How to achieve ‘net zero’ – the OGA’s new Stewardship Expectation

The OGA’s Stewardship Expectations form a key element of its Asset Stewardship Strategy to support the industry’s implementation of the steps required to achieve MER UK. The introduction of the new OGA Strategy on 11 February 2021 introduced a new focus on the reduction of greenhouse gas (GHG) emissions, including a new second limb to the Central Obligation and several changes to Supporting Obligations to promote the drive to achieve net zero. On 15 March 2021 the OGA published its new “Stewardship Expectation 11 – Net Zero” to assist the industry in understanding how the OGA expects implementation of these new net zero obligations to be approached.

Expectation Net Zero

Whole organisation

The OGA expects implementation to be carried out across a company’s entire organisation, creating a culture of GHG emissions reduction within the UKCS, by investing in and deploying GHG emissions measurement and abatement technologies, as well as implementing Key Performance Indicators and targets related to GHG emissions and emissions intensity. Companies must evaluate performance against the targets set by the industry and the government and align their approach accordingly. Company decision making should take account of and adopt a quantification model of the societal cost of GHG emissions and seek to continuously improve.

At an asset and/or infrastructure hub level, licensees are required to develop, implement and maintain GHG Emissions Reduction Action Plans and collaborate with industry peers to deliver those Plans, as well as meeting obligations in relation to any applicable OGA Plans.

Whole lifecycle

The Expectation makes clear that GHG emissions impact needs to be monitored through all lifecycle phases, supported by, amongst other things, improved energy efficiency, continued focus on maintenance, and a high level of production efficiency. For example:

• At licence application stage a potential licensee should provide an evaluation of the impact of GHG emissions of the work programme and programme lifecycle, continuously assessing the emissions from all proposed activities and seeking opportunities to collaborate with other licensees to reduce them. The OGA suggests this can be achieved through shared seismic surveys and drilling programmes.
• Well tests and well clean-ups need to appropriately reduce emissions, while also achieving their goals. Further, in light of its 2021 Strategy the OGA also expects account to be taken of the development of future CCS and hydrogen projects as well as windfarms. Moreover, the potential for reuse of wells after plugging and abandonment needs to be evaluated during the design phase.
• In the development phase, GHG Emissions Reduction Action Plans will require to be implemented, incorporating low GHG emission operations, zero routine non-safety flaring and collaboration with peers.
• With regard to field development plans, a forecast of the field’s emissions needs to be exhibited, with the incorporation of measuring instrumentation. The adopted Supply Chain Action Plan should incorporate opportunities to share supply chain and logistics synergies to reduce GHG emissions.
• Commissioning plans should include evaluation of the GHG emission profiles of different commissioning strategies.
• In the production phase (pre-COP) the focus is on optimising power requirements to reduce GHG emissions and incorporating new technology to help achieve this.
• In relation to decommissioning, consideration should be given to potential re-use and re-purpose of materials, infrastructure and equipment, with an emphasis on identifying possibilities for CCS and hydrogen projects.

The OGA Strategy also includes enhanced requirements in relation to collaboration and the effect of this can also be seen in the Stewardship Expectation, which includes requirements to communicate with regulatory bodies in relation to possible opportunities and to collaborate with all relevant parties (including with the renewables sector) to support and progress potential energy integration developments such as electrification, carbon capture and storage and hydrogen to maximise emissions abatement potential. The focus on technology and its development and deployment is also expected to be a key consideration at all stages in the lifecycle.

Delivery

Delivery of the Expectations will be monitored through various engagements such as the Annual UKCS Stewardship Survey, where the OGA may request additional information to evaluate compliance as well as forming part of the Tier Reviews. The OGA may also include this aspect in its publication of performance benchmarking data and as part of its regulatory consenting and decision-making process.

The OGA Strategy can be found here.

The Net Zero Stewardship Expectation can be found here.