FPSO Kwame Nkrumah operates on the Jubilee field - Tullow Oil

Tullow Oil outlines path to net-zero by 2030

UK-based oil and gas company Tullow Oil has committed to becoming a net-zero company by 2030 on its Scope 1 and 2 emissions through a combination of asset decarbonisation and carbon offsetting program.

FPSO Kwame Nkrumah operates on the Jubilee field in Ghana; Source: Tullow Oil

Announcing its commitment to become a net-zero company, Tullow has recently said it will achieve this through a combination of decarbonising its operated assets in Ghana and through a nature-based carbon removal programme to offset its hard to abate emissions from power generation.

It is worth mentioning that many European players have set the target of becoming net-zero companies by 2050, or sooner. This includes oil majors like BP and Shell as well as Norway’s state-owned giant Equinor.

On the other hand, German oil and gas company Wintershall Dea last November set a goal to achieve net-zero upstream activities by 2030, Australia’s Santos last year set a goal of reaching net-zero by 2040 and Japan’s Inpex in January 2021 revealed its strategy to become a net-zero company by 2050.

Emissions too high due to flaring

According to Tullow, over the last year its emissions have been too high as a result of elevated levels of flaring required for better reservoir management and sustained production levels. The carbon intensity of production in 2020 was 29 kg CO2 e/bbl relative to an IOGP industry average of 18 kg CO2 e/bbl.

Tullow explained that the decision to produce to flare from both its FPSOs has been a very difficult decision to take, but, after almost 10 years of excess gas injection on Jubilee, a request to flare was made to protect the reservoirs and to maintain oil production at its business planned levels.

In addition, on the TEN FPSO, several Enyenra wells, due to progressive declining/reducing reservoir pressure, can recently only be produced into the FPSO by routing fluid to a separation vessel that has to operate at a pressure much lower than its original design intent.

Low pressure separated gas from this vessel (up to 30MMscfd) is currently being flared, until such time as the company installs gas tie-in(s) to reroute this gas to the low-pressure section of FPSO gas processing train.

“We plan to bring the carbon intensity of operations back in line with IOGP industry averages or lower by 2025 or sooner through our commitment to eliminate all routine flaring, which will allow us to reduce emissions on a net equity basis (accounting for emissions from our non-operated portfolio) by between 40-45%”, Tullow said.

One key project that will increase gas handling capacity on Jubilee is already underway and others, such as process modifications on TEN to routing tie-ins, Tullow is targeting to progress in 2021 Key Performance Indicators (KPIs).

Also part of Tullow’s 2021 KPIs are plans to progress several NPV+ projects identified by the initial net-zero study.

Tullow Oil CEO, Rahul Dhir, said: “In 2020 we set out to define a decarbonisation plan and determine a timeframe for our net-zero commitment. These decarbonisation efforts will set Tullow on a path to reduce emissions on a net equity basis by 40 per cent relative to a 2020 baseline. Further identified emissions can reduce emissions by a further 5 per cent.

“Carbon offsetting will also be required to achieve carbon-neutral or net-zero status, and work is underway to determine the right carbon offset strategy for Tullow”.

Gas offtake agreements

To successfully eliminate routine flaring, Tullow will also need to secure long-term gas offtake agreements with the Government of Ghana.

The company’s target for 2021 is to achieve an offtake level between 100-135 mmscf/d to support oil production.

Tullow’s residual hard to abate emissions – largely from power generation on the FPSOs – will be offset via nature-based carbon removal programmes focused in the company’s key countries of operation.

“We will be looking to invest in new carbon offset projects in our key countries of operations over the next decade in order to offset its residual net equity emissions of ~600,000 tonnes of CO2e. As we intend to be the key investors of new projects, we will build this portfolio slowly with a view to being carbon neutral from 2030 onwards”, Tullow said.

Tullow also noted it has agreed on the strategic objectives of its carbon offset programme with the board and, in 2021, it will work to identify suitable projects for investment.