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This document outlines key insights into Measurement, Reporting, and Verification (MRV) practices from Nexen, highlighting the company’s operational strategies across various regions, including Norway, Canada, and Nigeria. It discusses their diverse asset portfolio, innovative exploration methods, and substantial growth opportunities. Furthermore, the text emphasizes the evolving regulatory landscape in GHG reporting, the challenges of harmonized reporting standards, and the importance of transparency in corporate governance. A focus on voluntary and mandatory disclosure mechanisms sheds light on the industry's commitment to sustainability and stewardship.
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Measurement, Reporting and Verification CoP 16, December 2010
Who is Nexen? Norway Total 2010 production guidance before royalties: 230-280 mboe/d Canada North Sea Gulf of Mexico Yemen Offshore Nigeria Other International • Visible near-term growth • Diverse portfolio of assets • High-impact exploration program • Innovative oil sands strategy • Substantial opportunity inventory • Value added marketing business *
Voluntary reporting preceded mandatory • Voluntary • Corporate governance – Stewardship and Sustainability • Association activity – working and cooperating with peers • Government Industry - Voluntary Registry and Challenge • Investors, Analysts and Shareholders • Carbon Disclosure project - Selective disclosure concerns • Mandatory • Resource Owner and/or Regulator • National data collection • Commercially sensitive data
Data Collection and Management • Manual systems bases on spread sheets • Use of analogue systems and data • 3rd party review – tracking and verification weaknesses • End users key to system design and vendor selection • Electronic data base – Enterprise wide integration • Links to SAP Maintenance module and Production Accounting • Forecasting • Tracking compliance: obligations and assurance
GHG reporting/verification for compliance • Governments and their advisors promulgating regulations requiring reporting equivalent to that for financials • In part this may be driven by those wanting extensive carbon markets • Regulators seem to be increasingly requiring reporting of relatively small, disperse emission sources (which can be large in aggregat • estimation methodologies for these sources have been developed (e.g., API Compendium) • uncertainties in these emission estimates may be high for individual sources but may not be large overall • in response to these high uncertainties regulators tend to be moving to more prescriptive measurement based methodologies
GHG reporting/verification for compliance • jurisdictions are not harmonized: the result is different reporting requirements in different jurisdictions • internal emission estimation and reporting systems may not meet everyone's requirements leading to increased reporting effort • additional metering, analysis and calibration requirements can significantly increase the cost of reporting and lead to premature closure of marginal assets • there are verification challenges due to the number of sources considered
Transparency • In a world where some companies are required to collect, third-party verify and publically report GHG-related data, and where that data is used as the basis for life cycle analysis and low carbon fuel standards, the lack of transparency likely disadvantages the most transparent reporters • Can MRV level the playing field?
