The firm has already taken some steps to reduce its emissions, writes Alberto Araujo
State-owned PetroEcuador is adapting to the energy transition and climate protection needs by setting greenhouse gas (GHG) emissions reduction targets.
The company aims to reduce its GHG emissions by 410,000t CO2 equivalent (CO2e) by the end of 2023 — compared with 2022 — by 610,000t in 2024 and by 1.32mn t/yr in 2025-30, as outlined in its decarbonisation and sustainability plan.
PetroEcuador, which estimates that it emitted around 13mn t of CO2e last year, is in the process of contracting an auditor to verify its emissions.
The company produced an average of 378,400 b/d of crude in January-June, or 82pc of the country's total output in the period. It produced 77pc of the 280,200 b/d of oil products consumed domestically in the first half of the year.
It is also the company with the highest GHG emissions in the country — estimates show that it accounted for around 12pc of Ecuador's total emissions in 2018. It did lower its emissions by 2.7mn t CO2e in 2010-22, or 225,000 t/yr, as it focused mainly on supplying renewable electricity to its fields and facilities, allowing it to reduce its use of power generated from diesel or fuel oil.
PetroEcuador will focus on two main projects to meet its reduction goals — the recovery of about 150mn ft³/d (1.5bn m³/yr) of associated gas, and the supply of renewable power to its fields through the construction of transmission lines to connect them to the grid.
Both projects are crucial for the company to lower its emissions, since around two-thirds of the GHG emissions released by the firm's operations come from its oil exploration and production segment, PetroEcuador energy efficiency co-ordinator Lorena Bracho explains. If both projects come to fruition, PetroEcuador will achieve its carbon reduction goals and could even hit carbon neutrality by 2050, according to Bracho.
North by northeast
Both projects require $1bn in private investment. The firm launched a tender for each project between December 2021 and April 2022, without success. The gas recovery project was declared null and void by PetroEcuador in March, although several firms made bids. The tender to build the northeast transmission grid failed to elicit any firm interest.
The company expects to relaunch the tenders soon and is working to make them more attractive, according to PetroEcuador environmental management specialist Carmen Peralvo.
PetroEcuador also plans to invest around $93mn until 2030 in another 20 projects to reduce GHG emissions, including the installation of solar panels at 15 natural gas stations and fuel distribution plants, and projects to identify and block methane leaks from its operations.
The company's decarbonisation plans could face some challenges, given its status as a state-owned entity, according to Carlos Grimaldi from regional petroleum and renewables companies association Arpel. The company could experience difficulties in gaining access to the latest technology and capital, while its obligation to follow political guidelines could delay its decarbonisation plans, Grimaldi says.
