Offshore Oil Players Navigate Energy Transition

When it comes to the transition toward cleaner forms of energy such as renewables, the offshore oil and gas industry has plenty of technical knowledge to offer, experts say.

Take the Equinor-operated Hywind wind farm offshore Scotland, for example. Its giant wind turbines utilize the same spar technology as Equinor’s Aasta Hasteen Field, the deepest oil and gas field development offshore Norway. Weighing 70,000 tonnes and standing 339 m tall, the spar platform comprising Aasta Hasteen—where production started in 2018—was a first for the Norwegian Continental Shelf.

It “shows how we can use this human capital, the skills we have, the financial capital and project management to really drive big projects in this area,” Monica Bøe, vice president of safety, security and sustainability for Equinor, said during a virtual event hosted by Rice University’s Baker Institute for Public Policy.

Traditional oil and gas players, like Equinor, have transformed into energy companies, pushing forward with alternative energy developments like wind and solar energy projects. The Norwegian energy firm is among several companies aiming to reach net-zero carbon emissions by 2050.

Included in the energy transition is a growing focus on the development of carbon management and other low-carbon technologies while incorporating solutions that further reduce emissions.

Looking offshore, oil and gas operations—particularly in the U.S. Gulf of Mexico (GoM)—have some of the lowest carbon intensity production in the world, according to Liz Schwarze, vice president of global exploration for Chevron Corp. The San Ramon, Calif.-headquartered company is among the GoM’s top leaseholders with operating facilities that include Jack/St. Malo, Tahiti and Blind Faith with interests in the Mad Dog and Perdido fields among others.

“In 2020, the carbon intensity of Chevron’s production in the U.S. Gulf of Mexico was about 7 kilograms of CO₂ per barrel. For comparison, our global average in the company is around 28,” Schwarze said. “And if you look at the IEA [International Energy Agency] statistics, the global average for oil is in the 40s and for gas it’s 71. So, the production out of the U.S. Gulf of Mexico has a very low carbon footprint and a strong role to play in higher returns and lower carbon for our company.”

Chevron, like its peers, has also been investing in low-carbon technologies. These include investing in Calgary, Alberta-based Eavor Technologies Inc., known for its scalable geothermal technology called Eavor-Loop. The company has also recently invested in Baseload Capital, which funds renewable energy projects globally, and Blue Planet, a California-based company that specializes in CO₂ mitigation technologies among others.

Chevron has already invested more than $1 billion in carbon sequestration. As part of its Gorgon natural gas project on Barrow Island offshore Australia, more than 4 million tons of CO₂ have been injected more than 2 km deep into the Dupuy Formation. The work comes as the company enters new partnerships to explore additional technologies in the carbon capture utilization and storage space, Schwarz said.

Like Chevron, Equinor has also taken steps to lower its emissions, having already cut the CO₂ intensity of its global portfolio to about 9 kg CO₂ per barrel of oil equivalent today to 8 kg by 2025.

Bøe used the Johan Sverdrup development in the Norwegian North Sea as an example of how the company is reducing emissions offshore. The fully electrified field is powered from shore, and its emissions from oil and gas production are only 0.67 kg CO₂ per barrel. Plans are for Johan Sverdrup to supply land power to other fields, including Edvard Grieg, Gina Krog and Ivar Aasen.

“Emissions savings from Johan Sverdrup alone are estimated at more than 620,000 tonnes of CO₂ on average each year, which is equivalent to emissions to more than 310,000 passenger cars,” Equinor said on its website.

Collaboration Crucial

Lowering emissions worldwide and shifting toward cleaner forms of energy, however, will take collaboration, “regardless of what each of us are doing,” added Angelica Ruiz, head of country for Mexico and senior vice president for Latin America at BP.

Also aiming to reach net zero by 2050 or sooner, London-based BP is focusing not only on getting the company, but the world, to net zero through partnerships with cities and corporations. Similar to Equinor and Chevron, BP has ramped up investment in low carbon energy as it grows its integrated gas portfolio.

“We will maintain our focus in E&P, but we will reduce our [oil and gas] production from 2.6 million barrels [of oil equivalent per day] to 1.5,” by 2030, she said. “What we’re trying to do is produce what we call resilient hydrocarbons, which include carbon pricing and carbon capture.”

BP is partnering with 10 to 15 cities, including Houston and Aberdeen, to reshape energy systems and the high tech and consumer products, heavy transport and heavy industry sectors to align net-zero ambitions.

“We can achieve 40% of mitigation through these partnerships,” which are essential to ensuring cities successfully manage the energy transition, Ruiz said. “In the same way, we know that 79% of corporations have already signed up to reducing their emission targets by 2050, even some before 2030 or 2040. Only 24% are on track to do this. So that is why we believe collaboration is key.”

Focus will be on technology to scale down emissions and consumer products.

Before the work begins with cities and corporations, “we have to ensure that we have the right ambition; that we’re aligned,” Ruiz said, “and that we have complementary capabilities to ensure we can reach the target even at the faster pace.”

The ambition is big, and the transition won’t be easy, she added.

“Hydrocarbons will still be key; we need to do them better. And gas will play a very important role,” Ruiz continued. “But most importantly, the consumer will also be making important choices. … This a journey that we should tackle together.”