Vår Energi positions IPO within ‘Green Shift’ energy transition
The energy crisis in Europe shows the important role of oil and gas in the energy mix and in the transition to a low-carbon world, according to the head of IR at Vår Energi, as the Norwegian giant prepares to list on the Oslo Stock Exchange.
Shares in Vår Energi, the largest independent oil and gas company operating in Norway, are expected to be listed and traded on February 16. The offering is being seen as a test case for investor appetite for fossil fuel energy generation in the age of ESG and sustainability. The investor relations function aims to show where the growing company fits in the transition to green energy through its marketing materials and interactive story.
Ida Marie Fjellheim, Vår Energi’s head of IR, tells IR Magazine that from a macro perspective, the timing for the IPO is good. Oil prices reached $90 per barrel on January 26, their highest level for seven years. The gas price is an important part of the company’s equity story, as Vår Energi is the second-largest exporter of gas to Europe from Norway.
Fjellheim says it has been a while since a petroleum, or any exploration and production company has listed. But the company and its shareholders – Eni and Point Resources Holding – consider the move a good way of demonstrating the value they see in the firm.
‘There is much focus on the Green Shift, as they call it here in Norway, and the media has questioned where this listing fits,’ Fjellheim says. ‘But we believe oil and gas will remain an important part of the energy mix, so we think it’s important to show the value we have in the company – not just today on current prices, but also going into the future.’
‘Greenwashing’ and R&D
She adds that it is important that IR is balanced, by showing the good strides made in the company without greenwashing: ‘As an industry in Norway, we’ve been heavily taxed on CO2 emissions since the 1990s. We’re reducing our Scope 1 and Scope 2 emissions, so we feel we have a very strong story on that side. We’re also among the leaders in terms of our ambitions to reach net-zero through electrification of oil and gas platforms, removing the use of gas turbines. For residual emissions, we’re applying different mechanisms to offset that.’
Fjellheim says Vår Energi supports the UN and the Paris Agreement, and the emitter-pays principle is important. The company understands the argument for addressing Scope 3 emissions over time and is working on it.
‘We do have R&D initiatives: we are part of a blue ammonia project, which is looking at the production of blue ammonia from natural gas, with associated carbon capture and storage, from our fields in northern Norway,’ Fjellheim notes. ‘We are working on the right things, but we have not set a specific target for Scope 3 yet. As of now, we want to really focus on the things we can control and that’s Scope 1 and Scope 2.’
She says her key IR goals in the 12 months after the IPO will be about building and maintaining overall credibility with the capital markets, maintaining relationships that have already been formed and focusing on developing new relationships through structured targeting.
‘The key word is credibility, through effective communication at the right time,’ she points out. ‘The right communication is really about robust and solid deliveries, everything from financial reporting to delivering on guidance that’s been set out.
‘And, of course, relationship management through everything from face-to-face conferences and meetings to frequent interactions with equity analysts. But particularly focusing on investor targeting, building and maintaining confidence in the equity story and building a pipeline of potential investors interested in the stock, as well as increasing the research coverage on the company. Maintaining the momentum we’re really getting through the IPO already and making sure we keep that up.’