Flaring

Gas flaring in our upstream operations is the process of burning surplus associated gas — a blend of hydrocarbon gases brought to the surface during crude oil extraction — either as a safety measure or as a means of disposal. Commercial alternatives for associated gas require a business environment with the right conditions, including available markets, infrastructure investments, fiscal terms, and appropriate regulations — currently not available in many countries. Gas is flared only when all options to utilize the associated gas have been exhausted.

In 2009, our upstream flaring averaged 445 million cubic feet per day, a reduction of about 23 percent from 2008 and a 43-percent improvement from 2005. In the last two years, we achieved a 55-percent reduction in flaring in Nigeria due to our continued investments in infrastructure. In Equatorial Guinea, we reduced flaring by 40 percent. One of the key contributors was improved management of the gas-to-oil ratio of our production. Together, these two countries accounted for about 80 percent of our upstream flaring. In addition, in the United States, we are designing flare gas recovery projects at our Beaumont, Billings, and Chalmette refineries to be completed in 2012.

View chart: Hydrocarbon Flaring From Upstream Oil and Gas Production