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Sustainable Business

Lundin sells 'carbon neutral' oil to South Korea's GS Caltex

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A general view of the drilling platform, the first out of four oil platforms to be installed at Norway's giant offshore Johan Sverdrup field during the 1st phase development, near Stord, western Norway September 4, 2017. REUTERS/Nerijus Adomaitis/File Photo

OSLO, June 16 (Reuters) - Lundin Energy (LUNE.ST) has sold an oil cargo certified as carbon neutral at the point of production to South Korean refiner GS Caltex in the first such sale of crude from Norway's Johan Sverdrup field, the Swedish company said on Wednesday.

Oil companies are increasingly seeking to market their products as cleaner in an effort to secure a future for the fossil fuel industry when investors, activists and regulators demand action to halt climate change. read more

Lundin said its crude from the Sverdrup field had been certified by Intertek Group (ITRK.L), which earlier this year also gave its stamp of approval to the oil firm's first carbon neutral cargo from a different North Sea field. read more

The oil will be counted as carbon neutral from exploration, development and so-called scope 1 and 2 emissions, but the major emissions caused by the oil's final use, or scope 3 emissions, are not included.

The Sverdrup oil platforms are powered by hydroelectric electricity from land and thus only emit 0.45 kilograms of CO2 emissions per barrel of oil equivalent produced, or around 2.5% of the global average, Lundin said.

"Lundin Energy has then taken the further step to neutralise net residual emissions using high quality, natural carbon capture projects," the company said in a statement on Wednesday.

It has previously said it will use tree-planting projects to neutralise such emissions.

"All future net production from Johan Sverdrup will be certified as carbon neutrally produced by Intertek under its CarbonZero standard," Lundin said.

Intertek Group, which provided Lundin's certification, is involved in testing and inspection and verification to ensure that products meet quality, safety, environmental and other standards for clients including Carrefour (CARR.PA), ConocoPhillips (COP.N) and Unilever (ULVR.L).

Lundin holds a 20% stake in Equinor-operated (EQNR.OL) Johan Sverdrup, western Europe's largest oilfield with daily output of 535,000 barrels of oil equivalent per day. The other owners are Aker BP (AKERBP.OL), TotalEnergies (TOTF.PA) and Petoro.

Reporting by Terje Solsvik. Editing by Jane Merriman

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