Greening offshore drilling: Rigs powered by alternative fuels in pursuit of low-emission era

As the offshore energy industry continues its gradual shift to low-carbon and renewable energy sources, offshore drilling players are intensifying their efforts to slash emissions on the path to a sustainable future. While drilling rigs largely run on diesel, which creates electricity to power the motors, rig owners are exploring ways to harness low-carbon and green alternatives. In this fast-changing landscape, which fuel will dominate the rig market and power offshore drilling rigs in the years ahead?

Main takeaways:

• Offshore drillers exploring low-carbon technology options as part of sustainability frameworks to find cost-effective and sustainable power sources
• LNG wins majority vote as key rig fuel to slash emissions in years ahead
• Rig owners looking into running their rigs on alternative fuels
• Hydrogen, methanol, and biofuels among future contenders to power drilling rigs in Seadrill and Saipem’s view, respectively
• Efforts to decarbonize rig operations not yet at ‘in with the new greener fuels out with the old fossil ones’ stage
• Embracing change and optimize drilling operations is work in progress
• Odfjell Drilling places green fuels at the heart of its zero-emission drilling mission
• Valaris’ emission reduction recipe: electrification and biofuel blends
• Noble pinpoints green methanol as promising rig fuel for GHG emission cuts
• Transocean’s strategy: oil and gas alongside renewables

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With decarbonization sweeping over every corner of the offshore energy industry, the oil and gas sector is working to curb its greenhouse gas (GHG) emissions footprint. The offshore drilling industry has also embarked on the energy transition journey, as rig owners pursue innovation, digitalization, artificial intelligence (AI), and emission reduction tools to ensure more sustainable fleet operations.

While popular decarbonization methods on offshore platforms tend to include offshore wind farms and subsea cables connected to onshore power sources, the GHG emission reduction quest for the vast majority of offshore drillers entails finding a suitable replacement for diesel engines, which usually require 20 to 45 cubic meters of diesel fuel per day, depending on rig type, environment and operations being performed.

In light of this, an anchored rig will use less diesel than a dynamic positioning one. According to the U.S.-based Noble Corporation, one of the serious emerging contenders for the job seems to be green methanol, as using this fuel instead of traditional diesel fuel on a jack-up rig is said to have the potential to result in up to 95% CO₂ emission reductions.

The International Petroleum Industry Environmental Conservation Association (IPIECA) has spotlighted several measures and equipment with the potential to boost energy efficiency, encompassing well-planned drilling operations, design and maintenance of the drilling rig, positioning and transit of the drilling rig, choice of heave compensation system, enhanced flexibility of energy production on the rig, closed bus, peak shavings of drilling loads, heat recovery systems, along with heat tracing.

IPIECA has also mentioned the optimization of cooling water systems, along with energy storage systems (ESS), the introduction of a combined hydrogen and methanol injection system, incentives in contracts with rig owners to reduce fuel consumption, data analytics and digitalization in internal emission monitoring, and alternative fuel or power sources.

Aiming to shed more light on the potential fuel that will – to a large extent – replace diesel to power drilling rigs, Offshore Energy created a poll to get industry professionals’ views on the issue, asking: ‘As the search for solutions to pave the way for further emission cuts gains ground, which fuel will drilling rigs mostly run on in the future?’

The participants had four options to choose from, which encompassed LNG (50%), green methanol (10%), ammonia/hydrogen (19%), and biofuels/alternative fuels (20%). As half of the votes went to LNG, the results of our research show that this fuel will likely play the biggest role in the rig decarbonization game, followed by biofuels and the rest of the alternative fuels on the menu.

Shell bet on hydrogen a few months ago by pouring a multi-million investment in a Brazilian technology research and development project testing hydrogen in diesel engines on marine vessels, such as drilling rigs and tankers, to reduce greenhouse gas emissions. This enables the oil major to pool resources with Ocyan and LZ Energia, the Protium Dynamics business unit, to decarbonize offshore operations.

All offshore drilling players are seeking to slash their GHG footprint. In line with this, Switzerland-headquartered Transocean intends to reduce operating emissions intensity by 40% relative to 2019 levels by evaluating and pursuing projects that support alternative energy sources.

The U.S.-based Diamond Offshore, which was also looking into ways to curb its emissions, saw the use of biofuels as an opportunity to achieve a reduction in GHG emissions in its business since the ones made up of bio-waste projects are said to have the potential to downsize lifecycle GHG emissions by 20% or more. This drilling player is now part of Noble Corporation.

On a mission to diversify energy sources and minimize the carbon footprint across offshore operations, Saipem disclosed plans to combine forces with Eni to enrich its decarbonization arsenal with renewable fuels, intending to employ biofuels on its drilling and construction vessels, with particular attention to operations in the Mediterranean Sea.

While embracing energy efficiency, Seadrill was trialing hydrogen and methanol injection technology in its fleet. The offshore drilling player claims the injection of a precise blend of hydrogen, oxygen, methanol, and water into three different air intake locations of its main diesel engines enables it to optimize the combustion process.

This process is anticipated to result in emissions reduction and fuel savings, with a projected drop in CO2e emissions of approximately 10-15% and a decrease in NOX emissions of 30-80% depending on engine load.

Seadrill previously said emerging technology opportunities could address and bring down GHG, NOX, SOX, and PM emissions, signaling its willingness to pursue carbon capture and utilization storage (CCUS) alongside opportunities to improve onboard systems, such as alternative fuels and hybrids.

Like its peers, Odfjell Drilling is determined to respond to the climate change challenge of transitioning away from fossil fuels to usher in a net-zero era. In pursuit of a green shift, the Aberdeen-based offshore drilling player has set interim emission goals to reach a 40% emission reduction by 2026 and 70% by 2035 on its journey to be a net-zero emission company by 2050.

In a move designed to bring it closer to zero-emission drilling operation, the rig owner pooled resources with its suppliers to bring battery- and hybrid solutions to its MODU fleet, resulting in new technology being retrofitted to its fleet, which led to the downturn in emissions. The firm considers energy efficiency and alternative energy sources as essential tools paving the way to net zero goals.

Two years ago, the company outlined four routes toward zero emissions, which entailed performing studies on alternative fuels such as ammonia and piloting biofuel onboard the Deepsea Atlantic semi-submersible rig, carbon capture solutions, a concept for drilling using shore power from a field center, and renewable power generation by floating wind turbines in close collaboration with its sister company, Odfjell Oceanwind.

The UK-based rig owner’s journey toward zero-emission drilling is divided into four phases covering operational awareness; increasing energy efficiency with peak shaving, redundancy, and spinning reserve projects alongside direct power reducing projects; optimizing solutions; and zero emission ready phase.

This fourth and final stage identifies green fuels as the key to unlocking GHG emission reduction targets set for 2035. In line with this, Odfjell Drilling participated in a study on ammonia as a marine fuel in 2022, initiated by Equinor and carried out by the UK-headquartered rig owner, Wärtsilä, and KBR, which created a dual fuel concept for retrofitting a GVA7500 rig to utilize ammonia as fuel, with an estimated CO2 reduction of 58% during moored operations.

Furthermore, the offshore drilling firm recently highlighted that renewable biofuel, piloted onboard its Deepsea Atlantic rig using hydrotreated vegetable oil (HVO) produced from waste oil in 2022, proved to be a suitable drop-in fuel, achieving carbon curbs of over 80% compared to a fossil fuel comparator. This prompted the firm to conclude that its MODUs are ready to operate on HVO biofuel to slash emissions but employment of such fuels depends on the availability and costs.

While confirming that shore power supplied to a rig through a nearby field center powered from shore is possible, Odfjell Drilling describes this decarbonization option as costly and explains that a plan for re-use of the cable would need to be devised once the drilling operation is finished.

Moreover, the rig owner points out that a concept study on renewable energy supply from a mobile offshore wind unit (MOWU) to a MODU, completed in 2022, includes an optional WindGrid solution with short-term energy storage, opening the door to emission reductions of up to 66% on the MODU while throwing biofuel use into the mix puts further cuts on the table.

Odfjell Drilling’s scenario for zero-emission operations envisions the possibility of a rig running on a combination of marine gas oil (MGO) and biofuel along with carbon capture and storage technology to capture the CO2 from the engines. Despite steps taken to enable retrofitting the rig to capture, temporarily store, and load the CO2 onto ships for further processing, the rig owner does not expect CCS to be commercially available soon.

Valaris is another offshore drilling player determined to reduce emissions. To this end, the company began implementing rig engine optimization projects, using biodiesel fuel in a jack-up rig, and conducting engineering studies on rig electrification, alternative fuels and additives, and other carbon reduction technologies.

The firm’s Scope 1 emissions were 703,674 metric tons of CO₂ equivalent (mt CO₂e) in 2023, an increase of 12% from 2022 due to increased mobilizations throughout the year and rig reactivations prompted by improved market conditions. However, the rig owner underlines that these emissions are 27% lower than those from its base year of 2019, thanks to lower active rigs in 2023. Valaris’ fleet intensity ratio is 15% higher than in 2019 because of a fleet makeup of more floaters.

While contemplating climate-related opportunities, the offshore drilling giant emphasizes the use of lower-emission sources of energy such as biodiesel and green electricity and the transformation of its energy generation to low-emission alternatives such as wind, solar, wave, tidal, hydro, geothermal, and biofuels, along with the access to new markets and new assets servicing the energy transition such as carbon capture and sequestration.

Valaris, which has been using biofuel blends on the Valaris 106 jack-up rig in Indonesia, claims that these fuels enable a significant reduction of GHG emissions, subject to the carbon content of such biofuel. However, such fuels are not widely available across all geographies for use onboard the firm’s offshore fleet. Since the offshore driller’s customers provide the fuel for its rigs, replacing diesel with low-emission alternatives will require their active participation in switching to biofuel blends.

Therefore, the firm’s customers would not need to purchase the biofuel blend, ensure its bunkering onshore, and contract supply vessels and other logistical services to deliver it to its rigs. Valaris perceives the customer-provided logistical ecosystem as essential for switching from diesel to biofuel blends for its fleet.

While the rig owner is interested in electrifying its jack-up units, it underlines that the required access to electricity is not yet available for its jack-up operations offshore. The firm is convinced that powering its jack-up rigs using a local electric grid or other sources, such as offshore wind farms and offshore platforms, would bring a significant reduction in its GHG emissions.  

“As is the case for biofuel blends, electrification will require the provision of electricity by our customers. Wider access to this technology will also require the participation of other stakeholders, including regulatory bodies and local authorities,” underlined Valaris.

Just like its offshore drilling peers, Noble Corporation is leaving no stone unturned in its quest to curb its GHG emissions level. Given its aspiration to slash carbon intensity by 20% by 2030, the firm is employing methods within energy consumption monitoring, energy management plans, sustainable behavior programs, and matured energy efficiency upgrades to achieve its aims.

Noble sees itself as a link at the front end of the oil and gas value chain, thus, it is determined to address the climate challenge, as hammered home by its emissions reduction initiatives, including what it claims to be the world’s first rig operating on shore power and the world’s first hybrid, low-emission rig upgrade. The firm also entered a carbon capture and storage (CCS) consortium and is testing to run its rigs on 100% sustainable fuels.

The drilling heavyweight’s Scope 1 emissions were 858,065 metric tons of CO₂ equivalent in 2023 with 750,460 MtCO₂e from rigs on contract and 107,605 MtCO₂e off contract, respectively. The company’s carbon intensity, measured as MtCO₂e per contracted day, was 38.05 for jack-up rigs and 120.27 for floaters, representing a 5 and 1.5% reduction over the respective carbon intensity in the baseline 2021 year. Noble’s Scope 2 emissions were 1,038 MtCO₂e in 2023 and accounted for less than 1% of its total emissions.

Noble continues actively exploring alternative power sources as key to decarbonizing the offshore drilling industry. The rig owner 4kl closely with our customers to explore using climate-friendly fuels on our drilling rigs. In offshore drilling, the industry standard is for the customer to take responsibility for the supply and cost of the fuel used during drilling campaigns.

As a result, Noble is dependent on collaboration with customers to achieve emissions reductions from alternative fuels. The company’s zest to move to more sustainable operations is illustrated by the rollout of the Energy Efficiency Insights (EEI) across all 29 marketed rigs. This energy consumption monitoring solution is believed to have the potential to deliver 6–10% reductions in fuel consumption and derived emissions.

Jorgen Schaffer, Rig Manager at Noble Venturer, outlined: “EEI is a game changer that we use actively to track our energy consumption patterns and overall environmental footprint. We host a bi-weekly ‘green meeting’ with our customer and EEI forms the base for discussions that have resulted in optimizing fan settings, thruster operations, and drilling equipment utilization, amongst others.”

Noble is adamant that its strategy is designed to embed decarbonization into its business model, allowing it to offer its customers decarbonization solutions to help them meet their GHG emissions reduction targets with the use of advanced monitoring equipment on rigs to seek to optimize fuel consumption and test what it deems as climate-friendly fuel types like green methanol and 100% sustainable diesel.

With the low-carbon and sustainable world in mind, the offshore drilling player thinks that transitioning to lower-emission energy sources such as biodiesel, renewable sources for electricity, rig electrification, and/or hybrid energy systems will result in a drop in its GHG emissions and create operational cost savings in the medium to long-term.

Building upon its renewable diesel test on the Noble Interceptor jack-up rig in 2022, Noble collaborated with Shell to test hydrotreated vegetable oil (HVO) in 2023 on the Noble Globetrotter II drillship in the U.S. Gulf of Mexico to provide comparable dynamic positioning system performance and engine response when using 100% HVO instead of conventional marine diesel.

While describing the performance results as satisfactory, the firm notes that this opens the path to using HVO and HVO blends in its floater rigs when its customers can supply them.

Since the transformation to a low-emission economy is giving rise to a growing demand for plug and abandonment (P&A) services in decommissioning oil and gas infrastructure, Noble is convinced that making its rig fleet ready for P&A activities holds significant market potential. In addition, the firm underscores that offshore drilling operations can tap into the emerging CCS value chain.

The company anticipates future demand for its services to entail drilling wells in reservoirs where CO₂ injection is already being executed at an industrial scale. Driven by this belief, the firm joined forces with DNV and BP to define the requirements for qualifying an offshore rig to be ready for CO₂ drilling operations.

This marriage of experience DNV has within CO₂ risk management, BP within CO₂ injection for enhanced oil recovery, and Noble from participation in the Greensand project enabled assessment of equipment upgrades and management system modifications required to perform drilling operations with a risk of encountering a high concentration CO₂ event.

Based on the rig owner’s data, the CO₂ rig project finished the initial phases of technology qualification, technology assessment, and threat assessment in 2023. Equipment testing followed this, providing the basis to complete full equipment and management system recommendations in December 2023.

While the energy transition story presents a wide palette of low-carbon and sustainable fuels for offshore drillers to try, green methanol is lately being signaled out in the shipping and maritime world as a decarbonization enabler on the path to net zero operations. Is it possible for an offshore drilling rig to run on this fuel and what will it take to equip a harsh environment jack-up with this option?

To get answers to these questions, Noble completed the conceptual design of a jack-up rig powered by green methanol in 2023 based on a prior feasibility study to understand the implications of converting a jack-up from operating on conventional marine diesel oil to green methanol.

The offshore drilling giant explains that the intention behind the conceptual design was to address the changes that would be required for such a conversion. These modifications cover outfitting the rig with new engines, tanks, piping, and a dedicated fuel treatment room, as well as considerations of how a methanol conversion would impact safety and weight distribution on board.

This conceptual design enables Noble to gain more insight into operational implications and requirements for approval of technical standards to present conversion to methanol-based operations as an achievable option for its customers.

Operating a jack-up rig on green methanol can result in up to 95% CO₂ emission reduction compared with traditional diesel-based operations, based on the offshore drilling player’s calculations. Bearing in mind all the options on the decarbonization table, the firm is determined to mature opportunities within emerging offshore markets and address energy transition ones.

Noble showcases what could be possible in the realm of methanol conversion

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“Energy is essential for people not only to prosper and thrive, but to carry out the most basic activities of everyday life. We expect hydrocarbons to remain critical to modern life, even as society takes steps to address climate change concerns by transitioning to a lower-carbon world,” emphasized Noble.

“Global geopolitical events demonstrate that we cannot cut off hydrocarbon use and expect to maintain a high standard of living and economic stability. We believe oil and gas will continue to play a significant role in meeting demand for affordable, reliable, and secure energy supplies while renewable sources reach technological maturity and global scalability.”

The CEO of Transocean highlighted in 2022 that the increase in energy demand would keep its upward trajectory, as global population growth was an indicator of the need for more energy. In light of this, he emphasized the importance of “responsibly and sustainably” quenching that need while also playing its part in curbing “energy poverty around the world.”

“We believe that achieving energy security requires the world to continue to develop both hydrocarbon and renewable energy sources while addressing factors like climate, environmental stewardship, and human rights,” underscored Jeremy Thigpen, Transocean’s CEO.

While confirming that the firm would keep focusing on offshore drilling, Thigpen made it clear that the company would also bankroll emerging technologies to bolster its operations and look into plays that would enable it to leverage its assets and technical expertise to move into other energy sources, such as wind, offshore minerals, and CCS.

Transocean’s 2030 sustainability goals include a reduction in operating emissions’ intensity of 40% relative to 2019 levels, alongside its energy expansion strategy in acknowledgment of climate change challenges. To this end, the firm has set its sails toward exploring, evaluating, and pursuing projects that support alternative energy sources.

The rig owner explained: “At Transocean, our approach to managing and minimizing environmental impact is driven by our pursuit of ever-greater safety performance, operational efficiency, as well as optimal energy management onboard our rigs. Transocean embraces a data-driven, risk-based approach to business.

“We apply that approach to our stewardship of the environment, with a focus on the following areas: (1) energy use and emissions, (2) loss of containment, (3) waste generation and water usage, and (4) biodiversity.”

The offshore drilling player started using a fuel additive in 2022 to improve engine efficiency by reducing the amount of fuel needed to power its rigs, enabling it to extract more energy from each metric ton of fuel consumed with fewer emissions produced.

In February 2023, Transocean agreed to invest in Global Sea Mineral Resources (GSR) in exchange for a non-controlling interest in this deep-sea mineral exploratory division of DEME Group, which is engaged in the development and exploration of deep-sea polymetallic nodules that contain metals perceived as critical to the growing renewable energy market.

The rig owner agreed to contribute its Ocean Rig Olympia for GSR’s ongoing exploration work. As a result, the latter was planning to convert the rig for a system integration test scheduled for 2025 to validate the technical and environmental feasibility of recovering polymetallic nodules in ultra-deep water on a commercial scale.

Thigpen emphasized: “We are excited to support its team in the effort to meet global demand for the critical minerals necessary for a lower carbon energy economy. A mixture of all energy sources will be required to meet future global energy demands. Transocean’s work in deep sea minerals is another way we will continue providing essential offshore energy services.”

Transocean’s diversification strategy is illustrated by the Transocean Enabler rig’s drilling activities at a carbon injection well and a sidetrack for the Northern Lights JV in 2022. The Northern Lights project is part of the Longship CCS project. The first phase was launched in 2024, with an initial annual storage capacity of 1.5 million tons. The rig owner intends to draw on its experience with the Northern Lights well to support similar offshore CSS projects around the world.

“Energy security continues to be a critical issue for both the developed and developing world. We believe that traditional fossil fuels, namely oil and gas, will continue to be vital sources of energy for many years to come; in addition, we recognize that oil and gas resources alone are not sufficient to meet the growing energy demands of our world,” Transocean pointed out.

“While Transocean remains committed to its core business, we recognize that our assets, core competencies, and capabilities also apply to renewables. Thus, we will continue to opportunistically pursue adjacent energy projects that allow us to leverage our strengths.”

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