890MM North Sea Barrels Could be Sanctioned in 2023

890MM North Sea Barrels Could be Sanctioned in 2023
The annual performance review for the UK's top producers highlighted 33 new projects targeting 1.3 billion barrels of oil and gas.

The annual performance review for the UK’s top producers highlighted 33 new projects targeting 1.3 billion barrels of oil and gas, according to the North Sea Transition Authority (NSTA), which noted that a total of 890 million barrels of those resources could be sanctioned as early as next year.

In a statement posted on its website, the NSTA outlined that it expects operators to rapidly deliver projects, in line with its effective net zero test, in the interest of UK supply resilience. The organization also revealed that exploration and appraisal activity is expected to return to pre-pandemic levels, with 20 wells per year forecast from 2022-24.

“The appetite for exploration remains and bodes well for NSTA plans to hold a new licensing round later this year, subject to the Climate Compatibility Checkpoint,” the NSTA stated.

The NSTA noted that it used the ‘Tier Zero’ review meeting to stress that an ongoing proactive approach is essential to surpass the emissions reduction targets agreed in the North Sea Transition Deal, which commits the industry to reduce emissions from production operations by at least 50 percent by 2030, against a 2018 baseline, on the path to net zero by 2050.

CO2 emissions for the UK upstream oil and gas industry were said to have fallen 14 percent to 12.1 megatons in 2021. This compared to a figure of 14 megatons in 2020, 15.6 megatons in 2019, and 15.4 megatons in 2018, according to a chart displayed on the NSTA’s website.

Flaring across the basin was also said to have fallen by 19 percent year-on-year and venting was said to be down by 24 percent. The NSTA said it challenged industry chiefs to sustain these lower levels in 2022, when gas production is expected to rise.

Eighty percent of Tier Zero operators have forward plans covering asset upgrades, emissions reduction and platform electrification, which will be crucial to meeting, and exceeding, North Sea Transition Deal targets, the NSTA highlighted. Discussions this year also covered “excellent” opportunities to repurpose infrastructure for decarbonization projects, such as CCS and H2, which are now a key area of focus, the NSTA said, adding that it will be launching a Carbon Storage licensing round “shortly”.

“This meeting once again provided a good platform for positive action, supported by our suite of benchmarks and data insights,” Andy Samuel, the NSTA Chief Executive, said in an organization statement.

“I am encouraged by the open, frank and productive dialogue. Many best practices and learnings were shared across the different operators,” he added.

Samuel noted that companies are now progressing new projects that will strengthen energy security, while generating tax revenues, and creating and safeguarding thousands of UK jobs as part of an orderly transition to net zero.

“Importantly the industry reconfirmed commitment to halve production emissions by 2030 with progress well under way,” he said.

“The growing momentum on clean power to offshore installations, CCS and hydrogen was also very evident,” Samuel added.

NSTA, TCE, CES Reiterate Carbon Storage Commitment

In a separate statement posted on its site this week, the NSTA announced that it, The Crown Estate (TCE) and Crown Estate Scotland (CES) reiterated their continued commitment to work in close collaboration to help meet the UK Government’s carbon storage targets of 20-30 million tons of CO2 emissions per year by 2030, and over 50 million tons by 2035. 

The NSTA noted in the statement that a coordinated approach to managing the seabed is critical to enable the UK to unlock the full potential of CCUS in the UKCS, accelerate the path to net zero, and creating lasting benefits. Work is already underway by the three organizations, government, and others to identify suitable seabed areas and subsurface geology for carbon storage, while being mindful of impacts on the marine environment, the NSTA revealed.

The NSTA describes carbon capture and storage as a rapidly evolving technology which can substantially reduce carbon dioxide emissions from the global economy at an industrial scale. Carbon capture is widely recognized as integral to the UK meeting its climate change target of net zero emissions by 2050, the NSTA noted.

Back in March this year, the Oil and Gas Authority (OGA) changed its name to the NSTA to reflect its evolving role in the energy transition.

“In 2021, the OGA revised our strategy to put net zero at the heart of our work alongside the important role of stewarding production,” the OGA said in a statement at the time.

“In March last year the North Sea Transition Deal between government and industry set out an ambitious program for this path and the crucial role that the UK’s oil and gas industry should play,” the OGA added. 

“The new name embraces this new context and our expanding role in energy transition, including as the carbon storage license and permitting authority, monitoring of emissions, assessing a net zero test for new developments, and stewarding domestic production,” the NSTA continued.

The NSTA regulates and influences the oil, gas and carbon storage industries, and helps drive the North Sea energy transition, according to its website, which adds that the organization holds the industry to account on halving upstream emissions by 2030.

To contact the author, email andreas.exarheas@rigzone.com

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