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Platts to launch carbon Intensity, offset premiums for major crude fields Oct 1

Highlights

Carbon intensity measure to cover well to storage terminal emissions

Carbon intensity seen becoming a key crude oil quality metric

S&P Global Platts announced Sept. 27 plans to launch monthly carbon intensity calculations and daily carbon offset premiums starting next month for 14 major crude fields including the giant Ghawar field in Saudi Arabia and Iraq's huge Kirkuk field.

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Platts, which publishes the daily Dated Brent price assessment that underpins the majority of the world's oil trade, said the carbon intensity calculations will help producers, investors and shareholders better understand the emissions associated with producing different crude grades, with carbon intensity likely to become another key quality attribute alongside its density and sulfur content.

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 and Shell have pledged to prioritize upstream spending on lower-carbon oil and are expected to increasingly sell off stakes in higher-carbon projects.

"By launching carbon intensity values and price premiums, Platts is bringing much-needed transparency into the market. Awareness of carbon intensity values – while working in tandem with carbon markets, both voluntary and compliance-based, will accelerate investments into projects that will reduce or avoid greenhouse gas emissions for the future," Platts' head of low carbon market analytics Deb Ryan said in a statement.

Last week the Oil and Gas Climate Initiative -- a group of 12 of the world's biggest oil and gas majors -- updated targets for reducing the carbon emission intensity of their upstream operations to 17 kg CO2e per barrel of oil equivalent. The collective methane and carbon intensity of upstream oil and gas operations was 0.23% and 21.1 kg CO2e per barrel of oil equivalent, respectively, in 2019, according to the OGCI.

Platts said it plans to begin publishing monthly assessments of oil field and related transportation carbon intensity in kilograms of carbon dioxide equivalent per barrel of oil equivalent (kgCO2e/boe) from Oct. 1 to reflect the impact of greenhouse gas emissions from wellhead production to the storage terminal. It said it will also publish daily assessments in $/boe and $/b respectively using the daily Platts Carbon Removal Credit (CRC) voluntary carbon credit assessment.

The upstream carbon intensity assessments take into account the production, flaring and venting, maintenance activities, production processing and transport to the storage hub to identify the main sources of emissions, relevant to specific operations.

In addition to the Ghawar and Kirkuk fields, the new assessments will cover crude from Girassol (Angola), Tengiz (Kazakhstan), Johan Sverdrup, Ekofisk (Norway), Cold Lake (Canada), Bakken, Eagle Ford, Mars-Ursa, Permian Delaware, Permian Midland (US), Tupi (Brazil) and Cantarell (Mexico).