Increasing stakeholder attention to climate change, stricter environmental regulations, and economically inaccessible fossil fuel reserves are forcing the Oil and Gas (O&G) industry to become more efficient and environmentally friendly in order to remain competitive. An increasing number of companies and governments realize that a carbon-constrained world is inevitable and “there is a growing consensus among corporate leaders that taking action on climate change is a responsible business decision” (Hoffman, 2006). The O&G industry is at the center of this challenge because it is a large contributor to global greenhouse gas (GHG) emissions via exploration, production, and end use of O&G products. Developing an effective GHG management strategy and implementing the right tools and technologies to efficiently reduce emissions while maintaining high productivity and profitability are achievable and crucial elements of creating a successful plan to address and prepare for a carbon-constrained world. The aim of this paper is to outline an approach for the development of a corporate GHG strategy focused on evaluating GHG emission reduction options for O&G companies. Concretely, the paper presents a methodology to: Quantify, account for, and report GHG emissions; Identify the process areas or operations with the largest GHG impacts and identify potential GHG emission reduction options; Evaluate GHG reduction options from a business and engineering perspective; Set feasible carbon mitigation targets and goals; and Measure the progress achieved in attaining the targets. This study focuses on upstream and downstream operations (IPIECA, 2003) of O&G companies, including exploration, development, and production of O&G (upstream operations), and refining, processing, and distribution of products derived from O&G (downstream operations).

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