Defining the oilfield service sector’s role in meeting CO₂ goals

By Cameron Wallace, Digital Editor on 2/3/2020

FLORENCE, ITALY - As operators worldwide set ambitious net-zero-emissions goals, oilfield service companies have an opportunity to both play a key role in meeting these targets, and take a leadership position in shaping the path of the coming energy transition.

“We are working on many fronts to practically reduce the carbon footprint of oil and gas, and we are learning how to better account for carbon as well,” said Chris Jones, Vice President, Europe Oilfield Services at Baker Hughes. The service company is following the lead of major operators like Repsol in establishing its own zero-emissions goals for the year 2050.

Understanding the full carbon signature of oil and gas operations is key - when there is a thorough understanding of where carbon is released throughout the exploration process, strategies can be implemented to proactively manage those releases.

“We track the amount of carbon generated in internal logistics in Norway, and divide that into the number of meters drilled, which gives us a carbon signature for each meter of wellbore we drill,” Jones said. He pointed out that there are opportunities to improve the accounting, but it is a building block for continued development across the drilling and production chain.

It is generally understood that, using traditional production processes, each barrel of crude carries with it 18 kilograms of carbon produced. Jones cited an example of how Equinor was able to dramatically reduce that carbon volume at its Johan Sverdrup installation offshore Norway.

By utilizing hydroelectric power generated onshore and transmitted to the platform via subsea cable, Equinor was able to eliminate gas turbines on the installation. This switch to a greener source of energy meant that the carbon volume for oil produced on the platform was reduced to 697 grams of carbon per barrel produced.

Jones said that efficiency of drilling, and particularly of logistics, will represent the oilfield service provider’s best opportunity to work with operators meet their individual carbon reduction goals. When it comes to offshore exploration and production, reducing air logistics offers a chance to meaningfully reduce greenhouse gas emissions.

“Equinor has worked with us to literally transform the way we work at the rig site, and break down roles that had been in the industry for a hundred years into new roles, so that we can reduce the number of people offshore,” Jones said. “We’ve managed to reduce the offshore work force, usually around 320 people, to 150 people. So that’s 170 people who aren’t flying around Norway to get to the installation, or traveling to a heliport in the first place.”

When it comes to well construction, Jones said that looking at each unique component of the drilling operation can reveal carbon-reduction opportunities as well. He cited changing the way friction reducers are utilized to reduce power consumption at the rig site as just one example of where additional reductions can be made. “It wasn’t that long ago where, on a rig, when you picked up a drillstring off bottom, the automatic throttles would kick in and you’d get this big plume of black smoke,” Jones said. “There’s a lot more thought going into the rig site, to finding ways to make this work better.”

 A new legacy. With nearly 200 licenses granted in the UK and Norwegian sectors of the North Sea in the past quarter, what was once considered a “legacy” basin is attracting new interest, from a new class of operator. This renewed focus is creating an opportunity for smaller, regionally-focused operators to fully apply the new technologies and processes being developed to reduce E&P’s carbon footprint.

“In the matter of two or three years, you’ve seen the emergence of a lot of very active North Sea players,” Jones said. “They aren’t looking at a global portfolio, their goal is to be very efficient and very effective in that one region.” He pointed out that, new “use it or lose it” lease regulations are playing a role in this expansion, and combining that with existing infrastructure and new technologies is driving the success of these dynamic new players.

Working with these smaller, more nimble players, is driving new, low-CAPEX approaches. “We are seeing real growth in our integrated services business, driven a lot by companies with a 40-person headcount rather than a 400-person headcount,” Jones said. “They are a lot more imaginative about looking at new models around integration.”

The net result is that Baker Hughes is able to offer its end-to-end solutions, with its emphasis on carbon reduction built in, to small, fast-moving players who can best benefit from an integrated approach.

IOCs are starting to see the value that these integrated services offer, from a slightly different angle than their smaller counterparts. “Partly through the need to move ahead after the downturn, when they tried to squeeze every cent out of the supply chain, but for sustainability reasons as well, we are working collaboratively for performance gains, and how to create value that can be shared.”

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