Lundin Energy to sell 'green' North Sea oil

16 Jun 2021

London (Quantum Commodity Intelligence) - Lundin Energy will sell carbon-free crude oil from its share of the Johan Sverdup offshore field in Norway, the company announced Tuesday.

The first cargo trade of certified carbon neutrally produced oil from Johan Sverdrup has already been bought by GS Caltex in Korea.

The 2-million barrel cargo will load in July 2021. 

Lundin Energy, a Swedish company, will neutralise emissions by buying offset permits generated from high quality, natural carbon capture projects, like forests, and which have been certified by the Verified Carbon Standard.  

Sweden levies the highest carbon tax in the world at 1,190 Krona/mt ($142.25/mt) of carbon dioxide equivalent on importers, distributors and large consumers of fossil fuels.

Johan Sverdup is certified as one of the world’s lowest carbon-emitting offshore oil and gas fields at 0.45 kg of carbon dioxide per barrel of oil equivalent (boe), about 40 times lower than the world average.

With crude oil prices at around $550/mt and carbon prices at around $2.50-10/mt depending on what type, it could cost just $8-33/mt to offset emissions at 0.45 kg per barrel.

Lundin Energy’s share of Johan Sverdup currently amounts to 100,000 bpd, but this will rise to 140,000 bpd next year.

From 2025, Lundin Energy will sell all its oil production as carbon neutral.

Norwegian energy giant Equinor also said Tuesday in a strategy update that it is investing further in the Johan Sverdup field due to its low carbon emissions in a move it hopes will cut the break-even cost 25% to $15/b.