Lundin Energy says all its future Sverdrup crude sales to be carbon neutral

Sweden's Lundin Energy said June 16 it had made its first sale of 'carbon-neutral' Johan Sverdrup crude oil and all its future sales of the crude would be certified carbon-neutral by an independent certification provider.

Lundin is one of a number of companies promoting 'carbon-neutral' crude oil and made its first sale of carbon-neutral crude, from the Edvard Grieg field, in April.

The company holds a 20% stake in the giant Johan Sverdrup field, which it discovered in 2010-11 and which came on stream in October 2019, meaning 20% of the overall Sverdrup production stream will be carbon neutral.

Production from the field has helped transform Norway's oil production prospects, accounting for over a quarter of the country's production.

Overall production capacity reached 535,000 b/d in May and is set to reach 755,000 b/d under a second development phase due on stream at the end of 2022.

The Intertek methodology includes emissions from exploration, drilling and development of the facilities, production operations, and the supply chain supporting production, Lundin said.

Day-to-day operational emissions are reduced by the facilities receiving power from the mainly hydropower-based Norwegian power network, while operational production costs are among the lowest in the North Sea.

Lundin said South Korea's GS Caltex had bought the first cargo of carbon-neutral Sverdrup crude.

It said the field had been certified at 0.45 kg of CO2-equivalent/barrels of oil equivalent produced, 40 times below the world average, and "residual emissions have been neutralized through high quality, natural carbon capture projects, certified by the Verified Carbon Standard."

"As a result there will be no net emissions released during the future production of Lundin Energy's Johan Sverdrup net barrels, which amounts to approximately 100,000 b/d of oil today and increasing to approximately 150,000 b/d when Phase 2 of the field comes on stream in the fourth quarter of 2022," Lundin, which is listed on the Stockholm stock exchange and is a third-owned by Sweden's Lundin family, said. It said it aims for all its crude production to be carbon-neutral by 2025.

CEO Nick Walker said: "Since we sold our first cargo of certified, carbon neutrally produced oil from Edvard Grieg earlier this year, we have seen significant interest in the market for this clearly differentiated product. With the certification of our Johan Sverdrup barrels... we now have a significant volume of crude being traded as carbon neutrally produced, which I believe will drive significant value for Lundin Energy."

Equinor has put emissions from the production process in the first year since the field's startup at just 0.17 kg/b of crude, using an operations-focused methodology rather than taking into account earlier stages of the project.