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This paper was prepared for presentation at the 1999 SPE Middle East Oil Show held in Bahrain, 20–23 February 1999.
This paper was prepared for presentation at the 1999 SPE Middle East Oil Show held in Bahrain, 20-23 February 1999.
Abstract BP Exploration (BPX) has completed a study which assembles in a rigorous, comparable format, a wide range of quoted costs for reducing emissions and discharges to the environment. It compares the costs of different improvement technologies for Exploration and Production, and shows how these costs compare with other parts of the petroleum sector or other industries. The study uses two measures (‘capex/annual te’, ‘NPC/total te). Regulators’ expectations of justifiable spends are mapped onto these typical technology costs from studies and actual projects. The environmental issues considered include atmospheric emissions (VOC, methane, NOx and CO2) hydrocarbon aqueous emissions. These common measures can be used by drilling, petroleum, facilities and production engineers to benchmark environmental spend and by management as an input to decision making in response to environmental challenges. The simple framework enables the mapping of environmental assessments from a variety of sources enabling site specifics decisions to be considered against a company-wide or industry-wide context. As well as providing a framework for true economic comparison of environmental improvement options, the paper provides powerful support to the strategy of making simple operational improvements before costly facility change, and for the need to consider the whole scope of environmental impact from any project, not just one narrow goal. Introduction Environmental issues have always been important in the petroleum industry, but the focus in the past has tended to be on the control of local impact, such as the prevention of discharge into rivers and the reduction of noise or visual impact in populated areas. These "local" impacts can sometimes encompass a wide area, such as the reduction and elimination of oil-based mud discharge in the North Sea. The shift in recent years has been for companies to consider the whole range of their emissions and discharges, not just those where there are pressing local concerns, and to set goals for reducing them as part of good citizenship and the need to deliver a sustainable industry in the 21 century. Achieving sustainability at lowest cost is the basis of the study described in this paper. The study has delivered a range of cost benchmarks and examples which can be used by Assets and operations to compare their own reduction options economically. In making the environmental decision, the cost benchmarks are factored in with the other key investment drivers, which are the environmental impact of the emissions or discharges, local pressures and concerns, regulatory compliance and the company's overall targets for reduction of particular emissions and discharges. The cost study The objective of this study is to assemble, in a rational, comparable format, typical costs per tonne for reducing emissions and discharges to the environment. The aim was to provide a rationale for helping the BPX Asset federation to target spend most efficiently in response to environmental concerns, and to be able to benchmark their own options against others and against external stakeholders' expectations. This style is particularly suited to "Asset-based" or very decentralised organisations. The environmental issues covered are (i) discharges of oil to sea from produced water and drill cuttings (ii) hydrocarbon emissions to air - VOC, methane (iii) combustion emissions - NOx and CO2. The costs are illustrated in two ways (i) total installed capex per annual tonne of pollutant reduced (ii) Net Present Cost (NPC) per lifetime tonne of pollutant reduced, using a discount rate of 8% real (but pre tax), and generally a project life of 10 years. NPC is the negative Net Present Value (NPV). The capex/annual te measure captures the immediate short term pressures of tight annual budgets set against annual emissions targets. The NPC/lifetime tonnes measure is a more accurate method of reflecting operating costs, revenue from any possible product recovery, and pollution taxes if applicable. Where projects actually show a profit the NPC measure will capture this, and the measure is also compatible with industry's general commercial criteria.
- North America > United States (0.94)
- Europe > Norway > North Sea (0.35)
- Europe > United Kingdom > North Sea (0.25)
- (2 more...)
- Europe > Norway > North Sea > Central North Sea > Central Graben > PL 019 > Block 7/12 > Ula Field > Ula Formation (0.94)
- Europe > Norway > North Sea > Central North Sea > Central Graben > PL 019B > Block 2/1-3 > Gyda Field > Zechstein Formation (0.94)
- Europe > Norway > North Sea > Central North Sea > Central Graben > PL 019B > Block 2/1-3 > Gyda Field > Ula Formation (0.94)
- Europe > Norway > North Sea > Central North Sea > Central Graben > King Lear Area > Block 7/12 > Ula Field > Ula Formation (0.94)