can. So hard to say and see the individual factors in themselves, but it's going to continue to be tight.

Next question is from the line of Oswald Clint from Bernstein. Please go ahead,

Ulrica, thank you. I’m curious, just on gas, again, curious on the 15-year contract with Cheniere. Some of you have asked do we, could we expect more of these, is that a Henry hub linked off take agreement for you? Do you intend to bring that to Europe? And ultimately, are you receiving stronger commitments now from European governments or customers to underpin such things like 15-year, 20-year contracts? That’s really the first question. Secondly, please, just on cost inflation, I think you spoke about Hywind Tampen. You spoke about OPEX pressures, but you also have pretty robust CapEx guidance, as you said next year and even looking out to 2025, despite having a, as you say, a full program of 23 projects on the go. Is this the better supply arrangements that you've been working on this last couple of years is really mitigating some of that or could there be some cost pressures on the CapEx side of the equation as we look out to 2025? Thank you.

Yes, thank you also for your questions. And yes, I mean, to your first question, if I talk about more longer-term demands out there, there are lots of conversations around gas demand and how industries, how companies, how countries will secure gas supplies. And we need to find the right balance that fits the strategies that we've got and make sure that we maximize the supply and the price indications that we do get knowing that clearly European gas is the priority. The gas contract we did in the U.S. is linked as you said and when there is a good contract coming up, that makes sense and fits into our portfolio and our production profile in the best way, we will pick that up as we go along. But there is of course pressure to sort of how can we secure our gas supplies is a very frequent question to us. On the comments you've made around Hywind Tampen and CapEx, and how we were mitigating the cost pressures, I guess, is underneath all of that. Hywind Tampen was actually not so much a cost pressure delay. It was more of a supply constraint around steel and to answer your question, I think that's the biggest, the inflation is a worry for us and we could do continue, as you say, mitigate that with these strong procurement capabilities we've got, we're doing more with less suppliers we're locking in contract as early as we possibly can. We are utilizing relationship across different categories. And all of that certainly helps in the short-term when you -- we had already started this. So it sort of carries us over in certain instances where we've been setting up long-term contract already before this push when inflation is coming. I think the one that is kind of also a worry that is linked to inflation is the supply chain disruptions. But again, some of the same solutions, working closely with the suppliers, being very much prioritizing the two sides of the supply chain is what we also need to do from that and there's more of that to come. But in terms of our CapEx guidance, we have, what we see is in our sanctioned portfolio we have got a lot of our contract sort of locked in already. And in our non-sanctioned portfolio is more exposed. And I guess most of our CapEx guidance as we have at the moment is linked to the sanctioned portfolio. And therefore you see a little bit less of movements in that, but we do see the pressures underneath. I hope that gives a little bit of color Oswald.

It does, thank you.

Next question is from the line of Biraj Borkhataria from RBC. Please go ahead.

Hi, thanks for taking my questions. The first question is on LNG, so you recently signed a long-term energy contract from the U.S. That's an area where you've been sort of underweight compared to peers. I would say hasn't been a huge focus in your kind of CMDs [ph] in the past. Can you talk about how you view the changed, I guess, given conflict and what you're thinking about over the next sort of 5 to 10 years, and how you can address that underweight if that's what you're looking to do? And then the second question is on your CapEx budget, just following on from the last question, you've obviously maintained the guidance over the medium term, but we're hearing that some very significant cost inflation numbers are coming through across oil and gas, but also low carbon. May be if you could put some numbers to what you're seeing currently on the inflation side and where you're most concerned that would be helpful? You mentioned that you are using long-term contracts as part of the mitigation strategy, but how long is the long contract typically? So some details around that would be helpful. Thank you.

Thank you. Thank you, Biraj. I think the U.S. contract start with that. I think we keep on understanding where are the best opportunities and where is the biggest demand and what are the strongest price signals and then that's part of that portfolio. And it's what we keep doing. It's what we've been doing and that's what we keep on doing now as well. Our primary focus has been however, on Europe and will continue to be in the future. Having said that, the U.S. is an important market to us and when we see that opportunities there as well, we will continue to look for those opportunities as well in addition. On a little bit more detail on the cost side, I mean, what we're seeing and there's two sides to it, there’s the operating costs, of course and then there's the CapEx. And what we do see and then, and we mentioned it a little bit here earlier on in the presentation is, is what we do see is operating and maintenance activities increasing. We do see of course, higher environmental cost and electricity prices. We are also not immune to that on the other side and those will impact our operating costs. And and then you've got the CapEx side, which the issues have been more around. And as I’ve said, there's been the rigs, the tightening market around the rigs sort of pretty harsh environment and where demand, I think is expected to increase towards 20 23 and then peak after that and but then it should balance going forward. It's in engineering and construction, where utilization rates are high and labor costs are increasing. And we do see potential constraint here going forward, but it's a global issue clearly, and not specifically to the Northern hemisphere here. And then we've seen steel and raw materials, which have stabilized and we are seeing them and they are expecting to decline. But, so even though there isn't a big impact yet, we are seeing these developments and it makes inflation and volatility makes tendering difficult. And as I said before, exposing the non-sanctioned projects for uncertainties, we are locking in, in terms of time horizons is very, very different. But per category, we were locking in pretty much there where we can the duration of the projects. So that's why the sanctioned portfolio is pretty stable at the moment for the environment we're in. But if you go beyond 2026, 2027, it's going to get more, it gets more and more fluctuating as you go into the future, because you've got bigger portion of an non-sanctioned portfolio coming into the total. I think that gives you a little bit of a flavor of what's driving it and what we're doing, but that difference between how it hits us and also the difference between the sanctioned and the non-sanctioned portfolio.

No, that is helpful. Are you able to say whether it's any worse on the low carbon side than in oil and gas, or are you just seeing kind of general inflation across spectrum?

Sorry, you cut out a little bit in the beginning, I didn't get the beginning.

Sorry, are you able to say whether the inflation you're seeing is worse across -- within low carbon projects or in oil and gas?

No, I think, I mean, it's more -- what we're seeing is general by category and it's not directly related to the projects as such. So as I said of course, steel will have it's category by category rather than project by project. And so it's fairly universal and also the constraints in the supply chain sort of also fairly widely, widespread with the same actions as we – I’ve talked about before to mitigate that.

Okay, understood. Thank you very much.

Thank you.

Next question is from the line of TeodorSveen-Nilsen from SB1 Markets. Please go ahead. TeodorSveen-Nilsen: Good morning, Ulrica. Thanks for taking my questions. Two questions from me. And the first just on your 15% to 30% net-debt-to capital employed ratio. Are you considering moving away from that ratio since it’s, looks like it's less meaningful with a very small denominator when you have negative net debt? And second question is on just gas exposure and it looks like now you're selling most of the gas from TTF prices versus NBP. I just want to -- could you give some guidance for second half of this year how much of your gas sales in Europe that you expect to be linked to the TTF price versus NBP and other pricing? Thanks.

Thank you very much Teodor and yes, it looks if you look at the 15% to 30% capital employed the negative numbers do look very different from what they did only a year ago. We have assessed our 15% to 30% capital employed ratio as a long-term range and we will stick, stick with that. And I think as much as it looks negative at the moment, we have got some very big payments coming along in the next quarter, I refer to some we have got a big tax payable and we have got a business that is facing significant swings and so the metric itself, we are still sticking to the metric itself. We do, that's what we are aiming for in the very long-term. And meanwhile, it's way below, as you say, and it does look a little bit odd, but it wasn't that long ago we were above. So the metric itself, I think, serves us okay for where we are today and for the future. So, no, we're not really looking at changing the 15% to 30%, neither the metric, nor the range. In terms of gas exposure, yes, the TTF versus NBP market has clearly been, as you've seen, been decoupling lately driven by, of course who's most exposed to Russian gas supplies and storage levels, et cetera. And these trading geographical spreads are out there and have been out there and we will continue to trade around those and then drive behind the pricing signals that that I give. And it's the flexibility of our transport and our -- that sort of limit us as to how much we will do that, but we will not share how much that will be, because one, we don't know at this point in time. We will look at the most optimal way of delivering and do that within the constraints that we've got. So I can't give you an indication from that. What I can say is that we do see continued geographical spreads to stay high and volatile as well at the same time. TeodorSveen-Nilsen: Okay. So [indiscernible] will be some roll in TTF prices>

I think if you asked about the proportion of TTF, you cut out a little bit, I can't share that with you, because again, it will be dependent on market conditions as we get there. TeodorSveen-Nilsen: Okay, sure, understood. Thank you.

Next question is from the line of Peter Low from Redburn. Please go ahead.

Hi. Thank you for taking my question. So you're doing a great job maximizing your noise in gas production. How long do you think you can maintain gas output at current high levels? And are there any risks to infrastructure or reservoirs from operating at such high utilization for a sustained period of time? So that would be my first question. The second was just related to MMP and derivative impacts, obviously they have kind of been swinging around quite a bit in recent quarters. Can you help us at all with kind of what you're expecting to see in the second half of the year there? Should we expect that some of the gains we've seen could unwind? Thanks.

Very good. Thank you, Peter. And on the sustained gas delivery, we will continue to try to sustain as much of the gas production as we can for, our role as to making sure that we’ve got stable, secure supply of gas certainly remains and we will do. And as you say, we've seen record gas production for the second quarter on the NCS. And that is partly because we've postponed some turnaround planned for the second quarter for gas fields, but also we are continuing exporting gas from Gina Krog and that would otherwise be used for injection. And there are other measures being taken that we've revised production permits and of course both for Troll and Oseberg. And as I’ve said before, we've resumed production in LNG and some of these are temporary, but some of these we could continue to push forward. And the gas injection, if that's what you referred to, whether it's sustainable, at this point in time at this prices, we believe it could be sustainable for longer, but each asset, each decision needs to be business case based. And we do have our geologists and assessing carefully if it's got any impact on the long-term viability of the overall asset. And, but at these prices there's some headroom in terms of continuing to do so. So we will try to continue to keep the gas where it is, continue to search and search for gas, continue to keep the efficiency up on our gas assets, and continue to see whether there's anything we can do to push, as I said any permits, et cetera for continuation should that be necessary. The derivatives and the future of those, I mean, we've taken some big gains. I mean, I would say I've said this before, there are two -- there's sort of two parts to the MMP trading position here around gas in particular, which is, one is the underlying contracts where we've got fixed term, fixed contracts in the future where we've basically swapped back to floating in the value of that. And then the value of the derivative itself gets mark-to-market on a quarterly basis where there, whereas the underlying only gets if you like mark-to-market or the value of that versus the current market only gets recognized at delivery. So there's that mismatch there and having taken -- and therefore the positions of those will move with where the market is moving and will depend on the rate on the pretty much the last day of the quarter. So very hard to predict what we've tried. And then the second part is more strategic positions, which are a small part of our portfolio, which again depends on the position of course, and we can't predict. But on this more underlying to get back to our more floating position that we have said, we'll try to give an indication as we invite for consensus on a quarterly basis, given that it's so dependent on where the market is at that point in time. So hopefully that will help us to understand the results and volatility when it comes to that when we go through each quarter.

Thanks, Ulrica.

Thanks.

Next question is from the line of Amy Wong from Credit Suisse. Please go ahead.

Hi, good morning. Quick question from me. Peregrino, good to see that project restarting and Phase 2 also scheduled for later this year. Could you give us kind of how you think about this a project like this in terms of economic performance and it's quite a heavy oil field as well. So how about its CO2 performance and how that fits into the overall Equinor strategy?

Great question. Yes, it's great news, that Peregrino is back on and resumed production on the 16th of July and it will gradually build up to reach capacity plateau through 2023 and also we got Peregrino 2 coming on stream this year. So you are right. It will have an impact on our CO2. And we've got that in our -- we have an energy transition plan, which includes this, and we are very clear on that. We have got a very clear production profile that we need to deliver and Peregrino is part of that and it's also part of the energy the emission ambitions that we've got to reduce 50% by 2030 of our emissions of our oil and gas portfolio. So the way we think about it is it needs to fit into that. It needs to fit in our overall ambition and in our energy transition plan. And that's how we will then balance security of supply as well as, investing in renewables, as well as delivering on the emissions plans that we've got outlaying reminding ourselves that actually on a emissions intensity point of view, we are probably about half of many of our peers already. So this fits within the boundaries of what we've already committed to and is part of that, if that makes sense. So we need to balance all of these to make sure that the energy supply is there whilst we transition, but we are very, very clear how it fits in and it's stretching, but confident that we can get there and that 50% reduction by 2030. Thank you.

Thank you. That’s very clear.

Next question is from the line of Henri Patricot from UBS. Please go ahead.

Yes, hi everyone. Thank you for the presentation. A follow up question on the question of distribution and the net debt, just want to get a better sense of how we should think about the potential additional sort of returns, like just there's no particular formula, but for instance, is there any particular level of net cash that you think would be too high and so we should be thinking about any additional cash flow that will bring you above that net cash level as potentially additional return to shareholders, any indications you can share around that? Thank you.

Yes, very, very good question. And I think I'll come back to what I said before. I mean, we are clearly way outside of the 15% to 30% range at the moment. I think what you've seen today and what you will have seen in Q3 and Q4 of last year is that we are committing to use the flexibility in the shareholder distribution programs that we got, to take steps towards that ratio. When we do that, I mean, there are some criteria here to sort of plug into the spreadsheet, which is we'll get back to the 15% to 30%. That's what we said in the long-term, but we have to take several factors into consideration, the volatility and the resilience that we need in the short term, the pull on the cash in the also short term and medium term, given the delay in our cash payments. And you can just look at our tax payable on the balance sheet, which needs to be paid for. We also have committing to big CapEx going forward the $10 billion now for the next two years, and then up to $12 billion. And we've committed to big renewables investments. They need to be financed. And you sort of, if you overlay that in and then plot a track towards 15% to 30%, this is a long-term range. We don't need to get into that in each quarter; it's a long-term range where you need to balance all of those factors in. So we will give you some guidelines and some principles. And if you look at what we've done in Q3, Q4, and now you can see that that's the any additional sort of cash is considered to be, we need to look into investment of the company. We need to look into those criteria and then see if there's anything else above that we are committed to competitive shareholder distributions and we'll use the flexibility to give that back over the period of time if that makes sense. So that's the formula rather than a sort of percentage of extra free cash flow. I will also say is that we're very conscious of what we, the payables that we've got, but also looking at history and seeing what we have earned so far, rather than looking into the future and bank on the current energy prices staying where they are for the next five years. So I think it's also important thing to draw a line where we are at the moment and understand what we've already generated versus assuming many sort of forecast for the future. Hopefully that helps a little bit over the context at least.

Okay, that’s helpful. Thank you.

Thanks.

Next question is from the line of Mehdi Ennebati from Bank of America. Please go ahead.

Hi, good afternoon all and thanks for taking my questions. Two questions, first one follow up, on Norwegian gas production, maybe some specification regarding the second half of this year and also the third quarter. So you've announced, hydrocarbon production maintenance impact roughly in line in the third quarter versus the second quarter, 65K BOE/D impact. And you've also highlighted, that the Norwegian production is back to normal. So it seems that normally with maintenance, let's say roughly in line and with much higher production from [indiscernible], it seems that you might be able to approach, 800K BOE/D natural gas production from the third quarter. So am I missing something here such as maintenance impacting especially the gas fields or anything else which could prevent you to significantly increase your gas production from the third quarter compared to the second one at the time when the gas price is now back to two we got high or no? So if you can help us there, that would be very good. And the second question is about the tax installment announcement that you've made for 2022 earnings. So one installment is $7.4 billion, this is very, very low, much lower than I think what the Street was expecting. And I wanted to understand if such low tax installment is due to the fact that most of your 2022 CapEx are related to the 2020, 2021 special tax regime or is it thanks to the new oil and gas tax regime which has been voted in June, and which has now entered into for, since July? Thank you.

Thank you very much. Let me go start on the production. And our guidance is 2% growth in 2022 and sort of 22% growth in production and that sort of includes what we have already. I shared some of you earlier on what production is coming online for the rest of this year. Yes, [indiscernible] is up and running. Peregrino 1 restart, as I said, started off, now we’ve got Peregrino 2 coming in, Johan Sverdrup Phase 2 and Njord future coming in. So that will impact the rest of the year. And the turnarounds, we have indicated as you mentioned, I guess one thing I could add on top of that is that the turnarounds will be, as you heard, we've delayed some turnarounds from this quarter into next. And one of those is Oseberg, so that has clearly got an impact on the gas forecast that you got. But if you take those moving parts, I think you'll get to the reasonable place. On the tax, I don't think it looks low. It's that one installment is as big as two of the previous ones. So it's just the number of installments that you need to look at there. So the 7.4 is one instead of two, basically. So it’s double, so it's quite low, well, double of the total anyway. So it's got nothing to do directly. Well, it's got a little bit to do with -- this one is kind of six months in arrears. So we’ve got, this is paying tax from six months ago, but what we are coming into now on the NCS tax scheme on it's [Technical Difficulty]

Working perhaps as it has in previous cycles, right? I mean, we've seen this for a while, but it, it gets through sort of quite unusual territory that even these gas prices is not making companies like Equinor drill more gas wells and I just want to make sure I've got that correct?

Thank you very much, Martijn. And let's put the first context into -- comment into context. That comment was made that I think going back is to, if we had paid the tax that was due right there in that back at that point in time, which is clearly not what we are doing. So that was a theoretical position that if we hadn't had six months delay on our tax payments on the Norwegian continental shelf, and we would've stopped here and paid them off the net debt would've been in positive territory. So that's what that is also referring to, not a forecast for the next quarter, which we wouldn't have done. On your price signals comment, there are many, this is a complex picture for an integrated energy company. Yes, there is a strong price signal in terms of gas, but there is also strong signals in terms of continuing the energy transition and transforming into renewables and sticking to your emission plans and making sure that you're driving forward as hard as you can on that. And then on top of that, of course, what we are also very committed to is the right level of return across that whole portfolio as we're going through the energy transition. If you put all of that together, you need to sort of tick all of those boxes to be invested in. And I think that's what you're going to find across the industry, that if it fits in, if you can optimize, if you can improve in there and sort of improve your portfolio within those parameters, you'll see investments. But you can't overweight one other side, because you will throw out your measure on emissions or you’ll throw out your measure on how much you’ve spent on renewables if you increase your oil and gas portfolio too much and consequently, the other way around, if you, you might throw out returns, if you push it too much into the velocity, into the future. So that's the parameter. That means that just increasing more because there's a higher price -- investing more because there's a higher price will -- the holistic picture doesn't work necessarily today.

Operator, I think we can take one more question and then we end the call.

Okay. The last question is from Matt Lofting from JPMorgan. Please go ahead.

Hi thanks for taking the questions. Two quick ones, if I could. First Ulrica, I think you talked right at the top of the call about tight supply set up and importance of underpinning industry investments to support energy security. So just sort of following up and extending on, on, on the previous comments in whilst there may be a lag around this in the context of unchanged CapEx guidance and the balance sheet sitting where it is, can you talk about the extent to which Equinor’s assessing additional project and particularly gas-related opportunities to build into the sort of the backdrop that we see today, and within that mindful of the little bit cost inflation comments that you made earlier, the extent to which leaning more into buy versus build is a consideration in this environment? And then secondly, on cash taxes, I think the guidance sort of were very clear in terms of the sort of the installment going into the third quarter. Historically and if I remember rightly in 2021 as well, that the company has made accelerated payments in Q4 to sort of catch up on that sort of delay prior to year end, is that something that you're anticipating as a possibility this year and sort of factoring into the way that you're looking at the balance sheet position? Thanks.

Very good questions, thank you, Matt. I do agree, we are investing more would be a good thing to do in this time. It would be good as long as it meets what I just talked about our total portfolio velocity into the transition, as long as it meets the return criteria. And we are and to your question about, are you assessing this? We are absolutely continuously assessing it. I keep saying the best place for this money is to invest it in the business, but we also need to be very clear that we create long-term sustainable, that we invest in long-term sustainable profitable projects and as I said that we take the holistic picture as to what it does to our energy transition plan into consideration. But what we will continue to do within all of this, we will continue to explore. We've said, we're going to continue to explore for oil and gas and if gas around on the NCS that wasn't always so popular, we've -- we said we will continue to do so. That is now much more accepted. We'll continue to do so with the way we've already communicated. We will continue to see what we can do to secure gas production and continue to invest in our current assets as well. And I do think from a cost inflation point of view we are, yes there is a build capacity constraint and looking at clever ways, smart ways of buying capacity of finding smarter solutions as to how to increase capacity is and maybe buy in some capabilities is also something we're looking at. But as I said, we will be doing that on an ongoing basis, needs to fit into that overall financial framework and emissions framework at the same time. So we are, this is a big, big topic on our agenda as to how to invest more to get better, faster, and still remain keep the returns or even improvement, improve them. In terms of cash taxes and the accelerated payment, then at the last this, this same mechanism exists this year. And we will be clearly carefully looking into and seeing what we need to do depending on where the prices are at that point in time to see how we can, and if we should utilize that the same way as we did last year.

Great, thanks for taking my questions.

Thank you very much

In the interest of time, we have to stop the Q&A session and I would like to hand back to Mads Holm for any closing comments. Please go ahead.

The conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Good bye.