We have set up the Natural Resources Business Groups, one of the two Business Groups that make up our organisational structure, to enhance the value of our upstream Oil & Gas portfolio sustainably. The new division will also manage energy efficiency activities, CO₂ capture and storageprojects and Forestry REDD+projects, contributing to the full decarbonization of all our products by 2050.
Our upstream operation includes all of the activities upstream of the natural gas and oil production chain, prior to the transportation and commercialisation stages, including obtaining exploitation rights, exploration, development and production. Our operating model incorporates all of these stages, to increase speed and productivity, enabling us to react more quickly to energy demands and market trends. Our strengths remain our proprietary technologies and the expertise of our people, which enable us to identify new resources with great speed and precision.
The combination of these factors means that, despite the downturn due to the pandemic, we identified 400 million boe in near-field (Egypt, Tunisia, Norway, Algeria and Angola) and frontier exploration areas (onshore Sharjah Emirate - UAE, offshore Vietnam and offshore Mexico) in 2020, at a competitive cost of $1.6/barrel. Daily hydrocarbon production in the same year remained at 1.73 million boe per day.
We also renewed the exploration portfolio in 2020 by acquiring approximately 23,600 kilometres of new acreage, primarily in Albania, Oman, the United Arab Emirates, Angola, Indonesia, Norway (through the Vår Energi JV) and Egypt. We also renewed exploration licences in Kenya as part of a long-term energy access and decarbonization partnership with the country.
Our results in 2020
Exploration continues to be a major feature of our upstream model. Here are the main results from 2020.
A platform from the Gulf of Mexico can be recovered and reused in Congo. A ship can be completely redeveloped in Singapore and become the technological centre of a large offshore hub anchored to the ocean floor in Angola. The circular economy and decarbonization are also core values for upstream: every asset is considered to be precious and every resource something to nurture, with a view to reducing climate-changing emissions. In 2020, we cut the volume of natural gas flared by a further 14% compared to 2019, resulting in an overall reduction of 39% compared to 2014: results that bring us closer to the goal of zero routine gas flaring by 2025. We also reduced fugitive methane emissions in operated assets by 49% in 2020 compared to 2019, mainly through monitoring campaigns and maintenance activities. Taking 2014 as a baseline, the overall reduction comes to 90%, so we are ahead of our target of reducing fugitive methane emissions by 80% by 2025. As well as not being released into the environment this natural gas was sold, contributing to the company's cash flow: it’s a perfect example of the economic value of circularity and decarbonization.
How we are reducing our carbon footprint
We continue to reduce emissions from upstream operations through operational excellence and energy efficiency. Here are the results from 2020.
Everything we do from the exploration phases onwards is in preparation for the final production stage, including studies by our Research Centres using the analytical capabilities of the HPC5to obtain preview information relating to the deposit and immediately start planning the development stage. The field is then gradually brought into production so that the new infrastructures can be incorporated and production capacity consequently increased. Exploring and extracting from the site quickly allows us to provide a rapid response to the demand for energy. With this in mind, the Dual Exploration Model, which is the sale of minority shares in deposits that are already at the exploration stage, allows us to generate cash in advance and therefore obtain funds to be reinvested, making the process even more efficient.
In more technical terms, the success of our development model is based on:
the parallelisation of phases (appraisal, pre-development, engineering)
a modular approach with accelerated start-up in early production and subsequent ramp-up
the minimisation of financial exposure
insourcing the critical project phases (detailed engineering, production supervision, commissioning/hook-up) where our expertise can be applied.
The field must be put into production in order to retrieve the hydrocarbons, drilling an optimal number of production wells and installing the necessary equipment to remove any unwanted components (such as solid particles, water, salts, etc.) from the gas and oil and separate the liquid phase of the oil from the gas phase. Development operations at sea are more complex, with production wells being drilled from various kinds of fixed platforms (steel, concrete, semi-submersible or even anchored with cables) that are often extremely large and channelled in such a way as to drain the largest possible area from a single station.
Production operations, whereby the hydrocarbons are extracted from the deposit, processed at the plants and sent to the market by pipeline or ship, follow the development stage. The productive life of a deposit can last for decades, during which it will be continuously monitored and work carried out within the wells to optimise production, sometimes including advanced recovery projects that involve injecting gas or water to increase the quantity of hydrocarbons that can be retrieved.
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