North Sea emerges as low carbon oil basin: 4th edition of Platts Periodic Table of Oil

Crude grades from the North Sea, the main pricing hub for high quality light sweet oil, have emerged as the least carbon-intensive globally, according to an analysis of S&P Global Platts data, as the upstream industry seeks to adapt to the energy transition by reducing emissions at the wellhead.

At least six out of the eight low-carbon crude grades listed in the Platts Periodic Table of Oil originate from the North Sea basin.

Norway's Johan Sverdrup, Oseberg, Grane and Heidrun, and the UK's Clair and Kraken crude grades are produced from fields with upstream operations emitting less than 15 kg of CO2 equivalent per barrel.

The North Sea is also home to Platts Dated Brent, the world's important crude oil benchmark, against which more than half of the world's oil is priced.

Dated Brent soared to over $100/b on Feb. 16, the highest since Sept. 4, 2014, data showed, with an extremely tight physical crude market supported by resurgent demand, uncomfortably low spare capacity, shrinking oil inventories and geopolitical tensions.

Carbon intensity has emerged as a new barometer in the oil industry, and is being viewed similar to the way the market looks at sulfur. The higher the carbon intensity of a crude, the lower its value will be, as this oil is crude produced at a relatively high rate of emissions.

The offshore fields in the North Sea and Gulf of Mexico boast low carbon intensity crudes, according to Platts Carbon Intensity calculations.

"These offshore fields have little to no flaring associated with the production of crude and in some cases, like Johan Sverdrup, are powered almost 100% by renewable sources, in this case hydropower, ensuring that the carbon footprint associated with these assets is extremely low," said Deb Ryan, Head of Low Carbon Market Analytics at Platts.

Many fields in the North Sea use renewable energy for their power instead of diesel generators, which sharply reduces their carbon intensity. Producers in the Gulf of Mexico have to adhere to strict regulations on flaring and spills, which can help reduce carbon emissions.

US medium sour crude Mars, produced in the Gulf of Mexico, along with Angolan medium sweet Girassol, are also classified as low-carbon crude grades by Platts.

Net zero emissions

Platts Analytics has started evaluating the carbon intensity of crude production across 104 fields. The results show a wide spectrum, from as low as 1.56 kg CO2e/boe of production for Johan Sverdrup, up to 175 kgCO2e/b for the San Joaquin basin in California.

Platts Carbon Intensity values reflect the impact of greenhouse gas emissions from wellhead production to the storage terminal. This considers the production, flaring and venting, maintenance activities, production processing and transport to the storage hub.

The market value of a crude grade has traditionally been defined by its density and sulfur content, but as the oil sector looks to better understand the emissions associated with producing different grades, carbon intensity is becoming an important benchmark.

Keen to hit net-zero emission targets, oil producers and industry players have become increasingly focused on reducing the carbon intensity of their upstream operations in recent years.

Energy majors such as BP, TotalEnergies and Shell have vowed to prioritize upstream spending on lower-carbon oil and are expected to increasingly sell their stakes in higher-carbon projects.

Many oil and gas companies are already looking to reduce their carbon footprints by employing many different strategies, such as reducing flaring, shifting to less carbon-intensive production, creating more low-carbons fuels, investing in carbon offsets and adding carbon capture, among other avenues, to stay viable.

From the impact of COVID-19 on global demand to the long-term effect of the energy transition on petroleum producers and refiners, crude quality and its carbon intensity have never been more important.

The 4th edition of the interactive Periodic Table of Oil contains new crude grades, carbon intensity values, a significant redesign and new functionality to help customers plan and make more informed decisions in rapidly changing volatile markets.