Forecasting Asset Lifecycle Profitability Through Energy Efficiency and CO2 Utilization Initiatives

Abstract

Under a new energy landscape, oil and gas operators are more focused on energy efficiencies to satisfy global Climate Change initiatives driven by the Paris Agreement (COP21), and pursuing SDG13, the United Nations Sustainable Development Goal 13, Climate Change. The new approach influences production predictions associated with energy balances and GHG emissions. Estimating the initial baseline and forecasting CO2 emissions along the hydrocarbon value chain is the first step to address Sustainable Development Strategy (SDS) goals and build a carbon-free future for new generations to come. Given the complex nature of upstream operations, a model was built to estimate associated carbon emissions. The model comprehensively covers the oil and gas value chain, including wells, gathering centers, booster stations, and effluent water disposal plants. The main inputs are the uncertainties and decisions to obtain the asset(s) production and cash flow forecasts, which combines several variables including field development philosophy, reservoir productivity, drilling and workover activities, producing effluents treatment options, corporate targets, technical-economic assumptions, and other system constraints to estimate profits and CO2 emissions. The model can provide the system's carbon intensity, raise alarms, and identify potential energy efficiency efforts to be incorporated in the company's business plan and annual budget. The model output presents operators and decision-makers with several mitigation actions to assess energy savings in the oil and gas sector related to energy generation and consumption in the short and long-term plan and CCUS projects at the reservoir level. Several case studies showcase how companies can save 8-20% on projects by implementing technology and best practices. Examples of which include but are not limited to revamping Organic Rankine Cycle (ORC), advanced modeling to reduce energy consumption, variable frequency drivers and high-efficiency motors, use of turbines, heat exchangers, and friction reducers. This model can translate the operating condition of the field into CAPEX/OPEX optimizations, compliance costs reductions, cost savings incentives (e.g., carbon pricing, taxes), and future technological advancements (e.g., Carbon Capture, Utilization and Storage - CCUS). This initiative integrates many variables to promote robust scenarios under strict corporate targets and ambitious regulations. Some reflections on the role of policies and regulations are provided, to trigger reflections about corporate and individual standings for Scopes 1, 2, and 3 in the overall Net-Zero efforts of oil and gas operators. Volume-based competition between operators is over. Oil and gas companies are pursuing more integrated targets, where profitability framed by net-zero targets is key to remain competitive in a new energy context, and their corporate goals connected with diversification and business models aimed to achieve SDS commitments, framed by selected SDGs.