About Øyvind Eriksen
In 2024, Eriksen stated that Aker had been "too eager too early" in the renewable energy sector, leading to "far too large losses on green investments." He said the company "gaped over too much" regarding its earlier renewable initiatives, but added that renewable energy and green technology remain "very relevant for Aker's future" given its engineering resources and industrial network. Eriksen also said he believes the oil age will last longer and the energy transition will take more time than expectations set by politicians who have not understood the complexity of the energy system, arguing that the world needs to invest in both oil and gas and renewables in parallel.
Regarding Aker BP, Eriksen said in early 2024 that the company has no plans to expand outside the Norwegian continental shelf and has an investment program of around 200 billion Norwegian kroner through 2027. He described Aker BP's task as producing oil and gas on the Norwegian shelf with the lowest emissions and lowest costs in the world. In 2020, Eriksen said Aker was preparing its portfolio companies for high volatility and low oil prices for the next few years, and that the company was in contact with the Norwegian government and opposition parties about changes to the petroleum tax regime to stimulate new activity.
Source: AI-verified profile updated from Øyvind Eriksen's recent appearances.
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Transcript (10 segments)
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Interviewer0:00
Let me ask you about the oil sector, your exposure to it. What are you expecting in terms of oil prices? What assumptions are you making about when we get a meaningful increase in oil prices?
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Øyvind Eriksen0:15
Well, so far this year, the markets have been extraordinary in all aspects. And in our company, we expect that it will take some years before the oil market is back in balance. So we're preparing our portfolio companies for high volatility and a low oil price for the next couple of years. And hence, it's our strategy and ambition to produce oil and gas at the lowest cost possible, because that's the best way to prepare the companies for the said volatility and lower oil price scenario.
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Interviewer1:00
And lower oil price scenario? Are we going to see a structural shift to a lower oil price environment, even beyond the next two years? Or even, there are limits to how much we can foresee the future. But sure, we see what prices in the short term, but even out into the medium and long term, are we looking at much lower oil prices, do you think?
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Øyvind Eriksen1:29
Well, I'm not looking to speculate on the longer-term oil price outlook, because experience tells that it's very hard to predict. It's also a risk that we're about to accumulate, and at longer-term, there might be a different imbalance because oil companies have now stopped investing in new capacity. And if the demand comes back, it could also be a challenge longer-term to produce the oil and gas the world will demand. But we're not making a bet on that. We're rather assuming, for the purpose of strategy and planning, that there will be a structural shift, and that we should be able to run profitable and good operations also in a low oil price scenario longer term. And hence, our strategy is just that: the importance of cutting costs and enhancing efficiency.
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Interviewer2:52
And even you have a sizable stake, forty percent in Aker BP. We saw the dividend being cut there. Do you think there's a chance that the dividend will have to be cut further? Aker BP?
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Øyvind Eriksen3:03
Well, the board of Aker BP will consider and decide upon dividend payment quarterly. We reduced the dividend for the second quarter by two-thirds, and management guided to the fact that the nominal level paid in the second quarter will be the point of departure for the board's assessment in the quarters to come. But the board will obviously also take into account the market volatility and the market outlook. But the guiding is, as I said, pay one-third of the original policy.
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Interviewer3:53
Given what you said about the future of oil prices, or even the uncertainty there, I know that in the last oil downturn, your business used the opportunity to build up Aker BP to do some mergers and acquisitions. Do you see similar opportunities out there right now, assets that look attractively cheap?
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Øyvind Eriksen4:12
Well, I think it's too early. Also, the M&A market has more or less stopped, so I think it's a wait-and-see approach in most organizations for the time being. But going forward, our expectation is that consolidations will happen both in the exploration and production segments and in the oil service industry. And it's core business for Aker to explore also transaction opportunities in order to turn this crisis into an opportunity.
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Interviewer4:54
Just briefly, can I ask you about your lobbying of the Norwegian government? They've made, they want to make changes to the petroleum taxes. Are they listening to the industry? I know you and others in the industry have been calling for change. Any sign the government is listening to you?
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Øyvind Eriksen5:16
Yes, definitely. We have a lot of contact with the Norwegian government and also the opposition in Parliament. And most political parties in Norway acknowledge the need for initiatives to stimulate new activity and the Norwegian oil and gas industry in general and the oil service industry in particular. So the discussion is more about what kind of changes to the total tax regime in Norway will be most efficient in order to stimulate new investments and more activity. And so I'm hopeful that we will be able to conclude a stimulus package during the course of May or June this year in order to facilitate more activity.
