Statoil Targets Deeper Carbon Dioxide Emission Cuts

Statoil Targets Deeper Carbon Dioxide Emission CutsStatoil Targets Deeper Carbon Dioxide Emission Cuts

Norway’s Statoil said it aims to cut its carbon footprint more aggressively as measures to reduce global warming could reduce the value of its assets, leaving some of its reserves stranded underground. The possibility that large quantities of the world’s oil will never be developed due to the increase of renewable energy and the electrification of transport has been a growing worry for investors in the oil sector, Reuters reported.

Statoil, Norway’s largest company, started stress testing its portfolio of oil and gas assets against global energy scenarios set out by the International Energy Agency at shareholders’ request in 2015.

The IEA’s Sustainable Development Scenario analyses the likely impact of energy policies by 2040.

“The net present value [NPV] of Statoil’s portfolio will be reduced by 13% ... under the IEA Sustainable Development Scenario,” Statoil’s Chief Executive Eldar Saetre told Reuters. However, he said that would still leave Statoil’s portfolio with a massive NPV.

The IEA says its scenario is aligned with the Paris Agreement goals to keep global warming from exceeding 2 degrees Celsius.

Saetre was speaking on the sidelines of a Statoil presentation to investors in London where the company announced plans to reduce emissions from some of its new fields to 3 kilograms of carbon dioxide per barrel of oil equivalents, less than a fifth of the global average. Its carbon intensity at its offshore fields stood at 9 kg per boe in 2017, compared to a global average of 17 kg per boe.

Statoil said optimization and efficiency improvements have substantially strengthened its portfolio, which includes the giant Johan Sverdrup Oilfield off Norway.

The field will be powered from shore instead of generating electricity by offshore gas turbines, the main source of emissions on the Norwegian continental shelf.

Statoil reduced its emissions from 11 kg of carbon dioxide per boe in 2014, partly by divesting its carbon-intensive oil sand operations in Canada in 2016.

Last year, it said it would no longer explore for heavy oil, which requires more energy and produces more emissions to lift barrels from the ground.

However, the company still operates two heavy oilfields in Brazil and Britain, and is working with Rosneft to develop a high-viscous field in Russia.

“Despite the negative impact on NPV in the ‘sustainable development scenario’, we see very limited stranding of assets,” Statoil said in its latest sustainability report.


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