From inception, Vencer embraced sustainable and responsible operations.
Eric Hasso, ESG Director of Vencer Energy, talks to us about implementing Vitol’s ESG framework.
Where does Vencer Energy sit in the Vitol portfolio, how has it aligned itself to the company’s ESG strategy and how do you fit into this?
Vencer Energy is an upstream exploration and production company with assets located in the heart of the Permian Basin, in the US. Vitol acquired these assets in June 2021 and assembled a very capable leadership team. From inception, Vencer embraced sustainable and responsible operations, adopting the Vitol E&S framework, creating relevant E&S procedures and ensuring that emergency response controls are in place, all of which I am responsible for implementing. Given the importance of sustainability to both ourselves and Vitol, I sit on Vencer’s ESG steering committee. With a background primarily focused on environmental compliance and sustainability I bring a significant amount of industry experience to our operational and corporate strategies. Utilising my experience and recognising the need to deliver energy more responsibly. I am completing my MBA in Energy and Sustainability from Franklin Pierce University.
Safety is the industry’s number one priority. How does Vencer approach the issue?
Culture matters at Vencer. As John Kotter noted, “culture eats strategy for breakfast”.¹ From the beginning, management recognised the need to enhance the safety culture in the field. Increased activity in the industry has led to a surge of inexperienced employees in the basin, presenting a risk for occupational safety. In 2022, we implemented an intensive safety transformation programme for our field staff. This included changes to how we handle medical cases, investigate incidents, document safe work practices, and improve our safety SPACs (standards, policies, and administrative controls). The transformation program concluded with a two-day “Life Critical Program Bootcamp,” which focused on key safety topics relevant to upstream oil and gas operations, such as safe driving, hot work, confined spaces, hydrogen sulphide and lockout.
Climate-related risks are rising on both corporate and financial institutions registers. How is Vencer addressing these risks at an operational level?
Firstly, we have focused on reducing routine flaring to limit our carbon emissions. During the second half of 2020, the previous owners of these assets flared 2.5% of the total produced gas. However, through careful planning, midstream contracts, and additional natural gas sales points, Vencer has been able to reduce its flare volumes to just 0.4% of total production in 2022. This not only reduces our greenhouse gas discharges, but also allows us to bring a valuable commodity, natural gas, to the market. In addition, Vencer is committed to achieving a 1% flaring intensity target as well as aligning with the World Bank’s goal of zero routine flaring by 2030. Secondly, methane is a greenhouse gas that is 25 times more effective than carbon dioxide at trapping heat in the atmosphere, according to the US Environmental Protection Agency. At Vencer, we are committed to reducing our emissions of this harmful gas. Our methane management practices include low-emission completions, tank and equipment controls, low and no-bleed gas-driven pneumatic devices, and fugitive emission monitoring with leak detection cameras, LIDAR (laser imaging, detection, and ranging) flyovers, and other innovative technology. In 2022, we introduced a number of new initiatives to further improve our methane management. We installed and retrofitted multiple tank batteries with instrument air systems, which allow us to run equipment using compressed atmospheric air instead of natural gas, resulting in zero greenhouse gas emissions. Additionally, in October, we conducted our first aerial fugitive emission survey using LIDAR technology from a low-flying aircraft across a material proportion of our battery asset base. This aerial approach enables us to survey sites much more quickly than using a “boots on the ground” method. Following its success, and to enhance our operational emissions management program, we plan to perform aerial LIDAR surveys across all our tank batteries from 2023. Lastly, we also consider water management within the context of climate-related risk. Vencer operates in an arid region of West Texas, and therefore it is important for the company to address freshwater stress and availability. The company has a contract to use at least 30% recycled water in its completion activities next year which will preserve over 5.5 M barrels of fresh water.
What other bodies inform Vencer’s approach to ESG risk management and the design of your programme?
In September, Vencer became the 100th energy company to join the American Petroleum Institute’s Environmental Partnership. This partnership brings together companies in the US oil and natural gas industry that are committed to improving the industry’s environmental performance. Members of the Environmental Partnership work to implement best practices and technologies, learn about new approaches, and collaborate to develop natural gas and oil resources in a responsible manner. Together with our parent company Vitol, Vencer systematically addresses ESG-related risk across our operations. Executive and field leadership convene regularly, through the ESG steering committee, to identify risks that Vencer faces and continually devise mitigation strategies for those risks.
1. John Kotter, Corporate Culture and Performance (1992) , pp. 4-8.