A mid-size Exploration and Production (“E&P”) company with assets in the Gulf of Mexico has a strong brand and reputation as a responsible operator. The company was one of the early U.S. E&P companies to produce an annual sustainability report. We were initially engaged to work with leadership to develop and refine an Energy Transition strategy. Our team subsequently helped the company become an early mover in Carbon Capture and Sequestration (“CCS”) market.
Through interviews and workshops, we engaged the executive team, Board of Directors, and other leaders throughout the organization to fully define a shared vision and key objectives for the Energy Transition strategy, as well as ambitions for CCS more specifically. In parallel, we provided research and analysis of the oil and gas markets, ongoing and planned CCS projects globally, and Environmental, Social, and Governance (“ESG”) pressures from investors, lenders, regulators, and other stakeholders.
Working together with leadership, we defined strategic options, built a financial model to evaluate the options, and aligned on an Energy Transition strategy and roadmap that was appropriate for the company’s vision, strategy, portfolio, and capabilities. The strategy included parallel priorities of growing the oil and gas business and scaling a formidable CCS business anchored on the U.S. Gulf Coast.
Subsequently, we supported the buildout of the CCS business. Our team assisted with financial modeling and scenario analysis, advised on carbon pricing and the CCS regulatory framework in the United States, and provided input into the strategic partners required to develop CCS projects. As partnerships were formed, we helped broker the relationships between the operator and partner companies, ensuring alignment on the vision, roadmap, and commercial model between parties. Internally, we helped the company think through the implications of becoming a service business with customers (i.e., emitters).
In August 2021, the company was named the winning bidder of a carbon storage site. The award placed the company among a very select group of U.S. independent energy companies with a physical project site dedicated to CCS. Since the award, the company has formed strategic relationships with another CCS project developer and a leading engineering company. The first major offtake agreements have been secured, anchored by an LNG facility. The companies anticipate first injection at the initial project by year-end 2024.