Wednesday, 28 August, 2024 / Edition 22

I enjoyed meeting some of you yesterday at this year’s IMAGE meeting in Houston. The conference is still going! Please stop by booth #200, bring your friends, and encourage them to sign up for Well Read and AAPG’s other newsletters. The more, the merrier!

Now, here are two pieces of interesting energy news from the past week.

Shangyou Nie

Editor, Well Read

ENI Gets the Greenlight for its $12-billion Gas Project in Indonesia

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ENI announced it has received approval from Indonesian authorities for its two Plans of Development for the Northern Hub project in the northern Kutei Basin. The project will commercialize on the Geng North discovery, made in October 2023, as well as the nearby Gehem Field.

ENI’s plan:

• The PODs will involve a newly built FPSO with a capacity of 1 billion cubic feet of gas per day and 80,000 barrels of oil per day of condensate, with 1 million barrels of storage.

• The PODs aim to commercialize 6.6 trillion cubic feet of gas and 400 million barrels of condensate.

• The Northern Hub project will cost $12 billion to develop and $5.6 billion to operate, according to Indonesian authorities as reported by Upstream.

Catch up fast:

• ENI discovered the Geng North gas and condensate field in October 2023. It contains 5 trillion cubic feet of gas and 400 million barrels of condensate.

• Geng North is located in the North Ganal Production Sharing Contract area, operated by ENI with 83.3 percent equity. A Singaporean partner Agra Energi holds the remaining equity.

• The Gehem field contains 1.6 trillion cubic feet of gas and is located in Rapak PSC area.

• Gas produced from these two fields will be used partly for Bontang LNG and partly for domestic markets.

What they’re saying: “The establishment of a new production hub in the (northern) Kutei basin represents a game-changer for ENI in Indonesia,” said ENI CEO Claudio Descalzi.

ENI in Indonesia:

• ENI has equity in 12 PSCs in Indonesia, nine in deepwater.

• ENI took over operatorship of the Indonesia Deepwater Development (IDD) project from Chevron in 2023 and spent $4.9 billion to acquire Neptune Energy in 2024 to build up its Indonesian portfolio.

• ENI has previously received approval for its POD for the two-trillion- cubic-foot Gendalo-Gandang project on the Ganal PSC.

• ENI operates and owns 82 percent equity in the Ganal and Rapak blocks with Chinese partner Tip Top of Sinopec, which owns 18 percent.

• ENI received a 20-year license extension for Ganel and Rapak PSCs, which were set to expire in 2028.

• ENI might take FID for its Northern Hub and Gendalo-Gandang projects, adding to its existing gas production in the southern Kutei Basin.

• ENI’s increased gas production fits well with Indonesia’s government desire to have more gas supply, both for its aging Bontang LNG project and domestic markets.

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German Study Shows Most Climate Policies Do Not Effectively Reduce Emissions

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Berlin-based Mercator Research Institute on Global Commons and Climate Change recently published a study in Science suggesting that climate policy may not address emissions as effectively as legislators had hoped.

What they found: The study analyzed 1,500 climate policies from 41 countries and found that only 63, or 4 percent, actually reduced greenhouse gas emissions.

Study design:

• The study used an AI algorithm to analyze policies introduced in different countries between 1998 and 2022, as compiled by the Organization for Economic Cooperation and Development.

• The 41 countries analyzed are located on six continents and represent 81 percent of the world’s CO2 emissions.

• The samples included 46 types of policy interventions, ranging from energy efficiency standards for household appliances, to carbon emission taxes on fossil fuels, according to the Wall Street Journal.

• Researchers estimate each of the 63 successful policies helped reduce between 0.6 and 1.8 billion tons of CO2.

• The study found that subsidies and regulations rarely worked to reduce emissions when implemented in isolation.

What supporters are saying:

• “This work illustrates the kinds of policy efforts that are needed to close the emissions gaps in various economic sectors,” said Jesse Smith, senior editor for Science.

• “The key value in the paper is in identifying those clean breaks in emissions in specific sectors and countries,” said Matthew Paterson of the University of Manchester, United Kingdom.

• “The commonality in those successful cases is where we see subsidies and regulations being combined with price-based policy instruments,” said Nicolas Koch, senior researcher at Mercator Insitute and one of the study’s authors.

What critics are saying:

• Long-term effects of energy policies have not been properly analyzed, as the study focuses on polices that had effects within two years of implementation.

• “It’s important not to overinterpret the headline result,” said Robin Lamboll of Imperial College London, suggesting that smaller emissions cuts not picked up by the study may combine to make big differences.

What to watch:

• Will governments take lessons from this study to implement changes to their climate policy setting?

• Read the study by Stechemesser and her international colleagues here.

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✉️ To get in touch with Shangyou, send an email to editorial@aapg.org.