Can we continue with oil and gas?

The world is in the midst a climate crisis that urgently needs to be addressed. So how can we in Equinor play a leading role in the energy transition – while continuing to explore for oil and gas?

Just before Christmas 2022, cheers and applause broke out in our exploration team in Harstad. Why? The drilling rig Deepsea Stavanger had just made a gas discovery in the Obelix Upflank well in the Norwegian Sea, at a depth of 3200 metres.

“It was an incredibly good feeling, and a fantastic Christmas present,” recalls geologist Linn Kristensen.

New discoveries are important

They had indications that there could be gas in this geological structure several years ago – and ever since the licence was awarded in 2020, they have been working intensely on the project.

“Not everyone believed we would find anything. It’s really hard to find more gas – since most of the large structures have already been drilled. But with new data and methods, we can make new discoveries in complex deepwater areas like this,” explains petro-physicist Zoë Cumberpatch.

Obelix Upflank was discovered in near-field exploration – that is, exploration near existing infrastructure. Near-field discoveries don’t need to be so large to be profitable, and can quickly be put into production with lower CO2 emissions and a shorter payback period. 80 percent of Equinor’s exploration is near-field, while 20 percent is aimed at testing new ideas or takes place in less explored areas awarded through licencing rounds.

“Production on the Norwegian continental shelf is decreasing in the longer term, and exploration is critical to mitigate this decline,” explains Kristensen.

The Obelix Upflank discovery is estimated to contain between two and eleven billion standard cubic meters of recoverable gas. In comparison, this equates to the consumption of over one million British households for seven years.

Now, plans are being considered to explore more parts of the structure and to connect Obelix Upflank to Irpa. Irpa is a subsea development that will be tied to the Aasta Hansteen platform. This subsea development will extend the life of Aasta Hansteen by seven years and contribute to both value creation and secure energy supply to Europe.

“It’s important to make new discoveries like this. The world will still need oil and gas in the future, and new discoveries ensure that we can be a reliable supplier of the energy the world needs,” says Kristensen.

Challenging dilemmas

At the same time, the world is in the midst of a climate crisis – and there is an urgent need to reduce emissions. The Norwegian 2050 Climate Change Committee’s report recommended a temporary halt in all oil and gas exploration until a strategy for the final phase of oil and gas is in place. Equinor aims to be a leading company in the energy transition. But how is it possible to have such an ambition while continuing to search for oil and gas?

“There are two main reasons why Equinor continues to explore for oil and gas: Because the world still needs a safe and stable energy supply, and because the energy transition needs financial muscle,” says Camilla Aamodt, Equinor’s strategy manager for exploration and production in Norway.

She also points out that gas exploration can enable new value chains, such as the development of blue hydrogen.

Equinor’s ambition is to continue delivering energy to society with constantly decreasing emissions, achieving net zero by 2050. At the same time, we are significantly increasing our investments in renewable energy and low-carbon solutions: the ambition is that more than 30 percent of Equinor’s gross investments will be directed towards renewable and low-carbon solutions by 2025. By 2030, this will apply to at least half of our investments.

In addition, oil and gas are crucial for meeting the world’s energy needs – which are expected to increase in line with the growing population and living standards.

Even though the development of renewable energy sources – such as wind and solar – is continuously advancing, oil and gas remain the most important energy sources for the majority of the world’s transportation, heating, and electricity. This will continue to be the case for many years to come, as has been confirmed by independent organisations such as the International Energy Agency (IEA).

“This means we must continue to explore to maintain a stable and secure energy supply. We are the largest provider of energy to Europe, and the war in Ukraine has underlined the importance of our contribution to energy security. We supply energy to 170 million people and businesses every day from Equinor, and that’s not a responsibility we take lightly,” emphasises Aamodt.

Did you know…?

Oil and gas have a much higher concentration of energy (energy density) compared to renewable energy sources. That is it also why it takes time to develop enough renewable energy to meet the world’s energy needs.

Let’s consider an example. Every five days, a ship loaded with liquified natural gas (LNG) sails from Hammerfest to Europe, carrying energy equivalent to 1 TWh (terawatt-hours, or 1,000,000,000 kWh). This is equivalent to the annual energy consumption of the town of Drammen in Norway. That same amount of energy takes two whole weeks to produce using all of Germany’s 1,539 offshore wind turbines.

Continuously decreasing emissions from production

In addition, there are significant differences in the emissions from production of oil and gas, depending on where in the world they are produced. Norwegian oil and gas production has considerably lower emissions than the global average – and it’s getting lower all the time.

In December 2022, when phase 2 of the Johan Sverdrup oil field in the North Sea started production, its emissions were 95 percent lower than the global average.

Our ambition is that by 2030, we will have halved greenhouse gas emissions from our own fields.

“This will be achieved through a series of large and small energy efficiency measures on the platforms, by optimising the use of existing installations, and by shutting down certain installations. But the most effective measure is to replace the gas-powered turbines on the platforms with renewable electricity from shore,” says Aamodt.

In this way, we can reduce emissions by a total of 5 million tons of CO₂ per year – which is equivalent to almost 10 percent of Norway’s annual emissions, resulting in a 70 percent reduction in emissions by 2040 and net zero emissions by 2050.

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