Welcome to Equinor's 2025 Global Supplier Day. My name is Juliette Baiduc.
My name is Tom Obersdahl. Together, we will be your moderators for today. Every year on Supplier Day, Equinor welcomes suppliers and interested stakeholders to gather and discuss relevant topics in the industry. This is for existing suppliers and for future suppliers. Today, we are streaming live from Offshore Technology Days in Stavanger, which means we have people attending also virtually. However, before we proceed, some practicalities for those present at this venue.
In an emergency, an alarm will be activated, or a spoken warning will be given on the speakers. Please follow the instructions and leave the premises. Emergency exits are marked with green exit signs. The assembly point, if an emergency should occur, is in front of the main entrance of the Stavanger Forum, M1 on the screen. First aid equipment and the defibrillator are located at the reception of the Stavanger Forum. There are no planned fire drills nor emergency evacuation tests, so if we do hear an alarm, we should evacuate. Smoking is only permitted outdoors. The theme of this year's Equinor Global Supplier Day is "Reimagining Industry Collaboration." Over the next hour, we'll discuss the challenges and opportunities ahead and explore how we can address them together through cooperation with both our current and future suppliers.
To discuss this topic, we are joined today by our Chief Procurement Officer, Mette Halvorsen Ottøy, our Senior Vice President for Projects, Trond Bokn, and our Senior Vice President for Renewables, Anders Heggeland. Before welcoming our speakers to stage, we will also have a safety moment. Once the presentations are concluded, we will open the floor for a question-and-answer session for 10 minutes. If you are here in the audience or are following online and have any questions for our panelists, you are welcome to submit them via your phone by scanning the QR code or by logging into slido.com and adding the code ESD25. We will now proceed with the safety moment. Over to you, Tom.
Thank you, Juliette. Every significant meeting needs a safety moment. This year, we rolled out an updated version of our IAM Safety Roadmap. This roadmap is our guide for achieving zero harm and to prevent major accidents. At Equinor, we believe that no one should be injured while working with us. While incidents may occur, this roadmap will help us minimize the serious consequences and ensure we look for continuous improvement. It also lays the foundation for collaboration with suppliers, partners, and stakeholders. The roadmap has four pillars, and they are all interconnected: proactive leadership and culture. We need to strengthen safety culture from proactive leadership. We need to promote a culture for psychological safety. We need to create collaboration with clarity, trust, openness, and engagement. Safety and design. We all know that knowledge is essential.
It's crucial to understand the risk, activities, and safety requirements, and we need proactive risk and barrier management. We need senior management engagement for safety and design before selecting our concept. Third pillar: learning from normal work and incidents. Our ability to improve depends on our ability to learn. There is always room for improvement. We need structured learning from normal work, and we need strengthened learning from incidents. The last pillar is called collaboration and partnership. This is essential to build safety capacity and competence. It's vital to continuously improve safety by fostering a culture of shared responsibility. So what does this mean for Equinor and for you as a supplier? We do not compete on safety. Our collective aim is to raise the bar for safety. We measure progress by shared achievements. We support supplier-led safety work.
We will actively collaborate with you to manage and improve safety measures. We believe that you know the context best, and you should be leading the safety work with our support. The category in Equinor that I represent is subsea power cables. We have long-term collaboration with key suppliers for execution of contracts set in fair competition. These contracts, they run for multiple years, and they include fabrication of cables and installation of cables with specialized vessels over long offshore campaigns. Equinor invites these suppliers to annual Marine Safety and Sustainability Days. Here, they will meet our top-tier suppliers for marine operation, and they learn from the best safety performance. Over the years, this collaboration has resulted in improved risk management for operation within power cables. It has also improved how lessons learned are identified, shared, and implemented for the next project. Do we all remember COVID?
It's not that long ago, really. We learned some new phrases: cohorts, social distancing, and we were exposed to travel restrictions. And now we are all expert in teams. We use it every day. During COVID, we performed loadout and installation of cables, including pulling to producing assets. The one-team approach ensured good safety performance with collaboration, with clarity, trust, openness, and engagement, referencing pillar number one. This is also reflected in the supply management statement, quote, "Equinor actively supports our safety journey by sharing best practices, setting high expectations, and encouraging continuous improvement across our operation." Now, I would like to mention a recent incident. On September 17th this year, we lost a dear colleague at a refinery at Mongstad on the west coast of Norway. A young man working for a supplier tragically lost his life while working for Equinor.
The accident occurred during a lifting operation as part of a turnaround at the plant. On behalf of Equinor, I would like to express my deepest condolences to the family, friends, and colleagues who have lost a loved one. This is a brutal reminder. We must never let our guard down when it comes to safety, promoting safety in our work. Safety is our number one priority. We are all responsible for integrating safety and security into everything we do to ensure that people who work for us are safe. It requires our continuous efforts and good cooperation with you, our suppliers. So on that note, thank you very much for your attention. It's now time to move on with the program. The first speaker today is our Chief Procurement Officer, Mette Halvorsen Ottøy. Please join me in welcoming Mette to the stage.
Good afternoon, everyone. It's great to be here with all of you, and it was really good to have the opportunity to greet many of you as you entered this event. I'm looking forward to spending the next hours with my dear colleagues, Juliette, Tom, Anders and Tone, and also with all of you, and we are going to have a networking session afterwards, and I hope that many of you are planning to stay behind and engage with many of the Equinor colleagues as such, then thank you, Tom, for your safety moment. Our IAM Safety Roadmap is probably the most important tool we have to continuously improve on safety, and looking back, we have, together with our suppliers, significantly improved on safety over the years. Even so, there is no room for complacency as long as we still experience serious accidents, as the recent fatality at Mongstad.
So I think that's a strong reminder that we just have to keep up the good work together with you as suppliers. So where to start? I think a good place to start is to start with the Equinor strategy, and the strategy stays firm. It gives direction in a world which is shifting fast, and there is a lot of uncertainty and, of course, also market volatility. And in this, it really guides us in how to adapt and also how to capture value. And one of the most important contributions we can do as a company is to make sure that we address and work on reducing our own emissions. And we have kept our target, our goal to reduce our emissions by 50% by 2030 compared to 2015.
And also, you know, in terms of the energy transition, it is ongoing, but I think we have to realize that the pace is somewhat different, so we have adjusted our carbon net intensity reduction. But still, working on our portfolio within renewables and low-carbon solutions and also on our own emissions is going to be important moving forward as well. And as a company, we are evolving, coming from being an oil and gas company, moving into becoming a broader energy company as such. So the Equinor strategy stays firm: always safe, high value, low carbon. Today, I'm going to address the opportunities on the Norwegian Continental Shelf, but it's hard for me not to mention that this is a great day for everyone that has worked on Bacalhau for a long, long time.
Yesterday, we came on stream, and now Bacalhau is there to actually contribute to our cash flow for decades to come, and I think that's a great milestone, and I'm sure Tone is going to mention that later as well. Even so, today, we will focus on the opportunities and the challenges on the Norwegian Continental Shelf. First of all, we as Equinor, we have communicated that we want to maintain the production from the Norwegian Continental Shelf at 1.2 million barrels a day up until 2035, and that comes with a lot of activities. We will invest annually over the next decade $6 billion-$7 billion, which is a lot of projects and activities, and Anders and Tone, they are going to talk about the projects and the project portfolio and how that is going to evolve over the years to come.
But I just want to mention that it all starts with exploration and drilling. And what we are looking at over the next 10 years or so is to drill 250 exploration wells, 600 increased recovery production wells, 3,000 interventions, 200 wells that have to be plugged. It's a lot of activities. And 80% of the work done within drilling and well is done by our suppliers. So a lot of opportunities if we get it right. And of course, if we do not explore and find, then there will be no future. So that's an important part of what we are going to address moving forward. And then, of course, looking at the NCS, which is getting more mature, operations and maintenance is going to be important.
Just to give you a few examples, operations, it's going to be important to make sure that we keep our installations running efficiently, not least because that is how we extend production, but also because that's a very important way to reduce emissions. And just to mention a few activities linked to operations, logistics, for instance, by helicopters and vessels, catering, that's another one. Maintenance, of course, is going to be important as well. And yes, I could mention a lot of different disciplines and categories, but just to mention a few: equipment, consumables, insulation, and scaffolding, and also surface treatment. Adding on to this, modifications. A lot of the projects we are going to work on moving forward will also imply modifications on our installations. We are talking about 2,500 modifications. Adding on to that, 3,000 modifications from our onshore facilities.
And then finally, Tone is going to talk about the subsea tiebacks. The opportunities are there, 75 subsea tiebacks. But it will require to capture all these opportunities, it will require a lot from all of us, not least from us as an operator, but also how we collaborate together. Thank you.
Thank you, Mette, for sharing your insight and reflection on these important topics. Before we move on, I would like to remind you once again about the question and answer session and for you to send your questions through Slido, and next, I will invite Trond Bokn, our Senior Vice President for Project, and Anders Heggeland, Senior Vice President within Renewables, to the stage to talk about our project portfolio. Thank you.
Thank you. I grew up listening to U2, and you know they have a song called "It's a Beautiful Day," and this fits extremely well to today. First of all and foremost, it's because we are able to see so many of you here, industry friends, coming together to listen to us and to collaborate, and secondly, of course, because of the Bacalhau that started up, some of us have been working a real long time to realize, and there are many of the suppliers in the room that have participated in the Bacalhau, so it's a beautiful day, and then I just wanted to touch upon safety as well. From an Equinor perspective, it will not be sort of a successful year when it comes to safety performance because of the reminder or sort of the tragic incident at Mongstad.
Having said that, we are still together with you guys working really hard and well on safety performance. If you look at the projects, we have the last 12 months, on average, we have 27,000 people working for Equinor, meaning through you, but for our projects every day, and we've had nine lost time injuries sort of with 27,000 people working, and that is the best safety results ever for projects, so I would like to start by acknowledging what you have been doing and working hard on, but still, the frequency just tells us that the risk is reduced, but we still see serious incidents, so we still have to improve even further on it.
But again, starting with an acknowledgment, and Tom, in your safety moment, you said that, "Okay, we will be working with and through the suppliers." Supplier-led safety is something we believe in, and we do see the results through the collaboration. So if we get to normally the most popular slide, by the way, this is sort of the project portfolio. And if you look at the sanctioned projects, most of these are projects that many of you have heard before, many of you are engaged directly in. What we see is that we have, as an example, three major greenfield development projects. As I said, we started up Bacalhau yesterday, officially announced today, and we started up Johan Castberg earlier this year. So it's a fantastic year for projects starting up two FPSOs. But we're also working on Haier and Rosebank midst of execution as per now.
We have a relatively long list of subsea tieback projects being worked and a significant number of electrification large brownfield projects. This is not sort of the 3,000 modifications we're talking about, but these are sort of significant-sized projects, and then we do work low carbon solutions, and for me, it was really good to see that we were able to sanction Northern Lights Phase II because that is pointing forward. There's still live the transformation, the energy transformation is still live. We do have customers that are willing to pay for us, to pay us to take care of their CO2, so we are moving forward in the energy transition, but at a lower pace than we anticipated some time ago.
And that's why, when we talk about the strategy, we have some flexibility in the timing because you guys, our partners, our suppliers, you're used to, of course, the customer us being right. And now we also have the customers. They are right on the pace. Our customers, they decide the pace on when it's right to invest in Blue Hydrogen or CCS opportunities. So if you look at the unsanctioned portfolio and starting on the low carbon side, yes, we still have a set of opportunities that are being worked and matured. But again, it's no point for us sort of investing in it unless we have clarity and a line of sight towards customer willing to pay for it. And that also takes political support. And again, this list looked a bit longer a week ago when we looked at the electrification project portfolio, the unsanctioned one.
For those of you following in Norwegian politics, it's interesting. It could be a word to sort of follow the debate. But we are dependent on support to be able to continue on this journey on electrification. But we still have projects that will lower the CO2 footprint. If we do these projects, we are at 45% reduction on Equinor's CO2 emission compared to the baseline that we have established. We had initially an emission of 50%, but again, now we have agreed not to pursue two of the remaining ones on electrification. So my perspective, if you look at the lower part of the unsanctioned or the pre-sanctioned projects, is that energy, Equinor projects are extremely political. So we are politics, and we depend on sort of support. We depend on willingness to invest and to invest in our customers in order to realize these projects.
And then the question we normally get most often is, what's up with Wisting? And Wisting is still alive as a reshape project. We are working it. We have simplified it significantly, and we are working towards a concept select this autumn. And we have a Bay du Nord project, also a greenfield development project in Canada. It's slightly ahead of Wisting. We have selected our partners, meaning the SEA and the BWO for respectively the SURF and the FPSO side. So suppliers targeting Bay du Nord sort of also need to go through these partners of ours. And then Mette has placed a teaser already on the subsea tiebacks. We have this as sort of the ones that have passed the first major decision yet in Equinor. So these are being worked and coming towards the market relatively soon.
On top of that, it's the 75 subsea tieback projects in the next 10 years. It means six, seven subsea tieback projects every year if we do it right, because we have names on all these opportunities. Some of them are prospects that need to be drilled successfully. Some of them are projects that need to be improved to get it robust enough toward low commodity prices, so if we do it right, the future is bright, but it also takes a different approach, so that's why we talk about sort of renewable, the energy and the collaboration with suppliers. We focus a lot on sort of the marginal mindset. These subsea tieback projects sort of are the bread and butter of project development in the NCS going forward, but we cannot copy and do exactly what we've done before because then they're not big enough.
They will not be sanctioned. So we need to reduce the cost. And we do that not just by pointing and chasing your margins. And if I point now, we can count the number of fingers. One is pointing upwards. I don't know where that is pointing, but the three other fingers is pointing towards me or to Equinor. And we work a lot internally on sort of what it takes from our side to reduce the cost and the competitiveness. This is about the technical requirements. This is about our ability to standardize, to reuse, to build on industry specifications. As we said, we believe in supplier-led safety, but we also believe to a large degree than before on supplier-led specifications. One of the reasons being that if you look at the future portfolio, it has the new projects coming on stream.
They have a lot sort of shorter lifetime. We're going to produce maybe in three to five years. And it doesn't make sense to use the same specifications as for Johan Sverdrup, just to provide sort of the obvious example. So we are looking into what we can do. We are chasing a culture program in Equinor called Heroes of the Margin. So the Heroes of Tomorrow, a slogan of Equinor, by the way, is the Heroes of the Margin. And sort of how do we work that? And it's sort of about demystifying it. And then we work the requirements, the specifications. And I discussed it with some of you at the Næringsforeningen in Stavanger early this year. And then I actually got a question that said, "Do you allow your engineers to be unfaithful to the TRs?" And I said, "Yes, yes, we do.
I empower and we empower our engineers together with suppliers to be unfaithful to the TRs." And then there was a heading afterwards, "Equinor allows their engineers to be unfaithful." I needed to take that back home and explain it a bit, but it's sort of back to the fingers pointing at us. And we need your help to guide us. Where are the cost drivers? Where can we together increase the competitiveness? Because we really need to bring down the cost, but still make a sustainable living for all the suppliers. So that is the main journey that we are embarking upon now to really make it a success and to be able to deliver on the ambition that sort of takes the 75 subsea tieback projects. So I think that's my introduction, Anders.
Thank you, Trond. And I think what you described in terms of the tieback portfolio fairly well reflects also what we're up against in renewables. I'm going to talk about cost. I'm going to talk about margins. I'm going to talk about collaboration. And it sounds like I'm stealing all of those from Trond. So let's get to it. We've achieved a lot in renewables over the last couple of years and also together with many of you here today. So I think that's a good achievement. But first and foremost, it's good to see you again. We've been busy since the last year we had our supplier day. We are currently constructing three of our biggest renewable projects, offshore wind projects ever, at the same time. And many of you here today are involved. Once done, these projects will provide about 8 million homes with green power.
And I think that is what really gets me up in the morning and gets a lot of energy out of. The photo on the screen and a bit what you saw in the video earlier is from our monopile installation on Empire Wind in the U.S., which we completed last week on schedule, even though we experienced a stop work order back in May. So I think that is a fantastic achievement from the Empire Wind team and worthy of a bit of applause. Thank you. Now, constructing three mega projects at the same time is not an easy thing to do. And that brings us back to our number one priority, which is safety. And on this end, we are simply not good enough. As an industry, we are lagging behind the oil and gas industry.
And we are roughly experiencing twice as many incidents and near misses as we see within oil and gas. And that is simply not good enough. So within the construction portfolio, within renewables, we are below our targets. And this cannot continue. And we definitely need your help to turn the trend. Within Equinor Renewables, we have roughly 15 million hours of work for 2025. 80% of that is work through you guys on supplier yards, sites, and with supplier employees. So we are fully dependent on your commitment to make this happen. If we look at the portfolio, what we see is dropped objects, people being in the line of fire, and energy isolation-related incidents, which are causing the near misses and the accidents. I think we all know that this can be prevented, but it requires relentless focus every day.
And that's what I want to see from you as well. So I'm curious in terms of your proposal and proposals in terms of how we can turn this and basically make renewables at least on par with oil and gas. Then a bit on the portfolio and the way forward. As I mentioned, Empire Wind is back on track. We're roughly 50% done with the project. And then we have Baltic II and III in Poland, roughly 20% on schedule. Dogger Bank in the U.K. has been a bit delayed on Dogger Bank A, but we're quickly catching up. And we have made significant progress on that project over the last year. We also have just installed the electrical infrastructure on all three phases on time. So that's a good achievement. We're obviously also looking at the next generation portfolio.
And I think some of the pressure points that Trond talked about, we're definitely seeing also within renewables. So a couple of examples. In Korea, we are developing the world's largest floating offshore wind project together with the Korean authorities, which we are assessing, but obviously a commercially challenging project. In Poland, we are progressing the Baltic I project, which is sort of on the back end of Baltic II and III, a bit of a convoluted way of saying that II and III comes before I, but that's how it's been named. But this is a solid market for offshore wind. In the U.K., we are progressing the extension of the Sheringham Shoal and the Dogger offshore wind farm to operational wind farms that we have in our portfolio. And we're also developing the smartly named Dogger Bank Phase D on the back of A, B, and C.
And then we've also been successful in a lease auction in the Celtic Sea. Here in Norway, you might have seen that we have delivered an application for Utsira Nord and look forward to the progression of that. None of these projects are easy. But we do see some positive signs in the market in terms of capacity. But I think it's fair to say that every stone needs to be turned to make these projects profitable and at the end of the day, investable. And I think across renewables, we see that the levelized cost of energy is now higher than the base electricity price. And hence, contracts for difference or support regimes are needed by various governments. And we see that, particularly in Northwestern Europe, that trend is coming.
But it's also a bit back to Trond's point that the end customer in the end is facilitating a lot of the progress on these projects, then a bit on strategy, and we are taking a more integrated approach within Equinor on power. Looking ahead, the world's energy consumption is quickly increasing, and that is dominated. The largest increase is coming through the power segment. The growth in renewables, while rapid, also comes with the challenge of intermittency, and we see that to solve this, we need more flexible generation assets, whether that is thermal, hydro, batteries, etc., so to ensure that we are approaching this from a holistic perspective, we're now gathering all power assets and teams within Equinor within what we will call the power segment, which is becoming effective in two weeks' time. Our ambition is still to grow significantly within this space.
And it's obviously something that we'll come back to in future supplier days. Through all of this, there's a couple of common themes that I wanted to leave you with and that we are focusing on. And they are listed on the bottom on the slide. First and foremost, safety within renewables must improve. I've talked about this. Our focus is to ensure that everyone comes home safe every day. We have to radically simplify the way we mature and build power plants or offshore wind farms. Standardization's implication is critical, and I think just as critical as we talked about in terms of tieback projects. And this goes both in the early phase when we are assessing the opportunities and definitely also in the project development up until FID.
We basically have to cut or bend the cost curve that we've seen and basically make projects sanctionable and then deliver as promised, and this is why we call it cost and execution leadership. I know that nothing of this is possible without the support of all of you, so I need all of your help to make this possible. Thank you for your attention.
You know, Anders, you need to work on the naming. In Subsea Tarbina, I just heard that Kjetil Kvalke was the name of our prospects.
Let's see. Thank you, Anders and Trond, for your good presentation. I think a lot of people saw some interesting topics. It may generate some questions later on. And Trond, you mentioned a beautiful day with your success in Brazil. I would have voted for Europe and the final countdown, but maybe another day. So before we move to the Q&A session, we would like to wrap up this part of the session by inviting Mette back on stage.
So you have probably got it now. There's a lot of opportunities, but it will require a lot from all of us to unlock these opportunities as such. Going back to what I said about our strategy at the beginning, we are working from being an oil and gas company into a broader energy company. But still, oil and gas is going to be with us for decades, and it's going to be extremely important for us to make sure that we have the capabilities to develop new value chains as well. And the MCS is going to be at the core of our business. So how does it look then, the Norwegian Continental Shelf looking forward? Well, for sure, it will be different from the past. And I think that's something we all have to acknowledge.
Looking back, looking at the discoveries we had back in the 1980s, 170 million barrels on the average per discovery. The last 10 years, it has been 10 million barrels per discovery. And looking ahead, it might be even smaller. And adding on to that, it's a mature area. And also, the reservoirs are going to be more complex. We are faced with tighter reservoirs, higher pressure, higher temperature, and more marginal discoveries. That says a lot about both income and also that this is going to be challenging in terms of costs and how we work forward, work moving forward. And if you look at what the Norwegian Offshore Directorate says about the production profiles, well, we are heading toward decline. But there is a huge difference between these three curves, purple, green, red.
And if you remember back to what I said about all the activities that we are planning for, that is something between the green and the purple. And that's what we would really like to unlock together with all of you. But I think you also got that message from Anders and Trond. The cost level we are faced with these days is not sustainable in terms of actually unlocking these opportunities. And it's not like pointing to the suppliers and everybody else. I mean, Trond mentioned that if you point like this, there is one that way and three that way and one up. We have to pray for something probably as well. And cost and efficiency and productivity, what we have experienced over the last years, and it's an industry trend, is not where we can actually continue. We have to break the curve.
Just to give you one specific example, since 2019, our subsea and marine installation costs have gone up by 90%, and yes, it has been impacted by higher material costs. It has been impacted by inflation, interest rate, wages, but it's also a lot about productivity, and it's a lot about high activity levels that have pushed the prices up, and we need to do something about that together, and when I say productivity, it's also internally. It's not only pointing to you as suppliers, and that's why we are also internally addressing this and working on how we can actually improve on end-to-end deliveries and how we work more efficiently as the portfolio is changing a lot over the next years, so this is not something we can solve on our own. It's something we have to solve together.
And for us as Equinor, I think the important stakeholders that we really need to continue working with are the suppliers, authorities, and also the partners. And if we start with the suppliers, you, I would really, really like to invite you to be part of this improvement journey moving forward. We need to develop more competitive solutions together. And that's about technology, innovation. It's about the technical solutions and the technical requirements. I mean, there might be other solutions for a project which is going to produce for a few years a marginal tieback to an existing infrastructure compared to how we had to deal with requirements when we developed Johan Sverdrup, for instance. It's very different. Simplifications, that's about more simple solutions. And it's also a lot about how we work to increase productivity together. And that's all about people and competence.
And as I said, it's not only on the supplier side, it's also internally that we develop the right kind of competence in terms of what we are going to solve for over the next years. And then partners. Economies of scale, thinking standardization across the projects, reuse, that's relevant, I mean, both for U.S. suppliers, but also across the licenses that we can work together and that we have a portfolio approach that is going to be more and more important. And then also, of course, we have the infrastructure. It's there. How to utilize this? How to use our existing installations in a more efficient way? And that's also where productivity is a really, really important parameter.
And then, in the end, with the authorities, I mean, one of the really, I would say, significant strengths with the NCS over the years has been the stable frame conditions, how it has been in terms of us knowing what frame conditions we have to relate to when we want to make a decision to have a profitable and sanctionable project. Moving forward, it might be that we will have to have other frame conditions, but I think it's also important that we have stable frame conditions and that we have attractive terms, and as Trond mentioned, we feel that we are politics these days because there's a lot of back and forth and debates around what we can do and what we cannot do, and to succeed together and to make sure that we prosper as an industry, we need help from the authorities as well.
And that's why we have called this how to reimagine industry collaboration. Thank you.
Thank you, Mette, Anders, and Trond. And we will now start with the question and answer session. So would you like to please come up on stage? So Tom, what have you got on Slido?
Some great questions.
Very good.
Some deep thought. Are you ready?
We are ready.
Some of you are asking very specific questions on inspection services, welding, and heat exchangers. We can't cover all of them from the stage, but please talk to the Equinor Category Managers outside afterwards.
Yeah, and you know that's really good advice, Bibi, because we have with us a lot of good and competent people, so please stay behind and take part in the networking session.
And red buttons is a signal, I guess.
Yeah.
A strong signal that you are coming.
But if you have detailed questions, it's probably better to ask others than the three of us if it's really detailed.
You can try. So the first question of today goes to you, Mette. Claire is asking about Equinor's focus on sustainability and life cycle optimization. How can suppliers support these goals, for example, through digitalization and on-demand production of spare parts?
It's a great question. And if you listen carefully, I said something about reuse of equipment, and that's one of our focus areas moving forward. And that's something we have to do together with the suppliers. And I think, I mean, there are a lot of things I could mention, but I would like to mention the way we have developed 3D printing and how we work with that. I think that's a great example of how we can actually gain some climate points in terms of our business. I don't know if you want to add on anything from your side.
Just on a 3D printing, I think there's really an untapped potential there. And this is also linked to the on-demand part of the question because we can really move fast, and I can also lower the inventory if we sort of get the opportunities to do 3D printing. And then AI, I think there's also we're still, most of us, fumbling our way into the language parts of the AI, but I honestly believe there is really a good potential there as well to both sort of increase the collaboration, but also the productivity and efficiency.
Thank you. So the next question is for you, Trond. How sensitive is Equinor's investment plan until 2035 on the oil price?
Yeah, I think some of the challenges of the operating companies has been that we go sort of together. We sort of create the same cycles and so on. And that is, of course, caused by the commodity prices. We are, as all companies, we are to some degree limited by our cash flow. We have promised dividend, we have promised buyback regimes. And then, of course, if the income is reduced significantly, we either reduce dividend, buyback, or investments. So it is linked. Having said it, we have communicated at the highest level in the company that we will have stable investment frames, and Mette referred to them on the NCS, $6-$7 billion every year. So we, as Equinor, we try to sort of remain a stable activity level.
And I really understand very well how important that is for the supply industry that we sort of avoid the heaviest cycles. But of course, it's not that we are immune to it as such, but again, an ambition to continue stable investments on the NCS. Okay, Arnas, the next question is for you. It's a question from the audience about your plans within energy storage. Are you only going to look at batteries, or are you looking at other technologies as well, like thermal storage?
Yeah, I think it's fair to say that, a bit like I mentioned, the more renewables growth there is, the more intermittent production is an issue. And I guess we are most advanced on batteries at the moment, particularly through our onshore platform companies. We just successfully installed one new battery in Denmark lately. But I think, obviously, we are technology agnostic, but this is very much back to the Levelized Cost of Energy and what makes sense in the specific markets. And I don't have a sort of a, is it this or that type strategy on this, but it obviously needs to make sense. And then we see that the different technologies have matured in a different pace. And I think batteries so far are one of the most mature ones.
Thank you.
And here is a question from a potential supplier. How can we best support Equinor in the early phase of your projects, for example, to make use of innovative delivery models and digital tools? Perhaps you want to start, Trond, maybe?
Yeah. Just sort of starting off with an example. When we recently sanctioned Johan Sverdrup Phase 3, it's a bit smaller than the other phases, but it's a subsea tieback. And then we used a supplier to help us on optimizing the weld path and the location of the subsea templates, competing towards our engineers. And the AI/supplier solutions, they saved, I can't remember the figures now, about NOK 150 million or something because it optimized better than the engineers were able to do in Equinor. So it's just very concrete examples on how we can use digital/intelligent computer softwares to help us improve and hence reduce the scope, meaning less steel into that project. So it is one way of doing it. Otherwise, how we work with projects in Equinor is that we do a technology assessment relatively early in the project phases.
And when we do that, we assess: Do we need new technology, anything that needs to be qualified? And then secondly, is there technology available in the market that can actually improve the business cases? And then, of course, this goes as advice. Okay, we're back to the category managers or we're back to the technology experts within Equinor. That sort of needs to be aware of the beautiful things that you may offer.
I might add something on that side because this was a question from a smaller supplier that would like to actually work for Equinor, and as a general advice, I think it's probably a good way to approach us through our key suppliers, and I think that's easier also in terms of figuring out how to become a supplier. I mean, you can always go into Equinor.com, and we have a supplier portal, and there you will find a lot of information and also what kind of requirements that we have put up to become a direct supplier for Equinor, but as a general rule, I think our key suppliers are curious and eager to actually work with smaller suppliers as well.
Mette, I have some great news. You actually answered the next question already.
I didn't know that.
No, I know, but.
I've been there before.
Yeah, that's good. Well, it was actually any advice for suppliers to have how to best communicate with Equinor. There's at least one in the audience that finds it challenging to reach the right department to offer the service. Well, we can say that it can be difficult within Equinor as well. Do you want to comment?
No, I think I already answered that. I mean, if you want to get more information, it's important that you look into the supplier portal, but you can always ask this question at a networking session or when you meet with the category leaders and managers and others.
Yeah, but be curious on the categories because we have categories for sort of mechanical. We have categories sort of if you sort of recognize some of the categories. It's a good starting point.
Yeah. Good. So time for one more question?
One more.
One more?
Yeah.
Okay. Anders, you mentioned simplification. Documentation requirements generate high cost and complexity to the projects. What can be done in order to optimize this?
I think it's fair that simplification goes both sort of for the physical components, the way we develop them, and obviously also how we document them. And this is another area where I'm a bit afraid of the AI race, Trond, in terms of us basically producing more at the expense of complexity. So that is something that has to be avoided. Also then, sometimes in our projects, we are financing them through project financing. We have government requirements through authorities. So some of these requirements in terms of documentation are not ours. But I think in project development in general, it is good to try to reduce as much as possible and then also be curious on how to digitalize and avoid that we have stacks of PDFs lying in difficult areas to reach and have it more in searchable databases, etc.
But I think it's a key point of simplification and standardization also within the documentation space.
You know, my father-in-law, he has been a supplier to Equinor for a long time. He's sort of really a small supplier, so supplying small things. He wouldn't like that, but anyway, I've been discussing documentation with him for family dinners for many, many years. He had lots of complaints, but I was really happy because I could finally tell him that, yes, we can reuse documentation, and we have previously sort of, okay, we needed this every new project and so on, but we are open now for reuse of documentation, and I honestly believe if you look at the future portfolio, if you're going to do 75 tieback projects, it's going to be a one slot, it's going to be a four slot, it's going to be a lot of standardization elements.
And then standardize, not just in documentation, but of course, reusing also documentation is one of the keys going forward.
Yeah. I just wanted to add, and you said it before, but I want to add it anyhow. It's not only about suppliers doing things differently. It's also looking at ourselves internally and how we can work differently internally and together with the suppliers. And I think it's important that you dare to challenge us. It's really, really important because without that dynamics, it will be difficult to succeed with all these challenges ahead of us, which will be turned into opportunities if we do it the right way.
Okay. Thank you very much, Mette, Trond, and Anders.
Thank you.