Germany's Wintershall Dea vows net-zero emissions from upstream by 2030

London — Germany's Wintershall Dea vowed Nov. 23 to be net-zero greenhouse gas emissions from its upstream activities by 2030, but rejected a corporate pivot toward renewable energy investment.

European oil and gas producers are increasingly setting targets for reducing emissions and for achieving net-zero emissions from their operations, with some major players also investing significantly more in renewable energy.

As well as its net-zero target, Wintershall Dea said it would aim to bring its methane emissions intensity below 0.1% by 2025 and to have no routine flaring by 2030. The company has already eliminated routine flaring at its operated assets, it said.

Wintershall Dea said it aimed to achieve net-zero operations by 2030 by increasingly focusing on gas and crude oil reservoirs that can be produced "relatively CO2-efficiently".

At the same time, strict emissions management will be pursued further, it said.

"With these two measures alone, Wintershall Dea aims to reduce its own CO2 emissions by more than 50%. This will be complemented by investments in nature-based mitigation solutions -- like forest protection and reforestation -- and the development and use of new mitigation technologies."

Those include participation in carbon capture storage projects (CCS) in the North Sea and investments in hydrogen projects.

"During the next 10 years, the company intends to invest around Eur400 million ($475 million) in reducing and offsetting greenhouse gas emissions," it said.

No renewables pivot

CEO Mario Mehren said on a call with journalists it could not be "pure business as usual" for companies like Wintershall Dea and the company's heavily gas-focused portfolio was "well positioned" for the transition.

"We are not going to change our strategy toward the renewables sector -- this is simply not where our core expertise lies," Mehren said.

Wintershall Dea has repeatedly said gas would play an essential role in the energy transition, especially as it can be used to produce blue hydrogen.

Oil, it said, would also play a role, but "it should not be burned as a fuel, but used as a raw material for many products such as medicines, new technologies and everyday products".

"Today, our focus is clearly on natural gas," Mehren said, pointing to solutions such as CCS and hydrogen.

Production outlook

In its Q3 report, Wintershall Dea said its production averaged 606,000 b/d of oil equivalent in the quarter, a 3% increase year on year.

CFO Paul Smith said the company was on track to be within its guided production range set before the coronavirus pandemic began, with the latest guidance at 610,000-615,000 boe/d.

Smith said the company's near-term development projects were progressing well, with the Raven field in Egypt and the Dvalin field in Norway expected to come on stream "around the turn of the year".

Raven is part of BP's West Nile Delta gas field complex and was already delayed to the end of 2020 having been scheduled to start at the end of 2019.

Dvalin, expected to have peak output of some 8 million cu m/d, was approved in 2017 and is one of the key projects expected to offset falling gas output elsewhere on the Norwegian Continental Shelf.

In Russia, Smith said the Achimov 4/5 project was also due to start up in late Q1 2021.

"These developments are very important for us and will increase our overall production next year and the year after," Smith said.

However, the pandemic had led to some project delays in Norway, with the Njord and Nova projects impacted by a "slowdown in construction and offshore commissioning due to COVID restrictions", he said.

"We now expect both of these projects to come on stream with some delays -- Njord around the end of 2021 and Nova in the first half of 2022," Smith said.

Mehren, meanwhile, also said Wintershall Dea remained ready to be floated, but a decision on an IPO depended on market conditions.

"We are ready to launch when the market is more constructive than it is at the moment," he said.