UK Zennor Offsets with Trees, Waste Heat

Private equity-backed UK producer Zennor Petroleum offset all its upstream carbon emissions from its plant through a forestry planting scheme in Scotland and a waste heat conversion plant in South Korea, CEO Martin Rowe told NGW late January.

Its current output is about 3,500 barrels of oil/day but it has ambitious growth plans once satellite fields around the Britannia field and Eastern Trough Area Project come on line. The operators of both platforms, Chrysaor and BP respectively, are looking at electrificatiom options, and there is also a scheme for an offshore electricity hub that could export power to the mainland, he said. This would require collaboration between producers, and a survey published January 28 has found this to be rising encouragingly.

Zennor will need to spend more on similar schemes to remain carbon neutral this year. The company does not have the capital to take part in major projects such as carbon capture and storage schemes, another route to carbon neutrality. he said. 

The company's financier, Kerogen, announced plans for carbon neutrality in a statement January 25. Zennor said it recognises that carbon offsetting is not the long-term solution to climate change and needs to be combined with a comprehensive decarbonisation strategy including efforts to reduce carbon emissions from operations.

This could involve floating wind-farms, Rowe said, rather than building turbines on to platforms that are already carrying a lot of weight. By towing floating turbines from platform to platform as fields depleted, this would improve the economics of each, he said, as a wind-farm could have an operational life of 30 years. 

He said Zennor will also apply the same approach to carbon neutrality when selecting third-party equipment or vessel suppliers, although it might be that the best offer environmentally is the most expensive financially.

Zennor has also undertaken a gap analysis against the requirements of the Taskforce for Climate-Related Financial Disclosure (TCFD) in order to align disclosures with the recommendations from 2021. 

Rowe said in a separate January 25 statement that the offshore industry had to accept responsibility for the impact it has on the environment and to do so as fast as it could. "We support the requirement for a just energy transition, and we see ourselves playing a significant role in helping to deliver the UK’s net zero commitments within the energy mix outlined by the UK Committee on Climate Change.” 

Upstream group Oil & Gas UK has collectively committed to cutting emissions by half by 2030 and by 90% by 2040. The sector only accounts for about 4% of the national emissions output however.

There is a tension between the UK's twin objectives of carbon neutrality and maximising the economic recovery of the UK North Sea as the additional costs may push marginal fields below the point at which they break even. But Rowe told NGW a year ago that the assets it bought from First Oil when it entered the UK were robust at $30/barrel or lower. For the present, he said the company was "comfortable" with its hedged positions. Britannia satellite Finlaggan has been postponed until Q2 of next year, owing to delays downstream. The output will be sold at UK hub market prices, he said.