Vol. 26, No.23 Week of June 06, 2021
Providing coverage of Alaska and northern Canada's oil and gas industry

Pikka shows ‘leaner’ Repsol profile 75% lower GHG than Slope average

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Steve Sutherlin

Petroleum News

Repsol has entered an agreement to sell its E&P assets in Malaysia and in Block 46 CN in Vietnam to a fully owned subsidiary of Hibiscus Petroleum, a publicly traded company based in Kuala Lumpur, Repsol said in a June 1 press release.

“The sale of the company’s upstream assets in Malaysia and in Block 46 CN in Vietnam supports Repsol’s broader rationalization of its global portfolio, streamlining its presence from 25 to 14 core countries within the framework of the multi-energy company’s 2021-2025 Strategic Plan that focuses on the geographic areas with the greatest competitive advantages,” Repsol said, adding that the assets included in the sale represent approximately 2% of Repsol’s global current net output.

Repsol said the transaction includes a 35% interest in PM3 CAA PSC, 60% in 2012 Kinabalu Oil PSC, 60% in PM305 PSC, 60 % in PM314 PSC, and 70% in Block 46 CN in Vietnam - a tie-back asset to the PM3 CAA production facilities.

The transaction followed the sale of the company’s producing assets in Russia, the cessation of oil production activities in Spain and the exit from exploratory activity in other countries, Repsol said. The agreement is subject to regulatory approval and the waiver of partners’ preemption rights.

The funds raised from the transaction as well as the resulting capex savings will contribute to the global strategic goal of funding core projects and new low-carbon initiatives, Repsol said. The company is now concentrating its upstream activity on 14 key projects centered around producing basins and executed through lean modular development, prioritizing value over volume.

In the United States, the key upstream projects Repsol is focusing on from 2021 through 2025 are the Pikka oil project in Alaska; a Marcellus gas project; oil, condensate and gas production from the Eagle Ford; the Shenzi and Shenzi North oil projects; and the Buckskin oil project, according to a 2020 presentation of Repsol’s 2021-2025 Strategic Plan.

Elsewhere, the company will pursue the Explo Mexico oil discoveries in Mexico; the Akacías oil project in Columbia; the BPTT gas project in Trinidad and Tobago; the BM-C-33 gas development project in Brazil; the Lapa SW oil project in Brazil; the YME oil project in Norway; the Sakakemang gas project in Indonesia, and additions to its oil production in the U.K.

Various decarbonization initiatives that Repsol has put into action have enabled the company to make strides towards reaching a goal of zero net emissions by 2050, despite the adverse scenario caused by the pandemic, Repsol said April 29 in its first quarter 2021 report. Acting under its 2021-2025 Strategic Plan, Repsol has focused 40% of its first quarter investments in low-carbon projects.

“The company has shown its steadfast commitment to assisting in Spain’s economic recovery through a series of initiatives focused simultaneously on decarbonization and industrial transformation,” Repsol said.

In its upstream assets, Repsol aims to reach a tier 1 lowest carbon intensity with a 75% reduction in emissions intensity per barrel produced, the company said in the 2020 presentation of its 2021-2025 Strategic Plan. It intends to reach the goal by utilizing energy efficiency and best technologies in operations, and by streamlining to a leaner upstream portfolio through the decline or exit of carbon intensive and non-core assets.

Alaska project low carbon

Repsol’s activities on Alaska’s North Slope appear to fit with the company’s quest for a low carbon future.

The Pikka development on the western North Slope, in which Repsol is a 49% partner, will have a greenhouse gas emissions intensity approximately 75% lower than the current North Slope average, based on the Wood Mackenzie Emissions Benchmarking Tool.

Repsol’s Pikka partner and operator Oil Search has been designing the Pikka project to be a global leader and model for efficient low emission intensity developments by designing greenhouse gas emissions, or GHG, intensity targets agreed on by its joint venture partner, Repsol, Oil Search’s top executive Keiran Wulff said April 30 at the company’s annual meeting.

Oil Search said it continues to assess and incorporate traditional knowledge that helps protect environmental resources and sustain the subsistence lifestyle of the local Alaska Native people. It has incorporated improvements to the environmental performance and sustainability of the project design, including minimizing the surface footprint while still ensuring that the resource base is efficiently developed.

Pikka has a “very, very small footprint,” Wulff told Petroleum News in February.

“It’s actually sandwiched between existing facilities, ConocoPhillips at Kuparuk, and the Alpine field to the west,” he said. “We’re not in a remote area; we can tie into existing pipelines. … So, this is almost like an offshore development, where we’ll be drilling 50 wells from a small pad rather than whole series of wells spotted over the area.”

Green energy in the mix

Repsol is going beyond its efforts to reduce the carbon footprint of its upstream portfolio, to make investments in low-carbon technologies.

It has joined a consortium of 15 partners to present an application for European Green Deal funding for the development of Europe’s first 100 megawatt alkaline electrolyzer plant which will be connected to a Repsol industrial site.

Electrolyzers use electricity to split water into its components - oxygen and hydrogen. When renewable electricity such as solar, wind and hydroelectric is used in this process no carbon dioxide emissions are created, and the resultant hydrogen is referred to as green hydrogen.

Alkaline electrolyzers contain caustic water solution with potassium hydroxide, sodium hydroxide and sodium chloride used as the catalyst. The liquid electrolyte allows ions to be transported between the electrodes and is not consumed in the chemical reaction.

The project - H24All - is designed to develop, build, operate, and demonstrate the sustainability of a 100 MW high-pressure alkaline electrolyzer in real operation according to end-users’ needs, meeting market requirements for competitive low-carbon hydrogen production, Repsol said.

Partners in the consortium hail from six different countries - Belgium, Denmark, Germany, Norway, Spain and Turkey, Repsol said, adding that the partners include research centers, material suppliers, engineering firms specializing in electrolyzers, electro-intensive industries, energy and automotive companies, universities, and industry associations, all of which have a high level of expertise in the field and are safety-oriented and committed to CO2 reduction.

During the H24All project, the partners will bring innovative solutions to represent, in a record time, significant progress in hydrogen technologies that improve the competitiveness and viability of an electrolyzer while reducing the required investment and operating costs, Repsol said.

The economic and business-modelling case will provide quantitative evidence that will reduce the risk for other hydrogen infrastructure deployment in Europe, Repsol said. The timeline calls for three years of research, development, and construction plus two years of the demonstration and validation phase.

Repsol said it aims to become a leader in the production of hydrogen in the Iberian Peninsula by reaching a production equivalent to 400 MW by 2025.

“Repsol’s refining business is currently the largest consumer and producer of this product in Spain, and it will, through its Technology Lab, contribute its technological capabilities, knowledge, and experience in hydrogen to the consortium,” the company said. “This project represents another decisive step for Repsol in leading the energy transition, transforming its industrial complexes into multi-energy hubs, and achieving net zero emissions by 2050.”

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