Cop: Oil, gas firms pledge emissions cuts from operations

  • Market: Crude oil, Natural gas
  • 12/02/23

Dubai, 2 December (Argus) — A total of 50 oil and gas companies, representing over 40pc of global oil production, today signed the Oil and Gas Decarbonisation Charter, pledging to “net-zero operations” by 2050 and “near-zero upstream methane emissions” by 2030.

Signatories promised to end routine flaring by 2030. The charter also commits them to “work towards industry best practices in emission reductions”, as well as increase transparency, including through measuring, monitoring and reporting on their emissions and progress in cutting these. The companies have also pledged to invest in “the energy system of the future including renewables, low-carbon fuels and negative emissions technologies”.

The charter is part of the overarching Global Decarbonisation Accelerator, launched today at the Cop 28 UN climate summit in Dubai, UAE, where 117 countries also agreed to triple the world's renewable energy generation capacity and to double the global average annual rate of energy efficiency improvements.

Of the oil and gas charter signatory firms, over 60pc are national oil companies. They include the UAE's Adnoc and Snoc, Norway's Equinor, Kazakhstan's Kazmunaigas, Nigeria's NNPC, Indonesia's Pertamina, Brazil's Petrobras, Saudi Arabia's Aramco and Azerbaijan's Socar. International oil company signatories include BP, Eni, ExxonMobil, Lukoil, Mitsui, Occidental, Repsol, Shell and TotalEnergies.

“Whilst many national oil companies have adopted net zero 2050 targets for the first time, I know that they and others, can and need to do more. We need the entire industry to keep 1.5°C within reach and set even stronger ambitions for decarbonisation”, Cop 28 president Sultan al-Jaber said. Al-Jaber is chief executive of the UAE's state-owned Adnoc.

“The oil and gas companies that joined the charter committed to reach net-zero emissions by 2050, but this is only for their own operations,” research organisation WRI global climate programme director Melanie Robinson said, stressing that it does not cover the fuel they sell.

Civil society organisation Oil Change International Oil Change International David Tong also warned that the deal was filled with “recycled commitments” and that the pledge cannot be a substitute for a formal negotiated outcome at Cop 28.

On methane Robinson said that is encouraging that some national oil companies have set methane reduction targets for the first time, but pointed to the fact that most international oil and gas companies already have “stringent requirements” and that measure to verify progress towards the targets will have to be put in place to hold oil and gas companies accountable.

Limiting warming to 1.5°C would require hydrocarbon production to fall by 75pc by 2050, according to IEA net zero pathway scenario. Oil and gas operations account for nearly 15pc of energy-related greenhouse gas emissions, according to the IEA, while consumption of oil and gas accounts for another 40pc.

Send comments to feedback@argusmedia.com

gg 4.1





Copyright © 2023 Argus Media Ltd - www.ArgusMedia.com - All rights reserved.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
03/04/24

India’s Torrent Power to supply gas for peak summer

India’s Torrent Power to supply gas for peak summer

Mumbai, 4 March (Argus) — India's private-sector Torrent Power is set to supply electricity from a gas-fired power plant to a unit of state-owned NTPC to meet peak power demand during summer, which will boost use of imported LNG. Torrent won a competitive bid to supply a minimum of 388mn KWh from a contracted capacity of 770MW, as per the agreement with NTPC Vidyut Vyapar Nigam (NVVN) on 1 March. Torrent operates a 1200MW plant in Dahej on India's west coast. The supply of power will start from 16 March and continue till 30 June, a period the government regards as a high-demand phase. Supply could be extended until 15 July, Torrent Power said. The award will increase imports of LNG as India does not have enough domestic gas to supply power plants. The government has been prioritising domestic gas supplies for the city gas distribution network and the fertilizer sector over the past year. India's LNG imports for the power sector more than doubled on the year to 2.23bn m³ during April 2023-January 2024, oil ministry data show. India's power demand is typically high during summer and the post-monsoon period. India's peak electricity demand is likely to touch 256.5GW in 2024 from a record 243GW in 2023, according to government estimates. The government has allowed NVVN to sell the procured gas-based power supplied by Torrent on the energy exchange to cover higher generation costs. Delhi had first introduced the scheme of harnessing gas-based power generation to overcome the country's rising power demand in 2023. It had approved a mechanism to operate around 5000MW of NTPC's gas-based capacity during summer 2023 and also tendered to procure another 4,000MW of power from gas-based capacity (other than NTPC plants). Torrent Power won the bids for both 2023 and 2024. Torrent Power will increase capacity utilisation at its plants to meet peak power demand this year. Torrent Power has pegged the minimum revenue at 4.4bn rupees ($53mn) for the minimum quantity sold. NVVN will therefore have to sell the power for Rs11.3/KWh on the exchange to reach breakeven, according to Argus calculations. India's power demand began surging since 2022 with day-ahead power tariffs in summer ranging from Rs10/Kwh to as high as Rs19/Kwh on the Indian Energy Exchange, as the Indian economy recovered rapidly following the pandemic. But tariffs moderated last year when more electricity was available for sale. Tariffs rose to a peak of Rs9/Kwh in March, and averaged around Rs5/Kwh for the entire month. Prices fell in May but a hotter-than-expected summer sent the average higher to Rs7/Kwh in August 2023. The average tariff in February 2024 was close to Rs5/Kwh, compared with Rs6/Kwh in January. A hotter-than expected summer this year will also likely send tariffs higher. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read More
News

Philippine firms launch first integrated LNG facility


03/04/24
News
03/04/24

Philippine firms launch first integrated LNG facility

Singapore, 4 March (Argus) — Three of Philippines' top energy firms have come together to launch the country's first integrated LNG facility in Batangas city, according to private-sector utility Aboitiz Power on 4 March. The utility owns several power plants across the country. The two other firms are SMC Global Power Holdings, subsidiary of conglomerate San Miguel (SMC), and power generator Meralco. The project is valued at $3.3bn, and is the country's largest such project to date. As part of the deal, all three firms will acquire an LNG import and regasification terminal located in Batangas and owned by domestic firm Linseed Field, to store and process the super-chilled fuel. The LNG will in turn be destined to feed two gas-fired power plants owned by SMC — the 1.2GW Ilijan power plant and a new 1.3GW combined cycle power facility which is likely to start operations by the end of 2024. Aboitiz Power and Meralco will also jointly invest in the two plants. This latest deal aligns directly with the Philippine Department of Energy's (DoE's) target for natural gas to make up 26pc in the country's power generation mix by 2040. Natural gas comprised only 4.2pc of the Philippine energy mix in 2022, according to DoE data. "The collaboration among the three power companies represents a shared commitment to innovation, reliability, and environmental stewardship in the energy sector," the three firms said in a press statement. This is an unprecedented move in an industry that has traditionally been marked by competition instead of cooperation, traders said. But some obstacles still remain. Philippine utility First Gen announced just last week that it could consider not awarding a tender that it issued on 19 February, citing a potential lack of commitment from Meralco to take and pay for part of the cargo. The firm was seeking a cargo for delivery to Batangas, with the gas intended for the 1GW Santa Rita, 500MW San Lorenzo, 97MW Avion and 420MW San Gabriel power plants. The cargo was sought to ensure full LNG stocks ahead of the peak summer demand months, First Gen said. By Rou Urn Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Australia’s oil, gas search spending falls in Oct-Dec


03/04/24
News
03/04/24

Australia’s oil, gas search spending falls in Oct-Dec

Sydney, 4 March (Argus) — Australian oil and gas exploration spending fell in October-December, after recovering to its strongest level since the pandemic in the previous quarter. Total expenditure for the quarter was at A$258mn ($168mn), down by 20pc compared to the previous quarter , and led by a significant A$61mn reduction in offshore exploration, according to Australian Bureau of Statistics (ABS) data. But total expenditure was up by 21pc on the year. Onshore exploration was largely stable from the previous quarter and rose by 26pc from the same period a year earlier. Western Australia (WA), Australia's largest gas-producing jurisdiction, spent A$114mn in October-December, a decline of 27pc compared to July-September, but up by 46pc compared to the same period a year earlier. Australia's largest oil and gas companies, domestic independents Woodside Energy and Santos, last month reported their full-year exploration and evaluation expenses for 2023, with Woodside spending $367mn, down by 12pc from $418mn a year earlier, and Santos reporting it spent $86mn, 42pc down from 2022's $148mn, as both firms progress their sanctioned projects. The A$90mn difference between onshore and offshore spending widened threefold compared to the A$30mn in the previous quarter. Uncertainty regarding regulatory approvals for offshore works such as seismic testing — which the federal government has promised to address this year — may have contributed to the significant decline in spending. Much recent exploration has focused on the onshore Perth basin of WA, where Australian independent Strike Energy completed drilling appraisal wells at its South Erregulla field in late 2023. Fellow domestic independent Beach Energy is nearing completion of the first phase of its Perth basin campaign, the firm said on 12 February, with production testing to occur in January-June at its Trigg Northwest and Tarantula Deep wells. Australia's largest onshore oil producer, Beach, also conducted its Western Flank oil exploration campaign in late 2023, drilling 17 wells in the South Australian Cooper basin. By Tom Major Australia oil, gas exploration spending (A$mn) Offshore Onshore Total Queensland WA NT Oct-Dec '23 84 174 258 67 114 15 Oct-Dec '22 76 138 214 51 78 33 Jul-Sep '23 145 176 322 68 157 17 q-o-q % ± -42 -1 -20 -1 -27 -12 y-o-y % ± 11 26 21 31 46 -55 Source: ABS Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Opec+ members extend voluntary cuts to June


03/03/24
News
03/03/24

Opec+ members extend voluntary cuts to June

London, 3 March (Argus) — Eight Opec+ members, including heavyweights Saudi Arabia and Russia, today said they would extend their latest voluntary supply cuts by three months, to the end of June. The move — announced independently by Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman — essentially represents the extension of a decision in November to continue and deepen ongoing supply cuts. Saudi Arabia said it would keep its 1mn b/d voluntary crude production cut until the end of June — something it first began implementing in July 2023. Russia vowed a mix of crude production and export cuts totalling 471,000 b/d. For April, it said it would cut crude output by 350,000 b/d and exports by 121,000 b/d. In May, its crude production cut rises to 400,000 b/d, with the cut to exports falling to 71,000 b/d. In June, the cut is entirely to production and equals 471,000 b/d. Moscow's announcement represents the only real change to the alliance's supply pledges. All its additional cut promises since August 2023 have applied to exports. In the first three months of this year it said it would reduce crude exports by 300,000 b/d and products exports by 200,000 b/d. The other voluntary production cuts to the end of June comprise 220,000 b/d from Iraq, 163,000 b/d from the UAE, 135,000 b/d from Kuwait, 82,000 b/d from Kazakhstan, 51,000 b/d from Algeria and 42,000 b/d from Oman. These are calculated from the respective countries' 2024 output targets, which were set in June 2023, and are in addition to a previous round of voluntary cuts announced in April 2023 that all last until the end of this year. In their statements, members said the voluntary cuts were aimed at "supporting the stability and balance of oil markets" and would be "returned gradually subject to market conditions." These phrases were echoed in a statement from Opec noting the extension. The cuts have been implemented at a time of production growth from, notably, the US, Brazil and Guyana. The consensus view on demand — from Argus , the IEA, the US EIA and Opec — suggests growing oil demand this year, with Opec itself the most bullish at 2.25mn b/d. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

TMX crude linefill starts in April, May: MEG


03/01/24
News
03/01/24

TMX crude linefill starts in April, May: MEG

Calgary, 1 March (Argus) — The operator of the Trans Mountain Expansion (TMX) in western Canada is calling for a combined 4.2mn bl of crude from shippers starting next month as it prepares to fill the new pipeline, according to producer MEG Energy. Canada's 590,000 b/d TMX pipeline yesterday made a call for 2.1mn bl of linefill in April and another 2.1mn bl in May, said MEG Energy's chief executive Derek Evans today. The combined volume represents almost all of the 4.4mn bl line fill Trans Mountain had previously said it needed for its expansion project. "We see this as incredibly positive," said Evans today. "Good news for not only us, but really everybody in the heavy oil business. That incremental egress will substantially reduce that [heavy crude] differential." Heavy crude producer MEG is a committed shipper on TMX and plans to move 20,000 b/d on the line connecting Edmonton, Alberta, to Burnaby, British Columbia. The now C$34bn ($25bn) project has been mired in construction and regulatory delays, but has only one small section in British Columbia left to finish. Trans Mountain plans by 4 March to start installing the last section of pipe in a tunnel about 100 kilometres east of Vancouver and said this week it intends on starting operations in the second quarter of this year. TMX and the existing Trans Mountain system will combine for 890,000 b/d of capacity for Albertan oil producers to the west coast. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.