8 ways the Oil and Gas Industry is making better use of sustainable technologies

8 ways the Oil and Gas Industry is making better use of sustainable technologies

1. Better use of data

At the end of last year, McKinsey placed the O&G industry’s performance gap at $200 billion. Their research states that on average, offshore platforms run at only 77% of maximum production potential. Correctly implemented data analytics systems and tools can overcome the operational complexity of O&G operations, quickly yielding returns of as much as 30-50 times the original investment and reducing ecological impact by reducing wastage, accidents and bottlenecks.

2. Decreasing freshwater usage

Water is an essential element in various oil production processes, from fracking to separating oil from other elements present in oil sands. Hundreds of millions of barrels of water are utilized every single day, and while the global O&G industry currently manages to recycle the vast majority of this water (between 80-95%), companies are rethinking the extraction process to reduce freshwater from the very outset.

3. Improving water recycling efforts

In order to decrease freshwater usage, O&G companies are exploring more effective ways of recycling and reusing water for their operations. Increasingly, companies are aiming to use 100% non-potable water by improving filtration oxidization methods, as well as advanced chemical-free water treatment solutions to neutralise bacterial contaminants such as sulphate-reducing and iron-oxidizing bacteria.

4. Reducing methane leaks

Finding ways to reduce methane leaks is a cost-effective opportunity for the industry. Recent figures from the International Energy Agency have outlined that it is financially possible to reduce oil and gas methane emissions[1] utilizing currently available and emerging technologies.

5. Used oil recycling

More companies are utilizing small-scale waste-oil micro-refinery units that transform used oil into diesel fuel. Not only does this approach yield fuel for ongoing operations, it’s also a relatively inexpensive alternative to more traditional oil disposal methods.

6. Streamlining/improving processes

Even innovations that don’t specifically make oil and gas processing greener and cleaner can still help improve the industry’s overall sustainability by allowing for more cost-efficient processes. For example, new ultrasound technology allows companies to create 3D images of the inside of oil wells, enabling them to make more informed and cost-effective production decisions. Similarly, IIOT, analytics, automation, reserve replacement and enhancement capabilities, and emerging artificial intelligence programs can all help find and eliminate operational inefficiencies.

By improving the efficiency of ongoing operational processes by even a small fraction, O&G companies can produce the same amount but with reduced costs and energy expenditure, leading to a lower overall carbon footprint.

7. Creating digital oilfields

Going beyond incremental operational improvements, the quickening pace of digitalization of the O&G industry has allowed for the creation of the ‘digital oilfield’, a process that is starting to come to prominence. Through the use of cloud technologies and big data, the digital oilfield allows for all operational data to be monitored, analyzed and utilized in real time, leading to safer, more sustainable decisions being made.

8. Greater acquisition and use of renewable energy

While many O&G companies are looking to lower emissions, just as many are also looking to diversify into the renewables market. At the beginning of 2018, BP said that $0.5 billion of its capital investment fund would be dedicated to clean energy, and the company recently bought a $200 million stake in Europe’s largest solar producer. With more high profile investments like this becoming the norm, O&G companies are set to transform into a significant investor base for renewables in the coming decades.

Equally, exciting are the advances being made in biofuel, which may enable production levels on a much larger scale in the near future. ExxonMobil is currently developing its Calipatria site and believes that due to recent major breakthroughs, it will be capable of producing 10,000 barrels of biofuel per day by 2025. This is an essential step forward in the foundation of an entirely sustainable and renewable biofuel industry.


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[1] https://www.energyjobline.com/article/is-clean-technology-reshaping-the-oil-industry/

Aramco CEO: Urgent global consensus required to concurrently address climate priorities and energy security challenges

Aramco President and CEO Amin H. Nasser highlighted the need for a much more credible energy transition plan, as he delivered a keynote speech at the Schlumberger Digital Forum today.

During the event, he stressed the importance of achieving a new global consensus on the way forward, and outlined three strategic pillars that should be central to the response.

The pillars are:

  • a recognition by policymakers and other stakeholders that supplies of ample and affordable conventional energy are still required over the long term;

  • further reductions in the carbon footprint of conventional energy, and greater efficiency of energy use, with technology enabling both;

  • new, lower carbon energy, that steadily complements proven conventional sources.

Highlighting the consequences of a flawed transition plan, Mr. Nasser said:

“When you shame oil and gas investors, dismantle oil- and coal-fired power plants, fail to diversify energy supplies (especially gas), oppose LNG receiving terminals, and reject nuclear power, your transition plan had better be right. Instead, as this crisis has shown, the plan was just a chain of sandcastles that waves of reality have washed away. And billions around the world now face the energy access and cost of living consequences that are likely to be severe and prolonged.”

On the importance of greater investment in the oil and gas sector, Mr. Nasser said: 

 “A fear factor is still causing the critical oil and gas investments in large, long-term projects to shrink. And this situation is not being helped by overly short-term demand factors dominating the debate. Even with strong economic headwinds, global oil demand is still fairly healthy today. But when the global economy recovers, we can expect demand to rebound further, eliminating the little spare oil production capacity out there. And by the time the world wakes up to these blind spots, it may be too late to change course. That is why I am seriously concerned.”

On the need for the world to unite behind a credible new energy transition plan, Mr. Nasser said:

“As the pain of the energy crisis sadly intensifies, people around the world are desperate for help. In my view, the best help that policymakers and every stakeholder can offer is to unite the world around a much more credible new transition plan, driving progress on the three strategic pillars I have outlined this morning… That is how we deliver a more secure and more sustainable energy future.”

Media contact information

All media inquiries are handled by Saudi Aramco’s Corporate Communications Department, Dhahran, Saudi Arabia.

International: international.media@aramco.com
Domestic: domestic.media@aramco.com


Dover Looks Toward the Future with Next-Generation Technologies to Support the Green Energy Transition

Dover Precision Components Innovation Lab Officially Opens
Company Looks Toward the Future with Next-Generation Technologies to Support the Green Energy Transition

Houston, TX (October 6, 2022) – Dover Precision Components, an integrated provider of performance-critical solutions for rotating and reciprocating machinery, today announced its Innovation Lab is officially open. Since the construction of the nearly 12,000-square-foot building was completed in 2020, the lab team has focused on the installation and commissioning of key test rigs for its fluid film bearings and compression products. The Innovation Lab has four independent test bays to allow work on multiple rigs at once with dedicated control rooms to monitor and collect test data and help ensure the safe operation of the equipment.

The lab was built to centralize the company’s test rigs and bring together the research and product development teams. These teams are focused on developing innovative new products and technologies to support a greener future, including the upcoming installation of a hydrogen testing facility for performance materials that are key to enabling the transition to hydrogen. “Dover Precision Components continues to make significant investments in product development and material science which have allowed us to accelerate the speed at which technologies are made available to our customers,” said Michael Corrie, Vice President, Advanced Sealing and Compression at Dover Precision Components. Added Chris Johnson, Vice President, Engineered Bearings, “As the world transitions toward clean energy to reduce carbon emissions, we are positioned to provide solutions that address these challenging application needs.” Waukesha Bearings ® and Cook Compression ® use component- and system-level test rigs to validate designs and analytical methods, evaluate performance and reliability, prove solutions under real machine conditions, and develop next-generation technologies.

About Dover Precision Components

Dover Precision Components delivers performance-critical solutions for rotating and reciprocating machinery across the oil & gas; gas, power generation, marine, industrial, chemical, and general processing markets. Comprising the Waukesha Bearings, Bearings Plus, Inpro/Seal, and Cook Compression brands, our portfolio includes hydrodynamic bearings, active magnetic bearings, system and bearing protection, reciprocating compressor valves, sealing technologies, pistons, rods, and more. Each solution is custom-engineered to provide optimum efficiency, reliability, and productivity, and is backed by comprehensive aftermarket services. Dover Precision Components serves its global customer base through facilities in North America, Europe, Asia, and the Middle East, as well as technical sales representatives around the world. Additional information is available at www.doverprecision.com.

Contact: Robin Vodenlic

Marketing Communications Manager

How The Oil And Gas Industry Is Building A Sustainable Future

By Brent Potts, Senior Director, Global Marketing, Oil, Gas, and Energy, SAP

Climate change and technology are affecting almost every industry on a global scale. None more so than the oil and gas sector. The groundswell of pressure toward sustainability is driving the oil and gas industry toward a major transformation.

In fact, many traditional oil and gas companies are evolving to the point where they now consider themselves energy companies, mobility companies, or even retail companies, as they diversify and expand into new areas with innovative business models.

Sustainability and digitalization have become the laser focus of many energy and utilities companies, and these industries are actually leading other sectors when it comes to adopting sustainable practices.

According to a recent survey by SAP and Oxford Economics, energy and utilities executives have made more sustainability-related changes to their operations than those in other industries. More than three-quarters (79%) say sustainability issues are a major concern or top-of-mind at all stages of the manufacturing process, and almost half (47%) have committed to a net zero carbon goal.

Drivers of Sustainable Change in the Oil, Gas, and Energy Sectors

There are several factors influencing sustainability efforts in the oil, gas, and energy industry. Companies are taking various approaches to address growing issues that are permanently impacting the industry. Some of the biggest drivers include:

1.    Government regulations, incentives, and subsidies

Increasing government interventions, such as the European Commission’s European Green Deal and the United Nations’ Paris Agreement are pushing oil, gas, and energy companies to look for more circular and sustainable solutions to meet aggressive carbon-neutral targets. These agreements are in addition to various carbon taxes, incentives, and subsidies being offered by different levels of government globally.

Several renewable or alternative energy initiatives currently have government incentives, such as tax credits for the use of solar panels, electric cars, or other alternative-energy options. Some governments may also offer subsidies to businesses or consumers who choose alternative or renewable energy sources. These government incentives and subsidies artificially inflate the demand and lower the cost of these alternatives, but the cost savings may not last.

It will be interesting to see if the demand will remain high once subsidies or incentives are reduced, revealing the true cost of alternative energy sources. As more renewable energy technology is developed and mass-produced, the cost of generating renewable energy goes down, but whether or not it will be enough to offset the government subsidies remains to be seen. Renewable energy costs must go down to the point where people will choose them regardless of subsidies or incentives, because ultimately, the cost will determine if people choose a particular energy source long term.

2.    Diversification and changing cost structures

Industry boundaries are blurring as several oil and gas companies extend beyond traditional revenue streams. A barrel of oil is not the central focus of many oil and gas companies anymore.

Now, many are placing a greater focus on customer needs and diversifying to include new revenue streams, such as renewable energy, electrical charging stations, advanced chemicals, biofuels, hydrogen, LNG, autonomous transport-on-demand initiatives, and even expanding retail outlets.

For example, Shell has set an ambitious goal to earn 50% of its revenue from non-fuels by 2025. The company is already the world’s largest mobility retailer, with more retail outlets than McDonald’s, and it sells $6 billion-dollars-worth of convenience retail products every year.

It also plans to ramp up its ‘power-as-a-service’ business model with an entirely new cost structure, which reflects the growing trend toward subscription or use-based business models being adopted by an increasing number of companies worldwide.

3.    Digitalization

Digitalization is what makes diversification possible. Advanced technology is changing he way companies work, creating more opportunities for partner collaboration and opening doors to new options for innovative business models.

For years, the World Economic Forum has said that digitalization is allowing the oil and gas industry to redefine its boundaries. The pandemic has simply accelerated that mandate. For example, companies quickly learned that they needed to be more agile to respond to major disruptions and drastic supply and demand fluctuations when the COVID-19 crisis made demand for oil and gas disappear almost instantly as lockdowns spread across the globe.

Aside from the pandemic, as more business systems and processes move to the cloud, it becomes easier to integrate and streamline operations across entire organizations and beyond. This opens the door for diversification as well as product and service innovation.

The survey shows that energy and utilities companies are more advanced than other respondents in their use of technology, with almost half (49%) using cloud technology versus just 36% for other industries.

4.    Changing customer, investor, and employee expectations

Peoples’ shifting expectations are having a huge impact on the oil, gas, and energy industry from multiple angles. Eco-conscious consumers continue to put pressure on companies to focus on sustainable practices and renewable energy sources. There is also mounting pressure from investors for companies to become more sustainable. For example, Harvard University plans to end all investments in fossil fuels and stop funding activities that drive global warming. Oil, gas, and energy companies should take note, as Harvard’s decision will no doubt influence other investors.

In addition to outside pressure from consumers and investors, many companies are also facing growing pressure from within their own workforce. As long-time employees retire, they take their traditional methods and intellectual property with them. They are being replaced with a tech-savvy, eco-conscious generation of employees who question conventional operating methods and may enter heavy-emission industries with the direct goal of promoting sustainability in the industry.

Many employees may focus on making a difference by encouraging and influencing more sustainable and purpose-driven practices within their own organizations. As a result, driving forces for sustainable change are mounting from multiple angles outside of organizations as well as from within the companies themselves.

Take Steps Toward a More Sustainable Future

As decision-makers attempt to move toward more sustainable practices, they should consider not one solution, but many. Here are a few recommendations:

  • Create a long-term strategy for foundational change that considers sustainability in every process.

  • Use data to influence decisions on implementing sustainable practices at the design, engineering, and manufacturing stages to track, measure, and reduce emissions at every stage.

  • Use transport and delivery methods that optimize loads and reduce mileage, emissions, and carbon footprint.

  • Source materials ethically and in the most sustainable way possible.

  • Operate assets and equipment in the most energy-efficient manner that is safe for the environment and the workforce.

Oil and Gas Companies Are Diversifying

As oil and gas companies look beyond the barrel and continue to diversify, it creates more complexity within their operations, which presents additional challenges to their sustainability efforts. According to the survey, 50% of energy and utilities executives say increased complexity is an obstacle to meeting their sustainability goals.

Despite this, close to half are still committed to achieving a net zero carbon goal, which is the most of any industry in the survey of 1,000 executives from industries worldwide.

Additionally, thanks to advanced technology, energy and utilities firms have more visibility than other industries into many aspects of manufacturing, including carbon emissions (58% vs. 43%), sustainable sourcing of raw materials (56% vs. 50%), and the complete lifecycle of by-products (49% vs. 42% for other industries).

This level of visibility provides valuable insight for business leaders as they focus on developing and enhancing sustainable practices throughout the oil, gas, and utilities industry today and into the future.

Learn more about balancing the bottom line with the green line in the SAP and Oxford Economics energy and utilities fact sheet, The Sustainable Supply Chain Paradox.

Credit to: Forbes

NABORS – RigCLOUD Releases New Drilling Emissions Reporting to Accelerate Decarbonization of the Oilfield

New digital tool delivers emissions and performance data to drillers and operators which optimizes engine utilization and reduces their carbon footprint

Aug. 18, 2021 – RigCLOUD®, the oil and gas industry’s next-generation, open, cloud-based rig instrumentation, analytics, and digital operations platform, today announced the release of its Drilling Emissions Reports, which are designed to help users optimize engine utilization and reduce their carbon footprint while drilling.

The newly released RigCLOUD emissions reporting is available to both drillers and operators.

As the energy industry collectively moves to reduce its carbon footprint, the lack of accurate emissions data continues to be an obstacle. Often, greenhouse gas emissions from the wellsite are estimated based on the amount of fuel purchased. But how much of the fuel was used? Where is the biggest opportunity for emissions optimization?

This tool provides accurate and reliable data on fuel consumption, greenhouse gas emissions, CO2 per foot drilled, average engine load and average number of engines online during each drilling activity, all accessible with the click of a button. To optimize emissions output, drilling contractors and operators have visibility into the minimum engine requirements throughout the well construction process. This capability enables customers to reduce their environmental impact without compromising operational performance.

Carlos Rolong, Senior Director of Operations at RigCLOUD, said: “Digitalization and automation have significantly contributed to improved efficiency and drilling performance. Now, RigCLOUD is using these advances to improve environmental performance. By deploying emissions analytics and advanced engine management, we are empowering anyone who is contracting or operating a rig to make progress on their sustainability commitments.”

Though reporting is an important first step, it is just the beginning. Engine optimization and management solutions will soon be available to customers. This innovative system will provide activity-based estimations of peak power demand using artificial intelligence (AI) based predictions. Similar to modern cars with auto-stop features, rig engines will cycle on or off as required during certain drilling activities to optimize greenhouse gas emissions.

Subodh Saxena, SVP of Nabors Drilling Solutions, said: “This is an exciting time in the industry as we embrace sustainability with the same collective sense of urgency that enabled us to deliver both substantial operational efficiency gains and overcome safety challenges. We are using RigCLOUD’s technology across Nabors’ fleet to improve our carbon footprint in the oilfield and I expect that this type of technology will be embraced across the industry.”

For more information: https://www.rigcloud.com/node/71

Rigzone – Global Gas Flaring Could Cost $82B Per Year

Global Gas Flaring Could Cost $82B Per Year

That’s according to GlobalData, whose recent report outlines that countries could make up to $82 billion per annum if they utilized this gas instead of flaring it. The company noted that many countries persist with the activity, even though technological solutions exist to avoid gas flaring. This includes developed countries such as the United States and Russia, GlobalData highlighted.

Besides lost revenue, it’s also an environmental issue as gas flaring is one of the major contributors to CO2 emissions, GlobalData outlined.

“It would do many countries, especially in Europe and Asia where natural gas prices are setting all-time records, a lot of good if oil and gas operators found the strategy to sell this gas rather than lose it – not only for the money but for meeting their CO2 targets too,” Anna Belova, a senior oil and gas analyst at GlobalData, said in a company statement, which was sent to Rigzone.

“The top 12 gas flaring countries flared almost 13 billion cubic feet of gas per day. To put that into context, that amount of gas could easily keep the whole of Japan well supplied for a year. All of that power has simply gone to waste,” Belova added in the statement.

Reducing global gas flaring will require a multi-prong approach due to unique regional drivers that prioritize flaring over monetization of gas, Belova noted.

“Small-scale modular technologies, aimed at converting gas into liquids or chemicals, represent a logical choice for remote and distributed flaring sites,” Belova said.

“Alternatively, multiple sites by different operators can be combined with large-scale midstream and downstream components – provided enough flaring density. This approach was pioneered by Saudi Aramco and has now been applied in Texas, with LNG-based monetization of gas, and Russia, with natural gas used as feedstock for petrochemicals,” the GlobalData analyst continued.

“Given that technological solutions exist at multiple scales, regulatory and investor pressures are needed to drive investments, supported by voluntary environmental, social and governance (ESG) commitments by operators to end routine flaring of gas globally,” Belova went on to say.

In its report, GlobalData revealed that the top 10 flaring countries, by volume from 2010 to 2020, comprise Iran, Venezuela, Russia, the United States, Iraq, Nigeria, Indonesia, Malaysia, Mexico and Angola.

Gas flaring involves excess natural gas being burnt or flared off during an oil and gas operation, the report highlights, adding that the process takes place across the oil and gas value chain but is predominant in the upstream sector. The report notes that it has often been an easier recourse than harnessing the excess gas but adds that, lately, there has been a conscious effort from industry leaders to minimize this activity by setting up a gas recovery system, or even channeling the gas to produce alternate revenue streams.

GlobalData describes itself as a leading data and analytics company. The business, which is headquartered in London, focuses on several sectors, including oil and gas, power, mining, pharma and financial services, its website shows.

To contact the author, email andreas.exarheas@rigzone.com

The Future Of Oil And Gas Is Sustainability

By Benjamin Beberness, Global Vice President, Oil & Gas Industry Business Unit, SAP

There is no easy way to put this; COVID-19 has been a one-two punch to the oil and gas industry from the consumer and commercial angles. With no need to travel to the office, vacations cancelled, and cargo ships at a standstill, the oil and gas industry has had to reconsider its strategy for a future. It’s clear that it will look very different from the recent past and will have to be much more sustainable. Add to this, increased tension with oil suppliers and you get the perfect storm that the industry is weathering currently. So how do you plan during such an unstable time? The solution lies in digitizing the oil and gas industry to prepare for the future of work and sustainability.

The duration of COVID-19’s impact on the industry is unknown, so devising a plan to adapt and digitize now is key to emerging from this global crisis in a strong position. While assessing the damage is important for moving forward, there are forward looking actions that oil and gas leaders can take now. After all, coronavirus is not the only factor that is fueling change in the industry. Sustainability, both in terms of the environment and company longevity, are on the minds of oil and gas executives around the world. They may be surviving this pandemic even though oil prices are plummeting, but there will always be another threat looming and growing expectations from investors to become more sustainable. This is why preparation now will pay dividends in the future.

The Current State of Oil and Gas

Oil and gas has been severely impacted by a chain reaction of events. Factories were forced to shut down, curbing the need for cargo ships and planes. Offices mandated professionals to log in from home, no longer requiring them to fill their tanks as often. Travelers cancelled their trips cutting the aviation sector’s typical 11% share of oil consumption in transportation. And as a result of all these realities, worldwide oil demand dropped considerably.

The Organization of the Petroleum Exporting Countries suggested global demand would fall by 6.8 million barrels a daythis year. While the worst is most likely behind us, as governments begin reopening municipalities, an ongoing contraction from previous highs is inevitable for the foreseeable future. But with that said, the oil and gas industry has put in significant effort to cut supply in order to minimize the blows dealt by such a major drop in demand.

Digitization Helps Oil and Gas Get Creative

The closing of offices around the world has put remote work to the test. And with many oil and gas companies relying on highly manual and in-person processes, this transition presented a number of speed bumps. However, Galp, a Portuguese oil and gas company, did not have to experience these setbacks. Even with their employees logging in from home, they set a new digital data platform live remotely to empower their modern infrastructure. This is especially notable because it is a first for such a traditional company and industry, and it paves the way for more forward thinking players in oil and gas that want to succeed, even while remote.

Galp isn’t the only company in the oil and gas space that is putting digital transformation front and center during this unprecedented time. In the past few weeks a steady stream of companies announced they would allow their workers to work from home for longer and longer periods of time due to the persistent threat of coronavirus and the proof that remote staff can be productive. Chevron CEO Mike Wirth in an interview with CERAWeek Daniel Yergin Stated “There will be a new paradigm on the other side of this. I don’t think that everybody will always work from home, but I also think the traditional model of where everybody comes to the same place and people get on planes to attend meetings … I think there will be changes” Twitter even declared that their employees would be able to work remotely permanently, so long as their positions didn’t require physical presence.

It’s entirely possible that other sectors will follow this lead and save on office space in the long run. And this, too, will impact oil and gas, as a lifestyle change away from the office will cut down on the amount of gas needed to transport professionals to offices and business meetings. Across industries, cost reduction has been a focus to ensure business continuity. Many companies are considering shedding custom code in exchange for market-based, standard solutions to dramatically reduce costs. And shedding offices could also be an essential way to save money going forward. That’s why the oil and gas industry need to make changes now in order to make the most out of what could be a permanent shift toward remote work. Digitization and automation help cut costs in a time where many other factors are largely out of a company’s control.

Shortening the Journey to Renewable Energy

Slowly, and then all at once, governments around the world were required to lower emissions and investors wanted more sustainable energy investment opportunities. In order for companies to properly measure and report out their progress, digital infrastructure must be in place properly. Repsol, Total, BP, Equinor, Shell and ENI are all part of the Oil and Gas Climate Initiative (OGCI) and have committed to a sustainable, “net-zero” version of their current selves in 2050. If the oil and gas industry standardized data collection, processing and storage going forward, then it would be much easier to determine which companies were on track to meeting their sustainability goals.

What’s Next for Oil and Gas

The oil and gas industry is due for a rebound, but the timing is unclear. A large reason for this is because oil and gas is at the bottom of the funnel for so many other industries. In order for oil demand to increase, so many other industries (like travel, manufacturing and retail) will have to open first to get people and products traveling again. Shifts in demand happened so quickly due to travel restrictions and mandatory quarantines, but the return to previous levels of travel and consumer confidence will take time. The winners of tomorrow will extend beyond the barrel and invest in renewables, digitization and diversification today.

Credit to Forbeshttps://www.forbes.com/sites/sap/2020/06/23/the-future-of-oil-and-gas-is-sustainability/?sh=634ac751747c

Find out how SAP is helping Oil and Gas companies prepare for a different future here.

SAP is the world’s leading provider of business software – enterprise resource planning, business intelligence, and related applications and services that help companies…

SAP is the world’s leading provider of business software – enterprise resource planning, business intelligence, and related applications and services that help companies…

Offshore drilling gearing up towards the Energy Transition


By Pamela Cordova, Sr. Rig Analyst, IHS Markit

Sustainability and being part of the energy transition has become an integral part of drilling contractors’ strategies in recent years, as drillers attempt to ‘out-green’ each other. Prompted by governments and the financial markets, international drilling contractors and operators have realised they need to be part of the solution in reducing emissions and achieving Net Zero targets as soon as possible.

As news reports focus on climate-related global events such as heatwaves, floods and wildfires, and the new Intergovernmental Panel on Climate Change (IPCC) report sees the UN Secretary General call for an end to new fossil fuel exploration and development, all stakeholders in the drilling industry are the subject of increasingly stringent regulations and under greater pressure from investors, the media and the public. Moreover, they have to plan for this in a volatile oil price and low day rate environment.

In all but the most rapid energy transition scenarios, IHS Markit expects demand for oil and gas to continue rising for at least another decade and remain considerable for many years after – thus the offshore drilling industry has an important role to play in a sustainable energy future, ensuring this demand is met with responsible operations that reduce the impact on the environment.

To comply with the more stringent regulations and emissions targets that are being set, offshore rigs are required to use best available technology to operate with the least possible damage to the environment and reduce Green House Gas (GHG) emissions in a timely and efficient way. How companies transform themselves to become greener while investing in new technology and producing returns is the real challenge.

International drilling contractors leading by example
International drillers are trying to achieve their Energy Transition goals via low-carbon solutions, through reducing Scope 1 emissions, which come from engines used for power generation. This involves optimising drilling through new systems centered around energy efficiency and reduced fuel use by varying energy loads. This helps rigs to drill faster and smarter, reducing costs and fuel consumption.

Currently at the forefront stands Maersk Drilling, with an ambitious climate target: a 50% C02 emissions intensity reduction from drilling operations by 2030. A number of years ago Maersk Invincible in Norway became the first jackup to run on shore-power, delivering huge yearly reductions in CO2 and Nitrogen Oxides (NOx) emissions. This method is now being explored in other regions.
In addition, Dolphin Drilling, COSL and Transocean have achieved ISO 50001 certification through Energy Management Systems, reducing energy consumption, environmental impact and increasing profitability.

Below, IHS Markit lists the most common initiatives being undertaken by drilling contractors.

Reducing fuel consumption by optimising rigs’ power plants
Various contractors have improved engine efficiency in terms of diesel consumption by installing hybrid power with batteries, closed bus systems, and electrification from shore.

Since 2019, Seadrill-managed semi West Mira and Transocean semi Transocean Spitsbergen have had hybrid power plants using Energy Storage Systems (ESS) to reduce fuel consumption. Both units are harsh-environment deepwater semis, and the economic incentives were provided by the Norwegian NOx Fund, an initiative dedicated to reducing NOx emissions. It contributes a grant of up to 80% of project costs, subject to verification of the emission-reducing upgrades. Transocean is also looking at placing more energy storage systems on another eight rigs.

A number of contractors have implemented power optimisation to improve fuel efficiency. COSL Drilling Europe has developed an Energy Control System that reduces the number of active generators on rigs and increases efficiency. Valaris’ use of ‘Green Dynamic Positioning’ mode in benign conditions during non-critical operations is ready to be deployed on most of its Dynamically Positioned (DP) assets. Engine optimisation is planned on one drillship in 2021 and is in the pre-FEED stage on the remainder of the floater fleet. Transocean currently has most of its active fleet modified for closed bus, two engine DP operations (running the minimum number of engine rooms possible at any time – to reduce carbon emissions).

Odfjell Drilling installed the Siemens Energy BlueDrive DC-Grid solution on Deepsea Atlantic and Deepsea Nordkapp. which allows peak shaving of drilling loads, so fewer generator sets can run at higher and steadier loads — reducing fuel consumption and carbon emissions. The contractor is looking at the opportunity to include this on Deepsea Stavanger, Deepsea Aberdeen, and Deepsea Yantai at a later stage.

Installing Selective Catalytic Reduction (SCR) systems
In the past year, at least 13 rigs owned by Valaris, Transocean, Seadrill, Noble, Maersk Drilling and Borr Drilling have been confirmed as having Selective Catalytic Reduction (SCR) systems onboard, an emissions control technology system which uses ammonia injection to convert NOx into harmless water and nitrogen. This is expected to reduce NOx emissions by up to 98%. The chart below shows the composition of rigs with SCR. This information can now be retrieved from IHS Markit’s RigPoint/RigBasedatabases.

European operators remain at the forefront in incentivising the drilling industry to invest in greener technologies, not only in Europe but also globally, as recently demonstrated by Equinor in Brazil. The operator has recently contracted drillship West Saturn and fuel consumption is expected to be reduced by between 10-15% with the introduction of a combined hydrogen and methanol injection system along with other energy efficiency upgrades. With these modifications, emissions of CO2 are expected to reduce by between 10-15%, and NOx by between 30-80%. It is understood Equinor will compensate Seadrill for the fuel consumption savings to justify the investment.

Increasing efficiencies by using data analytics in internal emissions monitoring
Valaris, Noble, Transocean, Stena, Maersk and Saipem are using their own analytics software packages to monitor and reduce fuel and emissions on rigs. For example, Valaris has the Valaris Intelligence Platform (VIP) which allows real-time tracking and analytics of GHG emissions and fuel efficiency through Power BI dashboards being deployed across the fleet. Currently it is on 14 rigs, and there is a goal to have it fleetwide by the end of 2021.

Transocean is installing its Smart Equipment Analytics (SEA) tool on 19 rigs. This is a dashboard that provides real-time data for monitoring equipment health, inferred emissions, energy consumption, and power plant performance. Stena has its Energy and Emissions Meters on Stena Carron and Stena IceMAX. Roll out is planned for the rest of Stena fleet.

Green class notations
Some major drilling contractors such as Valaris, Transocean and Seadrill have had a long-standing interest in sustainability efforts and many designs or recent upgrades have allowed rigs to be certified for environmentally friendly classification notations. The classification societies provide class notations that reflect a rig’s technology to reduce its environmental footprint. The American Bureau of Shipping (ABS) has class notations ‘ENVIRO’ and ‘ENVIRO+’. It recently introduced the the Low Emissions Vessel (LEV), NOx-Tier III, EEDI-Ph3 notations. DNV has the ‘Clean‘ and ‘Clean design‘ notations. IHS Markit’s rig database RigPoint provides information on the rigs that have rig class notations. Currently there are 36 rigs with any of these classes, illustrated in the graph below.

Below is a summary of the recent new technology implemented on offshore rigs to reduce GHG emissions. This information can now be retrieved from RigPoint and RigBase.

Alternative opportunities, creating partnerships
The Energy Transition can create new business opportunities for drilling contractors, as new technologies required to tackle emissions reductions need skills and capabilities found in the drilling industry: for example, using rigs for other purposes such as Carbon Capture and Storage (CCUS), and Geothermal energy.

Stena is investing in DCarbon X, which will use drilling units to explore for geothermal energy, CO2 and other gas storage locations that DCarbonX has identified. Others are investing in low-carbon technologies such as Odfjell Drilling investing in the Offshore wind power company Oceanwind AS, which has the Odfjell Oceanwind’s WindGrid™ hybrid solution for micro-grids enabling up to 70% reductions in carbon emissions. It owns Mobile Offshore Wind Units (MOWUs) to supply electricity to ‘off-grid’ or ‘micro-grid’ consumers, that could be used for offshore rigs.

Carbon Capture and Storage (CCS) projects are becoming increasingly important globally, and drilling contractors are creating partnerships with operators and industry participants to collaborate in reducing the environmental footprint. For example, in Australia, the federal government encourages upstream and industrial firms to support carbon-reduction projects. This aided BPH Energy’s CCS-Baleen well, for which a rig contract will be announced soon, and Victoria CarbonNet CCS project off Victoria which used jackup Noble Tom Prosser to drill the first well for testing the seabed for CCS purposes. The CarbonNet Project was established in 2009 by the Australian and Victorian Governments as part of a suite of solutions that have the potential to reduce CO2 emissions. In addition, Saipem is designing a jackup for re-injection of CO2.

In Denmark, Maersk Drilling is participating in Project Greensand. This is a CO2 storage consortium formed by INEOS Oil & GasDenmark and Wintershall Dea, providing an opportunity for offshore rigs to be used to repurpose existing oil and gas wells for CO2 injection. The project aims at building infrastructure and capabilities that will enable CO2 captured in onshore facilities to be transported offshore for injection and storage beneath the seabed. Maersk Drilling is also investing in innovation such as alternative fuel types for the rigs.

Concluding remarks
Industry players are becoming acutely aware of the need to step up their green credentials. The focus has been on upgrading existing rigs to reduce their environmental impact despite the capital intensity. Most recent upgrades have been in Northwest Europe and deepwater areas, where government support, or operator partnerships justify the investments. The main driver recently has been operators stipulating increased focus on such upgrades as they have emissions targets to meet. As the industry is facing a difficult time securing funding, operators and government incentives, and increasing the profitability of the drilling industry will be key in being able to handle the investments in new technology to continue the ‘green-ing’ of the sector.

Currently, there is no widely-used certificate or benchmark through which drilling contractors can measure themselves against their peers, but operators and contractors need to work together to decide standards on emission reduction and energy efficiency in rigs. And even in the future, having the industry agree on matters like alternative choices of fuel.

IHS Markit Petrodata’s platforms RigPoint and RigBase now provide customers with the ability to search for the relevant environmentally focused green modifications per rig.

RigPoint/RigBase by IHS Markit is the leading and most trusted information source for the global offshore drilling rig market. The platforms provide data and reports on the industry dating back to 1984 and offer unparalleled information on rig supply, demand and specifications. It is maintained by a team of analysts with a combined 90+ years of experience on reporting the offshore rig market, with access to IHS Markit’s deep knowledge and understanding of upcoming exploration plans, field developments and the upstream sector, provided by around 900 analysts and experts.

Credit: https://ihsmarkit.com/research-analysis/offshore-drilling-gearing-up-towards-the-energy-transition.html


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