Our medium-term targets include reducing GHG emissions intensity by 50 to 60% by 2030 and achieving a near-zero methane emissions intensity by 2030. These targets are based on our current asset portfolio, emissions reduction opportunities and view of future scenarios where oil and natural gas continue to make up a significant proportion of the energy mix over that period.
Like countries who may have different pathways to their NDCs, our targets may not be the same as other companies due to differences in asset mix, geographies, risks and opportunities. We want our employees, financial sector and community stakeholders to understand our goal to be resilient and competitive through the energy transition and for those stakeholders to have the confidence that our people, portfolio and strategic capability will meet the challenge.
What is GHG emissions intensity? Our performance is based on our GHG emissions, stated in carbon dioxide equivalent terms, divided by our production, stated in barrels of oil equivalent. Our 2030 target is set on both a gross operated and net equity basis, covering both the assets we operate and the assets where we have an equity ownership.
Which GHGs are included? The GHG emissions intensity target covers all GHGs, but in practice this will apply to carbon dioxide and methane emissions, as our other GHG emissions have not been material. We have also set a specific target for methane emissions.
We use a Global Warming Potential (GWP) value for our emission calculations. GWP values, published by the Inter-governmental Panel on climate change (IPCC), are used to convert methane and nitrous oxide emissions to carbon dioxide equivalents (CO2e). We used the IPCC Fifth Assessment Report (AR5)1 for this conversion, the Fourth Assessment Report was used previously. This adjustment was made to align with most reporting methodologies used in the regions we operate, and is aligned with the GHG protocol. This change was applied to our 2016 baseline target year, our 2019 baseline target year for methane, as well as our 2024 data, as is standard practice, to ensure consistency between base year and future target years. Metrics impacted by this change are noted in the performance tables and GHG and methane performance sections.
What are the target boundaries? The GHG emissions intensity target applies to both Scope 1 (process) emissions and Scope 2 (imported) emissions as these are the emissions that we have the most control over. It is not intended to cover Scope 3 (consumer) emissions as we do not control how our total production is ultimately processed into consumer products. The target only includes emissions that are strictly related to production. Emissions from activities such as Aviation and Polar Tankers fleets are excluded. This may give rise to small differences between the intensity we report for our GHG target purposes and the intensity we report for our annual metrics. Over the past five years, this difference has been less than 2%, or 1 kg CO2别/叠翱贰.鈥�
When comparing against other companies, it should be recognized that our numbers comprise emissions from our broad-ranging exploration and production business, including natural gas processing plants, oil terminals, LNG plants, pipelines and compressor stations, and may not be directly comparable to smaller companies who do not operate such assets or larger companies who designate those assets as midstream or downstream. There may be occasions where we choose to invest in good quality emissions offsets to mitigate our emissions. As these become material, we will report our performance with and without the impact of these offsets in the interests of transparency.
Is the target based on a range or a single number? It is a range, which recognizes several uncertainties such as: Our changing portfolio, changing commodity pricing, the ability to forecast long-term emissions with precision, technology development, and the speed and scope of GHG regulation implementation.
What is the definition of methane emissions intensity? Our performance will be based on gross operated methane emissions, stated in carbon dioxide equivalent terms, divided by our gross operated production, stated in barrels of oil equivalent. This metric includes our methane emissions from both oil and natural gas production. Currently, we include the methane emissions reported in accordance with the regulations in the jurisdictions where we operate. Through our participation in the Oil and Gas Methane Partnership 2.0, our future methane estimates may be informed by directly measured methane emissions.
How do we define near-zero methane intensity? We have set a new medium-term target to achieve a near-zero methane emissions intensity by 2030. This near-zero target is defined as 1.5kg CO2e/BOE or approximately 0.15% of natural gas produced.
What is routine flaring? Routine flaring is defined as flaring that occurs during the normal production of oil in the absence of sufficient facilities to utilize the gas onsite, dispatch it to a market, or reinject it. Flaring for safety reasons, nonroutine flaring or flaring gas other than associated gas is not included as part of the World Bank Zero Routine Flaring initiative. The target applies to our operated new and existing oil field assets. New oil fields will be developed to incorporate sustainable utilization or conservation of the field’s associated gas without routine flaring. For existing oil fields with routine flaring, we will seek to implement economically viable solutions to eliminate flaring as soon as possible, and no later than 2025. Existing oil fields are those in production at the end of 2020. If we acquire and oil field with active, existing production, it may or may not be included in the goal to eliminate routine flaring, depending on the scope of the acquisition.
Safety flaring can continue for as long as necessary to maintain safe operations without being reclassified to routine or nonroutine flaring. A process upset event, including third party upsets resulting in flaring of associated gas that extends beyond 30 days, is considered routine flaring and must be justified by the business unit. Any other nonroutine flaring event that extends beyond one year, regardless of conditions, must be approved by the vice president, HSE.
Why is the 2030 GHG target based on emissions intensity rather than absolute emissions? We are in a dynamic business environment where plans, technology, prices, industry structure and costs all change rapidly. As we learn new information, we often accelerate or defer projects, and we buy, sell or swap potential oil and gas developments to ensure that our portfolio is competitive. These actions could render an absolute target infeasible. An intensity target that allows a company to change its plans without having to reset its target appears to be more durable.
This has been particularly true over the past few years, when the industry has been in a state of consolidation. For example, in 2021, ConocoPhillips completed the acquisition of Concho Resources and the Permian assets held by Shell, which were significant additions to our portfolio. Similarly, in 2024 we completed the acquisition of Marathon Oil, which added low cost of supply and low GHG intensity assets to our portfolio. Had we set absolute emissions reduction targets, they would have needed to be adjusted to reflect the portfolio changes, making it harder to manage and potentially more confusing for stakeholders.
Our intensity target is based on our current asset portfolio, operational emissions reduction opportunities and view of future scenarios where oil and natural gas continue to make up a significant percentage of the energy mix. Providing oil and gas production that will best compete in any energy transition scenario is central to our company strategy. This production will be delivered from resources with a competitive cost of supply and low GHG intensity, as well as diversity by market and asset type. Our view is that GHG intensity, possibly by asset type (e.g., LNG, conventional, unconventional), will emerge as a useful metric for comparing company performance and ensuring the best barrels on both a cost basis and GHG basis are produced through the energy transition.
What uncertainties exist for GHG emissions intensity? First, we would expect GHG intensity of our older fields to increase through the next several years to 2030. (As natural gas and oil fields deplete, more energy is required to produce the same or lower volumes, while newer fields utilizing modern technologies are likely to operate at lower intensities.) Second, some of our reported emissions are the result of applying standard emissions factors which may underestimate or overstate our actual emissions. We expect industry technologies around emissions detection and monitoring and initiatives such as OGMP 2.0 to advance through this decade to reflect actual performance more accurately, which could also increase or decrease our intensity. Third, our portfolio will continue to change over time and, depending on the intensity of new production, our future short-term intensity could increase or decrease. However, by setting a medium-term 2030 target, we are committed to reducing our emissions intensity over time.
1. The Global Warming Potential (GWP) of methane (CH鈧�) issued by IPCC is: AR4 = 25, AR5 = 28, AR6 = 27.