OFSE sector steps up to carbon challenge
Services firms have challenges but also opportunities in both reducing footprints and leading standardisation
Oilfield service and equipment (OFSE) companies have an opportunity to both play a key role in helping operators meet ambitious net-zero-emissions targets, and to take a leadership position in shaping the path of the coming energy transition, according to a senior executive in the sector.
“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,” says Chris Jones, president, Europe oilfield services at energy technology heavyweight Baker Hughes.
Understanding the full carbon emissions of oil and gas operations is key—when there is a thorough understanding of where carbon is released throughout the drilling process, strategies can be implemented to proactively manage those emissions. “We track the amount of carbon generated in internal logistics in Norway, and divide that into the number of metres drilled, which gives us a carbon signature for each metre of wellbore we drill,” says Jones. There remain opportunities to improve the accounting, he continues, but it is a building block for monitoring and reducing emissions from the exploration and production process.
It is generally understood that, using traditional production methods, a barrel of crude carries with it 18kg of carbon produced. But Jones points to how Norway’s Equinor was able to dramatically reduce that figure at its offshore Johan Sverdrup installation.
By utilising hydroelectric power generated onshore and transmitted to the platform via subsea cable, Equinor can eliminate gas turbines on the installation. This switch reduces the platform’s carbon footprint to 697g CO2/bl produced.
Efficiency of drilling, and in particular of drilling logistics, will represent the OFSE sector’s best opportunity to work with operators to meet their individual carbon reduction goals, according to Jones. For example, in offshore E&P, reducing trips by air 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 breakdown roles that had been in the industry for a hundred years into new roles, so that we can reduce the number of people offshore,” says Jones. “We have managed to reduce the offshore work force, usually around 320 people, to 150 people. So that is 170 people who are not flying around Norway to get to the installation, or traveling to a heliport in the first place.”
On well construction, looking at each unique component of the drilling operation can also reveal carbon-reduction opportunities as well, says Jones. Changing the way friction reducers are utilised to reduce power consumption at the rig site is just one example of where additional reductions can be made. “It was not that long ago where, on a rig, when you picked up a drillstring off bottom, the automatic throttles would kick in and you would 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.”
North Sea renaissance
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 interest from a new class of smaller, regionally-focused operators—who, among other innovations, are keen to fully apply new technologies being developed to reduce the E&P sector’s carbon footprint.
“In the matter of two or three years, you have seen the emergence of a lot of very active North Sea players,” says Jones. “They are not looking at a global portfolio, their goal is to be very efficient and very effective in that one region.”
For OFSE firms, 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,” says Jones. “They are a lot more imaginative about looking at new models around integration.”
Baker Hughes is thus able to offer its end-to-end solutions, with its emphasis on carbon reduction built in, to these smaller, faster-moving players who appreciate an integrated approach. But large international oil companies (IOCs) are also starting to see value in integrated services, albeit 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,” says Jones.
Cameron Wallis is digital editor for World Oil