Environment, Social and Governance
BP to transition from IOC to integrated energy company
BP has introduced a new strategy to pivot itself from being an international oil company (IOC) to an integrated energy company (IEC).
Within 10 years, it aims to have increased its annual low carbon investment 10-fold to around $5 billion a year. By 2030, it aims to have developed around 50 GW of net renewable generating capacity – a 20-fold increase from 2019.
Over the same period, its upstream oil and gas production is expected to be reduced by at least 1 million BOED, or 40%, from 2019 levels (from 2.6 million BOED to around 1.5 million BOED).
The company also set out a new financial frame to support a fundamental shift in how it allocates capital toward low carbon and other energy transition activities. The combination of strategy and financial frame is designed to introduce a balance between committed distributions, profitable growth and sustainable value.
One focus area will be low-carbon electricity and energy, which includes building scale in renewables and bioenergy, seeking early positions in hydrogen and CCUS, and building out a customer gas portfolio to complement these low-carbon energies.
Resilient and focused hydrocarbons is another focus area. However, BP noted that it will not seek to explore in countries where it does not already have upstream activities. The company intends to complete its ongoing major projects, decrease capital intensity and continue to high-grade its portfolio.
Earlier this year, BP announced its net zero ambition and aims. By 2030, the company aims for emissions from its operations and those associated with the carbon in its upstream oil and gas production to be lower by 30-35% and 35-40%, respectively.
Halliburton launches innovation lab for clean energy
Halliburton recently launched Halli-burton Labs, an environment where entrepreneurs, academics, investors and industrial labs can come together to advance cleaner and affordable energy. The aim is to accelerate the growth of early-stage companies by providing access to lab facilities, technical expertise and a business network.
Located at the company’s Houston headquarters, Halliburton Labs adds support to the innovation community and fosters an open environment where participating companies can collaborate to solve current and future clean-energy challenges. Accepted applicants will work with Halliburton Labs advisors to advance their products, secure needed financing and prepare for further scale.
Jeff Miller, Chairman, President and CEO of Halliburton, said: “We firmly believe that oil and gas will remain an affordable and reliable energy resource for decades to come. At the same time, we recognize the importance of developing alternative energy sources. We are excited to help advance solutions that have the potential for a long-term, meaningful impact and that align well with our sustainability objectives.”
Nanotech, a materials science innovator in the fireproofing and insulation space, has already moved into Halliburton Labs as the first participant. Additional companies will join as the formal application process goes live in September. Interested companies must have progressed their technology beyond the proof-of-concept phase.
IHS: More renewables now powering oil and gas operations
Oil and gas field operations are beginning to be fueled by a surprising source – renewable energy. Such sources are being used to reduce the carbon emissions associated with operations, according to IHS Markit.
When the industry first deployed such technologies in the early 2000s, there were fewer than 15 of these renewable energy projects. However, the pace of growth has picked up notably over the past couple of years. IHS Markit now tallies more than 45 announced projects in its Oil and Gas Field-based Renewable Energy database, with 13 announcements made in 2018 and 15 made in 2019.
“Stakeholder pressure to reduce emissions is a factor,” said Judson Jacobs, Executive Director, Upstream Energy for IHS Markit. “It is also about steeply declining costs for renewables and the industry’s growing familiarity and experience with these technologies. And there are tangible improvements to operational performance that go along with using them.”
Hess releases new sustainability report
Hess has published its 23rd annual sustainability report, providing a comprehensive review of the company’s strategy and performance on ESG programs and initiatives. Highlights include:
- The establishment of a multidisciplinary emergency response team to oversee plans to reduce the risks of COVID-19;
- A 36% reduction in its severe safety incident rate;
- An approximately 60% reduction in Scope 1 and 2 equity greenhouse gas emissions;
- A discussion of material issues that the company has mapped to UN Sustainable Development Goals as part of a materiality assessment; and
- The company’s second annual carbon asset risk assessment.
Neptune energy joins clean hydrogen alliance
Neptune Energy has joined the European Clean Hydrogen Alliance, which was recently launched to support efforts for Europe to become carbon neutral by 2050.
“We believe hydrogen should play an important role in enabling decarbonization and are already advancing efforts through our PosHYdon pilot, the world’s first offshore green hydrogen project,” Lex de Groot, Managing Director of Neptune Energy, said.
With the PosHYdon project, electricity generated by offshore wind turbines will be used to power a hydrogen plant on the Neptune-operated Q13a platform, converting seawater into demineralized water, then into hydrogen via electrolysis.