How to reduce emissions from the world’s richest oil basins

Despite the acceleration of the energy transition, oil and gas will remain central to the global energy mix for the foreseeable future as key hydrocarbon sources continue to meet global primary energy demand, which is expected to exceed 650 exajoules (EJ) in the coming years. Rystad Energy estimates that by 2030, more than 75% of total demand will be met by fossil fuels, and emissions will rise as a result. A significant portion of these emissions will come from upstream activities, particularly hydrocarbon extraction and gas flaring. About three-quarters of these emissions will be related to the hydrocarbon extraction process, while the remaining quarter will result from gas flaring. It is estimated that this will contribute about 1.1 billion tonnes of carbon dioxide equivalent (CO₂e) annually for the next few years.

This underlines the continued importance of hydrocarbons, while underscoring the need for oil and gas companies to build sustainable portfolios and reduce their Scope 1 and Scope 2 emissions to meet medium and long-term targets. As upstream organizations work to become integrated energy players and decarbonize their operations, it is crucial not only to achieve transition goals but also to minimize the carbon footprint of upstream activities, with the extraction of these resources representing over 800 million tons of CO2.₂it’s every year.

As investors and governments intensify their focus on carbon reduction targets, identifying basins that can help reduce the overall impact on emissions is becoming increasingly important. Premium energy basins (PEBs) – a term coined by Rystad Energy – are particularly valuable because they are rich in hydrocarbon reserves and offer potential for the integration of low-carbon energy sources. As such, they provide an ideal platform for addressing emissions challenges, combining substantial volumes of hydrocarbons with opportunities to incorporate low-carbon solutions to reduce overall emissions.

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“A select few basins have the potential for upstream players to decarbonize while continuing to meet oil and gas demand. However, the race to decarbonise depends on three crucial factors: accelerating investment, overcoming geographical challenges and modifying existing infrastructure. These changes are critical to unlocking the full potential of these basins and for upstream players to achieve their decarbonization goals,” says Palzor Shenga, VP of Upstream Research at Rystad Energy.

After analyzing the PEBs based on the availability of remaining hydrocarbon resources, development costs, emissions, and the availability of new energy sources such as wind and solar, along with their suitability for carbon storage, the Central Arabian Basins and Rub Al Khali stands out as carbon. -efficient basins, rich in resources, with significant potential. These Middle East basins are at the forefront of PEBs and play a critical role in global conventional discovered volumes, especially as global discoveries decline and exploration activity peaks. Separately, these basins score highly in terms of regeneration potential, both offering more than 6.2 gigawatts (GW) of combined installed and future solar capacity.

Since 2015, these basins have contributed about 40 billion barrels of oil equivalent (boe) in newly discovered volumes, split equally between liquids and gas. Egypt’s Nile Delta, led by Eni’s huge Zohr gas discovery in the Mediterranean, ranks third with around 5 billion boe discovered during this period, followed by the US Gulf Deepwater (3.7 billion boe) and the Amu-Darya from Central Asia (3.6 billion BP). ) pools.

With a combined capital expenditure of $638 billion, the Rub Al Khali, US Gulf Deepwater and Central Arabian basins have seen the largest greenfield investments since 2000. Due to the large volumes discovered, the unit cost of development in the two Middle East basins it was below $2 per barrel. In contrast, the smaller average resource size of the US Gulf’s all-offshore deepwater basin drove development costs to over $9/boe, with only the Viking Graben basin ($11/boe) in northwestern Europe having a higher development cost. Significant investments have also been made in resource development in Brazil’s Santos Basin ($153 billion) and Australia’s North Carnarvon Basin ($140 billion).

By Rystad Energy

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