Wednesday, November 22, 2017

Statoil Plants Flag in Big Oil's Race for 'Cleaner' Crude

Norwegian oil company's Statoil logo is seen at their headquarters in Fornebu, Norway, June (Credit: Business Insider) Click to Enlarge.
While the world will need oil and gas for decades to come, Statoil’s Chief Executive Eldar Saetre expects that many oil deposits will never be tapped as increasingly discerning consumers will demand only the lowest-polluting crude.

“A lot of fossil fuels will have to stay in the ground, coal obviously ... but you will also see oil and gas being left in the ground, that is natural,” Saetre told Reuters in an interview in London.

“At Statoil we are not pursuing certain types of resources, we are not exploring for heavy oil or investing in oil sands.  It is really about accessing the most carbon-efficient barrels.”

Around 70 percent of the world’s discovered oil resources is heavy oil and bitumen, both highly viscous crudes that are more complex and energy-intensive to extract and process than lighter crude, according to the U.S. Geological Survey.

The comments from a senior oil executive may raise alarm bells for oil-rich countries such as Venezuela and Canada that mostly produce heavy oil.

The retreat from energy-intensive oil production in Canada and elsewhere is already taking place.

Statoil sold its entire Canadian oil sands business late last year to Athabasca Oil Corp, and Royal Dutch Shell, ConocoPhillips and Marathon Oil have all scaled back their operations in the country.

Statoil is now exploring for new resources offshore Norway and Brazil where oil is lighter and abundant.

“The world needs to develop more efficient barrels... Competitiveness to me is carbon competitiveness and cost competitiveness,” Saetre said.

Shell, Exxon Mobil, and France’s Total have also invested billions in recent years in Brazil’s oil wealth, and companies are vying to discover and develop resources in other light-oil provinces such as the North Sea as well as shale basins in the United States.

Growing pressure from investors on oil companies to reduce their carbon emissions, is propelling the trend - highlighted last week when Norway’s trillion-dollar sovereign wealth fund announced plans to cut investments in oil and gas companies.

Read more at Statoil Plants Flag in Big Oil's Race for 'Cleaner' Crude

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