Strategy to Net Zero Emissions

Strategy to Net Zero Emissions

Zennor Petroleum recognises the critical importance in addressing global warming and supports the goal of the Paris Agreement to achieve a carbon neutral global economy. We accept our responsibility to comply with emerging government emission targets, climate change legislation, regulation and industry best practice, including the UK 'Net Zero' goal by 2050. We will reduce our GHG emissions as far as is reasonably practicable through appropriate initiatives and use high quality and independently certified offsets for any remaining balance. Assessing the contribution of our operations to greenhouse gas emissions is part of our environmental impact assessment process for all operations.

Zennor's production portfolio is comprised of a range of non-operated facilities at different stages of field lifecycle. As a smaller company on the UKCS with no current operated offshore facilities, Zennor does not have the opportunity to actively incorporate improvements into existing operations but must work collaboratively with co-venture partners and host facilities.

As such, Zennor has made a commitment to align with the targets set by the UK's industry body, Oil and Gas UK (Pathway to a Net-Zero Basin: Production Emissions Targets). These targets are:

1. 50% reduction in Scope 1 and 2 production GHG emissions by 2030
2. 90% reduction in Scope 1 and 2 production GHG emissions by 2040
3. Net zero Scope 1 and 2 production GHG emissions by 2050

In addition, Zennor has achieved carbon neutrality for its Scope 1 and 2 emissions in 2020.

To achieve these targets, Zennor will implement improvements in key areas across the business. We will:

Governance and Reporting

• Achieve carbon neutrality for Zennor's equity share of production using carbon offsets on a Scope 1 and 2 basis
• Improve monitoring and reporting of emissions to include all GHG's (particularly methane, e.g. CO₂e) by 2021
• Report progress against objectives and targets
• Align the Company's disclosures with the recommendations set forth by TCFD from 2021

Non-Operated Production

• Encourage and support our Operator partners in their efforts to monitor, report and reduce Scope 1 and 2 emissions in line with their internal targets and the OGUK Pathway to Net Zero
• Ensure progress against targets is reviewed on a regular basis and actions are identified and taken to ensure targets are met
• Support Operators exploring the use of low-carbon energy sources to power assets, including renewable energy and power from onshore, focusing on inter-connecting assets in readiness for a viable connection to low-carbon electricity.
• Work with our Operators to investigate the potential for operational efficiencies and new technologies (e.g. electrification) and the potential for future re-purposing of offshore oil and gas facilities

Operated Projects

• Monitor, report and reduce Scope 1 and 2 emissions to ensure compliance with our internal targets and the OGUK Pathway to Net Zero
• Expand our existing processes and procedures to ensure that emissions are formally included as part of the option selection process for offshore operations and in the selection process for contracting potentially high GHG emitting equipment (e.g. drilling rigs, vessels)
• Assess the potential for the introduction of new low/zero carbon technologies for future field development (e.g. viability of integrating floating wind technology with subsea oil and gas field development)

New Business

• Introduce processes and procedures to ensure potential GHG emissions are evaluated and incorporated as key decision-making criteria for portfolio management and acquisitions/divestments

• Evaluate new investment or divestment opportunities to ensure that Zennor's overall portfolio emissions on a net kg CO₂e/boe basis remain consistent with our corporate targets
• Consider the opportunities for contribution to GHG reduction in a wider, national integrated energy framework through replacement of carbon intensive operations (such as displacing imported LNG with indigenous gas production) or introducing opportunities which may have later application for alternative technologies (e.g. hydrogen or CCS)

In addition, reductions will be achieved through the strategy set out by OGUK, namely:

• Operational Improvement (incremental)
• Reduced Flaring and Venting (operational)
• Step-Change Action Requiring Investment (capital)

[Link]

Martin Rowe

Managing Director

January 2021