Oil firms still eyeing arctic exploration

January 28, 2016

Despite a multibillion dollar backlog of projects, put on hold amid US$30-50/bbl oil prices, exploration firms are still eyeing resources in arctic waters.

New areas of the Barents Sea were offered to oil firms in Norway’s 23rd licensing round, with 54 blocks or part blocks being offered. 

Of particular interest are some 34 blocks in the southeast Barents Sea, bordering Russian territory, which are so far unexplored, offering the potential to open up a new petroleum province. The result of the round, including those who have gained access to this region, is due to be announced in Spring. 

Industry players are discussing the challenges of working in the arctic at this week's Arctic Frontiers conference in Tromso. Italian oil major ENI is (finally) nearing first oil at Goliat in the Barents Sea - the northern-most oil production facility - albeit over schedule and over budget. And Statoil recently announced it is moving forward with its Johan Castberg project, also in the Barents, after halving costs on the project. 

However, new challenges accompany the harsher, darker and most of all, colder operational conditions, says classification and assurance group DNV GL. This will mean using new technology and ever higher expectations for safe and sustainable operations.

The dangers of working in arctic waters has been highlighted by Shell's experience offshore Alaska, where it last year decided to drop its drilling campaign after an unsuccessful exploration program, citing factors including a difficult regulatory regime.

“The most severe actions on Arctic offshore structures are often caused by ice-structure interaction. It is therefore of great importance for the design of safe and reliable structures to address ice loads and ice loads effects properly,” says Hege Berg Thurmann, DNV GL’s Arctic Group Leader.

Under the project name FOLLOWS (floating structures: loads and load effects from waves and sea ice) DNV GL will join forces with industry parties, including Statoil, which has already signed up, as well as academia through the Norwegian University of Science and Technology. The project will provide methodologies and numerical methods for calculating loads and load effects on moored floating structures caused by the interaction between structure and sea ice.

Phase one of the FOLLOWS JIP will focus on implementing software for the calculation of loads in broken ice conditions without waves, while phase two will develop and implement a methodology for estimating the loads and load effects from ice in waves. Further work may include loads and load effects from icebergs.

“Calculating the loads caused by ice-structure interaction is an important part in the design process of an offshore structure operating in the Arctic. The outcome of this industry collaboration will help to ensure that the design of the structure is fit for purpose and that it will operate safely during its entire lifetime," says Thurmann.

Meanwhile, exploration firm Det norske and Norsar, an independent research institute, have also launched a research project which aims to find ways to provide continuous monitoring of the environment in the northern areas, in particular, how glaciers move, and how the areas respond to changes in the prevalence of ice.

Det norske will use the Norsar data to better understand the geological processes, identify weakness zones in the subsurface geology, and show when and where they are active as per today. If successful, this will provide a better opportunity to map the geology and provide a better understanding of where to locate oil and gas.

Norsar has a large network of earthquake monitoring stations that continuously collects data from the tectonics plates and the earth’s crust. Today these locations monitor all movements including signals from nuclear explosions.

Erik Holtar, head of research and development in Det Norske says: “We are very interested in data that can be used in new and different ways. This way we use our research funds to follow unconventional paths to reach the goal of a greater understanding of the subsurface. There is always a good reason for us to collect and process new data. This is how we can make advances within geology and geophysics.”

NORSAR is the Norwegian data center for monitoring the nuclear test ban treaty. This is a global system consisting of 321 monitoring stations in 89 countries, which are included in the test ban treaty.

Another JIP, the Arctic response Technology Oil Spill Preparedness project, also recently released a 300-page report, bringing together all the existing research in the area, and highlighting where there are gaps. It draws on some 960 literature citations. 

The report, funded by the Oil and Gas Producers association, has been published online along with a searchable database of existing research. 

The report’s aim is to suggest priority areas of work needed to improve assessment of the consequences of the various treatment strategies under Arctic conditions. The primary outcome is development of a process to integrate ecological consequence assessments within net environmental benefit analyses (NEBA) to better evaluate the environmental effects to valuable ecosystem components (VECs) within key environmental compartments that would result from using different response actions in the Arctic. Specifically, development of Arctic response consequence analysis table matrices and a semi-quantitative analytical tool will optimize decision-making and lessen environmental impact related to arctic oil spills in the Arctic.

Despite industry's efforts to prevent a spill, they do happen. Earlier this month, the Independent Barents Observer reported that there was a leak at the Russian Prirazlomnoye field, in the Pechora Sea, during a ship-to-ship crude transfer. 

So while investment might currently be on hold, work which will help pave the way for arctic exploration and production continues. When it actually starts to happen remains to be seen. 

Read more

Goliat first oil creeps closer

Retreating from the US Arctic 

Johan Castberg costs halved

Shell abandons Alaska exploration

Images: Top, the Finnica icebreaker. Middle, Transocean's Polar Pioneer semisubmersible.

Categories: Arctic Oil Spill


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