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ISSN 2753-7757 (Online)

Decarbonisation challenges in the upstream sector


6 min read

Sleipner oil and gas facilities at sea Photo: Harald Pettersen/Equinor
Upstream oil and gas companies are under increasing pressure to decarbonise โ€“ Equinor has been capturing CO2 and using the gas for enhanced oil recovery for two decades on the Sleipner field in the Norwegian North Sea

Photo: Harald Pettersen/Equinor

Pressure is building on oil and gas companies operating upstream to decarbonise. Here, Jessica Brewer, Principal Analyst Upstream at Wood Mackenzie, examines the policies, initiatives and challenges facing oil and gas companies as the sector addresses the path towards net zero.

As the energy transition unfolds, upstream companies are coming under increasing pressure to decarbonise. There are strategic advantages to producing less carbon-intensive hydrocarbons. Indeed, some consumers looking for cleaner, more sustainable end-products may even consider paying a premium.


Lower emissions operations not only offer environmental gains, but actually boost value, with greater production efficiency, reduced leakage, and the capture (and monetisation) of fugitive flare gas and methane.


Net zero targets for Scope 1 (direct) greenhouse gas (GHG) emissions and Scope 2 (indirect from electricity supply to operations) emissions are now an industry standard. However, itโ€™s a very different story for Scope 3 (indirect value chain) emissions. More and more companies are announcing bold commitments via carbon reduction, net zero and/or Scope 3 targets, but more action is needed if the sector is to successfully achieve decarbonisation.


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