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Why are we continuing with oil and gas? Here are two of the reasons.

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.

The Equinor office in Harstad, seen from the seaside. The picture is taken in winter just before sunset, with a snowy landscape in the background
The Equinor office in Harstad celebrated the good news just before Christmas last year
Photo: Kevin Rex Norlander

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.

Portrait photo of Linn Kristensen and Zoë Cumberpatch at Equinor in Harstad, standing outdoors in winter clothing, with the sea and snow-covered mountains in the background
Thanks to new data and methods, geologist Linn Kristensen and petrophysicist Zoë Cumberpatch can make new gas discoveries along with their colleagues
Photo: Kevin Rex Norlander

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.

The Aasta Hansteen oil platform in the North Sea
The new gas discovery in Obelix Upflank could help to extend the lifespan of the Aasta Hansteen platform.
Photo: Gudmund Nymoen

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.

A person wearing a red safety helmet and a high-visibility yellow jacket with the Equinor logo stands with their back turned, looking out over the gas facility at Melkøya. The sea can be glimpsed in the background.
Equinor aims to be a leader in the energy transition – while simultaneously delivering the energy the world needs
Photo: Ole Jørgen Bratland

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.

Our climate ambitions

“It’s incredibly expensive to lead in a phase of transition. You have to push boundaries, develop new technology, try and fail. Our oil and gas operations must finance all this – and without this income, it would not be possible to transition to the extent we wish.”

Camilla AamodtStrategy Manager for Exploration and Production in Norway
Portrait photo of Camilla Aamodt, Equinor’s Strategy Manager for Exploration and Production in Norway.

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.

White gas pipes at the Melkøya facility in Hammerfest

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.

Here’s how Equinor plans to cut emissions from oil and gas:

Electrification of platforms
Replacing gas turbines-powered generators, with electricity from shore. The Johan Sverdrup field emits less than 5 percent of the global average for oil production. This is achieved thanks to electricity from land (mainly hydropower), saving more than 620,000 tons of CO2 every year.

Energy efficiency
Energy efficiency is achieved through hundreds of small and large measures on the platforms. For example, at Statfjord C, a new steam turbine will generate electricity using surplus heat from two gas compressors. This replaces two gas turbines and cuts 25 percent of the platform's annual CO2 emissions – equivalent to emissions from 50,000 fossil-fueled cars.

Reducing flaring associated with operational disturbances is also a very important measure – reducing CO2 emissions by 574,000 tons between 2011 and 2022. This is equivalent to the emissions from 285,000 fossil-fueled cars.

Consolidation
Consolidation involves shutting down certain installations and optimising the use of existing infrastructure on the Norwegian shelf. For example, the Statfjord A platform is set to close in 2027, resulting in a reduction of 160,000 tons of emissions, while production from the field continues from Statfjord B and C. When Equinor, along with our partners, make new discoveries on the shelf, they are also largely connected to existing infrastructure.

Here’s why electrifying platforms is an important climate measure

The electrification of major point sources of emissions such as offshore installations is a topic of debate – and is sometimes referred to as ‘symbolic politics’ by critics, arguing that when gas is not used on the installations, it will simply be used by customers instead.

This isn’t correct, says Camilla Aamodt.

“It’s like when you buy an electric car: Even though petrol is still available in the market, emissions from your own car journeys are eliminated.”

This is confirmed by a report from Thema Consulting Group, which states that electrification of Norwegian oil platforms also has global benefits. They also note that Norway will not achieve its climate goals without electrifying field centres and processing facilities with high emissions and long lifespans.

Currently, a project is underway to maintain production and extend the life of the gas plant at Melkøya, also known as Hammerfest LNG. The Snøhvit partners are investing 13.2 billion Norwegian kroner in the upgrade with compression and electrification on shore. The project has significant ripple effects and creates jobs in Finnmark, Northern Norway, and nationally. Electrification reduces CO₂ emissions from the plant by some 850,000 tons annually. In addition, the Snøhvit Future project, of which electrification is a part, will ensure long-term operation and exports from Melkøya until 2050.

 The electrification of Equinor's gas facility at Melkøya will result in significant emissions reductions.
The electrification of Equinor's gas facility at Melkøya will result in significant emissions reductions.
Photo: Ole Jørgen Bratland

There has been, and continues to be, a lot of debate around the project. Aamodt emphasises that the government’s precondition for electrifying Melkøya is that more power must also be developed in Finnmark, so that the region as a whole receives a boost in power and industry.

“Melkøya is one of the largest point sources of emissions in Norway, making this a climate measure of real significance. At the same time, we understand that this is a difficult and complex matter – and now it’s about ensuring that the development proceeds in the best possible way.”

Constantly searching for better solutions

Aamodt points out that the world depends on a variety of measures to achieve climate goals.

“We must use all the tools in the toolbox. Collaboration between countries, governments, businesses, and society is absolutely essential to achieve the goal of net-zero emissions by 2050. We are fully committed to exploring and finding solutions to get closer to the goal.”

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