Listening to your customer can clearly pay off. There is perhaps no better example than the case of Equinor. Back in 2017, when Equinor was still known as Statoil, president and chief executive Eldar Sætre wrote to shareholders outlining how the company used the downturn to transform itself, realising significant annual efficiencies and all-time high oil production. At a time when the average price of Brent crude was US$54 per barrel, Statoil had taken down the break-even price of its next generation portfolio by more than 20% during the year to US$21 per barrel.
Mr Sætre wrote that even with oil prices recovering, the company planned to remain focused on reducing drilling costs further and sustaining the 2017 unit of production costs in 2020. It also broadened its energy portfolio with offshore wind investments.
“We believe the winners in the energy transition will be the producers (that) can deliver at low cost with low carbon emissions.”
Today, Equinor has ambitions to cut annual CO2 emissions from its logistical operations on the Norwegian continental shelf (NCS) by 50% by 2030.
Since 2011, Equinor has cut its total annual carbon emissions from logistical operations – including helicopters and vessels used for supply, emergency response, rig moves and storage – by 37% overall, from 465,000 to 292,000 tonnes, or when adjusted for reduced activity, by 26%.
Equinor expects its suppliers, including offshore support vessel owners, to be on the same page and of the same mindset. "Suppliers must be team players if we are to cut emissions,” said Philippe F Mathieu, head of Equinor’s joint operations support cluster. “We influence operations by our management of day-to-day activities commercially by rewarding low emissions in contracts and strategically by supporting a business that utilises vessels, vehicles and helicopters in a proper way.”
“We have an ambition of moving all vessels on long-term contract with us to shore power,” Mr Mathieu said, “because we have seen that it is an efficient tool for reducing emissions. We note that shipowners, crews, base companies and authorities are strongly committed and willing to prepare for operation and infrastructure that will help reduce emissions.”
Equinor has also introduced requirements in its long-term contracts stating that vessels must be fitted with hybrid battery systems and shore power connections. Now when Equinor enters into new contracts, emissions and energy efficiency are evaluated, and ships with technology for reducing consumption are prioritised.
“There’s a long list of things that have contributed to a significant reduction in fuel consumption and emissions of carbon dioxide,” said Equinor’s vice president of logistics and emergency response Frida Eklöf Monstad. “Battery operation and power from shore have also been very effective in reducing emissions, and ships that exploit these opportunities are therefore prioritised when contracts are awarded,” said Ms Monstad.
On an average day, Equinor could have between 40 and 50 ships at work on the NCS. Ms Monstad knows that supply vessels, anchor handling vessels and standby vessels account for some 85% of the CO2 emissions from Equinor’s logistical operations.
When they won long-term contracts back in 2017, DOF, Havila, Skanski Offshore, Solstad Farstad and Ugland all committed to having battery hybrid power and shore-power systems installed on their vessels.
One of the pioneers in the market was Eidesvik, owner of the Viking Energy, the first dual-fuel OSV powered by LNG and later fitted with a battery. In 2017, Eidesvik completed the installation of a hybrid energy system on board Viking Princess. Following the refit, the Viking Princess was able to use batteries to reduce the number of generators aboard the ship. The new energy storage solution improved engine efficiency, increased fuel savings and reduced GHG emissions.
Commitments to hybrid battery power by these forward-thinking OSV owners is paying off for the environment and their bottom lines. Others outside the Norwegian Continental Shelf are already following suit, but we’ll talk about those another day.
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