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G r e e n t e c h n o l o g ie s f o r u p s t r e a m o il a n - - PowerPoint PPT Presentation

Jan 21, 2023 219 likes •615 views

G r e e n t e c h n o l o g ie s f o r u p s t r e a m o il a n d g a s AOGC, KUALA LUMPUR SESSION CREATING DISRUPTION, MANAGING RISKS JUNE 24 ND , 2019 JARAND RYSTAD RYSTAD ENERGY Global GHG emissions: Energy 62%; Oil&Gas 37%,

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G r e e n t e c h n o l o g ie s f o r u p s t r e a m o il a n d g a s

AOGC, KUALA LUMPUR SESSION CREATING DISRUPTION, MANAGING RISKS JUNE 24ND, 2019 JARAND RYSTAD RYSTAD ENERGY

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Global GHG emissions: Energy 62%; Oil&Gas 37%, Up-midstream: 6%

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6 8 11 13 18 19 23

104

Upstream CO2 footprint range from 6 to 104 kg CO2/barrels produced

3

CO2Emission from upstream activity KG CO2 per bbl Norway has had CO2 tax since 1990. Other

  • nshore

Offshore shelf Middle East

  • ffshore

shelf Norway North American Shale Offshore deepwater Middle East Onshore North American Oil sands

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Sources of CO2 emission; example from Norway

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Exploration rigs (1%) Rigs/Drillships (4%) Production, platform (82%) Transport/onshore (14%) 1% Turbines 74% Flaring – 6% Motors – 2% Motors 3% 0.1% 1% Turbines 11% Flaring 2% Other* 2%

*E.g. boilers, well testing, minor leakages Source: Norsk Olje and GassNPD; Rystad Energy research and analysis

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Sources of CO2 emission; example from Norway

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Exploration rigs (1%) Rigs/Drillships (4%) Production, platform (82%) Transport/onshore (14%) 1% Turbines 74% Flaring – 6% Motors – 2% Motors 3% 0.1% 1% Turbines 11% Flaring 2% Other* 2%

*E.g. boilers, well testing, minor leakages Source: Norsk Olje and GassNPD; Rystad Energy research and analysis

53 % 25 % 12 % 9 %

Compression Export compression Injection Power:

50% water injection 25% gas compression 5% oil export 20% utilities

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Floating wind farms to feed power to five giant platforms in Norway

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  • 11 turbines

each 8 MW

  • 35% of

power demand

  • Reduce

emissions by 200,000 tonnes per year

  • Equinor
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Floating offshore wind projects. A huge market if prices comes down

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Surplus power could produce H2 for back-up power and feed vessels

Source: Maritime forening Sogn og Fjrodane consider to create H2 cluster around a concept as this

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2021: First H2 vessel

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Renewable power from shore big potential, ideally as HVAC

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  • If onshore powersupply is renewable, electrification
  • f offshore platforms has a high emission reduction

potential

  • Long distance HVDC conventional solution, since

HVAC creates reactive effect harming source grid

  • However; long distance HVAC, if enabled, has

benefits – Avoid converter stations, as many platforms do not have deck space – FPSOs with turrets cannot take HVDC

  • Equinors Martin Linge (start Q1 2020) is world

record long distance HVAC with 163 km from shore – Enabled by new Static Var compensator (Siemens) absorbing reactive power before grid access

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Compact topside CCS to capture CO2 from exhaust and inject

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  • Compact topside CCS to capture CO2 from

the exhaust gas from turbines on a platform

  • Self contained power system: Secures green

supply of power and heat

  • Captured CO2 disposed in the injected water.

(CO2 levels too small for CO2 EOR)

  • Dependent on easy access to exhaust gas

and available deck space – pose challenges to brownfield retrofits

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Reduce CO2 emissions through direct seawater injection from seafloor

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  • Water injection

drives 40% of emissions from turbines

  • Avoid topside

lifting and treatment of water reduce power consumption (and capex)

  • Full pilot as

Ekofisk currently with NOVs Seabox

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Globally, reduced flaring will have the biggest impact

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Norway Middle East Offshore shelf Offshore shelf Offshore deepwater North America Oil sands Other

  • nshore

Middle East Onshore North America Shale 0.5 1.1 2.4 3.8 4.1 6.6 7.7 10.4 (55%) (34%) (35%) (25%) (35%) (40%) (1%) (6%) Emission from flaring, by segment globally KG CO2 per bbl (share of total upstream emissions) Norway has had CO2 tax since 1990. Norway has been focusing on flaring reduction through digitalization since 2014 and reduced emissions further by 39% versus rest

  • f world 9%
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Methane leakages significant both upstream, midstream and downstream

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OGCI addressing methane leakage – ambition similar to CO2

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New members 20 kg Co2 per boe in

  • upstream. Assuming

0.32% methane leakage = 0.4 kg methane Next two decades, climate effect is 84 times (33 kg) (heat absorbance), or 32 times (13 kg) whwn looking at all effects

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The next step is to invest in renewables – cost getting competitive

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Offshore wind projects are getting bigger and bigger

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12 MW turbine sits 260 metres high with a 220 metre rotor diameter

35 m

270 m

Use picture of Petronas Towers

35 m

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Dau Tieng 1 & 2 Capacity: 450 MWp

Developer: B.Grimm (Thailand) EPC: PowerChina Huadong Tracking: Fixed CAPEX: 545.84 MAUD (387 MUSD) CAPEX per MW: 0.86 USD/MW Full load hours: 1800 Capacity factor: 0.1 Operational cost: USD 4 mill/year (30 workers) Production per year: 800 GWh Lifetime production: 2.4 TWh Lifetime Cost: 500 MUSD Cost per kwh: 21 cent

Solar PV also go offshore: Dau Tieng 1&2 in Vietnam; 450 MW

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Renewables investments to surpass upstream investments in Asia Pac

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10 20 30 40 50 60 70 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Upstream oil and gas investments in new fields USD billion invested in Asia Pac (excluding China, including India)

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Renewables investments to surpass upstream investments in Asia Pac

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10 20 30 40 50 60 70 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 USD billion invested in Asia Pac (excluding China, including India) Investments in renewables Upstream oil and gas investments in new fields

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But first – shale is the biggest disruption - could take 25% market share

Source: Rystad Energy UCube

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Global production of liquids and gas Thousand barrels per day

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Energy financing to change; Shale - a step on the road

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The offshore megaproject era 1970 – 2015 Large projects, bespoke USD 1 – 10 billion 80% - 85% equity 15% - 20% debt Finance by oil companies Subsurface risk, project risks, market risks, upside potential risks The shale oil and gas era 2015 – 2035 Well by well, industrialized farming USD 5 – 50 million 30% – 50% equity 50% - 70% debt Finance by PE and funds + operational cash + asset sales Less subsurface risks, project risks and market risks, production can be hedged The renewables era 2035 – 2100 Plant by plant, manufactirung USD 10 million – 10 billion 5% – 15% equity 85% - 95% debt Fiannce by pension funds and banks primarily Often governmentall guaranteed sales contracts and limited project risks

18 60 90 Offshore Shale Renewables

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…and geopolitical consequences follows

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The OPEC+ era 1970 – 2015 A few countries controls large energy resources. US care about energy security and it is a key element in foreign policy. Nations collapse with the oil price, e.g. Soviet union and Venezuela Middle East and Russia prosper from energy dominance The shale oil and gas era 2015 – 2035 One nation, USA, controls up to 25% of global energy resources. Energy security no longer key driver in US foreign politics. Self confidence to enforce sanctions on Iran, Venezuela and Russia Less focus on building and maintaining international institutions like WTO. US isolationism legtimace similar policies elsewhere. Opens up a space for China, Russia and others. Middle East and Russia shift to east for markets The renewables era 2035 – 2100 Solar, wind and storage will be build in all countries. Switch from

  • il to electricity and gas in
  • transportation. Many smaller

energy markets rather than one global. Energy dominance less important in geopolitics. US influence will

  • decline. A more balanced world.

Trade, technology and cooperation matters

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SLIDE 24

your oil & gas knowledge house

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Jarand Rystad

CEO Rystad Energy jarand.rystad@rystadenergy.com Oslo, Singapore, Dubai, Tokyo, Sydney, Bangalore, Moscow, London, New York, Houston, Rio, Stavanger, Aberdeen, Ålseund Consulting: Strategy, Benchmarking; Market research; Transaction DD, Macro Databases: Upstream (Ucube), RigCube, OilService, Subsea, Shale wells; Shale Economics; Global E&P, Carbon Footprint

THANK YOU

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And resources are abSolar full load hours

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Wind onshore full load hours

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East coast US and Canada

  • Few projects in the

medium term Buenos Aires

  • No planned

projects Bass Strait

  • Star of the South

Japan China North West Europe

Offshore wind market potential

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Peak oil supply movement – dead?

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  • 0.9% pa
  • 1.6% pa
  • 2.2% pa
  • 2.6% pa
  • 2.7% pa
  • 3.1% pa

Peak oil demand however, very relevant

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Simulation without OPEC+ cuts (back to Oct 2016 levels) and with shale

Source: Rystad Energy Dynamic Oil Price Simulation Model

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Global demand and supply Million bbl/d

4 years cycles if uninterupted

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Simulation with active OPEC+ market mgmt; Steady oil price at 65 – 85 USD/bbl

Source: Rystad Energy Dynamic Oil Price Simulation Model

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Global demand and supply Million bbl/d

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However; OPEC+ needs to cut very deep – will they do?

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Hybrid situation; OPEC+ cuts for a while, but also pushing market share (in 2021)

Source: Rystad Energy Dynamic Oil Price Simulation Model

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Global demand and supply Million bbl/d 2021/22 Downturn?

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Today: OPEC has to cut further…

32.7 32.0 31.4 30.3 31.0 30.5 29.7 29.1 29.1 28.6 28.5 28.5 31.8 31.7 32.1 32.2 30.6 30.0

25.0 26.0 27.0 28.0 29.0 30.0 31.0 32.0 33.0 34.0 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 Call-on-OPEC crude OPEC production

Source: Rystad Energy research and analysis, OilMarketCube

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Call-on-OPEC crude (demand) versus OPEC actual crude production Million barrels per day

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…but including outages and IMO 2020 crude demand looks better…

Source: Rystad Energy research and analysis, OilMarketCube

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Call-on-OPEC crude (demand) versus OPEC actual crude production Million barrels per day 32.7 32.0 31.4 30.3 31.0 30.5 29.5 28.8 28.6 28.2 28.1 28.1 0.2 0.2 0.5 0.5 0.3 0.3 0.2 0.4 1.0 1.3 1.0 0.6 0.5 0.5 0.5 0.5 0.5 0.5 31.8 31.7 32.1 32.2 30.6 30.0 30.4 30.0 30.6 30.4 30.0 29.6

25.0 26.0 27.0 28.0 29.0 30.0 31.0 32.0 33.0 34.0 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 Call-on-OPEC crude Demand risk IMO 2020 Unplanned outages OPEC production

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…but Iran, Libya and Nigeria downside could create stock draws (unless KSA respond)

Source: Rystad Energy research and analysis, OilMarketCube

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Call-on-OPEC crude (demand) versus OPEC actual crude production Million barrels per day 32.7 32.0 31.4 30.3 31.0 30.5 29.5 28.8 28.6 28.2 28.1 28.1 31.8 31.7 32.1 32.2 30.6 30.0 30.3 30.2 30.4 30.6 30.6 30.5

25.0 26.0 27.0 28.0 29.0 30.0 31.0 32.0 33.0 34.0 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 Call-on-OPEC crude Demand risk IMO 2020 OPEC production OPEC supply risk scenario

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OPEC+ has to accept the shale revolution…

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Overview of US counties with water issues (high water stress, groundwater depletion or drought) and fracking water withdrawal compared to total county water withdrawal.

Social license to operate: No show stoppers despite some conflicts

Water usage by fracking compared to total county water withdrawals

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  • Mr. Jarand Rystad, Chief Executive Officer, Rystad Energy, Norway
  • Sharing of the latest and future clean technologies that can be deployed in the energy sector.
  • Sharing of experience from a service company on what it takes to successfully get on the path

to energy transition, while drawing on the vast experience that the company has in delivering energy transition solutions to its clients in the energy space, both corporates and governments.

  • Advise on the preparation and tools required to solve the energy trilemma and smoothly move

to the next phase.