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Investors in Big Oil are becoming more and more vocal about the negative effects of the industry on the planet. No longer is it just about profits. Investors are demanding that some of the biggest companies in the oil industry reduce emissions to help mitigate climate change. As a result, Big Oil has succumbed to the pressure and is beginning to release climate scenarios and set indicative emission-cutting targets.
Some of the biggest oil and gas companies—including European majors BP, Shell, and Total, and even U.S. supermajor ExxonMobil—favor carbon pricing in America, as a group of major companies, also from outside the oil industry, said last year.
Exxon has recently pledged US$1 million to back the campaign for introducing a carbon tax in the United States, but is it enough?
Exxon and other oil companies’ support last year to put a price on carbon in the United States was met with skepticism by Greenpeace, which said that, “A nicely worded public relations exercise is no cure for decades of deception.â€
In Europe, Norway’s Equinor—which rebranded from Statoil earlier this year to drop the reference to ‘oil’ aiming to be a ‘broader energy company’—has been working (and profiting) for decades under some kind of carbon pricing at home. Norway has a climate policy designed to reduce greenhouse gas emissions by 30 percent by 2020 compared to 1990 levels. More than 80 percent of domestic emissions is subject to mandatory emissions trading, a CO2 tax, or both, Norway’s Ministry of Climate and Environment says.
Equinor has been working under such regulations and “Regulations have been conducive to solutions,†Eirik Waerness, chief economist at Equinor, told Forbes’ Christopher Helman in an interview published last week.
“The advantage is that we’ve been exposed to framework conditions that have put a price on carbon since 1991,†Waerness said.
When Norway started to develop its vast oil resources, it had a complete ban on flaring natural gas. Until the huge natural gas pipeline network from offshore to mainland Norway and to northwest Europe was built, Equinor used the natural gas to inject in reservoirs to keep the pressure, the company’s chief economist told Forbes.
To compare, drillers in the Permian, for example, are estimated to be flaring US$1 million worth of natural gas every day.
Yet, not even Norway’s Equinor is giving up on oil and gas development—it will continue to produce oil and gas.
“If we don’t do it, somebody else will do it elsewhere,†possibly with less commitment to preserve the environment as much as possible, Waerness told Forbes.
Another European major, Shell, is not ‘going soft’ on oil and gas, despite recent investments in cleaner energy and energy solutions—Shell’s core business is and will continue to be oil and gas for the foreseeable future, its chief executive Ben van Beurden said last week.
Shell aims to bring down the net carbon footprint of its energy products by around half by 2050, and last month it announced a target to maintain methane emissions intensity below 0.2 percent by 2025 for all oil and gas assets for which Shell is the operator.
BP, for its part, says that it believes “that carbon pricing provides the right incentives for everyone – energy producers and consumers alike – to play their part in reducing emissions.â€
The UK supermajor expects two thirds of BP’s direct emissions to be in countries subject to emissions and carbon policies by 2020, and evaluates plans for new large projects assuming a carbon cost.
These big oil players are vowing to reduce carbon emissions and make accommodations to prepare for an energy transition, but they are all their basing doomsday scenarios and alternative scenarios using different approaches, making it difficult to compare their projections, according to non-profit think tank Carbon Tracker.
According to Equinor’s Waerness, the “Industry needs help in setting framework conditions.â€
“The pendulum moves back and forth, but the overall trend of pricing carbon is a relatively heavy one. It would be a mistake to assume it’s not going to happen,†he told Forbes.
Carbon pricing may be coming, but the world may be a little late in its efforts to significantly cut emissions—the world needs to spend US$2.4 trillion every year until 2035 to slow down the effects of climate change, the UN said in a report last week.
Article from-Â Oilprice.com
Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023. Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.” Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.” Updated Guidance As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023. First Quarter 2023 Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023 Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico. The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin. The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL). Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee. “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling. Source: Dolphin Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
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