We believe there is a significant correlation between cost and carbon intensity – and minimising both is crucial to ensuring that our portfolio is resilient as we move towards a low carbon future.
We intend to reduce the carbon intensity of our oil and gas portfolio, by prioritising high value exploration and development projects with a lower carbon footprint. This shift helps us to reduce the business risk associated with climate change, while also reducing our costs.
We aim to remain an industry leader in carbon efficiency, emitting as little carbon as possible from each barrel produced. The carbon intensity of our operated upstream production is currently around 10kg per barrel of oil equivalent, compared with an industry average of 18kg/boe*. We had already set ourselves an upstream target of reducing that to 9kg CO2/boe by 2020. We are now pursuing a broader ambition to reduce it to 8kg CO2/boe by 2030.
The 2030 goal is based on production and emission forecasts, sensitivity testing to portfolio developments, as well as emission reduction targets for each business area. This is an ambitious target. We have a portfolio with many ageing fields, particularly in Norway, and the carbon intensity of a field increases as it gets older, since more energy is required to produce smaller amounts of oil and gas. Though our emission reduction ambition is challenging, we believe that sustaining our carbon leadership will strengthen our competitiveness.
To achieve our goals, we will systematically pursue energy efficiency measures, electrification and low-carbon energy sources at our installations. We need big leaps that will come from new technologies, but we also need many small steps initiated by our employees and in collaboration with business partners. These are driven by adopting the right attitude to ensure smart operational improvements that reduce emissions and drive energy efficiency.
*Source: International Association of Oil and Gas Producers (2016), Environmental Performance Data 2015. Based on operatorship.