By Avi Salzman

The Trump administration's decision to stop an offshore wind project that was already under construction was "unlawful," the company said on an earnings call Wednesday.

On April 16, Secretary of the Interior Doug Burgum sent a stop-work order to Equinor, the Norwegian energy company building an offshore wind project near New York that is expected to power hundreds of thousands of homes. Burgum wrote that there were "serious deficiencies" in the project's review and that it was "rushed."

The action surprised investors and analysts. While they had known President Donald Trump doesn't like offshore wind, they had expected already issued permits to be honored. People in the industry say they are watching this case closely to see if several other projects up and down the East Coast could be vulnerable, too.

Two weeks later, Equinor still hasn't heard anything about why the stop- work order was issued, CFO Torgrim Reitan said.

"Our position is clear. The stop work order is unlawful," he said. Equinor had received all necessary permits by last year, and had already done construction work on a port and laid rock on the seabed at the site of turbines. It says the project is more than 30% complete.

"Equinor has invested in good faith, and this is now a question about the sanctity of contracts," Reitan said. The company is considering legal options. The Department of Interior didn't respond to a request for comment on Equinor's claims.

One analyst on the earnings call even asked if Equinor has too much exposure to the U.S., given the issues with upholding this contract. That is the kind of question that is normally posed about countries with unstable political situations.

Equinor said it isn't concerned about its broad exposure to the U.S. and is just "managing the situation around one asset and one investment."

Equinor has already invested $2.5 billion in the project, with $1.5 billion of that financed through debt and the rest with equity. Equinor's gross exposure is between $1.5 billion and $2 billion, though the company said it is too early to discuss write-downs.

Equinor shares were down 1% in midday trading. In addition to its trouble with the New York project, the company reported financial results that were hurt by falling oil prices and relatively weak trading results. Earnings per share came in at 66 cents, while analysts expected 83 cents.

One analyst wrote that he expects the government to eventually rescind the order. "Base-case we expect that in order to avoid litigation that the US Administration will allow project work to restart fairly soon," wrote Citi's Alastair Syme.

Write to Avi Salzman at avi.salzman@barrons.com

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April 30, 2025 12:31 ET (16:31 GMT)

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