4.9.2Environmental Reporting

Offshore

In accordance with the IOGP and IPIECA guidelines, SBM Offshore reports on offshore units using the following reporting boundaries :

• Units in the Company’s fleet producing and/or storing hydrocarbons under Lease and Operate contracts
• Units in which the Company exercises full operational management control. This view is complemented with an equity share view for the same scope on total offshore scope 1 emissions. Through this approach SBM Offshore accounts for offshore emissions according to its share of equity in the assets under operational control. The share reported is determined as the equity share held by SBM Offshore in the JV that itself owns the vessel

SBM Offshore considers ‘operational management control’ as: having full authority to introduce and implement operating policies at the operation, in line with the IPIECA definition.

The environmental and process safety performance of the Company is reported by region or management area: Brazil, Angola, North America & Equatorial Guinea. Based on the criteria stated above, SBM Offshore reports on the environmental and process safety performance for the following 13 units :

• Brazil – FPSO Espirito Santo, FPSO Capixaba, FPSO Cidade de Paraty, FPSO Cidade de Anchieta, FPSO Cidade de Ilhabela, FPSO Cidade de Marica, FPSO Cidade de Saquarema 
• Guyana − Liza Destiny (FPSO)
• Angola – FPSO Mondo, FPSO Saxi Batuque and N’Goma FPSO
• North America & Equatorial Guinea – FPSO Aseng
• Asia – FPSO Kikeh 

The environmental offshore performance reporting methodology was chosen according to the performance indicators relative to GRI Standards and IOGP guidelines. This includes:

• Greenhouse Gases, referred to as GHG which are N₂O (Nitrous Oxide), CH₄ (Methane) and CO₂ (Carbon Dioxide)
• GHG emissions per hydrocarbon production from flaring and energy generation
• Non Greenhouse Gases which are CO (Carbon Monoxide), NOx (Nitrogen Oxides), SO₂ (Sulphur Dioxide) and VOCs (Volatile Organic Compounds)
• Gas flared per hydrocarbon production, including gas flared on SBM Offshore account
• Energy consumption per hydrocarbon production
• Oil in Produced Water per hydrocarbon production

SBM Offshore reports some of its indicators as a weighted average, calculated pro rata over the volume of hydrocarbon production per region. This is in line with the IOGP Environmental Performance Indicators.

Onshore

SBM Offshore reports on its onshore scope 1, 2 and 3 emissions¹. As indicated in the 2019 Annual Report, efforts have been made in 2020 to further mature onshore emissions reporting to extend the reporting scope to include all locations in operational control by SBM Offshore. In 2020, the reporting scope includes all locations where the headcount is over 10 and yards over which the Company has full operational control. The Company can now report onshore emissions on more locations. There is no revision of the 2018 data however, as there was no data for the locations added in the scope in 2019.

Next to this, the Company reports both the ‘location-based approach’ as well as the ’market-based approach’ for its scope 2 emissions. This is related to the SDG target on percentage of renewable energy used in the offices set in place for 2019. SBM Offshore reports onshore emissions data for the following locations: Amsterdam, Houston, Kuala Lumpur, Marly, Monaco, Rio de Janeiro, Schiedam, Shanghai, Carros lab, Georgetown, Bangalore, Brazil Shorebases, Canada Shorebase, Luanda Shorebase and Malabo Shorebase. The Singapore office is excluded as we have no visibility on energy breakdown usages as the energy is included in the lease.

The Company reports on scope 3 emissions related to business flights. This consists of all flights invoiced and paid for via our standard travel system in 2020 and the data covers all operating companies. The GHG emissions relating to business flights are based on third-party documentation on distances, the conversion to CO₂-equivalent is based on CO2emissiefactoren.nl.

For the onshore electricity usage, the Company uses the World Resources Institute Greenhouse Gas Protocol (GHG Protocol) method and conversion factors to calculate CO₂ equivalents. For fuels the Company uses conversion factors published by the UK government’s Department for Environment Food & Rural Affairs (DEFRA). CO₂ equivalency is a quantity that describes, for a given mixture and amount of greenhouse gas, the amount of CO₂ that would have the same global warming potential (GWP), when measured over a specified timescale (generally, 100 years).

Atmospheric Emissions

The calculation of air emissions from offshore operations units uses the method as described in the EEMS-Atmospheric Emissions Calculations (Issue 1.810a) recommended by Oil & Gas UK. SBM Offshore uses the GHG Global Warming Potentials from the Fourth Assessment Report issued by the IPCC.

Emissions reported in the Company records include :

• GHG emissions for the production of energy. Records of GHG emissions from steam boilers, gas turbines and diesel engines used by the operating units.
• GHG emissions from gas flared. Flaring events accountability is split into either client or SBM Offshore: ‘SBM Offshore Account‘ is flaring resulting from unplanned events. Whereas client account is flaring resulting from events caused by the client or planned by SBM Offshore in agreement with the client.
• GHG emissions from flights. Scope 3 emissions are calculated using distances and third-party emissions factors.
• GHG emissions for onshore operations are reported using the market-based and location-based approaches.

Identifying the causes of flaring for which SBM Offshore is responsible and acting on these events is part of the continuous improvement process.

Offshore Energy Consumption

The energy used to produce oil and gas covers a range of activities, including :

• Driving pumps producing the hydrocarbons or re-injecting produced water
• Heating produced oil for separation
• Producing steam
• Powering compressors to re-inject produced gas
• Driving turbines to generate electricity needed for operational activities

The main source of energy consumption of offshore units is Fuel Gas and Marine Gas Oil.

Oil in Produced Water Discharges

Produced water is a high volume liquid discharge generated during the production of oil and gas. After extraction, produced water is separated and treated (de-oiled) before discharge to surface water. The quality of produced water is most widely expressed in terms of its oil content. Limits are imposed on the concentration of oil in the effluent discharge stream (generally expressed in the range of 15-30 ppm) or discharge is limited where re-injection is permitted back into the reservoir. The overall efficiency of the oil in water treatment and as applicable reinjection can be expressed as tonnes of oil discharged per million tonnes of hydrocarbon produced.

Incidental environmental releases to air, water or land from the offshore operations units are reported using the data recorded in the SRS database. SBM Offshore has embedded a methodology for calculating the estimated discharge and subsequent classification within the SRS tool.

Changes in reporting

Data Revisions

The offshore environmental data has been revised due to an improved process methodology in 2020. The following elements have been updated in 2020 which had an impact on the overall emissions KPIs :

• Gas Production figures have been further aligned with IOGP definition (updated to include only Fuel Gas, Gas Flared and Gas Exported). This update has an impact on the overall Hydrocarbon production (sum of oil and gas produced) which decreased compared to what was initially reported. This therefore also affected the different ratios per production such as: gas flared, GHG emissions, Energy Consumption, Oil in water per production. These ratios increased.
• Conversion factors for Gas volumes have been updated to reflect Standard conditions (15.5 deg). This update slightly affected the volumes of gas considered for the vessels where this conversion factor applied. The gas volumes produced (tonnes) considered slightly decreased. This therefore had an impact on the parameters using the volumes of gas such as (gas flaring, GHG emissions from Flaring and Energy generation – as power generation emissions are also based on amounts of Fuel Gas).

These updates have been made to improve data and calculations accuracy and ensure consistency in the way our KPIs are produced. To ensure proper comparison of trends with previous year’s reported data, 2019 figures have been presented using the new methodology.

Revised Data for 2019

• ¹ GJ = gigajoule, energy from fuel gas and marine gas oil
• ² gigajoule per tonnes of hydrocarbon production
• ³ tonnes of gas flared per thousand tonnes of hydrocarbon production
• ⁴ in tonnes of CO2 equivalent
• ⁵ tonnes of oil discharged to sea per million tonnes of hydrocarbon production