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Oil & Gas
Oil and gas in transition
Equinor ’ s Grane oilfield in the North Sea . Photo : Elisabeth Sahl and Jonny Engelsvoll / © Equinor .
The oil and gas industry is prospering at the moment , with production and consumption in equilibrium . Paradoxically , the industry is currently very profitable yet it faces significant downsizing in the long term if climate goals are to be met . The industry faces two linked challenges : how to increase sustainability and how to manage the transition to greener types of energy .
By James Chater
Outlook The price of oil peaked in early 2022 as the world market recovery from Covid 19 got into full swing and the Russia-Ukraine conflict escalated . It touched almost 120 dollars per barrel before descending in the second half of the year . It is now hovering around 80 . This is moderately good for both consumers and suppliers ; in other words , the market is perceived as well-balanced . OPEC is hopeful that demand will increase in late 2024 1 – although the IEA predicts a slowing of demand in the long term as greener energy forms emerge 2 . The oil & gas sector is currently enjoying record profits , and therein lies a paradox and a dilemma . The paradox is that , despite these profits , the fossil fuel industry faces significant downsizing as the transition to greener energy gains momentum . The dilemma is that privately owned , publically quoted companies all have an obligation to their shareholders but also face extreme moral and legal pressure to act in ways that respect the reality of the climate emergency . The short-term outlook hinges , as always , on geopolitical factors . Will the Middle East flare up again ? Who will win the US presidential election ? The two contenders ’ attitude to the fossil-fuels industry are sharply opposed , with Donald Trump being more favourable than his opponent , Kamala Harris , who is likely to take a tougher approach . The long-term outlook probably depends on states ’ ability to grasp the nettle and create legal frameworks that help fossil fuel companies transition quickly enough to become providers of green energy , thereby preventing climate breakdown .
Projects Despite a finding from the IEA from 2021 that no new coal , oil or gas fields are required to meet the goal of zero emissions by 2050 (“ Net Zero by 2050 : A Roadmap for the Global Emissions ”, p . 21 , 51 etc .), in 2024 it looks very much like “ business as usual ”, to judge from the number of projects operating or under construction . A crucial factor in the supply-demand balance is the recent upsurge of activity in South and Central America . After years of stagnation , Brazil ’ s Petrobras has been increasing its output significantly . And a new FPSO , the Maria Quitéria , is en route from China and should arrive at its destination offshore Brazil , in the Jubarte field in the Campos basin ’ s pre-salt layer , in the third quarter . In Guyana , another offshore hotspot , ExxonMobil is adding a further FPSO , Whiptail , built by SBM Offshore . ExxonMobil has also unveiled its seventh project , a 30-well drilling campaign named Hammerhead , in the Stabroek block , and enlisted Fulcrum LNG to develop the region ’ s natural gas resources . Mexico is developing its offshore Zama oilfield , for which the French company DORIS will supply two offshore platforms , 68 km of pipelines and cables , and a new onshore facility . In Argentina , TotalEnergies and Wintershall Dea have started drilling in the Fénix field offshore Tierra del Fuego and are planning three development wells .
32 Heat Exchanger World September 2024 www . heat-exchanger-world . com