Conoco allocates $200mn to the energy transition

US major ConocoPhillips said December 6 it would spend about $200mn in 2022 on items related to the energy transition.

Conoco outlined a company-wide capital expenditure plan for 2022 of $7.2bn. Of that, an estimated $200mn will be allocated toward energy transition efforts. That spend is geared to reducing the company’s Scope 1 and Scope 2 emissions, as well as potential investments on limiting Scope 3 emissions.

Scope 1 emissions come directly from the company, while Scope 2 emissions are typically associated with indirect sources such as the purchase of electricity. Scope 3 is a broader category that includes sources not covered in the other categories and businesses typically try to cut those emissions through such things as work-from-home programmes and clean transportation.

CEO Ryan Lance said the spending plan aligned with its triple mandate of producing more for less, lowering its greenhouse gas intensity and delivering returns to investors.

“We expect to play an essential role in the energy transition by executing sound investment plans, delivering superior and consistent returns through cycles and meeting our net-zero ambition, while retaining the flexibility to successfully adapt as the future unfolds,” he said.

About $700mn is tied to the company’s recent transaction in the Permian shale basin. Conoco last week completed a $9.5bn spend on some 225,000 net acres from Shell Enterprise. The assets include more than 600 miles of pipeline and associated infrastructure.

Conoco estimated the acreage would produce around 200,000 barrels of oil equivalent (boe)/day in 2022.

The Permian basin is the largest inland oil producer and second-largest gas producer in the United States. This marks Conoco’s second acquisition of US shale assets in the last year, following its purchase of smaller rival Concho Resources for $9.7bn.

Conoco said it expected to realise a full-year 2022 production level of 1.8mn boe/d.