Energy Use in Offshore Oil and Gas Production:

Trends and Drivers for Efficiency from 1975 to 2025

PSI Working Paper, September 2005

Robin Vanner

Part of a wider collaborative study

A Methodology for Measuring Sectoral Sustainable Development and its application to
the UK oil & gas sector
The project is funded under the DTIs Sustainable Technologies Initiative LINK
Programme, with funding from the Engineering and Physical Sciences Research Council
(EPSRC), matched by industry, largely through in-kind contributions in identifying and
providing data, case studies and research papers

ABSTRACT
This paper looks at the energy used by the offshore oil and gas industry in the UK and considers the industrys efforts
to reduce its energy use. The sector is a significant emitter of CO2. It emitted 24.4 million tonnes of CO2 in 2001 and
was allocated 8% of the total UK allocation for the EU Emissions Trading Scheme in 2005. If, as many in the industry
believe, there is considerable potential for energy savings offshore, the sector could play a major role in achieving the
UKs climate change policy objectives. This paper explores the trends and drivers for efficiency, and then reports on
work undertaken in collaboration with Shell UK to help inform their energy management strategy. Datasets were
generated for 15 Shell facility case studies so that trends in the life of field energy use could be explored for three
different field types. By providing simple plots of the sectors energy and main material and flows, the approach which
has been developed can highlight contradictions or inconsistencies in forecasted data between similar fields, as well as
providing performance benchmarks for others in the sector to compare their own performance against. The papers
overall conclusion is that energy consumption relative to production is expected to increase later in a fields life.
Keywords: Offshore, oil, fuel gas, life of a field, projected energy demand, energy intensity, CO2 emissions.
ACKOWLEDGEMENTS
The research was supported and directed by a number of senior executives throughout the upstream oil and gas sector
in the UK. Many thanks is due to Mark Hope and Gerbert Schoonman of Shell helped frame the analysis, Professor
Paul Ekins of the Policy Studies Institute and James Firebrace (who represents UKOOA) directed the research
throughout and an Interest Group of industry experts provided feedback on emerging results. However particular
acknowledgement and thanks should go to John Madden of Shell who provided data, analysis and support throughout.
INTRODUCTION
This work has been undertaken under a two year DTI LINK funded research programme, in partnership with UK the
Offshore Operators Association (UKOOA), and the Policy Studies Institute. The overall objective of the study was to
develop a generic sustainable development methodology that could be applied both to the oil and gas industry and to
other regions or sectors and thus be of wider public benefit. This work represents one of four work streams within
the programme, and has been undertaken in close partnership with Shell Exploration and Production in Aberdeen.
Offshore Oil and gas production facilities require large amounts of energy to extract, process and export their products
to shore. For UK production, CO2 emissions from the sector were 24.4mt in 2001 (UKOOA 2002) and the sector was
allocated 8% of the total final UK allocation for the EU Emissions Trading Scheme (DRFRA 2005).
The North Sea is a relatively mature region with many of the installations nearing the end of their productive life. As
production levels decline the associated energy demand will not necessarily reduce correspondingly. For a typical
offshore installation, early years of high plateau rates of production are normally followed by a longer period where
net export rates decline and a variety of production-enhancing techniques are often deployed which require
considerable energy input. Examples include:

Water injection for production aquifer pressure support

Increased gas compression due to declining reservoir pressure

Increased dependency on production lift techniques such as gas lift or electrical submersible pumps.

Increasing complexity and reduced reliability of facilities operations arising from a variety of factors such as
increasing volumes of water produced with the oil production and the addition of sub-sea production facilities
which feed their production back into existing production facilities.
In addition, since production facilities are normally designed to cater for early and plateau rates and throughputs, the
period in later field life where throughputs are lower may be inherently inefficient. Therefore, it is commonly believed
that energy consumption relative to production will increase later in the life of a field. By implication, as the North
Sea basin reaches maturity, indicators of energy efficiency could show a declining trend.
EVENT IN THE LIFE OF A FIELD
There are a number of key events in the life of a field which can cause shifts in the amount of energy consumed. The
more significant events (i.e. thought to drive about 90% of the total of the energy consumption) are shown in Figure 1.
The direction in which these events are likely to impact on the energy consumption is illustrated with the direction of
the events arrow in Figure 1. A description of all of these events is provided in Annex I.

Figure 1 Key events in the life of the field

Fuel gas deficient /

gas import

Sub-optimal
throughput

GOR

Compressor
recycling
Water cut
Gas lift
Water
injection
Reduced
operating
pressure

Increased
downtime

Switch off train

Power sharing

Switch off
spinning reserve

Remote
operation

changes

Decommissioning

Energy Intensity (EI) GJ/GJ of Product

PWRI

Real-time
optimisation

New technology
Facilities
modification

Life of field
Note: The shape of the curve is entirely illustrative

THE MANAGEMENT OF ENERGY OFFSHORE

Forecasting of energy demand
An important early stage in any energy management cycle is the forecasting of future energy demand based on the
existing knowledge of the system. Energy factors are needed to forecast energy demand based on future production and
process requirements (see Bakkane et al 2004). Energy factors can either be generated using bottom-up methods to
understand the energy requirements of each piece of equipment in the overall production process, or the development
of correlation models based on historical experience. Both approaches suffer from the lack of reliable fuel gas use data,
which was only rigorously quality assured from the mid 1990s onwards. An additional drawback of using historical
flows to generate energy factors is that the various process flows tend to be correlated so the models have difficulty
allocating the energy consumption between the product and waste water streams. The results of bottom-up approaches
need to ensure that the results capture all of the equipment in the process train. A set of energy factors generated by
another study and by using the bottom-up approach, are provided in Table 1.
Table 1 - Bottom-up estimates of energy factors
Min
Max
Mean
kJ/m3
kJ/m3
kJ/m3
Oil production
0
7
Oil export
11
22
Total oil
11
29
Gas export
180
360
Water injection
25
54
Source: Novatech 2003, Appendix C

4
16
20
270
40

Drivers of Energy efficiency

Figure 2 shows that the drivers for the management of energy within the sector are regulation, cost, reputation and the
need to maintain production. Figure 2 illustrates that considerations of reputation are often dealt with separately to the
other more technical issues.

Figure 2 Drivers for energy management offshore

Oil Company

Regulation

Energy
management
team

Cost

Energy
management
outcome

Reputation

Maintain
production

Stakeholders

(Adapted from a presentation given at a conference organized by the Royal Institute of International Affairs under
Chatham House rules)
The flaring of gas offshore - regulation and reputation
A key issue for the sector in recent years has been the reduction in the volume of gas they flare offshore. Historically, a
large volume of the gas which was produced with the oil was burnt-off. Indeed, for some of the early oil fields there
were no gas export pipelines available for any excess gas. This is no longer the case and the flaring of gas is also now
tightly regulated. In addition, the pressure from stakeholders to stop flaring has caused the industry to increase their
efforts to reduce rates of flaring and flaring now only occurs where it is required for the safe operation of facilities.
However, there remains considerable potential for energy savings within the processes. Estimates of this potential are
thought to be as high as 20%.
Cost and the maintenance of production
Energy management is closely tied to, and to some extent constrained by, the need to maintain process stability and
optimisation. The financial loss in the event of any lost production means that any planned production downtime is
unlikely to be justified outside the annual maintenance shutdown and reliability is a key factor when investment
decisions are being made. In addition to this, many of the facilities in the UK sector were commissioned in the 1970s
and 1980s and have a relatively short lifespan remaining. There is therefore limited scope for companies to make
capital investments in more energy efficient equipment and much of the energy management effort is associated with
the management and optimization of existing equipment. The following 5-stage energy efficiency staircase is based
on the strategy Shell has adopted in their management of energy (presented in Vanner et al 2005):
1.
2.
3.
4.
5.

Understand the energy profile type of the facility (i.e. oil/gas, low/high volumes of water etc)
Specific assessment of the energy demands on each installation
Meaningful performance measures with good data.
Effective management review and forecasting processes
Embed ownership and culture of energy management in production teams

ANALYSIS
To start to explore the first two steps on the Shell energy efficiency staircase, analysis undertaken in collaboration
with Shell UK Exploration and Production used fifteen of their facilities as case studies to:
1. explore whether it is possible to generate a generic life of field view of energy use; and
2. provide benchmarks for other facilities to compare their performance against (see Svalheim 2003 and
Edwards 2004)
Table 2 Distribution of case studies by field type and age

Product

Life phase of field

Early

Mid

Late

Oil

Oil and gas

Gas

Shells standard conversion factors were used to generate the datasets and where possible the fields were selected to
achieve adequate spread across the different reservoir types and stages in field life. Due to the mature nature of Shells

facility assets, it was not possible to achieve a comprehensive range of case studies across the different categories, most
notably early life oil fields. This distribution of fields is shown in Table 2.
An indicator was developed which showed how energy use relative to production changes over the life of a field (see
Svalheim 2003 and Edwards 2004 for similar use of this indicator). The Energy Intensity (EI) of production is defined
as the total energy used in the offshore production process as a percentage of the total products exported from the
facility. The variables within the facility datasets, as well as how these variables were used to calculate the EI (i.e. only
using the variables in grey) are shown in Figure 3.
Figure 3 General model for the analysis
Injection
water & gas

Facility X

Produced water

Energy

Flare & vent

Fuel gas
Diesel
Electricity
Produced fluids

Equipment
Pumps
Compressors
Motors
Turbines
Engines
Heaters

Systems
Separation
Compression
Art lift
Treatment
Export
Utilities

(Oil, Gas & water)

CO2 emissions

Exports
(oil & gas)

Energy Intensity (EI)

= Energy / Exports (GJ/GJ)

Historical and projected data were combined to generate the facility datasets. It should be noted that there are a number
of potential quality issues with both historical and forecast data:
1. As previously discussed, fuel gas use was not rigorously quality assured until the mid 1990s.
2. Only recently with the introduction of emissions trading has quality assurance for fuel gas use forecasting
become apparent. There is an ongoing process of reviewing fuel use forecast since the introduction of
emissions trading.
3. The normal business plan timeframe within the industry is 5 years. Forecasts that extend beyond this point
will of necessity be based on rudimentary assumptions rather than using detailed bottom-up quantification
approaches.
4. Export support services some facilities provide export support for nearby facilities. The energy
requirements for this have not been factored into the analysis, although these export streams are not captured
within the data sets either. This is likely to affect gas fields in particular as the power required to achieve gas
export compression is considerably more than oil.
RESULTS AND DISUCSSION
A series of graphs were generated for each case study. These were used within a specially convened Interest Group of
12 industry experts on the 17th November 2004 where the results were discussed and interpreted. For the case studies
considered:

Oil fields have a life of field EI range of 0.7% to 2.7% (n= 5, mean = 1.6%)

Oil & Gas fields have a life of field EI of 1.4% to 3.7% (n= 7, mean = 2.0%)

Gas fields have a life of field EI of 2.3% to 6.5% (n= 3, mean = 4.7%).
Combined field, life of field trends in EI is shown in Figure 4.

Figure 4 - Energy Intensity (EI) by Product type

Oil

Energy Intensity % (EI)

(Excludes vent and flaring)

Oil & Gas

Gas

16%

All Case studies

14%

% EI (GJ/GJ)

12%
10%
8%
6%
4%
2%
49

46

43

40

37

34

31

28

25

22

19

16

13

10

0%

Year of production

Note: Dotted lines show where some forecast data is being used to calculate the EI
Figure 4 shows that, after the initial few years of production, the EI for all oil producing case studies (i.e. oil and oil &
gas case studies) are low and tend to follow an increasing trend during approximately the first 15 years of production.
This increase in EI is consistent with reduced operating pressure and production volumes often experienced during this
life stage. The EI continues to increase throughout the life of oil and gas mixed case studies but not for oil case studies this is discussed below. For gas fields, there is a consistent increase in EI forecasted after 25 years of production. The
historical trend leading up to this is not as consistent but would suggest an increasing trend.
Discussion
The trend for oil case studies is for a peak after about 20 years of production, followed by a decline after about 25 years
of production. This trend was partly generated by forecasted data, as shown in a dashed line in Figures 4 and 5. This
trend was considered by the industry experts attending the projects Interest Group to be counter to what they would
have expected. Data from another operating company was then sought to compare the trend. The results of this further
exercise are shown in Figure 5.
Figure 5 Comparison of Shell data with another operators data
Energy Intensity (EI) %
Oil only

Shell (Oil)
Company 2 Oil

14%

% EI (GJ/GJ)

12%
10%
8%
6%
4%
2%
49

46

43

40

37

34

31

28

25

22

19

16

13

10

0%

Year of production

Note: Dotted lines show where some forecast data is being used to calculate the EI
Company twos actual data broadly confirms the value for EI of oil only production to be about 4% after about 25 years
of production. The trends of the two operators forecasts then increasingly diverge. Figure 5 therefore confirms that the
Shell trend does not confirm to what would have been expected by others in the industry. This was extensively
explored and was found to be largely due to a number of additional production wells being planned, the production of
which will be fed into the selected case study facilities, and thereby increasing the production efficiency (i.e. EI) of
these case studies.
Through analysis of each case study in turn, the project team was able to draw conclusions about the specific variations
and events at each facility case study. This re-affirmed the relevance of key parameters that impact on the demand for

energy and the energy performance on a given installation. These parameters, as drawn up by John Madden who was
the Shell expert assigned to the work, were as follows:
Key energy factors - oil

system uptime

system pressure relative to export pressure

the need for energy intensive lift / treatment activities (gas lift, water injection)
Key energy factors - gas

system throughput

system pressure relative to export pressure

system throughput relative to original design capacity (% recycle)

Key process issues
i. System operating pressure relative to export system pressure
ii. Systems throughput relative to original equipment/system design basis
iii. Topsides process stability (whether prone to unplanned outages)
iv. Changes in time in gas/oil ratio (GOR), and gas /liquid ratio.
Key equipment issues
i. Compressors, turbines, motors
ii. Electric submersible pumps
iii. Water injection requirements
iv. Gas lift requirements
v. Requirement for equipment redundancy (e.g. spinning reserve on generators)
vi. Facility modifications (upgrades, new technology)
vii. Availability of sophisticated controls systems for turbines and compressors
Future operator focus
i. Explore potential for real-time surveillance of energy use data
ii. Need for energy use to be included in performance targets and reviews.
CONCLUSIONS
By providing simple plots of the life of field energy and main material and flows, the approach which has been
developed is able to highlight inconsistencies in forecasted data between similar fields, as well as providing broad
performance benchmarks for others in the sector to compare their own performance against. The research undertaken
has highlighted the considerable energy flows required for oil and gas production, and the potential CO2 savings which
may well be available. It has also found that making such savings will not come easily but will involve careful and
detailed energy management from those within the industry whilst striking a balance between reductions in emission
and the benefits from continued production of oil. The papers overall conclusion is that energy consumption relative to
production is expected to increase later in a fields life.

ANNEX I - EVENTS IN THE LIFE OF A FIELD

The direction of the arrow represents the impact the event has on the Energy Intensity (EI).
Reduced operating pressure Declining reservoir pressure during the life of a field requires increasing
energy to lift fluids from the reservoir, and maintain export pressures. This tends to be more evident in
gas fields.
Gas lift Injection of produced gas reduces the density, and therefore the hydrostatic pressure of the
fluid column, which in turn assists in the production of fluids. This requires compressors to compress the
injection gas.
Facility modification Periodic modifications to a facility, (not necessarily an energy efficiency
measure) which changes the demand for energy.
Power sharing Sharing of power between facilities or installations in a mini grid to reduce the
requirement for spinning reserve and operate at a more efficient point within their operating envelope.
Switch off spinning reserve Spinning reserve refers to a turbine staying online for no purpose other
than to safeguard production in the event of another turbine tripping out. If plant stability can be
increased to a sufficient level, then the additional turbine can be shut down, and thus reduce energy
consumption.
Switch off train / spinning reserve Declining production volumes permits the switching off of a
processing train or turbine leading to a step change in energy consumption.
Water injection The injection of water provides production pressure support and therefore maintains
higher levels of production, but these water injection pumps consume energy (see Table 2.2). There is
some limited potential for the re-injecting produced water into production (rather than non-pressure
support wells), and therefore reduce the overall energy consumption.
Water cut The re-emergence of water (produced water) with the produced oil and gas. The source of
produced water can either be water from the reservoir and its aquifers, or the re-emergence of injected
water. The increasing volume of produced water requires to additional energy to process, and usually a
decrease in volumes oil being produced.
Compressor recycling Declining gas production volumes may require the recycling of gas back
through compressors to enable them to continue to stay within their operating envelope. This is
necessary for both the safety and reliability of the compressors.
Increased downtime Downtime due to system trips or extended planned maintenance leads to
reduced production and greater energy use during downtime During downtime less total energy will be
used, but since there will be no or limited production then the EUP will be much higher. There may need
to be a switch to diesel fuel during downtime which is more carbon intensive.
Gas deficiency When a field becomes deficient in fuel gas it either imports gas or electricity if an
appropriate connector is available to neighbouring field, switch to more expensive diesel fuel, or
consider early decommissioning. Early decommissioning would lead to a reduction in EULP as late life
production is often very energy intensive.
Real time optimisation Allowing the operator access to real time data showing energy consumption
within the plant allows for greater optimisation of the process, and leads to a subsequent reduction in
energy use.
GOR changes Over the life of a field the ratio of oil to gas production will likely increase. Gas
production typically requires more energy due to the need for compression for export.

REFERENCES
1. Bakkane, K. K., Husdal, Geir., Linde Melhus, M. S., Utvik, T. R., Forecasting Energy Demand, Emissions
and Discharges for the Petroleum Industry Examples and Experiences, Society of Petroleum Engineers
(SPE), 2004, SPE 86606 paper prepared for presentation at the seventh SPE international conference on
Health and Safety and Environment in oil and gas Exploration and Production held in Calgary Alberta,
Canada, 29-31 March 2004
2.

DEFRA 2004, Draft UK National Allocation Plan for the EU Emissions Trading Scheme, Annex I List of
installations (Excel version), http://www.defra.gov.uk/corporate/consult/eu%2Detsnap/, Page last modified:
24 June 2004, Page published: 19 January 2004

3.

DEFRA 2005, European Union Emissions Trading Scheme, UK National Allocation Plan (Phase I)
Installation-level allocations http://www.defra.gov.uk/environment/climatechange/trading/eu/nap/install.htm - Page published: 24 May
2005

4.

Edwards, John., Improving Energy Efficiency in E&P Operations, Society of Petroleum Engineers (SPE),
2004, SPE 86604 paper prepared for presentation at the seventh SPE international conference on Health and
Safety and Environment in oil and gas Exploration and Production held in Calgary Alberta, Canada, 29-31
March 2004

5.

Novatech 2003, FORECASTING GUIDELINES, Part I: Energy Consumption and Emissions to Air in the
Upstream Petroleum Industry, Project Number 01043.00, Novatech Norway, July 18, 2003

6.

Svalheim, S., King, D. C., Life of Field Energy Performance, Society of Petroleum Engineers (SPE), 2003,
SPE 83993 paper prepared for presentation at Offshore Europe 2003 held in Aberdeen, UK, 2-5 September
2003

7.

UKOOA 2002, UKOOA Inventory Report Year 2001, Unpublished document, UKOOA October 2002