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North Sea oil and gas sector has decades-long energy transition role: executives

Highlights

North Sea region to be exporter of technology, expertize

BP 'quite happy' with UK West of Shetland oil assets

Equinor international head sees 'incredible' global opportunities

  • Author
  • Nick Coleman
  • Editor
  • Kshitiz Goliya
  • Commodity
  • Coal Energy Transition

The oil and gas sector will continue playing a role in the energy transition for "decades to come," from decarbonizing operations to capturing emissions at industrial facilities, BP production and operations head Gordon Birrell told the Offshore Europe conference Sept. 7.

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Birrell, together with executives from Norway's Equinor and UK producer Harbour Energy, stressed the ability of the North Sea industry to export energy expertise and technology around the world, including carbon capture and storage, hydrogen and offshore wind projects.

However, BP's anticipated 40% reduction in oil and gas production in the coming decade does not mean the company will "starve" its upstream business of investment, Birrell said, adding it had a great "hopper" of upstream opportunities globally.

He also said the UK major was "quite happy" with its West of Shetland oil portfolio, which lies at the core of BP's UK business but has run into some challenges in terms of production levels.

Birrell highlighted joint efforts by the industry to redesign the supply of power to oil and gas facilities, enabling supply from subsea cables and renewable sources, saying this would be "probably the single biggest intervention for eliminating emissions from North Sea offshore operations."

He said BP's expectations of reduced oil and gas production in the coming years "puts at a premium the things where the industry in the North Sea has shown real leadership," referring to curbing emissions and flaring, as well as carbon capture and storage projects designed to decarbonize industry along the UK coast.

"As a sector we face significant challenges as the pace of this energy transition accelerates [however] there is a very, very important role for the oil and gas industry to play for decades to come. This is pretty much true for any [energy] scenario you may choose to take," Birrell added.

He highlighted the Net Zero Teesside and Zero Carbon Humber projects -- intended to decarbonize UK heavy industry -- as well as BP's recent Scottish wind power lease bid alongside Germany's EnBW, saying: "Increasingly net zero will involve more opportunities for North Sea businesses to collaborate."

West of Shetland

Birrell also defended BP's biggest UK investments of the last decade at the West of Shetland Clair and Schiehallion fields, saying platforms put in place in the second half of the 2010s were still "relatively new" and the industry's "best brains" were tackling the "very complex" geology of the Clair heavy oil field. Both fields have fallen short of production expectations, with one partner, Chrysaor, last year noting Schiehallion faced sand management issues as well as the likely impact of reduced drilling.

"In BP we've done a lot over the last five years to rationalize, optimize, improve our portfolio. We're quite happy with our West of Shetland portfolio right now. Clearly there are some relatively new assets... that we have in the form of the new Glen Lyon [platform] and the Schiehallion field. We have the two platforms in the Clair field that are relatively new, that's a very complex reservoir," he said.

"We have our best brains engaged in trying to figure out the reservoir there with our partners in these fields."

Fellow North Sea executive Phil Kirk, head of Harbour Energy's European operations, added progress was being made in the current collaboration by a number of companies aimed at electrification of the central North Sea sector, saying "We're beginning to see a light there."

Global opportunities

More globally, "extraordinary" differences in controlling upstream emissions around the world were highlighted by Al Cook, head of international upstream operations at Equinor. He noted that Norway's flagship Johan Sverdrup field produces less than 1 kg of CO2 per barrel of oil produced, while for some operators around the world the equivalent figure was over 100 kg, with a similarly "vast difference" for methane control performance around the world.

"In Norway we banned routine flaring back in the 1970s and yet we've still got this going on today. It's this juxtaposition that is an incredible opportunity... to transfer the skills from where we're best to where the industry is at its worst," Cook said.

"As an industry and as companies we should be seeking to reduce carbon emissions wherever we invest, wherever we operate, and doing our best to do that before we divest," Cook said, referring to moves by some companies including his own to shed overly carbon-intensive assets.

"We can do an awful lot by reducing emissions in North Africa, in the Middle East, by 50% rather than continuing to perfect what we've got in the best places in the world," Cook added.