ASX-list oil and gas producer, Oil Search, has become one of the early companies to release a Climate Change Resilience Report prepared in accordance with the Financial Stability Board Task Force Recommendations for Climate-related Financial Disclosures (TCFD), released mid-2017.
The report includes the outcomes of climate scenario analysis conducted during 2017, where Oil Search’s portfolio was tested against the International Energy Agency (IEA) New Policies Scenario, IEA 450 (2°C) Scenario and the Greenpeace Advance Energy [R]evolution (~1.5°C) Scenario.
Oil Search was established in Papua New Guinea (PNG) in 1929. More than 98% of its assets are in PNG, where it operates all of the country’s producing oil fields, holds an extensive appraisal and exploration portfolio and has a 29% interest in the PNG LNG Project, operated by ExxonMobil PNG Limited. It has also made recent exploration acquisitions in Alaska.
The Climate change Resilience report shows that the company has applied a US$24 per tonne 'base case' price on carbon for projects in PNG, and UC$40 per tonne in the US.
The company says the analysis shows its current and growth assets have "long-term resilience and would continue to generate positive returns to shareholders under a range of decarbonisation scenarios, including a 2°C pathway".
The report also provides an overview of how the company manages its climate risks, how it conducts climate scenario stress tests and what targets and metrics are used to monitor performance.
Oil Search’s Managing Director, Peter Botten said: “In 2017, Oil Search undertook considerable work on our approach to climate change and how it fits into the company’s strategy and decision-making processes.
“As a result of this work, towards the end of the year, the Oil Search Board approved a new Climate Policy and today, we have released our inaugural Climate Change Resilience Report, in line with the recommendations of the TCFD, making Oil Search one of the first companies to have reported under these new guidelines.
“We are pleased to report that the extensive testing against independently published climate scenarios has concluded that the PNG LNG Project and Oil Search’s operated oil assets, as well as our LNG expansion project in PNG and oil assets in the Alaska North Slope, are all assessed to be resilient to climate change under a range of scenarios.
“Our recent analysis demonstrates that oil and gas will continue to have a major role to play and that natural gas will be pivotal in the transition to a low emission energy system. We are fortunate to have exposure to resilient assets, both in PNG and Alaska. The impact of climate change will continue to be incorporated in all our strategic decisions.”
The Oil Search Climate Change Resilience Report is available here