Presented by:
Editor's note: The full version of this article originally appeared in the April issue of E&P Plus.
Subscribe to the digital publication here.
If you want answers to ESG in oil and gas, be prepared to join the search party. The answers are hard to decipher, mainly because ESG in oil and gas remains something far from a black-and-white issue with unquestioned solutions. Collectively, the work is being done; it’s just that there isn’t really one right way, one right measurement or one all-encompassing goal between all three prongs of ESG—as of yet.
“There’s a different answer between the E, the S and the G,” admits Sean O’Donnell, managing director with Quantum Energy Partners, one of the largest private equity investors in oil and gas. “Private equity has always had the ‘G’ figured out pretty well in terms of ownership, alignment and control. You’re seeing the conversation in the public market change to catching up on having ESG-oriented scorecards.”
So, the money wants ESG to be a big part of the oil and gas industry. That’s a well-documented fact that satisfies why producers and oilfield service (OFS) providers are scrambling to get their ESG-friendly operations and reporting in order. Just take a look at these articles featured in various Hart Energy media:
- ESG Takes Root
- Energy ESG: Building a Case for an ESG Ready Future
- EOR Tech to Help Oil Producers Reach ESG Goals
- Q&A: Why ESG Investing Will Impact Oil and Gas in 2021
- Why ESG is Here to Stay for Oil and Gas Industry
But the what and the how remain the enigma. That’s not to say there hasn’t been progress toward finding the right solutions, particularly in the area that has dominated headlines, politics and Wall Street for the last couple of years.
“The real push over the last 24 months for the industry has been a step-function kind of change on the E,” O’Donnell said. “It’s on methane, in particular.”
O’Donnell pointed out the green shoots of metrics for measuring methane mitigation as a catalyst for progress.
“The technology and the operational protocols are now well understood and available,” he said. “There’s also been a refinement of reporting that upstream companies should be focused on. Three years ago, four years ago, there were 1,100 different measurements for ESG.”
That thought probably makes your head spin. Clearly, that’s too daunting of a task for any large major to figure out, let alone a small independent oil and gas E&P. However, O’Donnell said the metrics that matter most have come to the forefront over the last two years.
“The technology and the ability to capture those data, and the ability to quality control those data, and the ability to have meaningful baselines that are common across companies that—in the last 12 months—have been what’s really started to develop,” O’Donnell said. “Investors can start to make relative value decisions.”
Click here to read the full ESG cover story,
featuring in-depth interviews with Schlumberger and US Well Services, in the April issue of E&P Plus.
Recommended Reading
CNOOC Makes 100 MMton Oilfield Discovery in Bohai Sea
2024-03-18 - CNOOC said the Qinhuangdao 27-3 oilfield has been tested to produce approximately 742 bbl/d of oil from a single well.
TPH: Lower 48 to Shed Rigs Through 3Q Before Gas Plays Rebound
2024-03-13 - TPH&Co. analysis shows the Permian Basin will lose rigs near term, but as activity in gassy plays ticks up later this year, the Permian may be headed towards muted activity into 2025.
Proven Volumes at Aramco’s Jafurah Field Jump on New Booking Approach
2024-02-27 - Aramco’s addition of 15 Tcf of gas and 2 Bbbl of condensate brings Jafurah’s proven reserves up to 229 Tcf of gas and 75 Bbbl of condensate.
Well Logging Could Get a Makeover
2024-02-27 - Aramco’s KASHF robot, expected to deploy in 2025, will be able to operate in both vertical and horizontal segments of wellbores.
Shell Brings Deepwater Rydberg Subsea Tieback Onstream
2024-02-23 - The two-well Gulf of Mexico development will send 16,000 boe/d at peak rates to the Appomattox production semisubmersible.