Hart Energy Publishing

CERA Week: Statoil’s Helge Lund says gas is the obvious choice to reduce GHG

At a luncheon keynote address on Wednesday of CERA Week, Helge Lund, president and CEO of Statoil ASA, discussed the advantages of investing in gas development and a means of decreasing greenhouse gas emissions and securing energy security in the US.

By Judy Maksoud Murray, Editor E&P
March 12, 2010
Word Count: 503
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Although oil was the subject of the day at CERA Week in Houston on Tuesday, there was so much discussion about natural gas that Statoil President and CEO Helge Lund was compelled to dedicate his luncheon address to the subject of natural gas the following day.

Although Lund touched on several topics in his speech – including Statoil’s interest in reducing greenhouse gas emissions, the company’s approach to carbon capture and storage, renewables, investment in the Gulf of Mexico (GoM), and continuing concern about access to reserves both in the GoM and abroad – the bulk of his message was that natural gas usage needs to be at the forefront of R&D in the US.

In short, Lund believes a stronger commitment to gas as a source of energy is the fastest way to reduce global greenhouse gas emissions.

In his comments, Lund said he is unsure of the timing for establishing a global framework for CO2 emissions, but that he is convinced pressure on the oil and gas industry to contribute to this process will intensify.

Helge Lund, president and CEO of Statoil ASA, told participants at CERA Week in Houston on March 10, “There is a need to move from talk to action” in developing natural gas. (Statoil archive photo: Trond Isaksen)

 

That is one of the reasons Statoil has taken a proactive approach to climate change, in particular in applying new technologies for carbon capture and storage. According to Lund, this move puts Statoil in a unique position that will be a “differentiator” for the company. “It will be a competitive advantage,” he said, enumerating the three specific areas in which Statoil is investing: CO2 efficiency, carbon capture and storage, and offshore wind farms.

Having said this, however, Lund noted: “Oil and gas need to be a long-term part of energy supply.” And the emphasis should be on gas.
Statoil has put its money where its mouth is. In 2008, the company began investing significantly in shale gas. That year, Statoil acquired a 32.5% interest in the Marcellus from Chesapeake Energy Corp.

The company defined this acquisition as “part of a strategic agreement between the two companies to jointly explore unconventional gas opportunities worldwide.”

In this transaction, Statoil acquired access to more than 32,000 leases in the states of Pennsylvania, West Virginia, New York, and Ohio. Chesapeake plans to continue acquiring leases in the Marcellus shale play, and Statoil has the right to a 32.5% participation in any additional leasehold.

By entering the Marcellus shale play, Statoil acquired future, recoverable equity resources of 2.5-3.0 Bboe. According to Statoil, the company’s equity production from the Marcellus shale gas play is expected to increase to at least 50,000 boe per day in 2012 and at least 200,000 boe per day after 2020.

It is evident that the company sees the potential of shale gas. And according to Lund, shales will be a reliable domestic energy source for the US energy sector.
Furthermore, Lund said, “Gas is a climate measure that is available now and will both create jobs and reduce emissions.”

Though there has been a lot of talk about the many benefits of gas, Lund said, “Now there is a need to move from talk to action.”