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Equinor Cancels Plan for Vietnam's Offshore Wind Sector
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Equinor ASA (EQNR - Free Report) , a Norwegian energy firm, has announced its withdrawal from Vietnam’s offshore wind sector. The company has scrapped its plan to invest in the offshore wind segment of the Southeast Asian country. This announcement is seen as a major blow to Vietnam’s ambitions to reduce the usage of coal and shift to cleaner alternatives.
Vietnam’s Renewables Targets and Regulatory Hurdles
Vietnam has highlighted that it intends to develop wind farms with a capacity of 6 gigawatts (GW) by 2030. Currently, the country does not have any operational offshore wind project. The 6-GW capacity would equal 4% of its planned capacity and help the country achieve its net zero carbon emissions target by 2050.
Per a World Bank report, Vietnam has garnered significant international attention toward renewables projects in the country due to strong winds that blow in its shallow waters near the coastal areas. These regions are densely populated as well. However, despite having such favorable conditions, delays in regulatory reforms have caused many potential investors to reconsider their plans.
Equinor’s decision to cancel its investment is another major setback for Vietnam. Previously, Ørsted, a Danish offshore wind firm, also hit a pause on its decision to invest in large offshore wind farms in Vietnam. The recent political climate of the country is causing delays in reforms, leading to hold-up of projects.
Equinor’s Strategic Withdrawal
Equinor has stated that it will end its business development operations in the Southeast Asian country and close its Hanoi office. The company has recently withdrawn its upstream business from several countries to focus more on renewables and low-carbon energy initiatives. However, this is the first time that EQNR closed an international office that was dedicated to renewable energy.
EQNR had conducted a regular review of its portfolio of renewables assets before dissolving its Hanoi office. A company spokesperson said that the offshore wind sector was facing several headwinds and the company needed to pursue a disciplined approach to its investments.
When Equinor first opened its office in Hanoi in May 2022, it highlighted Vietnam’s potential to become an attractive market for offshore wind. It stated that the country had some of the best wind resources of Asia. However, despite the initial enthusiasm, the company decided to withdraw its operations from the country.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company’s total backlog witnessed a record high of $13.9 million in the second quarter of 2024, indicating a year-over-year increase of 4.51%. This growing backlog ensures strong revenue growth for FTI in the future.
MPLX LP owns and operates a wide range of midstream assets. The partnership's midstream assets include oil and natural gas gathering systems and transportation pipelines for crude, natural gas and refined petroleum products. MPLX is least exposed to commodity price fluctuations as it generates stable fee-based revenues. Furthermore, it surpasses its industry peers in terms of distribution yield, reflecting its commitment to returning capital to its unitholders.
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Equinor Cancels Plan for Vietnam's Offshore Wind Sector
Equinor ASA (EQNR - Free Report) , a Norwegian energy firm, has announced its withdrawal from Vietnam’s offshore wind sector. The company has scrapped its plan to invest in the offshore wind segment of the Southeast Asian country. This announcement is seen as a major blow to Vietnam’s ambitions to reduce the usage of coal and shift to cleaner alternatives.
Vietnam’s Renewables Targets and Regulatory Hurdles
Vietnam has highlighted that it intends to develop wind farms with a capacity of 6 gigawatts (GW) by 2030. Currently, the country does not have any operational offshore wind project. The 6-GW capacity would equal 4% of its planned capacity and help the country achieve its net zero carbon emissions target by 2050.
Per a World Bank report, Vietnam has garnered significant international attention toward renewables projects in the country due to strong winds that blow in its shallow waters near the coastal areas. These regions are densely populated as well. However, despite having such favorable conditions, delays in regulatory reforms have caused many potential investors to reconsider their plans.
Equinor’s decision to cancel its investment is another major setback for Vietnam. Previously, Ørsted, a Danish offshore wind firm, also hit a pause on its decision to invest in large offshore wind farms in Vietnam. The recent political climate of the country is causing delays in reforms, leading to hold-up of projects.
Equinor’s Strategic Withdrawal
Equinor has stated that it will end its business development operations in the Southeast Asian country and close its Hanoi office. The company has recently withdrawn its upstream business from several countries to focus more on renewables and low-carbon energy initiatives. However, this is the first time that EQNR closed an international office that was dedicated to renewable energy.
EQNR had conducted a regular review of its portfolio of renewables assets before dissolving its Hanoi office. A company spokesperson said that the offshore wind sector was facing several headwinds and the company needed to pursue a disciplined approach to its investments.
When Equinor first opened its office in Hanoi in May 2022, it highlighted Vietnam’s potential to become an attractive market for offshore wind. It stated that the country had some of the best wind resources of Asia. However, despite the initial enthusiasm, the company decided to withdraw its operations from the country.
EQNR’s Zacks Rank and Key Picks
Currently, EQNR carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are SM Energy (SM - Free Report) , TechnipFMC plc (FTI - Free Report) and MPLX LP (MPLX - Free Report) . SM Energy presently sports a Zacks Rank #1 (Strong Buy), while TechnipFMC and MPLX carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company’s total backlog witnessed a record high of $13.9 million in the second quarter of 2024, indicating a year-over-year increase of 4.51%. This growing backlog ensures strong revenue growth for FTI in the future.
MPLX LP owns and operates a wide range of midstream assets. The partnership's midstream assets include oil and natural gas gathering systems and transportation pipelines for crude, natural gas and refined petroleum products. MPLX is least exposed to commodity price fluctuations as it generates stable fee-based revenues. Furthermore, it surpasses its industry peers in terms of distribution yield, reflecting its commitment to returning capital to its unitholders.