Page 6 - NorthAmOil Week 33 2021

NorthAmOil COMMENTARY NorthAmOil
BP, Equinor reiterate low-carbon focus
European energy giants BP and Equinor have both talked up their plans to produce low-carbon oil and gas at an industry event this week
GLOBAL
WHAT:
Low-carbon oil and gas remains a major component of the decarbonisation strategies for both BP and Equinor for now.
WHY:
Both companies are exploring ways to reduce their carbon footprint while still tapping their most attractive oil and gas assets.
WHAT NEXT:
Over the longer term, both companies are planning to pivot more towards renewables.
EUROPEAN energy giants BP and Equinor have both talked up their plans to produce low-carbon oil and gas at the joint NAPE and Offshore Technology Conference (OTC) event held in Houston, Texas this week. Representa- tives of both companies discussed their energy transition strategies, and how oil and gas con- tinues to fit into them even as they pursue long- term net zero targets and pivot to renewables
BP and Equinor have both set targets of net zero greenhouse gas (GHG) emissions by 2050. Both companies are planning to grow their renewables businesses while scaling back in oil and gas over the coming years – ambitions that they reiterated this week.
Their comments come as major oil and gas companies face growing public pressure over decarbonisation. European players are taking a more aggressive approach to the energy transi- tion compared with their US counterparts thus far. But this will not be enough for environmen- tal groups and other critics that want fossil fuels to be abandoned altogether sooner rather than later.
Changing focus
For now, oil and gas remains a piece of the puzzle for both BP and Equinor as they fig- ure out the path to net zero. In BP’s case, the London-headquartered company is focusing on fields with high margins and lower carbon intensities even as it scales back its oil and gas portfolio. If particular assets are seen as having the ability to help fund BP’s energy transition, they could have a role to play in its portfolio for some time yet.
“As a result of our transformation, we no longer want to be one of the biggest oil and gas companies out there, but we want to be the best,” BP onshore US oil and gas unit BPX’s chief operating officer, Kimberly Krieger, said at this week’s event.
Indeed, recent announcements from BP illustrate how certain oil and gas projects con- tinue to move forward. In June, the super-ma- jor started up the Manuel project, a subsea
tieback to the Na Kika platform, in the US Gulf of Mexico. Meanwhile, it continues to develop the $9bn Mad Dog 2 project, also in the Gulf and scheduled for start-up in 2022. Elsewhere in the world, it kicked off gas production at the Raven field, the third stage of its West Nile Delta (WND) development offshore Egypt in April. At the same time it started up a new field at India’s KG D6 block in partnership with Reli- ance Industries Ltd (RIL).
While these developments have progressed, BP was also announcing a string of renewable and low-carbon projects. These have included preliminary agreements with potential hydro- gen customers in the UK and various moves to expand its global offshore wind footprint.
As the super-major shifts its focus increas- ingly to renewables, it appears set to become even more selective about the oil and gas pro- jects it continues to invest in. Based on Krieger’s comments, it already looks as though projects either need to generate attractive returns or con- tribute some other benefit related to the compa- ny’s energy transition.
Indeed, one of the projects flagged up by Recent
Krieger was the Grand Slam facility in the US’
Permian Basin, which is aimed at helping the
company to reduce flaring of associated gas out-
put. The oil, gas and water handling facility has
been fully electrified, which reduced its flaring
intensity from 16% to 2% in less than two years.
The super-major is also turning its attention to and gas projects electric fracturing, with Krieger saying it had
recently carried out a pilot project using the technology.
“The first pilot was very, very promising, and it’s something that we’re certainly interested in pursuing at scale,” Krieger said.
At a separate OTC session, BP’s vice president of digital production and products, Rob Kelly, talked up the need to adopt what he called an “agile mindset” when approaching the energy transition. According to him, being open to learning and change, and wanting to develop, are all necessary qualities for successfully navi- gating the transition.
announcements from BP illustrate how certain oil
continue to move forward.
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