Despite the accelerating energy transition, oil and gas will remain central to the global energy mix for the foreseeable future as the key hydrocarbon sources continue to satisfy global primary energy demand, Rystad Energy stated in a release sent to Rigzone by the Rystad team recently.
The company, which highlighted in the release that this demand is “projected to exceed 650 exajoules in the coming years”, said it estimates that by 2030 more than 75 percent of total demand will be met by fossil fuels, “with emissions climbing as a result”.
“A significant portion of these emissions will originate from upstream activities, particularly hydrocarbon extraction and gas flaring,” Rystad stated in the release.
“Approximately three-quarters of these emissions will be linked to the hydrocarbon extraction process, while the remaining quarter will result from gas flaring,” it added.
“This underscores the continuing importance of hydrocarbons, while also highlighting the need for oil and gas companies to build sustainable portfolios and reduce their Scope 1 and Scope 2 emissions to meet medium and long-term targets,” it continued.
“As upstream organizations work to transform into integrated energy players and decarbonize their operations, it is crucial not only to achieve transition goals but also to minimize the carbon footprint of upstream activities,” it went on to state.
In the release, Rystad noted that, as investors and governments intensify their focus on carbon-reduction goals, identifying basins that can help lower the overall emissions impact is becoming increasingly important.
“Premium energy basins (PEB), a term coined by Rystad Energy, are particularly valuable because they are rich in hydrocarbon reserves and offer potential for integrating low-carbon energy sources,” Rystad highlighted in the release.
“As such, they provide an ideal platform for addressing emission challenges by combining substantial hydrocarbon volumes with opportunities for incorporating low-carbon solutions to reduce overall emissions,” it added.
Palzor Shenga, Vice President, Upstream Research at Rystad Energy, said in the release, “a select few basins hold the potential for upstream players to decarbonize while continuing to meet oil and gas demand”.
“However, the race to decarbonize hinges on three crucial factors: accelerating investment, overcoming geographical challenges, and modifying existing infrastructure,” Shenga added.
“These changes are essential for unlocking the full potential of these basins and for upstream players to achieve their decarbonization targets,” the Rystad VP continued.
Rystad Energy noted in the release that the Central Arabian and Rub Al Khali basins stand out as carbon-efficient, resource-rich basins with significant potential.
“These Middle Eastern basins are at the forefront of PEBs and play a pivotal role in global conventional discovered volumes, especially as global discoveries decline and exploration activity peaks,” the company added.
“Separately, these basins also score highly in terms of renewable potential, with both offering more than 6.2 gigawatts (GW) combined of installed and upcoming solar capacity,” it added.
Since 2015, these basins have contributed approximately 40 billion barrels of oil equivalent in newly discovered volumes, evenly divided between liquids and gas, Rystad highlighted in the release.
Rystad revealed in the release that the U.S. Gulf Deepwater basin leads the way among PEBs in CO2 storage potential, “boasting 750 gigatons of saline aquifer capacity”.
Rigzone has asked the International Association of Oil & Gas Producers (IOGP) for comment on Rystad’s release. At the time of writing, IOGP has not yet responded to Rigzone’s request.
According to the Energy Institute’s latest statistical review of world energy, which was published earlier this year, total primary energy consumption came in at 619.63 exajoules in 2023 and 607.35 exajoules in 2022.
Last year, oil made up 196.43 exajoules of the total, natural gas made up 144.37 exajoules, coal made up 164.03 exajoules, nuclear energy made up 24.57 exajoules, hydro-electricity made up 39.65 exajoules, and renewables made up 50.58 exajoules, the review showed.
In 2022, oil made up 191.62 exajoules of the total, natural gas made up 144.31 exajoules, coal made up 161.53 exajoules, nuclear energy made up 24.13 exajoules, hydro-electricity made up 40.58 exajoules, and renewables made up 45.18 exajoules, the review revealed.
Primary energy comprises commercially traded fuels, including modern renewables used to generate electricity, the EI states in its review, adding that energy from all sources of non-fossil power generation is accounted for on an input-equivalent basis.
