Hi, thanks, and thanks everybody. Welcome to the Equinor Call, as you heard, for the first quarter of 2021. I'm pleased to welcome Svein Skeie, acting CFO, who will present the results for around 15 minutes, and then we will move to the Q&A. This call will last for a maximum of one hour. I know there are a number of companies reporting today. Also joining the call, we have Ørjan Kvelvane, head of accounting, Rune Karlsen, acting head of performance, and Mads Holm, head of finance. With that, let me pass immediately over to Svein to start the presentation. Many thanks.
Thank you, Peter. Good morning, everyone. I very much appreciate you joining us, especially on what we know is a busy day as Peter said. Today, we present our best quarterly results since 2014. This is of course driven by better commodity prices, but we also capture value from strong operational performance, continued cost improvements, and strict capital discipline. In 2014, the oil price was close to $100 per barrel. We now deliver results at the same high level with an average oil price of around $60. We booked gain on divestments within renewables, and we are of course also helped by Johan Sverdrup's major contribution to these results. A year ago, we saw rising uncertainty in the markets, and we implemented our operational and financial contingency plans. Now, we see a clear improvement in the world economy and some countries are starting to reopen.
In other areas like Brazil, where we have large operations, the situation is still very demanding and unpredictable. The status on infections and restrictions also affect manning at construction yards in several countries and may have further impact on the progress of our projects in execution. I continue to be impressed and grateful for all our employees and suppliers who have kept our operations running safely, supplying energy to people around the world during these difficult times. The Troll A platform has provided enormous amount of gas to Europe, delivering a total of more than NOK 1.6 trillion in revenue to date, still we expect the remaining potential to be significantly above this. Last week, we delivered the plans for the full and partial electrification of the Troll B and the Troll C platforms, cutting almost 500,000 tons of CO2 per year from 2024 and onwards.
Troll 3 start production this autumn, adding a total of more than 2 billion bbl of oil equivalent and at a breakeven below $ 10. For three of our commercial discoveries in first quarter, tieback to Troll B or Troll C is an option. The same technology used to build the enormous Troll A structure is now being developed to build the 100 meters tall spar substructures for the 11 floating wind turbines of Hywind Tampen. This is a great illustration on how we exploit value-creating synergies between offshore oil and gas and offshore wind. Hywind Tampen will be the world's largest floating wind farm, providing electricity for the five Snorre and Gullfaks platforms, and is an important step in commercializing this technology. We also continue to mature our offshore wind project in the U.S.
During the quarter, Equinor and our strategic partner BP were selected to provide renewable energy to the state of New York from our assets Empire and Beacon Wind. We completed the divestment of 50% of these wind assets in the quarter, as well as the farm down of the 10% of Dogger Bank A and B, and booked an aggregated gain from renewable transactions of nearly $1.4 billion. The board of directors has increased the dividend for first quarter 2021 to $0.15 per share, up from $0.12 last quarter. This is consistent with our statements that the board will assess the dividend on a quarterly basis, reflecting assessments on the company's financial position and funding requirements, investments in our competitive portfolio, the market conditions, and the commodity price expectations.
Before discussing our safety performance this quarter, I want to remember our 13 colleagues and friends who five years ago, on April 29, lost their lives in the Turøy accident on their way home from the Gullfaks B platform. Our thoughts go to the families. The safety and security of the thousands of people working at our plants, projects, and offices, and the integrity of our operations is Equinor's top priority. The fires at Hammerfest LNG and Tjeldbergodden last year were fortunately without personal injury, but we see these as serious incidents, and after the fires, we have started several initiatives to improve on safety across the company. We will learn from previous incidents to avoid new ones. For the last 12 months, we reported a serious incident frequency of 0.5 and a total recordable incident frequency of 2.3 per million working hours.
This is an improvement from the first quarter of last year. Now, on to our financial results. The financial results this quarter reflect the increase in oil and gas prices. Our realized liquids price was up 28% and invoice European and U.S. gas prices up 64% and 46%, respectively. Underlying upstream operating costs were down 4% in the quarter. The continued cost control and solid operational performance position us to capture value from the price increase. IFRS net operating income was $5.2 billion. Net income $1.9 billion. Adjusted earnings before tax were strong at $5.5 billion, up from $2 billion in the same period last year. The group tax rate this quarter was 51.3%. For the upstream business in Norway, the tax rate was 72.6% due to the strong results giving less impact from the tax package. Now to comments to each of the reporting segments.
E&P Norway delivered its best quarterly results since 2014. In 2014, E&P achieved this quarterly result with a Brent price of around $100 per barrel, whilst now making it at just above $60. A true testament to the major improvements done over the last years. The production efficiency was strong, this together with other improvements, secured a reduction of 3% in underlying operating costs. Sverdrup and Troll are the largest contributors, we see strong deliveries across the board. In the quarter, we had four high-value discovery wells on the NCS, close to existing infrastructure, adding a total of around 90 million barrel oil equivalent net to Equinor. E&P International delivered a strong result with $382 million in adjusted earnings before tax. Adjusted earnings after tax are negatively affected by a non-recurring effect in Angola impacting the tax rate.
The continuing efforts to reduce cost by ourselves and our partners are rewarded as underlying operating expenses are down 6% in the quarter. Our business in Brazil is impacted by the Peregrino field not producing due to the pandemic impacting the repair of the risers and delivers a negative bottom line in the quarter. We will drill two exploration wells towards the summer with a potential financial exposure for Equinor of around $150 million, including signature bonuses. Our U.S. upstream segment delivered adjusted earnings of $192 million and a strong cash flow from operations of around $600 million. The sale of Bakken closed on Monday, therefore both production and revenues from Bakken are included. E&P USA is continuing to reduce cost and the investment level has been significantly reduced compared to the same quarter last year. To the MMP.
MMP delivered adjusted earnings of $61 million in the quarter. Last year, we decided to move sales of some gas volumes from 2020 to summer 2021 and so on beyond, taking advantage to capture higher prices. With the impacts of colder weather in Asia and Europe and the draw of greater LNG volumes into Asia, European gas prices were even better than anticipated. The increase in gas prices was positive for the group overall, as reflected in upstream results this quarter. It also means that MMP report losses on derivatives for gas forward sales against the stronger prices seen at the end of the quarter. Refinery margins were weak in the quarter and affected the results negatively, and the shutdown of Hammerfest LNG also impacts the results. However, we deliver solid results within liquids trading, especially within LPG and the light ends. To renewables, the new segment.
We report our renewable business as a separate segment this quarter. The structure of this segment differs from the other ones in important ways, affecting how we report. It has been a common practice to establish separate companies to develop and to operate the renewable assets. This, combined with us often having an ownership share of 50% or less, leads to equity accounting being common in this segment. Both project financing and portfolio optimization are key parts of our value creation strategy in renewables. Like other renewable companies, we will therefore not adjust for profits and losses from transactions in this segment. We will, however, continue to provide full visibility how we consolidate and report gains and proceeds from transactions. In addition, I would like to remind you that on equinor.com, there's further information about our renewable assets.
Our share of the results from renewable assets in production was $24 million in the quarter. Including the cost associated with maturing our renewable project pipeline and gains from transaction, adjusted earnings for the segment was $1.34 billion. To the production, and I will start with the oil and gas. This quarter, we delivered stable and safe operations with high regularity despite COVID restrictions and strict infection control measures. Our equity production was 2,168,000 bbl per day in the quarter, slightly down from the record production in the same quarter last year. Production is negatively affected by the outage at our Hammerfest LNG plant, and at Peregrino, partially offset by higher production at Johan Sverdrup and production ramp up at Snorre expansion. To capture additional value from higher gas prices, we also had high production from our flexible gas fields in Norway and from our U.S. gas operation.
To the renewables production. Our offshore wind farms had high availability and stable operation throughout the quarter. In March, Hywind Scotland was named the U.K. offshore wind farm with the highest capacity factor for the third time. There was less wind this quarter than expected for the season, and the production ended at 450 GW hours, down from 558 GW in the same quarter last year. In the quarter, we deliver a strong cash flow from operations of $6.6 billion and a very strong net cash flow of $5.2 billion after net investments and dividends. Driving the cash flow were continuous improvements and strong capital discipline, combined with proceeds from the investment. We paid cash tax of $78 million in the quarter at NCS and will pay around $160 million in the second quarter based on the 2020 results.
Based on the first quarter results, we expect increased tax payments in the second half of 2021. The strong cash flow helped to significantly improve our net debt ratio by 7.1 percentage point down to 24.6%. Going towards the end, let me end with our outlook. We expect annual organic CapEx in 2021 and 2022 at $9 billion-$10 billion. In 2021, exploration is kept at around $0.9 billion. The expected annual average production growth from 2020 to 2026 is around 3%, while the rebased production growth for the current year is expected to be around 2%. Thank you very much for your attention, I look forward to your question, pass it back to you, Peter Hutton.
Many thanks, Svein. With that, I pass it through to the operator to open up for calling, and then we'll be taking the first question.
Ladies and gentlemen, at this time we will begin the question and answer session. If anyone wishes to ask a question, they press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today please lift the handset before making your selection. Anyone who has a question may press star followed by one at this time. One moment for the first question please. First Question is from the line of Biraj Borkhataria from RBC. Please go ahead.
Hi, thanks for taking my question. Two, please. The first one's on shareholder returns. Where do you want your gearing or net debt to be before you can return your dividend back to pre-COVID levels as you previously planned it? Second question is actually on maintenance. Just thinking about the portfolio as a whole, depending on the country you're in, the rules around personnel distancing, et cetera, will be different. I'm just wondering if you look at your maintenance activities for 2021, are you on track as it stands today? Or is it maybe taking longer to complete some of these things? Also, can you confirm if you're still completing the same level of preventative maintenance now as you maybe would have planned six, 12 months ago? Thank you.
Thank you, Biraj. Thanks for good questions. Regarding the dividend, as we have said over the last quarter, is that when the board is then doing the assessment on the dividend level based on a quarterly basis, it's an assessment of the company's financial position that we are in, the funding requirements ahead of us, investments that we have at hand from our good and advantaged portfolio, the market condition, but also the commodity price expectations. Those are the things that we are taking into account. What the board has done then on the evaluation, we see that there are some better market conditions out there. We have been able to reduce the debt by 7.1 percentage point down to below 25%. The assessment that has been done in this quarter is that we increase the dividend by $ 0.03 to $ 0.15 per share.
There is no clear rules on when we are then getting to exactly this level of net debt ratio than we will then do a further assessment. It's the totality that really matters here, and the board is doing that assessment on the quarterly basis as we have communicated. Regarding then the maintenance for 2021, as you might remember, in 2020, we then deferred quite a bit of the maintenance due to the COVID situation. We had some more maintenance, for example on NCS towards the end of the year, normally in second and third quarter. This year, we have also focused a lot then on the maintenance being on track. What we now see and expect in the second and third quarter is that we will have more maintenance.
For the totality for the year, we expect turnaround effects of around 50,000 bbl oil equivalent per day. The major part of it will then come in second and a little bit less we expect then in third. We are following the COVID restrictions there and doing good planning with the people on board there so that we are able to prioritize and do the maintenance as we go along.
Okay. Operator, can we have the next question?
The next question is from the line of Oswald Clint from Bernstein. Please go ahead.
Thanks, Peter. Svein, thank you. Hammerfest, another six months delay. I just want to firstly understand the insurance. Is it $100 million a quarter, it looks like $60 million of that is from the captive. Is that how we should think about that? It's kind of net $40 million each quarter. Principally my question is, are there any critical milestones here to ensuring this starts up by the end of March next year? I know there's 180 km of cable to arrive this summer and then replace. Does that need to be in before the winter period this year? Just any color around that would be interesting, please. Secondly, you mentioned integrity of operations.
Just with that in mind, Ørsted, I think this morning took a pretty sizable warranty provision on cable protection around their wind turbines. It's all around scouring or just in terms of the rock. I imagine with your offshore experience, you probably plan for these issues, but is there any reason to expect that you might be susceptible to similar issues now or in the future? Thank you.
Thank you, Oswald. On the Hammerfest, as you referred to, is that we had an income from the insurance coming into the DPN segments this quarter of around $100 million. Part of this is coming from our captive and around $60 million is then estimated to come from the captive while the remaining will come from external sources. This is then based on totality and not then on the quarterly impact of it. Going forward with Snøhvit and Melkøya in this perspective, it's then quite a lot of cable and work that needs to be done. It's been working on getting the full overview here, so it's man-hours then being required. Has been some limitation due to the COVID and to get people into the facility there, but we are also working on that one.
Our best estimate now is that we will have a start-up within end of first quarter next year. On the totality with the seasons into Northern, the harbor, since we have the Gulf Stream, it's not iced place, so it's possible to operate with both in and out at all time. On the wind part of it, as you alluded to, I will not comment on Ørsted's statements there, but what we are following on the totality is that we are utilizing, in general, the competence that we have from our offshore oil and gas in an extensive way for the development of the areas and those things. We are also working closely with our suppliers for the wind turbines to also make sure that we have that in good place. No new update from us on this one.
That's great. Thank you.
Next question is from the line of Teodor Nilsen from SpareBank 1 Markets. Please go ahead.
Good morning, thanks for taking my questions. Two questions. First one is on Sverdrup. This morning, Lundin is out and commenting on that plateau for phase II could exceed current guidance of the 720,000 bbl per day. I guess that's not any shocking news, could you please comment on that? What should we expect after first oil at phase II? Second question is regarding U.S. sign. You said that, or at least as far as I understood, the earnings from the U.S. activity includes Bakken in first quarter. I just wonder how much of the earnings of $190 million is related to Bakken. Thank you.
Thank you. Thank you, Teodor. Johan Sverdrup, now we are working to lift the production on Phase I to 535,000, and we expect that that will happen before the summer. The totality for the full field for Johan Sverdrup, our best estimates today is still the 720,000 bbl in the full capacity. It's been work to study some of those things, but our best assessments where we are today is that the capacity is 720,000 bbl on Johan Sverdrup. Regarding Bakken, the impact on the Bakken there in the results into the net operating income is a little bit less than $50 million in the quarter.
Okay. Thank you.
Next question is from the line of Mehdi Ennebati from Bank of America. Please go ahead.
Hi, good morning, and congratulations for those very strong results. Two questions. First one on the working capital variation, please. This is the first quarter in a row where you have a working capital outflow. I imagine that the reasons are different every quarter, but my question is, how do you explain the working capital outflow in the first quarter? Should we expect part of that working capital outflow to reverse soon? Second question is about your natural gas production in Norway. It has been down roughly 3% versus Q1 last year. I understand that you have been impacted by a Snøhvit production shutdown, but I thought that you might have been able to boost production from fields where you have compressor units, given that the natural gas price has been very strong.
Have you been able to boost that gas production from the fields where you have a compressor or no, and why? If I may, on gas, would you say that the demand in Europe is currently high on it? Thank you.
Thank you for your questions. Regarding the working capital, what we are then seeing then from fourth quarter is then mainly related to the price impact. There was not that much volume impact, in fact that we are working on to take that further down and looking into the totality there, of course, dependent on the market outlook, contango versus backwardation. It's been taken into consideration. Ørjan, will you like to give some more details?
We see from fourth quarter to first quarter that we have increase in prices, but there are decrease in volumes. That is the impact on the inventory and also on the trade and other receivable we see increase then related to both prices and that is related to activity in December and March. Limited effect on the trade and other payable.
Thank you, Ørjan. On the oil and gas in Norway, the Snøhvit impact is around 40,000 bbl oil equivalent per day. That also explain some of the reason why the production is slightly down on the Norwegian Continental Shelf. In first quarter, on our flex gas fields, both Oseberg and Troll, we have been running those at high capacity, taking advantage of all the gas prices that we have seen in Europe. In totality, you saw that invoice gas price is around $6.70 per million BTU in Europe. By having done the good capacity and utilizing those two fields in the best possible way, we have been able then to capture strong values from there. Regarding the European gas market, prices then going up and being at a high level, it has been strong demand in Asia.
Cold weather in Asia also then driving then demand for LNG. That has meant that less LNG has come to Europe. It has also been a cold weather in Europe. Also a little bit less then supply from other sources into Europe. That has meant that gas prices has been strong. This is something that we are then taking advantage of, utilizing the capacity that we have at our fields to gain this value then for our business. We are then well supported by the higher prices there. Of course, we also see currently that the prices are at a high level and currently there is then filling of storages and those things which is ongoing, and then always the competition for the LNG with Asia also currently having high prices.
Perfect. Thank you very much. Maybe, if I could just make one clarification just to hop in on there. If you look, the gas production in this quarter in Norway was 723. A year ago it was 745. Actually the Snøhvit reduction more than makes up the difference excluding that one, underlying gas production was actually higher.
Yeah. I know. I indicated that. Thank you. Thanks very much. Bye now.
Next question is from the line of Thomas Adolff from Credit Suisse. Please go ahead.
Hi, good morning, guys. Two questions for me. Just one going back to the dividend. You've obviously mentioned in the past that the dividend needs to be competitive with peers, and over the past 12 months, we've seen many of your peers introduce a variable component with a lower base dividend. Obviously, you've got a good starting point there, and I guess you don't have to really comment on what you're thinking, but is it fair to assume that we'll get a new distribution policy announced with your analyst day in the middle of June. I guess secondly, on flex volumes for gas. I believe there's an annual quota. I'm not quite sure how exactly it works from one quarter to another, but perhaps you can talk about the seasonal flexibility you had in the second quarter and the third quarter, please. Thank you.
Thank you, Thomas. Starting with the dividend there, just also repeat what I said earlier is the board is doing the assessment on the quarterly basis here based on the outlook, the projects that we have enhanced, the volatility that we are seeing in the market. That's what we will also continue to do. We will have the Capital Market Day that we'll have in June. There we will update our strategic outlook for the portfolio, that also include overall financial framework to it. That's where we are there, the board is deciding on a quarterly basis on the dividends. With the volumes for the gas, it's mainly related to the Troll field and to the Oseberg where we have the flexibility.
On Troll and Oseberg, we are then utilizing the quotas and the production permit in the best possible way. We are then running and optimizing based on the prices that we are seeing. Being able then to capture the value then from the flexibility. If you look at compared to last year, you have seen that it's then up then for the flex gas in totality due to the fact that we saw that there were high prices now that we then took advantage for. The production permit is for totality on Troll especially. There is a production permit which also means that we can run that at a high level.
Comparing then with the gas last year, you saw that the Troll was mainly at a similar level while the Oseberg where we produce it over a shorter period, we took the advantage of having high production now in the first quarter and onwards.
Okay, thank you.
Next question is from the line of Yoann Charenton from Societe Generale. Please go ahead.
Hello, everyone. Two question, if I may? Regarding the tax losses pool in the U.S.A., which is not reflected on the balance sheet, are you able to touch upon the possible implications of these farm downs, and the back-end asset sale for the size of this tax losses pool, please? The second question would be on turnarounds. You are guiding for 120 kboe/d in the second quarter for the impact of maintenance. Are you able to say how much of this stems from Norwegian gas versus Norwegian oil, please?
Thank you. On U.S. and the tax positions there, by doing the farm downs, for example, as we did now on Empire Wind and the Beacon Wind, we are able then to utilize our tax position in U.S., which means that we are able then to do this without having to pay tax on the transaction. We are utilizing that one in a good way. It's also similar on the back-end that we can utilize the positions there when we are then doing the divestments. When we are looking then at the turnarounds then in totality, as you said, around 120 for the quarter on NCS, I would say around 2/3-ish will then be related then to the gas and then around 1/3 then related to liquid of the turnaround in Norway as part of the totality of the 120. Ørjan?
Yep. Just to comment on the back-end, we keep the tax carry forward position within Equinor.
Yeah. Thanks, Ørjan.
It's very clear. Thank you.
Next question is from the line of Anders Holte from Kepler Cheuvreux. Please go ahead. Mr. Holte, can you please unmute your telephone?
It is now unmuted. Sorry for that. Actually, my questions are largely concentrated around the new segment, renewable segment. Now, you've been very helpful in providing your production per field for oil and gas assets. I wonder if you will do the same for your renewable assets on a quarterly basis. And also, while you mentioned the Hywind Tampen in your introduction there, I know it's early days still, but is there any chance you can give some flavor on what you think levelized cost of energy will end up at when it comes to Hywind Tampen? Thank you.
Could you repeat your first question? The line was not that good. If it was then production per-
The first question is related to the production of renewable power in the quarter. For oil and gas, you report on a field by field basis for the quarter, which is extremely helpful and it's a very good set of numbers that you provide on a quarterly basis. I'm just wondering, will you do the same for the renewable assets?
On that one, we are now in the build-up of the renewable portfolio. It is still early days, those are things that we actually will then look into going forward, how then to provide good information also then for each of the wind parks that we are then building up. That is something that we are looking into and will then continue to look into. On your second one, on the Hywind Tampen part of it, I do not have the exact levelized cost of energy on that one. What we have seen is that when we started off with the first Hywind windmill just outside Stavanger, then moving over to Hywind Scotland with the six windmills there, we saw a significant decrease in the cost and the levelized cost of energy there. We saw that further into the Hywind Tampen.
We have the estimate for the Hywind Tampen of the total CapEx figures, and we are within this. I do not have the exact levelized cost of energy for it.
Right. Thank you. Thanks. Congrats.
Next question is from the line of Martijn Rats from Morgan Stanley. Please go ahead.
Yeah. Hi, good morning. I also have two, if I may. I wanted to ask you about the EU taxonomy, because I find it a topic that is sort of a little hard to gauge. I recognize the question is sort of quite broad, but what do you think the sort of EU taxonomy means for Equinor, and particularly this decision that we're all anticipating later in the year, whether natural gas may come under EU taxonomy or not. Can you talk a bit about what that may mean for Equinor? It may mean very little, but I'm just trying to figure it out. The other one I wanted to ask you is that I noticed that Equinor New Energies has a separate credit rating of its own, or at least from Moody's it does. Not from the rest, but from Moody's it does.
I was wondering if you could talk a little bit about exactly what is in this entity. I would imagine it's, of course, your sort of renewables projects, but if you can sort of describe that would be helpful. Also, why is the credit rating of this particular company lower than the main credit rating from Equinor? Does that mean that financing renewables projects via an entity like this is somehow at a sort of cost of capital disadvantage?
Thank you. I will start with the EU taxonomy and also ask Ørjan if he would like to add something. On the rating, Mads, can you also then prepare for that one for the new energy company. What we see in the EU taxonomy, it's then part of the overall reporting requirement, which is then incoming. We have been reporting with the sustainability report for quite a lot of years, trying to give overview of important impacts from our operations and how we are doing. What we will now do is awaiting the final legislation to follow that one from EU towards the Norwegian legislation which will come. What we see as an overall is that the taxonomy aligns well with our strategic direction and also the vision of shaping the future of energy.
In that context, ESG has and will be an important part to us. Ørjan, will you add something up?
Yeah. We got some important clarification last week. We are in the middle of assessing this. I don't think we are in a position right now to comment any further, but we need to come back to that on a later quarter.
Supporting into it and driving the strategic direction there. Mads, some of rating on the new energy company.
Yes, thank you very much, Svein. On the rating side, I can say that New Energy Solutions is containing most on the renewable business, but most important, it does not include the U.S. offshore wind at this point in time. The rating is slightly lower than Equinor ASA, that's not because it's not solid, that's a little bit about how we rate these entities and set it up. Thank you.
Thanks, Mads.
All right. Wonderful. That's been great.
Next question is from the line of Jon Rigby from UBS. Please go ahead.
Thank you, Svein. Two questions, actually. Rather more granular, I guess. The first is you made some comments about how problematic the pandemic effects are in Brazil. I just wanted to check on both the Peregrino work and the Bacalhau FID. Are the conditions in Brazil going to allow you to proceed with both of those on schedule, or should we just be a little bit cautious on that? I guess it depends on how much work you have to do in-country. The second is, and forgive me for asking about this, the tax rate on the NCS has been a bit all over the place since the tax concessions last year, and it's popped back up to something that looks more akin to where we were before those concessions. I guess, as I understand it's got much to do with the oil price.
If oil prices continue in the kind of range we've seen year to date, is the tax rate on the NCS that we saw in the first quarter a good number to be thinking about going forward? Thanks.
Thanks, Jon, for the question. Let me start with Brazil. As you all know, Brazil has been hit hard by the pandemic there. What is our main priority is the safety and security for our people. That means that we are following this very closely, making sure that we are not having more people on board than is absolutely critical than to do the development. There has been very hard also limitations in Brazil on number of people that we are having on board. That is the main priority, and that means that it's a bit hard to say how this is developed going forward.
That means that we just need to follow it, make sure that the safety is well taken care of, and when there are possibility then to do something and have more people on board, then we will then have more people on board. That's for the Peregrino Main, but it's also impacted on the Peregrino Phase II. Peregrino Phase II was in plan and then to deliver with the startup by end of last year. Following this pandemic situation, it is also so that this has then also been delayed following the pandemic there and also on the repairs on Peregrino Main. That means that we have now a later startup. It's still a challenging situation in Brazil, so it means that we need to follow it closely and making sure that the safety is well taken care of.
We also need to come back then later on when we see that it's going back to more normal again to come with the exact dates for this one. No firm update on it. On the tax rate on Norwegian Continental Shelf, and the taxes paid in Norway on the Norwegian Continental Shelf is then this quarter coming from the results that we made in 2020, and it was $ 78 million that we paid. However, when we look at taxes payable, which will then impact the second quarter, that is then increasing. As you said, Jon, on the tax rate on the NCS, it's now then close to 72 percentage point. That's impacted by the strong results that we have been able then to generate on the Norwegian Continental Shelf.
High earnings, and this is the highest quarterly result since 2014 with the current prices. With the high prices, we also see then less impact from the tax package. That's the tota lity on it. Of course, dependent on investment level, that has an impact with the increased uplift, but with high results in the E&P Norway segments, the impact from the tax package will then be less than what we saw in last year when we had lower results, and then you had much more impact from the tax package.
Okay. Super. Thanks for that.
Next question is from the line of John Olaisen from ABG. Please go ahead.
Hey, good morning, gentlemen. My question is actually more like over request or for some comments on it. The renewable business, it's great that you start reporting it as a separate segment. However, of course, when you're doing the equity accounting as main principle, the revenues, EBITDA or EBIT numbers will be missing or at least being useless. These numbers are really important to look at when we try to evaluate the underlying performance or try to value that part of the business. I just wonder if it would be possible to, at some point, to go over to more proportionate accounting similar to what you do in the oil and gas business, as it would be more useful for us to judge. For next three quarters, your revenues for that segment will be zero unless you have any sales, of course, and asset sales.
Also finally, on the same renewable business, it would be great to get some more insight into the financing of the individual wind farms.
I guess that's more a request, but I wonder if you could comment a little bit on those issues. I'm sure you thought about it.
Thanks, John, for the questions there. This quarter, we are then reporting Renewables first time as a separate segment following the accounting rules there. As you said, several of the companies is then equity accounted, and that we are in a way following. We tried also then to give some more visibility on part of the totality as we also have been doing earlier on annual basis. Also, some of the commercial terms and then as well as descriptions of the totality is then also then given at equinor.com. There are some more information there. Then also we have tried then to give some, for example, on Dogger Bank, when the financing was in place, we also released some information around that one. I think it's a segment in development.
Yeah. Just a comment from my side.
Thank you. Yeah.
Okay. Next one?
Next question is from the line of Lydia Rainforth from Barclays. Please go ahead.
Thank you. Good afternoon. Two questions if I could. The first one on cost. If I look at sort of Norway being down sort of 3% year-on-year, then international and U.S. 6% year-on-year, are they broadly in line with what you would expect at this stage? I'm just wondering if Norway could go a little bit further. Secondly, on the hydrogen side and the Keadby project that you announced during the quarter, is the idea that the Equinor natural gas going into that project, and that ends up being a long-term contract, and that essentially is then zero carbon gas in the way that you're thinking about it? Thanks.
Thank you, Lydia. Let me start on the cost side and the totality there. As we also comment a bit on in the run through of the segments, the underlying operating costs are down both in the E&P Norway, in E&P International, as well as in the U.S. We see that there are 3% underlying cost down in the E&P in Norway. It's we are able to capture on the improvements that we have been doing over the last years. That is good, and there is high focus on it in the organization. Looking at the totality, when you look at the absolute numbers on Norway, since we are reporting in U.S dollar and quite a lot of the costs are in Norwegian krone, there will be a currency impact on it.
What we are then trying to focus on the underlying, then we're trying to take out that impact, and there we see the improvements that we are getting then with around 3% related to not the currency and the impact coming from that. On the international part of it, in the E&P International totality, we have still strong focus there, both ourselves as well as then our partners there. We see that both we and, but not our also where we are partners, that the operators are also having that strong impact on the cost and good focus then to take that further on. On the hydrogen part of it, as you asked also, Lydia, we have then set up a separate unit within the MMP segment. It's called Low Carbon Solutions. In this quarter, we have then been able then to have progress on several things.
We have the releases that we have related then to around Humber in U.K. We are maturing and working on that one, as well as the MoU that we have for Netherlands, Belgium, and France. That is handled by the Low Carbon Solutions group in MMP.
Thank you.
As a reminder, if anyone would like to ask any further questions, please press star followed by one on your touchtone telephone.
I'm actually going to interrupt that actually because we do have to get away. I think as far as I'm aware, there are no further questions. I'd like to take this opportunity to thank Svein and our colleagues for covering those and for all of you who have joined the call this morning. As always, if you have any follow-up, please don't hesitate to call us in Investor Relations. I also take the opportunity to remind you that it's our Capital Market Day, as Svein said, on June the 15th. We look forward to talking to you then as well. With that, I'd like to just pass on my thanks. Stay safe and best regards. Many thanks indeed.