Mero Revolutions: countering CO2 in pre-salt Brazil?

The super-giant Mero field in pre-salt Brazil is not like its predecessors. While prolific, it has a 2x higher gas cut, of which c45% is corrosive and environmentally unpalatable CO2. Hence, Petrobras, Shell, TOTAL and two Chinese Majors are pushing the boundaries of deepwater technology. Our new, 16-page note assess four innovation areas, which could unlock $2bn of NPV upside. But the distribution of outcomes remains broad. $4bn is at risk if the CO2-challenges are not overcome.


Page 2 provides background on pre-salt Brazil, especially the flagship Lula project, which a new super-giant, Mero, is trying to emulate.

Page 3-4 contrast Mero to Lula, based on data from flow-tests. Mero has a 2x higher gas-cut and c8x higher CO2.

Page 5 reviews Petrobras’s own internal concerns over CO2-handling at Mero, and how they are expected to sway the decline rates at the field.

Page 6 outlines our valuation of the Mero oilfield, testing different CO2-handling scenarios. Our full model is also available.

Pages 7-8 review Mero’s FPSO design adaptations, to handle the field’s higher gas and CO2. These will be 2-2.5x larger FPSOs than Lula, by tonnage.

Pages 8-10 illustrate pipeline bottlenecks facing pre-salt Brazil. After considering alternative options (re-injection, LNG), we argue more pipelines may be needed.

Pages 10-12 describe riser innovations, which may help handle the risks of CO2-corrosion at Mero. One option is overly complex. The other is more promising.

Pages 12-16 cover the holy grail for Mero’s CO2, which is subsea CO2 separation. This would be a major industry advance, and unlock further billion-barrel resource opportunities. Upcoming hurdles and challenges are assessed.

Pages 15-16, in particular, cover Shell’s industry-leading deepwater technology, which may be helpful in maximising value from the resource, longer-term.

Johan Sverdrup: Don’t Decline?

Equinor is deploying three world-class technologies to mitigate Johan Sverdrup’s decline rates, based on reviewing c115 of the company’s patents and dozens of technical papers. Our new 15-page note outlines how its efforts may unlock an incremental $3-5bn of value from the field, as production surprises to the upside.


Pages 2-3 provide the context of the Johan Sverdrup field, its implied decline rates and how their variability will determine the field’s ultimate value.

Page 4 re-caps the concept of decline rates and how they should be measured.

Pages 5-7 recount the history of Digital Twin technologies, the cutting edge of their application offshore Norway and evidence for Equinor’s edge, as it deploys the technology at Sverdrup.

Pages 8-11 illustrate the upside in Permanent Reservoir Monitoring, comparing Equinor’s plans versus prior achievements deploying the technology off Norway.

Page 12-14 show the cutting-edge technology that excites us most: combining two areas where Equinor has established a leading edge. This opportunity can improve well-level production rates by c1.5x.

Page 15 ends by touching upon other technologies that will be applied at Sverdrup, quantifying Equinor’s offshore patent filings versus other listed Majors’.

Scooter Wars?

E-scooters can transform urban mobility, eliminating 2Mbpd of oil demand by 2030, competing amidst the ascent of “electric vehicles” and re-shaping urban economies.  These implications follow from e-scooters having 25-50x higher energy efficiencies, higher convenience and c50% lower costs than gasoline vehicles, over short 1-2 mile journeys. Our 12-page note explores the consequences. 


Page 2 charts the meteoric ascent of e-scooters. In their first year of deployment, they matched the peak growth rate of taxi-apps (e.g., Uber) and overtook ride-sharing bicycles which have been under commercialisation for quarter-of-a-century.

Page 3 assesses the leading companies, all of which launched in late-2017 or early-2018, and have since raised $1.5bn.

Pages 4-5 compares the energy-economics of electric scooters with fourteen other vehicle concepts, explaining the physics of e-scooters’ 25-50x higher efficiencies.

Page 6 compares the relative benefits of e-scooters versus electric cars, which are clearest when comparing the relative strain on grid infrastructure.

Pages 7-8 show how e-scooters displace oil demand, outlining our projections for 2Mbpd of demand destruction globally by 2030. This oil demand is not “replaced” by electricity demand. c95-98% of it is simply eliminated.

Pages 9-11 model the per-mile costs of e-scooters, as a function of multiple input variables, showing the most competitive contexts relative to cars and taxis.

Page 12 ends by exploring potential consequences for urban economies. Most of all, we expect economic growth to be supported, particularly for retail; conversely e-mobility may embolden policymakers to ban gasoline vehicles from cities.

De-Carbonising Carbon?

Decarbonisation is often taken to mean the end of fossil fuels. But it is more feasible simply to de-carbonise them, with next-generation combustion technologies.

This 19-page note presents our top two opportunities: ‘Oxy-Combustion’ using the Allam Cycle and Chemical Looping Combustion. Both can provided competitive energy with zero carbon coal & gas.

Leading Oil Majors are supporting these solutions, to create value while advancing the energy transition.


Carbon capture remains an “orphan technology”, absorbing just c0.1% of global CO2. The costs and challenges of current technologies are profiled on pp2-4.

Energy penalties are particularly problematic. Paradoxically, the more CCS in our models, the longer it takes to de-carbonise the energy system (see pp5-6).

Next generation combustion-technologies are therefore necessary…

Allam Cycle Oxy-Combustion burns CO2 in an inert atmosphere of CO2 and oxygen. We evaluate a demonstration plant and model strong economics (see pp12-15).

Chemical Looping Combustion burns fossil fuels in a fluidized bed of metal oxide. We profile the technology’s development to-date, net efficiency and levellised costs, which are passable (pp8-11).

Oil Majors are driving the energy transition. We count ninety patents from leading companies to process CO2, including 30 to de-carbonise power. The best advances are profiled from TOTAL, Occidental, Aramco and ExxonMobil. (See pp16-19).

Shale: Upgrade to Fiber?

Completing a shale well depends on over 40 variables. Each one can be optimised using data. It follows that next-generation data will deliver next-generation shale productivity. Hence our new, 25-page note focuses on the most exciting new data methodology we have seen across the shale space: distributed acoustic sensing (DAS) using fiber-optic cables. It has now reached critical momentum, to transform the shale industry in six main ways…


(1) Productivity gains. DAS advances the shale industry’s quest for ‘ideal’ completions (chart above). The best studies to-date have already achieved c25% production uplifts and c10% cost-savings. Pages 2-14 describe the technology, its maturation and the recent step-change for its application in shale.

(2) Further DAS improvements could deliver further productivity gains throughout the 2020s, materially lowering the long-term decline rates in shale basins (see page 17).

(3) Economics break even at $15/bbl when deploying DAS in a cross-well, adding $0.8M of NPV10 at ($40/bbl oil) (see page 18).

(4) DAS levels the playing field, allowing newer basins and smaller operators to derive competitive designs quickly. Without this ability large operators in the Permian will crowd out the rest (see pages 15-16).

(5) DAS disrupts the Services industry, gaining dominance over other diagnostic techniques, such as seismic. Services’ adaptability is screened (see pages 20-21)

(6) DAS will give E&Ps and Majors an edge. To help quantify who is in the lead, we identify and rank the “Top Dozen” operators’ progress, based on their patents and technical papers (see pages 22-24) .

Aerial Ascent: why flying cars fly

Aerial vehicles will do in the 2020s what electric vehicles did in the 2010s. They will go from a niche technology to a global mega-trend that no forecaster can ignore. The technology is advancing rapidly. Fuel economies and costs will both be transformational. Aerial vehicles accelerate the energy transition.

These conclusions are all explained in depth, in our new, 20-page insight…


Pages 2-3 demonstrate the need for aerial vehicles, as urban mobility has begun deteriorating, after 200-years’ of progress.

Page 4-5 recap the military development of drones, stretching back to the late 19th Century, accelerating with the US’s Predator and Reaper programmes.

Pages 6-9 identify leaders among 110 companies, employing 50,000 people, which have now flown over 40 aerial vehicles; from start-ups to aerospace heavy-weights.

Pages 10-11 describe average flight parameter across the different vehicle concepts we screened, including speeds, range, payload and fuel-economy of aerial vehicles

Pages 11-13 show electric vehicles leading on the metrics above, with unparalleled fuel economies, which we replicated, bottom-up via the equations of flight.

Pages 13-14 shows the future is battery powered for aerial vehicles, at today’s battery densities, creating a vast opportunity for fast-charging infrastructure.

Pages 14-18 calculate exceptional economics can be attained, comprehensively bridging to levels that are 65-85% below today’s ground-transportation.

Pages 19-20 summarise the hurdles, presenting the best counter-evidence we can find to legal, regulatory and “adoption” pushbacks.

Oil Companies Drive the Energy Transition?

There is only one way to decarbonise the energy system: leading companies must find economic opportunities in better technologies. No other route can source sufficient capital to re-shape such a vast industry that spends c$2trn per annum. We outline seven game-changing opportunities. Leading energy Majors are already pursuing them in their portfolios, patents and venturing. Others must follow suit.


Pages 2-3 show that today’s technologies are not sufficient to decarbonise the global energy system, which will surpass 100,000TWH pa by 2050. Better technologies are needed.

Pages 4-6 show how Oil Majors are starting to accelerate the transition, by developing these game-changing technologies. The work draws on analysis of 3,000 patents, 200 venture investments and other portfolio tilts.

Pages 7-13 profile seven game-changing themes, which can deliver both the energy transition and vast economic opportunities in the evolving energy system. These prospects cover electric mobility, gas, digital, plastics, wind, solar and CCS. In each case, we find leading Oil companies among the front-runners.

Shale EOR: Container Class

Will Shale-EOR add another leg of unconventional upside? The topic jumped into the ‘Top 10’ most researched shale themes last year, hence we have reviewed the opportunity in depth. Stranded in-basin gas will improve the economics to c20% IRRs (at $50 oil). Production per well can rise by 1.5-2x. The theme could add 2.5Mbpd to 2025 output.


Pages 3-5 review the theory of shale EOR. Its recovery factors could in principle surpass conventional EOR.

Pages 6-7 review lab results and field trials. They have been promising, suggesting >1.5-2x production uplifts should be attainable.

Pages 8-10 review the economics in detail. Our full model is informed by technical papers, and can be downloaded here.

Page 11 tabulates key statistics for using CO2 as a huff-n-puff injectant, the economic opportunities for carbon capture, but also the challenges.

Pages 12-13 attempt to quantify the production upside from shale EOR, by adapting our basin models.

Pages 14-15 cover the remaining challenges, including E&P patent-filing insights.

Page 16 lists a handful of companiesat the forefront of shale-EOR, including some earlier-stage start-ups.

LNG in transport: scaling up by scaling down?

Next-generation technology in small-scale LNG has potential to reshape the global shipping-fuels industry. Especially after IMO 2020 sulphur regulations, LNG should compete with diesel. Opportunities in trucking and shale are less clear-cut.

This note outlines the technologies, economics and opportunities for LNG as a transport fuel, following a three-month investigation.


  • Why technology matters. Pages 2-4 of the note describe incumbent technologies in small-scale LNG, and the need for superior solutions.
  • The cutting edge . Pages 5-7 draw on patents and technical papers to describe next-generation technologies, at the cutting edge of small-scale LNG. We model that they are economic. They can can provide LNG to the market at $10/mcf.
  • Potential to transform shipping-fuels. Pages 9-13 find strong economic upside for novel LNG technologies in the shipping industry, with potential to create 40-60MTpa of incremental LNG demand, looking across the global shipping fleet.
  • Less positive on LNG as a trucking fuel. Pages 14-15 explain why the economics are more challenging for LNG use in land-transportation, i.e., trucking.
  • Less positive on LNG use in shale. Page 16 explains, similarly, why LNG is less advantageous in the shale patch than converting rigs and frac spreads to piped gas.
  • Other technologies. Page 17 notes other companies with interesting offerings in small-scale LNG liquefaction, including advances by Exxon and Shell.

Have further questions? Please contact us and we’ll be happy to help: [email protected]

Can Technology Revive Offshore Oil?

The appetite to invest in new offshore oil projects has been languishing, due to fears over the energy transition, a preference for share-buybacks, and intensifying competition from short-cycle shale. So can technology revive offshore and deep-water? This note outlines our ‘top twenty’ opportunities. They can double deep-water NPVs, add c4-5% to IRRs and improve oil price break-evens by $15-20/bbl.


Pages 9-18 of the note outline each of our ‘top twenty’ focus areas, after reviewing 1,500 patents and 300 technologies across the industry. In each case, we outline which companies are most advanced.

Our work shows it is essential to invest with – or have your resources managed by – technology leaders. The industry must also keep improving, to re-excite investment.