5.2.2Environmental Reporting

ATMOSPHERIC EMISSIONS

Emissions reported in SBM Offshore’s records include:

  • Scope 1 – Direct Emissions
  • Scope 2 – Purchased Electricity
  • Scope 3 – Business Travel
  • Scope 3 – Purchased Goods and Services
  • Scope 3 – Downstream Leased Assets

For all reported emissions, CO2 equivalency is a quantity that describes, for a given mixture and amount of greenhouse gas, the amount of CO2 that would have the same Global Warming Potential (GWP), when measured over a specified timescale (generally, 100 years).

Scope 1 – Direct Emissions

For site emissions related to gas consumed and use of diesel for back-up power generators, SBM Offshore takes an operational control view and uses conversion factors from the Dutch Emission Authority and the website Co2emissiefactoren.nl and, for diesel-related factors, the Greenhouse Gas Conversion Factors by the UK Government.

Scope 2 – Purchased Electricity

Scope 2 comprises GHG emissions from energy purchased for offices (market-based and location-based).

The reporting scope includes all locations where the headcount is over 10 and yards over which SBM Offshore has full operational control. SBM Offshore reports onshore emissions data for the following locations: Amsterdam, Houston, Kuala Lumpur, Marly, Monaco, Rio de Janeiro, Schiedam, Shanghai, Carros lab, Georgetown, Bangalore, Porto, Singapore, Brazil Shorebases, Luanda Shorebase and Malabo Shorebase.

For the purchased electricity usage, SBM Offshore uses conversion factors to calculate CO2 equivalents from energy consumed (kWh). Sources used for these conversion factors are, amongst others, the European Environmental Agency, the European Investment Bank and the Association of Issuing Bodies.

Scope 3 Emissions

Scope 3 categories reflect an analysis performed using the GHG protocol Technical Guidance for Calculating Scope 3 Emissions. During 2021 SBM Offshore applied criteria aligned with SBM Offshore’s goals related to emissions and the criteria guided by the GHG Protocol (size of footprint, influence, risk, stakeholder interest, outsourcing, sector guidance and spending/revenue). The following categories are a result of this analysis and is re-considered on an annual basis.

Scope 3 – Business Travel

This scope entails GHG emissions from flights invoiced and paid for via SBM Offshore’s standard travel system in 2023 and the data covers all operating companies. The scope and data accuracy increased due to addition of data from one more travel agency and better information about multi-legged flights. Business travel is determined based on flight data communicated by travel agencies, including mileage per invoice date and a calculated extrapolation of data for the last two weeks of the year. In a few cases where mileage data is missing, it is completed with mileage from a similar route. The GHG emissions relating to business flights are based on third-party documentation on distances and the conversion to CO2-equivalent is based on CO2emissiefactoren.nl.

Scope 3 – Purchased Goods and Services

This category consists of GHG emissions associated with the procurement of (capital) goods and services for FPSO projects (hereafter ‘projects’) that SBM Offshore is executing on behalf of its clients. The following parts of an FPSO are considered in the calculations of the GHG emissions for this category:

  • Hull (in Fast4ward® this is MPF) – the marine structure of an FPSO.
  • Topsides – the processing facility of an FPSO. Other parts of the FPSO (mooring structure, integration etc.) are not accounted for in this initial GHG calculation due to the data limitations and the limited percentage they add in weight as-build.

SBM Offshore calculates the GHG emissions of its projects via the GHG protocol’s average data method. In this phase of raising understanding of emissions during project (EPC) stage, SBM Offshore has chosen a pragmatic approach to assess which components and materials used in projects contribute most to GHG emissions. The outcome of the analysis is initially focused on identifying GHG hot spots. Once these GHG hotspots are identified, SBM Offshore can increase the accuracy of the GHG inventory via supplier engagement and, with that, abate emissions.

Estimated weight topside

For Topsides the breakdown in materials is based on proposal estimates and not actuals. SBM Offshore used two variants, one for the Guyana and one for the Brazil field, as the basis for calculation for all topsides.

Estimated weight MPF

For MPF, the breakdown in materials is based on latest actuals. The MPF’s are, based on the Fast4Ward®, sister hulls and are similar in design and weight. Since the hulls are based on the same design the same material weights are assumed for each FPSO project that uses the MPF.

To derive the total GHG emission related to projects under construction, SBM Offshore uses the completion rates in a given year. The percentage completed in a given year determines the total allocated emissions in that year.

Calculations for MPF and Topside were done as follows:

  1. Break down MPF/Topside into their components.
  2. Analyze materials and weights for each component.
  3. Retrieve GHG conversion factors of the materials for each component.
  4. Apply the following calculations:
    1. Gross/estimated component weight X GHG conversion – GHG emissions per component.
    2. SUM GHG emissions of each component – GHG emissions per project.
    3. GHG emissions per project X annual completion – GHG emissions per projects for the year.
    4. SUM GHG emissions projects for the year – GHG emissions for all projects for the year.
  5. SUM GHG emissions for all Item types – Total GHG emissions for scope 3.1 Procured (Capital) Goods and Services.

SBM Offshore applies the following standards and sources for the above calculations:

  • GHG Protocol – Scope 3 Corporate Value Chain Accounting & Reporting Standard.
  • Conversion factors from the ecoinvent Database to convert volumes and weights to GHG emissions for the various procured (capital) goods and services.
  • SBM Offshore Project Weight Control Reports for the various Items.

Scope 3 – Downstream Leased Assets

SBM Offshore reports on emission from assets producing and/or storing hydrocarbons under lease contracts. GHG emissions come from the energy consumed (steam boilers, gas turbines and diesel engines) and from gas flared.

The environmental performance of SBM Offshore is reported by region or management area: Brazil, Angola, North America & Caribbean, Asia & Equatorial Guinea. Based on the criteria stated above, SBM Offshore reports on the environmental performance for the following 15 units:

  • Brazil – FPSO Espirito Santo, FPSO Cidade de Paraty, FPSO Cidade de Anchieta, FPSO Cidade de Ilhabela, FPSO Cidade de Marica, FPSO Cidade de Saquarema.
  • Angola – FPSO Mondo, FPSO Saxi Batuque and N’Goma FPSO.
  • North America & Caribbean – FPSO Liza Destiny, FPSO Liza Unity1, FPSO Prosperity2, Thunder Hawk3.
  • Asia & Equatorial Guinea – FPSO Kikeh, FPSO Aseng.

The environmental offshore performance reporting methodology was chosen according to the performance indicators relative to Greenhouse Gas Protocol, GRI Standards, IOGP and IPIECA guidelines. This includes:

  • Greenhouse Gases, referred to as GHG which are N2O (Nitrous Oxide), CH4 (Methane) and CO2 (Carbon Dioxide).
  • GHG emissions per hydrocarbon production from flaring and energy generation.
  • Non-Greenhouse Gases which are CO (Carbon Monoxide), NOx (Nitrogen Oxides), SO2 (Sulphur Dioxide) and VOCs (Volatile Organic Compounds).
  • Gas flared per hydrocarbon production.
  • Energy consumption per hydrocarbon production.
  • Oil in Produced Water per hydrocarbon production.

The calculation of air emissions from offshore operations units uses the method as described in the EEMS-Atmospheric Emissions Calculations (Issue 1.810a) recommended by Oil and Gas UK. SBM Offshore reports some of its indicators as a weighted average, calculated pro rata over the volume of hydrocarbon production per region. This is in line with the IOGP Environmental Performance Indicators. The GHG-intensity figures in sections 2.1.7 and 5.3.2 use hydrocarbon production as a denominator, being the standard metric used in the industry.

OFFSHORE ENERGY CONSUMPTION

The energy used to produce oil and gas covers a range of activities, including:

  • Driving pumps producing the hydrocarbons or reinjecting produced water.
  • Heating produced oil for separation.
  • Producing steam.
  • Powering compressors to reinject produced gas.
  • Driving turbines to generate electricity needed for operational activities.

The main source of energy consumption of offshore units is fuel gas and marine gas oil: the calculation of their volumes in Gigajoules being a function of calorific values and conversion factors from Oil and Gas UK. The energy intensity figures in section 5.3.2 use hydrocarbon production as a denominator, being the standard metric used in the industry.

OIL IN PRODUCED WATER DISCHARGES

Produced water is a high volume liquid discharge generated during the production of oil and gas. After extraction, produced water is separated and treated (de-oiled) before discharge to surface water. The quality of produced water is most widely expressed in terms of its oil content. Limits are imposed on the concentration of oil in the effluent discharge stream or discharge is limited where reinjection back into the reservoir is permitted.

The overall efficiency of the oil in water treatment and, as applicable, reinjection can be expressed as tonnes of oil discharged per million tonnes of hydrocarbon produced.

Incidental environmental releases to air, water or land from the offshore operations units are reported using the data recorded in the SBM Offshore Incident Management tool. SBM Offshore has embedded a methodology for calculating the estimated discharge and subsequent classification within the Incident Management tool.

CHANGES IN REPORTING

As part of continuous improvement, SBM offshore regularly reviews and updates as required its environmental emissions calculations methodology.

Note that in 2023, emissions associated with the SBM Offshore ’Normand Installer’ Installation Vessel have been assessed. They have however not been included at this stage to the overall reported emissions under the Scope 3 – Downstream Leased Assets Category as the Installation Vessel is chartered to client projects. These emissions represent 12,240 tonnes CO2e in 2023, which is not material in this category (0.2% of Scope 3 – Downstream Leased Assets emissions).

FPSO Liza Unity was sold to ExxonMobil Guyana on November 9, 2023. From that date on, its emissions no longer are part of Scope 3 – Downstream Leased Assets. The 98,459.10 tonnes of CO2e of associated emissions represent 2% overall reported emissions; this amount is not material for the year 2023 hence not reported in the numbers provided under the section Scope 3 – Downstream Leased Assets. Note however that all other indicators of this table are unaffected by this change. SBM Offshore is looking into the reclassification of above emissions volume.

In 2023, water emissions are reported more accurately and now account for produced water discharges from both slop tanks and from topsides (process) directly.

Restatement – Scope 1 and Scope 2 emissions

During 2023, SBM Offshore gained access to new data related to energy consumption. It concerned the consumption of gas in the laboratory site in France and the use of back-up generators for power consumption by the owner of the building in Angola. This resulted in an increase in Scope 1 disclosure data. For 2022 numbers, the restatement represents an increase of 365 tonnes of CO2e – from 172 tonnes to 537 tonnes of CO2e.

For Scope 2 emissions, SBM Offshore found a miscalculation in its Netherlands energy consumption, impacting emissions as well. The location-based emissions for 2022 have changed from 2,140 tonnes of CO2e to 2,039 tonnes, the market-based emissions from 1,280 to 1,351 tonnes of CO2e and energy use in offices from 26,082 GJ to 31,182 GJ.