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Offshore Oil Projects Deploy New Ways to Cut Emissions

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Offshore oil and gas fields are seen as advantaged assets in the portfolios of hydrocarbon producers, who are looking for ways to reduce their operational emissions while still banking cash flows to fund their energy transitions. Industry groups point to offshore basins like the US Gulf of Mexico and the North Sea off Norway as sources for some of the least emissions-intensive hydrocarbon barrels on the planet — a largely credible claim, despite some eye rolling from environmentalists who question the very idea of "low-carbon" oil. Still, operators are looking to do even better, with several companies advancing technologies and development strategies they hope will lower their offshore emissions profiles even further.

Shell Slashes

US Gulf operators note the region’s extensive existing pipeline infrastructure, relatively low flaring rates and high-volume reservoirs as key contributors to its low emissions profile. And while newbuild facilities are getting increasingly rare, a batch of fresh platforms hitting the water this decade aim to bolster the region’s low-emissions credentials.

Shell, the Gulf's largest producer, stands out in this regard. By year's end, the company expects to bring on its long-planned Vito project, centered around a semisubmersible platform able to produce up to 100,000 barrels of oil equivalent per day at peak. The project, in development for more than a decade, underwent a major reduction in scope in 2015 to rein in costs. As a result, Vito is substantially smaller than other Shell hubs in the Gulf. Its 8,200 ton topsides are 70% lighter than earlier designs — a feat of engineering that surprised many industry watchers, the company says.

Initial designs included gas-injection equipment to improve oil flows — which would have required four times as much horsepower to operate, says Vito Project Manager Kurt Shallenberger. “So you’re now a quarter of the emissions in the new design because you’re choosing to not do that big scope of gas injection, which uses a lot of power, which means a lot of emissions to get those extra barrels,” he said. “So the barrels on Vito you see today are lower-carbon barrels than the original Vito.” The tradeoff, he says, is that “there are certain barrels you don’t produce because they need too much energy to get out.”

Leverage What's Available

Repsol and private partner LLOG Exploration are taking the idea of leveraging existing infrastructure to a new level with their newly announced Salamanca development. Operator LLOG said the partners will repurpose an old decommissioned platform once known as Independence Hub to produce the remote Leon and Castile fields some 250 miles southwest of New Orleans.

Plans include retrofitting the platform’s topsides but keeping the hull largely intact. That will save time and money, LLOG says. “The project has a significantly positive environmental, social and corporate governance (ESG) impact as it reuses an existing unit compared with abandonment of the unit, while also accomplishing approximately a 70% reduction in emissions impact compared to the construction of a new unit,” LLOG said in a statement.

Electrifying the Oil Field

ESG-minded oil producers worldwide are looking at ways to power more of their operations by electricity, and the cleaner the electricity, the better. Many offshore facilities today run on natural gas produced on site, which is cleaner than some other fuels but still presents problems around potential gas leakage and other emissions. Equinor’s giant Johan Sverdrup field offshore Norway started up in 2018 as one of the highest-profile oil installations to be powered from shore. In the first phase, Johan Sverdrup has capacity of some 100 MW of shore-based electricity and can produce up to 440,000 barrels per day. A second phase to expand capacity is due on line late this year.

Critics say powering oil installations from shore is a waste of clean energy and stresses the power grid. It's also expensive. But other clean methods of powering offshore production are emerging. Norway-based Odfjell Oceanwind, a start-up formed in 2019, has developed a “mobile offshore wind unit” it says can supply power to offshore installations. It can integrate with other proprietary technology that stores power for use during periods of intermittency and can shut off gas power during periods of high wind production. The units can be leased and transferred to different facilities, or even “parked” at floating wind farms, the company says. It aims to have its first units contracted by 2024.

Combining Technologies

A bit further afield, Houston-based Excipio Energy is pushing a floating hull solution it calls the Excibuoy. The platform can support a 10 MW wind turbine, but the real innovation is the platform’s ability to host several other power-producing technologies. Those include wave and current energy, and potentially ocean thermal energy conversion (Otec). This harnesses the thermal gradient between warm shallow water and cold deepwater to produce energy, a technology uniquely suited to the Gulf of Mexico.

None of those technologies besides wind make sense on their own, Excipio CEO Roy Robinson says, but together they can help smooth out the wind’s intermittency. He says an Excibuoy can power remote clusters of offshore wells produced through a “subsea factory” tied into an existing pipeline. Excipio is planning a Series A round this year and a Series B in 2024, but commercialization of the Excibuoy is not expected until late this decade.

Topics:
Upstream Projects, Upstream Technology, Emerging Technologies, Deepwater, Offshore Oil and Gas, ESG, Methane Emissions, CO2 Emissions, Independent E&Ps, Majors, Corporate Strategy
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