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UK North Sea emissions down three years in a row

Greenhouse gas (GHG) emissions from UK offshore oil and gas production were cut for the third consecutive year in 2022 as the sector continued its drive to reach net zero by 2050, according to the North Sea Transition Authority (NSTA). Meanwhile, Norway and the UK are reportedly ‘on course to achieve significant milestones’ following increased investments, exploration success and production.
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Last year’s estimated 3% reduction in GHG emissions contributed to a 23% drop between 2018 and 2022, according to the NSTA’s latest Emissions Monitoring Report. Furthermore, the North Sea oil and gas industry is reported to remain ‘well on track’ to meet targets to cut emissions 10% by 2025 and 25% by 2027, as agreed in the North Sea Transition Deal (NSTD) with the UK government in March 2021.


However, the report also states that ‘bold measures’ will be required to hit the key target of halving emissions by 2030 – the absolute minimum the NSTA expects from industry, which, it says, ‘must strive to surpass this goal’.


The NSTA warned last year that unless the sector took positive steps, a likely rise in oil and gas production in 2022 would cause emissions to remain flat or temporarily rise. But industry investment in technologies which minimise flaring and fuel-efficiency initiatives meant emissions continued to fall, despite higher production than in 2021. Emissions decreased on 78% of offshore facilities between 2018 and 2022, in some cases through permanent shutdowns, but for 59% of those, through active emissions reduction initiatives.


‘These measures not only support the UK’s net zero goals – they also bolster energy security by saving gas that can be used to keep lights on, homes heated and businesses running,’ notes the NSTA.


It should be noted that tackling direct Scope 1 and Scope 2 emissions is only a small fraction of the battle to decarbonise the energy sector, with most of the oil and gas industry’s environmental impact coming from Scope 3 emissions, ie those created through the end use of the oil and gas produced. However, at present, quantifying and tackling these emissions is outside the control of the oil and companies, which means that most leave Scope 3 emissions outside their decarbonisation targets.


In other news, the NSTA is expected to take on the role of offshore hydrogen transport and storage regulator in the UK, following the conclusion of a consultation on the proposal. The move is intended to support the industry by enabling pioneering projects to obtain the necessary licences and consents and move quickly into operation.


The UK government published its Hydrogen Strategy in 2021, laying out an ambition for 10 GW of low-carbon hydrogen production capacity to be available for use across the UK economy by 2030.


North Sea oil and gas industry boost 
Meanwhile, in the North Sea, Norway and the UK have ‘overcome recent challenges and are on course to achieve significant milestones due to notable increases in investments, exploration success and production’, according to market analyst Rystad Energy. It adds: ‘Solid oil and gas production from the region is also providing indispensable resources to Europe and the rest of the world navigating through the energy transition.’


Investments in Norway’s oil and gas industry are expected to reach a record high of about $21bn in 2023. It comes as several key projects have been approved in recent years, driven by the country’s temporary tax regime, which was introduced to incentivise spending on the Norwegian Continental Shelf.


Despite a decline of almost 15% from a peak of nearly 4.6mn boe/d in 2004, Norwegian oil and gas production is set to rise again. By 2025, production might rise back towards peak levels due to increased focus on gas production and new projects in the pipeline, suggests the market analyst, noting that these volumes ‘will be produced with one of the world’s lowest CO2 footprints and reduce Europe’s dependency on Russian hydrocarbons’.


Oil and gas investments in the UK have not recovered in the same way as in Norway. It is expected that 2023 investments will be around 75% lower than 2013, when investment peaked at nearly $22.7bn. With many developments in the pipeline, however, next year could see the highest number of projects sanctioned in a decade. While three to five projects are sanctioned, on average, in the UK each year, 2024 could see up to 14 new oil and gas fields given the green light, says Rystad Energy. The three largest projects awaiting approval are Rosebank, Cambo and Clair Phase 3.


Latest Norwegian licensing round 
In other North Sea news, the Norwegian Ministry of Petroleum and Energy reports that it has received applications from 25 companies for the Awards in Predefined Areas (APA) 2023 licensing round. Awards are expected in early 2024.


Rising oil price
Meanwhile, in global oil news, the price of oil jumped to a 10-month high last week after Saudi Arabia and Russia announced they were to extend their voluntary production cuts of 1mn b/d and 300,000 b/d respectively until the end of the year. The ICE Brent front month price jumped from $88.5/b on the news; the current price is $92.6/b. 

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