Statoil to quit Alaska
Norwegian oil company Statoil is to quit Alaska citing "recent exploration results in neighbouring leases", a reference to Shell's disappointing Burger J well.
It said in a statement that the leases in the Chukchi Sea "are no longer considered competitive within Statoil's global portfolio, so the decision has been made to exit the leases." It will also close its office in Anchorage.
The decision means Statoil will exit 16 operated leases, and its stake in 50 leases operated by ConocoPhillips, all in the Chukchi Sea. The leases were awarded in the 2008 lease sale and expire in 2020.
Statoil's executive vice president for exploration, Tim Dodson said: "Since 2008 we have worked to progress our options in Alaska. Solid work has been carried out, but given the current outlook we could not support continued efforts to mature these opportunities."
But, like Shell, the company does not rule out a return at a later date.
Dodson said the studies, research and activities that have taken place in Alaska in recent years have given the company skills and expertise that can be leveraged in other opportunities in northern environments in the future.
"Our understanding of the challenges and opportunities has increased considerably over the last years. This gives Statoil a unique position and experience which the company will continue to apply going forward," he said.
Yamal LNG closing in on finance deal
A deal to bankroll the 16.5 million tons Yamal LNG project could be signed off next month, Russian deputy prime minister Arkady Dvorkovich (pictured) has said.
"All the basic questions have been addressed," he told reporters at an intergovernmental energy cooperation commission in Beijing. "Now all the basic conditions have been agreed on, so we expect the signing to take place in December."
The gas export project is led by Russia's Novatek and France's Total, alongside China National Petroleum Corporation (CNPC) and the Silk Road Fund, a Chinese investment fund.The estimated cost of the whole venture is estimated at round $27 billion, which will include a large amount of external debt.
China can play a leading Arctic role, says Russian minister
Russia's deputy energy minister Anatoly Yanovsky wants to see more Chinese firms take a role in developing the country's Arctic oil and gas deposits.
He told state news agency RIA Novosti that talks are ongoing between Russian oil company Rosneft and China to explore potential opportunities in the region."The topic is in discussion at the company level," he was quoted as saying. "As far as I know, Rosneft is negotiating [with China]."
In early September, China Oilfield Services Limited (COSL) signed deals with Rosneft and Norway's Statoil to drill two exploration wells in the Sea of Okhotsk.
Chinese firms are already participating in the Yamal LNG project, with Chinese banks set to play a key role in financing the scheme after Western credit sources dried up in the wake of sanctions over Ukraine.
Industry dives into sub-arctic Canada
There was plenty of appetite among the big international names for the latest East Coast Canada bid round.Key winners for blocks off Nova Scotia and Newfoundland included BG, Chevron, BP, Statoil and Exxon Mobil.
Statoil - just as it was departing offshore Alaska - said that it had secured six exploration licences in the Flemish Pass Basin, offshore Newfoundland, and two offshore Nova Scotia in the awards.
The offshore Newfoundland licenses total 14,670 sq km, and are located in an area in proximity to the Statoil-operated Bay du Nord discovery. The Nova Scotia acreage covers 6,500 sq km approximately 250 km from Halifax.
Tim Dodson, Statoil's executive vice president for exploration called the blocks "frontier areas".He said: "The significant exploration investment offshore Newfoundland will provide Statoil an opportunity to further advance our established exploration position in this region through a step-wise approach, while in Nova Scotia, we are able to apply the exploration knowledge and experience we have gained globally and in the North Atlantic specifically."
Statoil holds a strong position in the Flemish Pass Basin. The new licences are in an area near to previous discoveries: Mizzen in 2009, and the Harpoon and Bay du Nord discoveries of 2013.
Shell's Arctic boss to leave the company
Ann Pickard, Shell's executive vice president for the Arctic who oversaw the recent offshore Alaska drilling campaign, is to leave the company in February 2016.She will join the board at Houston-based engineering and construction giant KBR Inc.
Pickard (pictured) was appointed to her Arctic role in 2012 after the company's previous exploration plans floundered, when the Kulluk rig ran aground in rough weather.Shell has now put its offshore Alaska drilling plans on hold citing disappointing well results and high costs after completing the long-awaited Burger J exploration well.
KBR chairman Loren Carroll said in a statement that Pickard was a "qualified executive" who would "make an immediate and positive impact to our Board."
Shale production, renewables challenge Arctic investment
US oil companies are reassessing costly commitments to the Arctic in light of domestic shale production, the growth of renewable energy technology, and climate change concerns.
That's the message from Amy Myers Jaffe, executive director of energy and sustainability at the University of California, who took part in a Wall Street Journal panel discussion recently.
She told the panel that these things are "prompting some large energy companies to reconsider the viability of their expensive mega projects that take a long time to build before they produce oil and gas - including drilling in the Arctic, Caspian and some deep-water locations."
ConocoPhillips cleared to drill Greater Mooses project
The US Bureau of Land Management (BLM) has approved a drilling permit for the proposed Greater Mooses Tooth Unit oil and gas development project (GMT1), led by ConocoPhillips Alaska.
GMT1 is owned by ConocoPhillips (78%) and Anadarko Onshore E&P LLC (22%).A final investment decision on the $900 million scheme, which could yield up to 30,000 bpd at peak, is expected later this year.
The move clears the way for the first oil and gas production from federal land in the National Petroleum Reserve-Alaska.In a statement, BLM director Neil Kornze said it was a collaborative effort to ensure responsible development that will provide a new source of oil for the trans-Alaska pipeline.
But the project, first proposed a decade ago, has faced multiple delays due to environmental and community considerations.US Senator Lisa Murkowski said: "Mitigating impacts to subsistence and local communities is critically important to responsible development, but the protracted process and requirements GMT-1 has been subject to must not be a precedent for development" in the reserve.
The roughly 23 million-acre National Petroleum Reserve-Alaska is the largest single block of federally managed land in the USA.
US Arctic port plans now on hold
Plans for a deepwater Arctic port off Alaska have been put on hold following Shell's decision to abandon drilling work in the area.
The Army Corps of Engineers has now suspended a study into building the facility, which would have provided shelter for large oil and gas support ships operating in the Arctic region.
Shell ended its exploration in the Chukchi and Beaufort seas recently after finding oil but not in sufficient quantities to merit the cost and complexity of development.
"During the next 12 months, the Corps and its partners will monitor Arctic activities to determine if there may be the potential for federal interest in continuing the study," the Corps said in a statement.
It was exploring the possibility of creating a port at Nome Harbor, about 550 miles northwest of Anchorage, by expanding it and deepening it to 28 feet.
In the wake of Shell's departure, the US government has also scrapped petroleum lease sales in Arctic waters scheduled for 2016 and 2017.
Most recently, Shell confirmed this week that it is to abandon another key project, the 80,000 bpd Carmon Creek oil-sands project in Alberta after walking away from its Arctic drilling programme.
Cammell Laird secures polar research ship contract
British ship builder Camel Laird is to build a new polar research vessel after being a handed a £200 million contract by the UK government.
The vessel is due for delivery in 2018. It will secure the UK's position as a world leader in polar research, according to the country's science minister Jo Johnson.The ship, which will operate in both Antarctica and the Arctic, will be the first British-built polar research vessel with a heli-deck and will be able to endure up to 60 days in sea-ice.
Alaska drill site CD5 produces first oil
ConocoPhillips Alaska has commenced first oil production at its $1 billion CD5 drill site, part of the Alpine field (pictured), the company announced on October 27.
CD5 is the second new ConocoPhillips North Slope drill site to come on stream this month. First oil was announced at the Kuparuk Drill Site 2S (DS2S) on October 12. It marks the first commercial oil development on Alaska Native lands within the boundaries of the National Petroleum Reserve-Alaska (NPRA).
"First oil at CD5 is a landmark for our company, Kuukpik Corporation, Arctic Slope Regional Corporation and for Alaska. This announcement is the culmination of more than 10 years of work and collaboration with key stakeholders, including the residents of the nearby village of Nuiqsut," said Joe Marushack, president of ConocoPhillips Alaska.
Four wells are now complete at CD5, with development plans calling for 11 more wells by early 2017. Peak gross production is anticipated at 16,000 bpd.DS2S is expected to add about 8,000 barrels of oil per day gross at peak production.
CD5 is located approximately 8 miles from the Greater Mooses Tooth 1 (GMT1) development, Conoco's next key project in the area
Gazprom Neft advances Ob Sea offshore oil terminal
Gazprom Neft has completed pre-construction work on its Arctic terminal in the Yamal Peninsula. The offshore facility, in the Ob Sea, near Cape Kammeny, will facilitate year-round oil exports from the nearby Novoportovskoye field.
All pre-construction works are expected to be completed in 2015, the company said in a statement, with full testing of the Arctic terminal due to commence in early 2016.
Gazprom Neft first deputy chief executive, Vadim Yakovlev, said it marked a major step forward in the sale of year-round shipments of Novy Port oil to European customers. The terminal will have a capacity of more than 8.5 million tonnes of crude per year.
"Commercial production at Russia's Novoportovskoye field from early 2016 will mark the emergence of a new, northernmost outpost in oil production, unique in its operating conditions, infrastructure and transportation facilities," said Yakovlev. "Supplies from Novy Port are expected to reach two million tonnes as early as 2016, and we expect to be producing more than four million tonnes here from 2017."
Recoverable reserves at the Novoportovskoye field, which lies within the Arctic Circle, comprise more than 250 million tonnes of crude and condensate, and more than 320 billion cubic metres of gas.
More Alaskan lease sales set for November 18
Alaska's Department of Natural Resources will hold its annual North Slope, Beaufort Sea and North Slope Foothills area-wide oil and gas lease sales on November 18. The US federal Bureau of Land Management (BLM) will also offer leases in the National Petroleum Reserve in Alaska (NPR-A) the same day.
The state is offering total offshore and onshore acreage of 7.7 million acres, with bids to be received by November 13; the BLM is making 143 tracts available across 1.5 million acres.
"This annual lease sale was planned with careful consideration to balance the exploration and development of oil and gas resources with the protection of wildlife habitat and subsistence activities, such as fishing and hunting, of rural residents and Alaska Natives," said BLM Alaska director Bud Cribley.
The NPR-A, which comprises the largest single block of federally managed land in the US, contains an estimated 896 million barrels of recoverable oil and 52.8 trillion cubic feet of natural gas, according to the US Geological Survey.
Alaska's economy could suffer after Shell departure
Shell's decision to pull the plug on its offshore Alaska adventure following disappointing well results could harm the state's economy, financial analysts have warned.
The ratings agency Moody's said this week that Shell's decision to halt its drilling project in the Chukchi is "credit negative" for Alaska, potentially harming the state's future economic prospects. Alaska's credit rating is AAA-negative.
The agency says Shell's efforts to tap offshore oil would have provided indirect benefits to Alaska's economy through job creation as well as improved viability of the under-utilised Trans-Alaska Pipeline System.
Shell's Alaska decision may undermine future offshore licensing
Oil consultancy Wood Mackenzie said last week that Shell's decision to abandon its offshore Arctic exploration plans is likely to dent further interest in the region.
On September 28, Shell announced that it would not pursue further exploration at the Burger field in the US Chukchi Sea. Although the company found oil and gas, it said the results were not sufficient to justify further activity.
Wood Mackenzie said this spells bad news for planned lease sales next year and beyond."The Bureau of Ocean Energy Management has scheduled lease sales in the Chukchi and Beaufort seas in 2016 and 2017 respectively," it said in a bulletin. "However, with Shell's results casting deep uncertainty over the viability of the US Arctic, we expect extremely low levels of participation and interest, with this decision potentially deferring all exploration in Alaska's federal waters."
Norway's Goliat project 'needs $100 a barrel' for success
Norway's giant Goliat project, which is set to enter production this year, may require an oil price of $100 per barrel if it is to be deemed economic, one oil analyst said this week.
"Looking at the whole project, I believe we must see an average oil price of nearly $100 a barrel in order for the project to see a good return," Christian Yggeseth, an analyst with Arctic Securities, a financial institution, told broadcaster NRK. Crude oil is currently trading at less than $50 a barrel.
The project, jointly owned by Eni and Statoil, is the first oil project to be built in the Norwegian Barents Sea.
It is also reported to be running over budget to the tune of around $2 billion, according to Norwegian newspaper Stavanger Aftenblad, citing figures to be released in connection with the 2016 national budget on Wednesday.
Shell to cease Alaska offshore search as Burger J well disappoints
Shell has announced that it will halt further exploration work off Alaska after seeing disappointing results from its Burger J well in the Chukchi Sea.
The well, located 150 miles from Barrow, Alaska, in about 150 feet of water, did show oil and gas but not in sufficient quantities to merit further action.
"Shell will now cease further exploration activity in offshore Alaska for the foreseeable future," the company said in a September 28 statement. "This decision reflects both the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska."
Shell said that it safely drilled the well to a total depth of 6,800 feet "in a basin that demonstrates many of the key attributes of a major petroleum basin".It added that for an area equivalent to half the size of the Gulf of Mexico, the basin remains "substantially under-explored".
Marvin Odum, director, Shell Upstream Americas, said his company still sees longer term potential in the basin, "and the area is likely to ultimately be of strategic importance to Alaska and the US."
Shell retains a 100% working interest in 275 Outer Continental Shelf blocks in the Chukchi Sea.
88 Energy to drill Icewine-1 exploration well
Australia's 88 Energy has is preparing to drill its Icewine project on Alaska's North Slope.
The Australian-listed group announced last week that its wholly owned subsidiary, Accumulate Energy Alaska (AEA), had signed a rig contract with Kuukpik Drilling.
"Kuukpik Rig 5 will be utilised for the upcoming Icewine-1 exploration well, which is on schedule for spud in October 2015," 88 Energy said in a statement. "The rig is a winterized rig with a telescopic mast rated for 400,000 pounds that is well suited for the drilling of Icewine #1."
Dave Wall, 88 Energy's managing director, said the company was now fully funded for the well, with a rig in place, and is now chasing down any final permits required.
Kuukpik Rig 5 has drilled remote exploration wells in all areas of the Alaskan Arctic, including the Barrow Gas Fields, Umiat, NPRA and an offshore ice island in the Beaufort Sea.
Rosneft to add to its Arctic fleet
Rosneft has placed orders with the Far Eastern Shipbuilding and Ship Repair Center (FESRC) for two ice-class support vessels for its growing Arctic business.
The vessels are to be built at the Zvezda Shipyard, in keeping with Moscow guidelines to keep ship building and other manufacturing local where possible.
Rosneft chief Igor Sechin said: "We started implementation of the task set by the Russian President to localise the manufacturing of marine facilities in the Far East, and we expect that other license holders working at offshore license blocks, and shipping companies will follow our example."
The contract also includes an option for a further two similar vessels
Arctic Economic Council Secretariat opens in Tromsø
The Arctic Economic Council (AEC) Secretariat has been officially opened in Tromsø, Norway.
The group held its founding meeting in Iqaluit, Nunavut, Canada in September 2014. A year later, on September 8, 2015, representatives gathered again in Tromsø to formally inaugurate the new Secretariat.
The Arctic Council approved the creation of the AEC last year "to foster sustainable development, including economic growth, environmental protection and social development in the Arctic Region."
Speaking at the launch event, Norwegian Foreign Minister Børge Brende said: "The Arctic must remain a region of peaceful cooperation, stability, respect for international law and sustainable development of resources. The Arctic Council is a vital contributor to this end."
AEC chairperson Tara Sweeney added: "It's time to get to work."
Shell quits climate change project amid Arctic drilling row
Shell has walked away from a Prince of Wales climate change project which it helped to found amid its controversial drilling work in the Arctic.
The company is currently drilling off Alaska in the Chukchi Sea area.
The firm's exit from the Prince of Wales's Corporate Leader Group was announced in a short note on the climate change programme's website, based at Cambridge University.
It read: "As of September 2015 longstanding member Royal Dutch Shell is no longer a member."
According to reports, there had been a falling out with other companies associated with the initiative unhappy about Shell's Arctic exploration.
Canada's offshore Arctic rules may stifle development work
Offshore drilling rules for Canada's Arctic may "stifle" future development work in the area, a government internal briefing report has suggested.
It suggests the current rules do not provide incentives for drillers to proceed with production after discovering oil.
The advice, cited in a Reuters report, was prepared for the government by Aboriginal Affairs and Northern Development Minister Bernard Valcourt.
It follows lobbying by Imperial Oil and other companies seeking concessions on existing legislation.
The right-leaning Conservative government said in July it would review the legislation, known as the Canada Petroleum Resources Act.
The note said that Imperial and its partners ExxonMobil and BP requested extensions on two existing licences last December to drill in the Beaufort Sea. Chevron was another name cited in the document as seeking changes to the law.
Svalbard identified as a possible refugee location
A group of Norwegian politicians has put forward the idea of sending refugees to remote Svalbard.
The Atlantic archipelago is one of the world's most remote areas and is currently inhabited by more polar bears than people. The current population of human inhabitants is just 2,600.
Some officials think the move would boost the local economy and have urged leaders to explore the idea in greater detail.
China's Silk Road Fund to join Yamal LNG team
Russia's Novatek has signed a framework agreement with China's Silk Road Fund (SRF) that will see the Chinese investment group take a 9.9% stake in the Yamal LNG project.The $1.4 billion deal was first discussed in August and signed during a visit by President Vladimir Putin to Beijing.
Following the completion of the deal, the shareholder structure of Yamal LNG will be Novatek (50.1%), Total (20%), CNPC (20%) and SRF (9.9%). SRF is a $40 billion Chinese fund focused on energy and infrastructure projects worldwide.
"We welcome SRF's entrance into the Yamal LNG project as another step forward in the mutually beneficial cooperation with our Chinese partners in the development of gas projects in the Russian arctic region," Novatek chairman Leonid V. Mikhelson said in a September 3 statement.
China is expected to assist in project financing the Yamal LNG venture because of difficulties in accessing western credit markets in the wake of the Ukraine standoff.
SRF president Wang Yanzhi said he considered the Arctic project to be "one of the most prospective and competitive LNG projects in the world".He added: "We hope our entrance into the project will facilitate an expedited closing of the project's general external financing, as well as contribute to further development of the Chinese-Russian cooperation in the energy sector".
The Yamal LNG project envisages the construction of an LNG plant with annual capacity of 16.5 million tons per annum taking gas from the South-Tambeyskoye field.
TMK moves pipelines to Russian gas project
Pipelines group TMK announced this week that it has now supplied this year's product quota to Yamal LNG.In 2014 the two sides signed a contract for the supply of pipeline products through to 2020 for the huge gas export scheme.
"This year, 1,748 tonnes of cold-resistant pipe, including 1,716 tonnes of premium products, have been delivered to Yamal LNG under a seven-year contract," a TNK statement read.
The shipments included casing pipe and tubing pipe of various diameters, plus connections and accessories, all made at TMK's Volzhsky, Sinarsky and Orsk machine building plants.
Barents Sea seismic in demand
EMGS has reported more interest in its Barents Sea seismic data.The company said it has entered into "two new data licensing agreements with two oil companies" for the provision of 3D EM data from EMGS's multi-client data library over the Barents Sea and the Norwegian Sea.The seismic package is worth USD 1.6 million, it added.
EMGS has plenty of experience in the area. Five years ago it secured pre-funding from Statoil for an extensive multi-client 3D EM survey in the Barents Sea, ahead of Norway's 21st exploration licensing round. This followed earlier seismic work in the Barents Sea area during 2008.
Russian spy ship nears Shell's Alaska drill fleet
A Russian spy ship was spotted last week close to the Noble Discoverer, one of the rigs contracted by Shell for its Alaska drilling campaign.
Shell is currently exploring in the Chukchi Sea area, north of the Bering Strait between Alaska and Russia.
A Pentagon spokesman, Jeff Davis, confirmed the sighting to CNN. "We are aware of the Russian vessel Kurily sailing in the vicinity of the Noble Discoverer. We recognise the rights of all sovereign nations to freely navigate in international waters."
The US Northern Command was alerted to the Russian vessel's presence after the US Coast Guard was first informed, CNN reported, although no American defence assets were deployed.
The Noble Discoverer (pictured) is one of two rigs being used by Shell for its Alaska drilling alongside Transocean's Polar Pioneer
Rosgeologia commences Kara Sea seismic work
Russian seismic firm Rosgeologia has commenced a new project to collect fresh data across the Baydarata Bay of the Kara Sea.
The survey will cover an area of approximately 20,000 sq km and is expected to be completed by the end of 2017.
Rosgeologia's client list includes the likes of Gazprom, Rosneft and Lukoil, as well as international operators.
Obama's Alaska visit highlights Arctic cause
US President Barak Obama, visiting Alaska this week, has called for new investments in the region to to enhance safety and security in a changing Arctic.
As well as a pledge to build more icebreakers (see story below), it could include a new deepwater harbour north of Dutch Harbor, located on the Aleutian Chain, to provide a safe haven for vessels transiting the US Arctic region.
New maritime mapping studies are also planned for areas now open to shipping as a result of increased melting sea ice, involving the National Oceanic and Atmospheric Administration and the US Coast Guard.
The president also outlined a number of key marine and land-based environmental projects during his visit.
US icebreaker strategy emerges
During his Alaska visit, President Obama also outlined plans to overhaul the US icebreaker fleet in a bid to keep up with Russia's growing ambitions.
He said his administration will propose to accelerate the acquisition of a replacement heavy icebreaker to 2020 from 2022, begin planning for construction of additional icebreakers, and call on Congress to work with it to provide sufficient funding.
"These heavy icebreakers will ensure that the US can meet our national interests, protect and manage our natural resources, and strengthen our international, state, local, and tribal relationships," a Whitehouse statement read.
Currently, the US fleet is down to the equivalent of two fully functional icebreakers and only one heavy-duty icebreaker. Russia, on the other hand, has 40 icebreakers and another 11 planned or under construction.
"The growth of human activity in the Arctic region will require highly engaged stewardship to maintain the open seas necessary for global commerce and scientific research, allow for search and rescue activities, and provide for regional peace and stability," the statement added.
"Accordingly, meeting these challenges requires the US to develop and maintain capacity for year-round access to greater expanses within polar regions."
Oil price challenge for Arctic upstream projects
Gazprom Neft deputy director Vadim Yakovlev has said his company remains committed to the Arctic even though project economics remain extremely challenging.
In an interview on the company's website, cited by the Barents Observer, he said that Gazprom Neft will press on with further development plans in the area despite oil prices dropping again recently.
The company estimates that its Prirazlomnoye field - Russia's first and currently only offshore Arctic oil project - requires a price of around $50-60 per barrel to be profitable.
Other companies face the same challenge, including Statoil and Eni in the Norwegian Arctic. The pair's Goliat project - due on stream later this year - could need an oil price closer to $90 to be economic, according to some sources.
North Energy eyes Russia's Barents Sea
Norwegian oil company North Energy is eyeing up Russia's Barents Sea.
In its 2014 annual report, the company makes its ambitions known. It is already partnering Russia's Lukoil on upstream projects on the Norwegian side of the Barents Sea, but now seems keen on working on the other side of the border.
In the report, cited by RIA Novosti, it states: "The goal of North Energy business is then exploration, development and production of oil and gas on the Norwegian continental shelf and in the Russian sector of the Barents Sea, as well as providing the possibility of ownership or participation in companies with similar activities, including through subsidiaries."
Norway's Arctic border with Russia caught in migration spotlight
The Arctic region has become embroiled in Europe's growing refugee crisis.
Norwegian press reported last week that more than 100 Syrian asylum seekers have crossed the country's Arctic border from Russia in recent months.
The refugees are reportedly using bicycles to bypass a law that makes it illegal either to cross the border on foot or to give someone without papers a lift in a vehicle.
The Storskog border station, two hours drive from Murmansk, is Norway's only legal border crossing with Russia.
Shared emergency response resources for northern Norway
Eni Norge has signed a mutual assistance agreement with the Norwegian Coastal Administration (NCA) for the pooling of support vessels on the Goliat field, the first of its type in the country.
Andreas Wulff, Eni Norge's external communication manager, said the agreement will provide better oil spill protection in a sensitive region, as well as making available to both sides access to optimal towing capability
"It represents a strengthening of the capacity both within oil spill protection, towing and search and rescue operations off the coast of West Finnmark."
The Goliat field will be the first oil field to come on stream in Norway's Barents Sea when it starts production this year. It is being developed by operator Eni Norge and Statoil.
Assistance provided to Eni by the NCA is restricted geographically to the Goliat field and adjacent areas along the West Finnmark coast, said Johan Marius Ly, director of the NCA's Department for Emergency Response.
"This is an effective way to make use of shared oil spill protection resources," he said in a statement. "Our goal is mutual utilisation of vessel capacity permanently stationed in the area in the event of unforeseen incidents and suspensions in operations."
Russia's Lukoil making inroads into the Arctic
Russia's second biggest oil company Lukoil looks to be making progress in its quest to access more Arctic upstream opportunities, securing the East Taimyr oil field against rival bidder Rosneft.
The field is on the northern tip of Taimyr, a peninsula between the Kara and Laptev Seas, where Rosneft is already active.
Local press said Lukoil paid the equivalent of around $30 million for the project, which was offered for tender by the Russian Natural Resources Ministry.The company is keen to break the hold on the region by Rosneft, and another rival firm, Gazprom.
Clinton speaks out against Alaska offshore drilling
Democratic presidential hopeful Hilary Clinton has spoken out against offshore exploration in the Arctic, breaking ranks with President Barack Obama.
Just days after Obama gave the green light for Shell to drill deeper on its Chukchi Sea acreage, Clinton commented on social media that offshore Alaska exploration was just too risky.
"The Arctic is a unique treasure," she said via twitter. "Given what we know, it's not worth the risk of drilling."
The Clinton team later said that she was specifically referring to offshore work, as opposed to the longstanding exploration and production onshore Alaska's North Slope.
Shell gets nod to drill deeper
Shell is drilling deeper into its Burger J prospect in the Chukchi Sea off Alaska after being given the final green light by Washington.
The company has been active in the area for several weeks but had to wait for the return of a vessel carrying vital safety equipment before it could drill into deeper zones.
US environmental officials are monitoring the work closely. "Activities conducted offshore Alaska are being held to the highest safety, environmental protection, and emergency response standards,'' said Brian Salerno, director of The Bureau of Safety and Environmental Enforcement (BSEE), which issued the final permit.
Studies suggest that more than 20% of the world's undiscovered oil and gas resources could be found buried in the Arctic.
Statoil boost for Arctic cycling event
Statoil has confirmed that it will continue to sponsor the Arctic Race of Norway, a unique cycling event in the country's far north, as part of its commitment to the environment.
With the 2015 race underway, the company has agreed a new contract to be the race's main sponsor for the next three years. The race takes place through some of Norway's most beautiful countryside.
"Northern Norway is an important focus area for Statoil," said Reidar Gjærum, Statoil's senior vice president for corporate communication. Race experts say the event would not be possible without the group's support. "We want to help promote the region and drive industrial development and growth," said Gjærum.
Cairn Energy still keen on Greenland
Despite its lack of success in the field there so far, Cairn Energy's chief executive Simon Thomson has said his company remains keen on Greenland.
The company has spent more than $1 billion exploring Greenland's offshore to date, but without any commercial find.
Speaking in an update this week, Thomson said the company is not likely to drill any further wells until it has brought in a partner to share the cost.
He said the North Sea currently presents good opportunities following the slide in oil prices.
New US sanctions target Sakhalin gas field
The US has stepped up its sanctions against Russia's energy sector, targeting the Yuzhno-Kirinskoye field in the far east of the country, which forms part of the Sakhalin 3 project.
The sanctions restrict exports, re-exports and transfers of technology and equipment to the field. The move could dent Shell's plans to expand links with Russian gas giant Gazprom.
In June, the two sides signed an agreement to develop a strategic alliance in the gas sector. The development of Sakhalin-3 is regarded as central to that alliance.Shell and Gazprom are already partners on the existing Sakhalin 2 LNG venture.
"It is clear that this is a signal to Shell: don't go into new projects, deal with existing ones," an executive at a Russian energy company who works on projects in Sakhalin was quoted as saying by Reuters, on condition of anonymity.Last year, the US imposed sanctions on an Arctic project that Russian oil major Rosneft planned to develop with ExxonMobil, effectively forcing the two companies to suspend drilling despite the discovery of oil
Dynagas picked for Yamal LNG fleet
The gas export scheme, now being built on the remote Yamal peninsula, involves 16 new icebreakers to enable year-round navigation and access to the port at Sabetta.All of the Dynagas vessels are under order in South Korea, each with a capacity of 172,000 cubic metres and collectively worth an estimated $1.5 billion.
Other shippers involved in the icebreaker fleet include Sovcomflot, a consortium of Teekay LNG and China LNG Shipping, and another pairing of Mitsui OSK Lines with China Shipping Development. Yamal LNG is expected to commence first gas exports in 2017.
Lundin Petroleum lines up more Barents Sea wells
Lundin Petroleum is planning more wells this year as part of its Barents Sea exploration campaign off Norway's northern coast.
The second Alta appraisal well is ongoing, it announced in a second quarter financial presentation released August 5.And there are two remaining prospects for 2015: Neiden, to the north of Alta, and Ornen, further out to the east.
Gross prospective resources at Neiden (PL609) are estimated at 200 MMboe and for Ornen (PL708), some 350 MMboe. Lundin is the 40% operator of both the Alta discovery and the nearby Gohta discovery
Shell prepares to drill into deeper zones
With drilling work already underway off Alaska's northwest coast, Shell has now applied to federal authorities for a permit to enter deeper oil-bearing rock with its maiden 2015 well in the Chukchi Sea.
Shell was limited from drilling too deep by the federal Bureau of Safety and Environmental Enforcement because equipment was not on hand to handle a possible well blowout.
The equipment is located on the Fennica icebreaker (pictured) which suffered hull damage last month, but has since been repaired and is now on its way back to the drill site.Officials say the emergency equipment must be on hand and available for use within 24 hours.The Fennica is expected to arrive back in the drilling area this week.
US export policy shift could open more Alaska exploration
New legislation to permit US oil exports could also pave the way for more drilling off Alaska too.
The US Senate's energy committee last week passed a bill to repeal US crude export limits. It means a full vote on the export policy turnaround could take place in Washington later this year.
The Offshore Production and Energy National Security Act aims to repeal oil export limits but also calls for new lease sales and more drilling offshore Alaska.The bill was introduced by Alaskan Republican Senator Lisa Murkowski (pictured), the energy committee's chairperson.
Shell drilling of Burger J prospect now underway off Alaska
Drilling is now underway by Shell at the Burger J prospect in the Chukchi Sea, offshore Alaska. It follows a last minute hitch when the icebreaker Fennica was forced to return to port for repairs. The vessel is now on its way to the drill site.
"In the days to come, the team aboard the Transocean Polar Pioneer will work to complete the top portion of the well in anticipation of drilling to total depth once the Fennica arrives on site," Shell said in a brief statement.
"We remain committed to operating safely and responsibly and adding to Shell's long history of exploration in offshore Alaska," it added.
Greenpeace activists attempted to block the Fennica in one final protest as the ship set sail from Portland to rejoin the Shell fleet.
The Burger J well is the first of a potential two-well Shell campaign off Alaska this summer.
Russia stakes new UN claim for Arctic territory
The country made a similar claim in 2001, which was rejected because of insufficient evidence, and opposition from other Arctic states. It also placed its flag on the Arctic seabed in 2007 in a much publicised, but controversial, move.
But Moscow says the latest claim is backed by fresh scientific data. "Ample scientific data collected in years of Arctic research are used to back the Russian claim," the Russian foreign ministry said in a statement.
The other Arctic states - the USA, Canada, Norway, Denmark - are also keen to assert their own territorial claims in the region.
Scientists and geologists believe the Arctic could hold up to a quarter of the world's undiscovered oil and gas reserves.
Last week, Moscow also announced that it was to strengthen its naval forces in the Arctic as it steps up interest in the region.
Canada considers Arctic drilling lease extensions
Canada is also to look into extending the duration of Arctic drilling licenses. It follows a similar move by the USA to also explore the idea.
Officials are keen due to the challenges of drilling in harsh conditions while meeting strict safety requirements, which severely limits the actual time operators can spend working in the field.
The Canadian government is pondering the law change in response to industry lobbying to extend licenses that expire in 2020 for seven years.
Imperial Oil said only last month that it needed more time before it could drill an exploratory well in the Beaufort Sea, alongside partners BP and ExxonMobil.
Critics argue that the move could cost the state millions of dollars in new cash deposits from the major oil companies.
Repsol drilling reveals 'significant potential' in Alaska
Spanish oil group Repsol has announced that it has completed a two well drill programme on Alaska's North Slope, with promising results. In a statement, it said the wells add to "encouraging" results from previous campaigns that indicate an area of "significant potential".Production tests yielded good quality crude from multiple pay zones. The Qugruk 8 (Q-8) well flowed 30 degree API gravity crude at rates of up to 2,160 bpd. The Qugruk 301 (Q-301) horizontal well yielded rates as high as 4,600 bpd.
"The positive news from this year's exploration campaign, combined with the recent changes in the state's tax structure, make Alaska a compelling area to continue to invest and generate the potential for development," said Luis Cabra, Repsol's E&P executive vice president.Repsol operates the concession area alongside partners, 70 & 48 LLC, a subsidiary of Armstrong Oil and Gas, and GMT Exploration Co.
Kharyaga production fall dents local economy
Reduced oil output from Russia's Kharyaga field is adversely impacting the local Nenets economy. Local authorities there control a 10% stake in the project through the Nenets Oil Company (NOC). According to newspaper Vedomosti, 2014 production from the field dropped 5% to a total of 1.5 million tons, while investments and operational costs spiked.
Total is the operator, alongside partners Statoil, Zarubezhneft and NOC. It has lowered its annual peak production estimates for the field from 3,5 million tons to 1,9 million, according to reports.
Small oil discovery for Lundin Norway
Lundin Norway AS has made a small oil discovery northwest of the Snorre field in the North Sea with the 33/2-2 S well in production licence 579.
The company is now concluding the drilling of the wildcat well, drilled about 40 km northwest of Snorre, and 180 km west of the Flora field. The well - the first in block 579 - encountered oil over an interval of about 173 metres. No recoverable resources have been estimated so far. It was drilled by the Bedford Dolphin rig, which will now drill wildcat well 16/4-9 S in production licence 359, on behalf of Lundin.
Russia begins resupply of its Arctic bases
Russia is busy loading up its remote bases in the Arctic with fresh supplies, local news sources have reported.
One vessel loaded with food, technical equipment and other items set off for Ostrovnoy, a closed military town located on the eastern end of the Kola Peninsula, the Barents Observer said, citing a press release from the Northern Fleet.
More ships are to follow, a mix of navy and civilian vessels. Among the places to be supplied are newly reopened bases at Franz Josef Land, Novaya Zemlya, New Siberian Islands and Severnaya Zemlya, the report said.
US must invest in new icebreaker fleet
The US must invest in new icebreakers if it is to tap the Arctic's emerging oil potential, according to experts.As Russia commits to a new fleet of icebreakers (it already has over 20 heavy icebreakers), the US risks missing out, insiders say.
The Polar Star, built in the 1970s, is currently the US Coast Guard's only heavy icebreaker.Speaking to Alaska Dispatch News, Shiva Polefka, an Arctic specialist at the Center for American Progress, said it is an area Washington should prioritise immediately."Our GDP is at least eight times that of Russia. And yet we say we can't afford an icebreaker. We just need to make it a priority," he said
Lukoil ponders East Tymyr oil terminal idea
Lukoil may be ready to develop a new Arctic oil terminal, according to reports. The company hopes to copy its successful Varandey project, and is squaring up to rival Rosneft in a bid to develop the East Taymyr (Vostochno-Taymyrsky) structure, on the northern tip of the Taymyr peninsula near Russia's Arctic coast.
The newspaper Vedomosti reported that if Lukoil wins the rights to develop the field it could hook it up to a coastal terminal, much like Varandey on the coast of the Pechora Sea, where millions of tons of tons of oil is exported through Arctic waters.
Moscow is expected to pick between the two oil rivals this August.
USA takes over Arctic Council leadership
The United States has taken over the chairmanship of the Arctic Council from Canada following last weekend's summit in Iqaluit.
US Secretary of State John F. Kerry, the new Chair of the Arctic Council, outlined his country's plans for the group during its two-year leadership stint.The US theme, One Arctic: Shared Opportunities, Challenges and Responsibilities, will focus on issues including climate change, safety, security and stewardship, and improving living conditions for Arctic communities.
"There's only 'one Arctic' and all of us - the United States, other nations, indigenous peoples, and Arctic communities - must join together to ensure responsible stewardship of this incredible region," Kerry told the summit.Two new regional task forces will also be set up, one covering arctic marine cooperation and another on telecommunications infrastructure.
Absent from the meeting was Russian foreign minister Sergey Lavroy.It was the first Arctic Council biennial meeting he has missed in more than a decade and comes at a time of heightened tensions between Russia and the West over Ukraine and the Crimea.He cited a scheduling change, with Russia's environmental minister, Sergei Donskoir, attending in his place.
New icebreakers for Gazprom Neft's Novy Port project
Aker Arctic and Vyborg Shipyard are to design and buid two new icebreakers for Gazprom Neft's Novy Port project.
The vessels will be based on the Aker ARC 130 A design and used in the oil terminal operated by LLC Gazprom Neft Novy Port in the Gulf of Ob.
The new icebreakers will be 122m long, with a combined propulsion power from the three azimuth thrusters at 21.5 MW.
The ships will be classified by the Russian Maritime Register of Shipping.
Russian military to build first icebreaker in decades
Russia has commenced work on a first military icebreaker for decades. The new vessel, named Ilya Muromets, is now under construction at St. Petersburg's Admiralty Shipyards and scheduled for completion in 2017.
It will be part of the Russian Navy's Northern Fleet and will deploy troops and escort transport convoys to supply bases and airports within the Arctic region, the shipyard said in an online press release.
Tugboat crew commended for bravery during Kulluk rescue
The US Coast Guard has recognised a lifeboat crew for its "professionalism, courage, and flawless performance in extreme conditions" during the emergency rescue of the Kulluk rig off Alaska in 2012.
Officials praised the crew of Crowley's Prevention and Response tugboat, Alert, for its part in the rescue operation off the drill barge in the southern part of Kodiak Island when it was working for Shell.
The tug arrived on scene to find the Kulluk adrift at 4.5 knots in rough seas, and caught a trailing line from the rig to commence tow. But with 54-foot seas and 40 to 50 knot winds, the Alert was being pushed back toward the Kodiak Island shore. A day later, it was ordered to release the tow wire.The tugboat is typically used for tanker escorts to and from Alaska's Alyeska Valdez Marine Terminal.
Floating nuclear power stations for remote mining sites
A Canadian company has proposed the use of floating nuclear power plants to meet rising energy demand in the country's far north.Arctic towns, cities and mine sites are typically powered by diesel generators, which carry high fuel costs and heavy pollution.
At a recent mining event in Iqaluit, Dunedin Energy Systems flagged the example of Russia's OKBM, which is building a floating nuclear power plant, due for delivery next year in the Siberian port of Pevek.It will have two modified naval propulsion reactors to produce 70 MW of electricity or 300 MW of heat, far in excess of most arctic diesel plants.
Dunedin executives told delegates that the floating nuclear option could deliver more power quickly to remote arctic sites and with reduced environmental impact.
Goliat arrives in Barents Sea
The Goliat floating production storage and offloading vessel has arrived in the Barents Sea following its voyage from a South Korean dockyard. The FPSO was successfully floated off the heavy vessel transport, Dockwise Vanguard, in a fjord outside Hammerfest.
The platform will now be temporarily moored in Ersvika, six km south of Hammerfest, where work to complete preparations for tow out to the Goliat field will begin.This will include inspections, tests and checks of all systems and equipment.Tow out to the field in the Barents Sea is expected in early May, with first production on stream by mid-year.
Greenpeace activists board Shell fleet bound for Alaska
A small band of Greenpeace activists have climbed aboard a vessel carrying a Shell rig that could be used for Arctic drilling later in the year.
Six campaigners boarded the Blue Marlin, a heavy lift ship carrying the Polar Pioneer rig, to protest at Shell's plans to drill in Alaska this summer. The ship is currently hauling the rig from Singapore to Seattle across the Pacific Ocean. The incident occurred 750 miles northwest of the Hawaiian Islands.
The protesters have set up a makeshift camp on the underside of the Polar Pioneer's main deck."We're here to highlight that in less than 100 days Shell is going to the Arctic to drill for oil," one of the group said in the statement. "Shell's actions are exploiting the melting ice to increase a man-made disaster. Climate change is real."
Shell, which hopes to drill in the Chukchi Sea off Alaska's northwest coast later this year if it receives clearance, has applied to the courts to remove the activists.
Russian nuclear submarine fire at Arctic naval dock
An investigation is underway following a fire onboard a Russian nuclear submarine docked at an Arctic naval shipyard.The fire on the Orel submarine has now been put out, according to local news reports.
The vessel was undergoing repairs at the Zvezdochka shipyard, near Arkhangelsk, when the fire took place.No weapons or nuclear fuel were on board at the time of the incident and there were no reports of any casualties.
Yevgeny Gladyshev, a spokesperson for the shipyard, also said that no environmental or radioactive contamination had occurred. The Orel's nuclear reactor had been shut down prior to the blaze."Smoke is no longer coming out, only steam," he was quoted as saying by Interfax news agency.
Prudhoe Bay no longer biggest US oil field
Alaska's Prudhoe Bay has slipped from first place to third in the list of America's top oil fields, according to a new report by the US' Energy Information Agency.The two largest oil fields are named as two areas in Texas at the forefront of the country's shale oil revolution: Eagleville, in the state's Eagle Ford Shale Play, and the Spraberry Trend Area. Prudhoe Bay lagged behind in terms of both oil reserves and production.
According to the report, Top 100 US Oil and Gas Fields, Prudhoe Bay's production averaged 79,080 million barrels in 2013, some distance behind Eagleville at 238,050 million barrels.The EIA said the Spraberry Trend Area produced 99.78 million barrels in 2013.
First discovered in 1967, Prudhoe Bay helped inspire Alaska's oil boom and the construction of the trans-Alaskan oil pipeline. The field held the number one spot in the last top 100 ranking which used data from 2009.Kuparuk River was the only other Alaskan field to make it in the top 10 this time recording production in 2013 of 29,487 million barrels.Other Alaskan oil fields (Milne Point and Alpine) dropped positions in the new list, while the only one to buck the trend was Nikiutchuq, which jumped up to number 65 in the rankings.
Arctic sea ice maximum reaches lowest extent on record
Arctic sea ice extent for March averaged 14.39 million square km, the lowest for the month since satellite records began, the US National Snow and Ice Data Center (NSIDC) reported this week.
The figure is 1.13 million square km below the 1981 to 2010 long-term average of 15.52 million square km.
NSIDC said Arctic sea ice reached its maximum extent for the year on February 25 at 14.54 million square km (5.61 million square miles). "This year's maximum ice extent is the lowest in the satellite record," it noted.
"After reaching its seasonal maximum, the beginning of the melt season was interrupted by late-season periods of ice growth, largely in the Bering Sea, Davis Strait and around Labrador."The monthly average Arctic sea ice extent for March was the lowest in the satellite record, it added.
NSIDC is part of the Cooperative Institute for Research in Environmental Sciences at the University of Colorado Boulder, and receives some support from NASA
Sovcomflot steel-cutting ceremony for new Arctic tanker
Work has begun on SFC Group's (Sovcomflot) latest reinforced ice class Arc-7 Arctic shuttle tanker, following a steel-cutting ceremony at a South Korean yard. The vessel is being built at Samsung Heavy Industries in Pusan.
The tanker is the first in a series of three ordered by Sovcomflot under a long-term time charter agreement to transport oil from the Novoportovskoye field. Construction of the first tanker is scheduled to be completed in 2016.
Representatives of SCF Group, the Russian Maritime Register of Shipping and Lloyd`s Register were all present at the steel-cutting ceremony.
A new world for US Coast Guard
New threats, operational demands and climate change mean the US Coast Guard faces more pressures than ever before according to USCG chief Admiral Paul Zukunft. In his 2015 State of the Coast Guard address at USCG's HQ in Washington, DC, Zukunft said "there is no question: the United States Coast Guard is operating in a world unlike ever before."
He cited geopolitical instability, budgetary constraints, the transformation of industries and governments by digital technology and the ongoing opening of Arctic waters. The commandant outlined how America's Coast Guard will meet today's challenges while preparing for the complexities that remain ahead.
"I will take decisive action to alleviate the strain of an austere budget environment and will make tough decisions in the face of our increasing demands," said Zukunft. "Through investing in our people, the recapitalization of our aging cutter fleet, including acquisition of the Offshore Patrol Cutter and sustainment of front-line operations, the Coast Guard will return more operational value on every dollar."
The speech will add to the debate about the looming capacity gap in America's ice-breaking fleet, with only one heavy icebreaker currently in active service. The Coast Guard has said that independent analysis shows it needs three heavy and three medium icebreakers to cover the nation's anticipated needs in the Arctic and Antarctic but budget constraints continue to impede procurement.
Rosneft seeks Arctic licence extensions
After last year's headline-making oil strike in the Kara Sea, which was drilled quickly to beat looming sanctions, Russian oil giant Rosneft is now requestingpermission for extensions of up to two years on its licences in Arctic waters. According to regional press reports, Rosneft, which is subject to Western sanctions imposed in response to Russia's role in the Ukraine conflict, has written to the Russian authorities for permission to postpone exploration activities, citing the pull-out of foreign partners and the resulting challenges of securing investment.
Statoil plans up to six wells offshore Newfoundland & Labrador
Statoil plans to drill up to six exploration wells offshore Eastern Canada during its current 15 month campaign, with the bulk of the wells focused around its Bay du Nord discovery.
The Norwegian oil giant's exploration chief Tim Dodson told reporters last week that one well has already been drilled and the rig has moved to the next prospect. Well results will not be released immediately, said Dodson.Statoil has already found up to 800 million boe at its Bay du Nord and Mizzen discoveries offshore Newfoundland & Labrador.
Authorities investigate incident at Goliat oilfield
Norway's Petroleum Safety Authority is investigating an incident in which a worker fell overboard from the Scarabeo 8 working on the Goliat field in the Barents Sea. After being recovered by the Esvagt Aurora, the person involved was sent to Hammerfest Hospital with minor injuries. The area around the accident site has now been cordoned off and activity suspended.
API considers new Arctic offshore rules
The American Petroleum Institute's director of upstream, Erik Milito, said the industry body is carefully reviewing Washington's proposed Arctic offshore regulations.
'The safe and responsible development of oil and natural gas in the Arctic is critical to our economy and national security,' said Milito. 'We are reviewing these rules to ensure they offer a realistic path for energy production in the Arctic. Failure to develop these resources would put America's global energy leadership at risk at a time when Russia and other Arctic nations are forging ahead."
The API is concerned about the requirement for a second rig to be on standby to respond to a potential blow-out in Arctic waters; it believes alternative methods, such as using a capping stack, could achieve the same season relief and same safety and environmental protections without the "unnecessarily burdensome" requirement of having two rigs on site for a single well.
Gazprom Neft makes first winter shipment of Novoportovskoye crude
Gazprom Neft has made its first ever winter shipment of oil from the Novoportovskoye field on the Yamal Peninsula, with 16,000 tonnes of crude oil shipped to European consumers by oil tanker, escorted by an atomic icebreaker. Over 50 thousand tonnes of oil is to be shipped during the winter delivery period which will finish in May this year. Atomflot provides the icebreaker support for Gazprom Neft's tankers along the North Sea route.
Crowley Maritime awards Alaska student scholarships
Crowley Maritime, which specialises in maritime services in the Arctic, has awarded fourThomas B. Crowley, Sr., Memorial Scholarshipsto University of Alaska Fairbanks (UAF) students. The students - John Oulton, Shamariah Hale, William Kelly and Elizabeth Lindley - were chosen for their outstanding academic records and each received US$2,500 toward tuition. Preferences for Crowley-funded UAF scholarships are given to students from rural Alaska from Crowley-served communities throughout the state.
BOEM releases updated EIS for controversial Chukchi Sea lease sale...
The Department of the Interior has released the Final Supplemental Environmental Impact Statement (FSEIS) for Chukchi Sea Lease Sale 193, the 2008 oil and gas lease sale off Alaska that has been mired in legal challenges. In response to a federal court order, the FSEIS updates the Bureau of Ocean Energy Management's (BOEM) estimates of the full range of production levels from offshore oil fields that might be developed in the Chukchi Sea as well as the related potential environmental effects of the lease sale.
Secretary of the Interior Sally Jewell said the updated analysis was "a major step toward resolving the 2008 oil and gas leases that have been tied up in the courts for years". The original EIS for the sale was published in 2007, ahead of the 2008 sale which saw companies, including Shell, bid highly for exploration acreage. Subsequent legal challenges and federal court decisions remanded the sale back to Washington's BOEM for further analysis and in early 2014 the Bureau of Safety and Environmental Enforcement (BSEE) suspended all of the Chukchi Sea leases issued in Lease Sale 193.
The FSEIS is based on the best available data - including actual leasing records, current geological information and consultation with the public and tribal governments in Anchorage, Fairbanks and a number of Chukchi Sea communities - to estimate the highest amount of production that could reasonably result from Lease Sale 193; this is higher than in previous analyses.
The scenario used in the FSEIS assumes the discovery and development of two prospects and represents a "high case" of oil and gas activities that could result from the lease sale. It assumes combined oil and condensate production of 4.3 billion barrels and gas of 2.2 TCF to be produced via eight Arctic-class design platforms and 589 wells over a time frame from exploration to decommissioning of 77 years.
...as environmental groups warn of "recipe for disaster"
Environmental campaigners pointed out that the new analysis also increases the risks of large oil spills as a result of offshore activity in the Chukchi Sea. Friends of the Earth climate campaigner Marissa Knodel said that with a 75% chance of a large oil spill, the decision to proceed with drilling in the Arctic would be a "recipe for disaster".
"It is unconscionable that the federal government is willing to risk the health and safety of the people and wildlife that live near and within the Chukchi Sea for Shell's profits," said Knodel.
Following the publication of the FSEIS, there will be at least a 30-day waiting period before a final decision can be made on the lease sale. If then approved, BOEM and BSEE would need to review a company's specific exploration plan, an application for permit to drill and other materials before any exploration activity could occur.
Seattle signed up as home port for Shell's Arctic drill plans
The Port of Seattle has inked a two-year lease to allow Foss Maritime to use Terminal 5 on the Seattle waterfront as the base for Shell's Arctic drilling ambitions in the Chukchi Sea, according to local press reports.
Despite low oil prices and cuts in its capex plans, the Anglo-Dutch supermajor is keen to resume drilling in the Alaskan Arctic this summer, pending permits and approvals. News of the Port of Seattle deal has angered local green groups
Goliat sets sail for Norway
As we reported last week, the Goliat platform is now aboard the Dockwise Vanguard, the world's largest heavy lift vessel. Now the giant vessel and its FPSO load, pictured above, have started their journey to northern Norway. Goliat will be the first oil field to come on stream in the Barents Sea and will be produced using the world's largest and most sophisticated cylindrical Floating, Production, Storage and Offloading (FPSO) facility, which was built at the HHI yard in South Korea. The journey from Korea to Hammerfest in northern Norway will take about 60 days, with expected arrival by early April ready for first oil in the summer
Antarctic rescue highlights value of Polar Star heavy icebreaker
The US Coast Guard's only active heavy icebreaker has rescued a fishing vessel that had been trapped in Antarctic ice 900-miles northeast of McMurdo Sound for nearly two weeks. The
Antarctic Chieftain, an Australian-flagged fishing vessel, had damaged three of its four propeller blades in the ice . It was rescued by the USCG Cutter Polar Star, which broke through 150 miles of thick Antarctic ice and navigated around massive icebergs to reach the trapped vessel and its 26 crew.
The icebreaker's crew navigated through difficult weather conditions during the five-day rescue operation including heavy snow fall, high winds and extreme ice conditions. "I doubt any medium icebreaker could have made the rescue since we had to go on turbine to get through the multiyear ice that appeared to be as thick as 20 feet in places. The amount of icebergs in the region suggested that the area was extremely hazardous to navigation," said Captain Matthew Walker, the commanding officer of Cutter Polar Star. "This rescue demonstrates the importance of our nation's only active heavy icebreaker in the Polar Regions."
"There were some very happy sailors aboard Antarctic Chieftain upon our arrival," said Walker. "The ice conditions that we found the fishermen in were dire, more so if Antarctic Chieftain had to stay much longer."The crew of Polar Star was deployed to McMurdo Station, Antarctica, as part of Operation Deep Freeze, which provides military logistical support to the US Antarctic Program managed by the National Science Foundation. They will now return to their home port of Seattle.
Rosneft hails 154% reserves replacement
Russian oil giant Rosneft has reported that an independent audit of its reserves and resources by DeGolyer & MacNaughton confirms it has proven reserves of almost 34 billion barrels of oil equivalent, with a reserve replacement ratio last year under SEC rules of 154 %. This is a level that would be the envy of many Western oil majors, struggling to replacement production. Rosneft's company's reserves were up 3% on 2013 and it has a hydrocarbon reserve life of 24 years.
Igor Sechin, Rosneft's boss, said the company had "once again confirmed its status of the world leader in terms of reserves". "During the past 6 years, the Company has been steadily replacing over 100% of its production with new reserves and is going to continue this practice," said Sechin.
Lundin used the Island Innovator to drill the Alta discovery
The oil price continued its precipitous descent this week, with benchmark Brent briefly crashing to US$45 per barrel. This is inevitably bad news for high cost projects in the Arctic that looked marginal at US$100 per barrel oil prices and are now on ice until economics improve.
The Statoil-led Johan Castberg field in the Barents Sea, for example, has suffered serial delays since 2013 while the oil giant, having failed to add material new reserves in the area, seeks to slash costs to push the project over the line. The company drilled extensively in the Barents Sea last year but results were, at best, mixed and regional watchers are waiting to see how much it will bet on the region in 2015: details are expected at the capital markets day on February 6.
Despite the gloom cast by the price rout, the industry is holding firm on some Barents Sea projects. Sweden's Lundin Petroleum, for example, plans to drill four wells there in 2015. The company has set a pre-tax exploration budget for 2015 of US$320 million, of which 85% will be spent in Norwegian waters where it plans to drill seven exploration wells. This will include two exploration wells in the Barents Sea, targeting the Ornen prospect in PL708 and the Neiden prospect in PL609, plus two appraisal wells follow-up last year's Alta discovery in PL609.
"We believe it's unrealistic that oil prices will stay at these levels forever," said Lundin's chief executive Ashley Heppenstall in a phone interview with Bloomberg. "Ultimately, the viability of the Barents Sea will be driven by how much resources are actually found."
Proposed terminal at Veidnes remains on the drawing board
Preliminary talks between Lundin Petroleum and Statoil about a joint development of Barents Sea resources in order to justify an onshore oil terminal in Arctic Norway have come to naught. Lundin's CEO Ashley Heppenstall confirmed this week that the distances between its Alta and Gohta discoveries and Statoil's stalled Johan Castberg project are simply too great to warrant joint development.
The Norwegian authorities are keen for an onshore oil terminal in the High North to act as hub infrastructure to unlock further discoveries in the remote region. But the costs of developing Johan Castberg, where there are between 450 and 650 million barrels of oil, via a pipeline to an onshore terminal are prohibitive and Statoil has been rethinking development scenarios, including an FPSO solution. Alta is estimated to host 85 million to 310 million barrels and Gohta holds 60 million to 145 million barrels of oil.
WoodMac: NCS faces 25% cut in upstream spend in 2015
Investment in Norway's upstream sector is predicted to slump by 25% in 2015 to around NOK136 billion (US$22 billion) as oil price volatility hits exploration, deals and development spend. According to Wood Mackenzie's annual review of Norway's upstream oil and gas sector, it was business as usual in 2014 as oil prices remained high for most of the year, leading to busy exploration, record M&A activity and appetite for acreage remained high.
Malcolm Dickson, North Sea analyst for Edinburgh-based Wood Mackenzie, said Norway was a global exploration hotspot in 2014, with 59 exploration and appraisal wells drilled, the same as in 2013, resulting in the discovery of 817 million boe, close to the 10-year average. But, he said, the results were "lacklustre": of the 44 exploration wells drilled, only four were clear commercial discoveries
NPD rethinks northern Barents geology
The Norwegian Petroleum Directorate has released new studies into the geology of Svalbard and the northern Barents Sea region. The NPD says the view that sand and shale deposited around the Arctic archipelago derives from an earlier microcontinent, a kind of sunken Atlantis called Crockerland, is mistaken. According to NPD geologist Bjørn Anders Lundschien: "Nothing suggests that such a land mass ever existed."The geologists now believe that the sand found around the islands originated to the south-east, from the highlands and mountain chains in Russia's Ural region. The NPD has staged a number of expeditions to and around Svalbard since 2006, collecting and analysing data together with Norwegian, Russian, Polish and British research institutes. Data from this fieldwork is presented in the latest NPD Bulletin.
Greenland oil exploration on ice...
The collapse in the oil price is the final nail in Greenland's near-term exploration ambitions. Statoil, GDF Suez and Dong Energy have ended their projects there while Shell, Maersk and Cairn Energy have sought two-year extensions before committing to further expensive exploration. Perhaps most symbolic of this shift has been the closure of Cairn energy's office in Greenland: the Edinburgh-based company invested billions in fruitless wildcatting in these frontier waters and is now focusing its cash on northwest Africa, where it recently made a major oil strike off the coast of Senegal.
...as Chinese take on Greenland iron ore mine
Greenland's newly established coalition government has approved a change in ownership of the company that has the rights to exploit iron ore in western Greenland. Hong Kong-based General Nice Development Limited is now the owner of London Mining Greenland, which was awarded the licence in 2013 but went bankrupt last year after its operations in Sierra Leone were hit by the Ebola epidemic. The Greenland government said London Mining Greenland will keep its name and headquarters in Nuuk.
Noble fined US$12 million over Shell's Arctic campaign in 2012...
The fall-out from Shell's ill-fated Arctic campaign of 2012 continues, with contractor Noble Drilling fined US$12.2 million after it was charged with environmental and maritime crimes for its operation of the drillship Noble Discoverer and the drilling unit Kulluk.
Noble pleaded guilty to eight felony offenses, has agreed to implement a comprehensive Environmental Compliance Plan and will be placed on probation for four years. Noble’s parent corporation, London-based Noble Corp, will implement an Environmental Management System for all of its Mobile Offshore Drilling Units worldwide.
Key offences include knowingly failing to maintain an accurate Oil Record Book and an accurate International Oil Pollution Prevention certificate, knowingly failing to maintain a ballast water record book, and knowingly and willfully failing to notify the US Coast Guard of hazardous conditions aboard the Noble Discoverer.
During the 2012 drilling season, Noble was the operator and bare boat charterer of the drillship and the conical-shaped Kulluk, which ran aground off the coast of Unalaska when it broke free from its tow in bad weather en route to Seattle. The Noble Discoverer suffered failures with its main engine, its propeller shaft and other equipment and Noble negligently discharged machinery space bilge water from the drillship into Broad Bay, Unalaska, creating a sheen on the water.
Shell and Greenpeace respond to the latest legal challenges
In response to the federal court charges, Shell issued a statement to local press saying company officials were disappointed by the events that took place in 2012 but that the plea agreement confirmed Noble had taken steps to investigate the incidents and improve its training and environmental compliance.
“While Noble has worked to resolve all of the issues and has appropriately accepted responsibility, we’ve made clear that their actions in 2012 are not acceptable,” said Shell.
Greenpeace Arctic, which has been a vocal campaigner against Shell's ambitions in the Arctic, said the charges were the clearest indicator yet that Shell failed to manage its contractors safely. "Letting Shell back into such a precious and risky environment as the Arctic would be sheer madness, yet that’s what Shell wants to do next summer,” said Greenpeace campaigner Ian Duff.
In August 2014, Shell submitted new plans to the US administration that could pave the way for its return to drilling in the Chukchi Sea offshore Alaska in summer 2015.
Russia readies northern military preparedness
Russia's Defence Ministry has completed its third Arctic military installation, on Alexandra Land island, as Moscow ramps up its northern defences. The other two bases are onWrangel Island andCape Schmidt inthe Chukchi Sea close toAlaska.
President Vladimir Putin has championed theincreasing militarization ofArctic inrecent years, calling inApril fora unified Arctic military command structure. Earlier this week, Russian news agency Tass reported that the forces of the Western, Central and Eastern Military Districts will be transferred to the new united strategic command in the Arctic by December 15. The entire Northern Fleet will be transferred to the command, a high-ranking defence ministry source told TASS. Bythe end of2015, Russia hopes torestore all formerly Soviet Arctic defence installations tofull operational use.
Kristin Færøvik appointed MD of Lundin Norway
Navy boss highlights growing importance of the Arctic in US policy
Secretary of the Navy Ray Mabus met with senior research personnel and faculty members at the University of Alaska Fairbanks, home to the International Arctic Research Center, last week to discuss the role of the US Navy in the Arctic.
"We in the Navy have a particular interest (in the Arctic) because our responsibilities increase as the Arctic changes," said Mabus. "As sea levels rise, as ice melts, our role in terms of freedom of navigation, in terms of search and rescue and in terms of scientific exploration, increases pretty dramatically."
Mabus, who has also visited Sweden, Finland and Norway to strengthen relationships with fellow Arctic Council nations, said the Arctic is “only going to gain importance, particularly for the US Navy."
As Frontier Energy has reported before, however, Washington's increased focus on Arctic issues, and the growing traffic in Arctic waters as the sea ice retreats, has not been matched by investment in naval hardware, with the US ice-breaker “fleet” significantly weakened by long-term underinvestment.
New studies highlight glacial ice loss in Antarctica
With the World Meteorological Organisation reporting that 2014 is on track to be the warmest year on record, new research has shown that melting Antarctic glaciers that are large enough to raise worldwide sea level by more than a metre are dropping a Mount Everest's worth of ice into the sea every two years. A study released by researchers at the University of California, Irvine and NASA's Jet Propulsion Laboratory, published in Geophysical Research Letters, confirms that ice loss from the Amundsen Sea glaciers has accelerated sharply over the past two decades. In some cases, glaciers reached speeds of more than a third of a mile in a year as they approached the Amundsen Sea, where they either merge into a floating ice shelf, or become icebergs.
A second study published in Science by the GEOMAR Helmholtz Centre for Ocean Research in Germany found that the shallow waters in the Amundsen and nearby Bellingshausen Seas have been warming over the last three decades as warmer water shoals – or rises closer to the surface – in many spots.
Papp lays out America's Arctic Council priorities
As America readies to take over from Canada as chair of the Arctic Council, the White House is preparing the ground with a PR push. The US Department of State's special representative on the Arctic, appointed by Secretary of State John Kerry this summer, is Admiral Bob Papp, the former head of the US Coast Guard. This week Papp contirbuted to the White House blog, setting out his vision for US Arctic policy. He is keen to position the Arctic as a strategic part of the American story, pointing out that what happens in the Arctic can impact the nation as a whole. “The entire country experienced abnormal weather as the result of a storm that passed through the Bering Sea in Alaska earlier this month,” he writes. “The future of America is inextricably linked to the future of the Arctic.”
He points out that while he's a sailor, not a scientist, he has “seen first-hand the dramatic changes taking place across the region”.
“As an Arctic nation, we have a moral obligation to use our human, financial, and scientific resources to help those in the region find ways to adapt to these changes, and to significantly reduce the pollutants driving global climate change,” writes Papp, a sentiment that may surprise those who may have expected the US to follow Canada's pro-development stance on Arctic issues.
Instead Papp has identified three key issues to focus on during the two years the US leads the Arctic Council: Arctic Ocean safety, security, and stewardship; Economic and living conditions of Arctic communities; Climate change mitigation and adaptation.
Gazprom Neft hails horizontal drilling landmark in Yamal Peninsula
Gazprom Neft has become the first oil operator inRussia todrill ahorizontal borehole of1,500metres. The well, onthe Yamal Peninsula, stretched for 4,200 metres, with 91percent ofthe horizontal section running through the oil-saturated and high permeability Novoportovskoye formation, which yields high flow rates without the application offracking. Testing is expected to complete in early 2015.
Full development of this formation could involve up to 90 wells with horizontal sections ofupto1,500metres. The three-year plan for development ofthe field from 2014 through 2016 envisages the construction offive cluster pads and drilling of60wells. InOctober 2014 Gazprom Neft completed the first season of oil shipments from Novy Port bysea: in 2016 a new terminal will be completed allowing oil to be dispatched year-round.
Walker takes over as Alaska governor
Alaska has a new governor, Bill Walker, who takes the helm at an interesting time for the resource-rich state. There's ongoing debate about opening Alaskan waters to exploration, the US$45-US$65 billion is at a crucial pre-FEED stage, oil prices are tanking and climate change remains a pressing concern for the Arctic state. Walker also joins at a time when Arctic issues are gaining greater prominence in national life as the US takes over chairmanship of the Arctic Council in April 2015. He and his Democratic Lt Governor ByronMallott – who together formed the “unity ticket” that defeated former Gov Sean Parnell - are now working on the preliminary budget provided by Parnellbefore submitting their own budget by December 15. Already there are changes, with Walker planning to accept the federal money to expand Medicaid that the Parnell administration rejected.
Greenland begins coalition talks
Greenland has also been to the polls, with the governing Siumut party finishingjust ahead of the Arctic island's main opposition group in parliamentary elections in the semi-autonomous Danish territory. The social-democratic Siumut won 34.3% of the votes, just ahead of the left-leaning Inuit Ataqatigiit on 33.2%. Eachparty got 11 of the 31 seats in Inatsisartut, or Parliament, with the Democrats winning four seats and newcomer Partii Naleraq takingthree. The business-orientedAtassut party got 2 seats.
This means a coalition needs to be formed to handle the serious economic challenges facing the Arctic country after a mining boom failed tomaterialize and oil exploration came back empty-handed.
The elections were held 18 months ahead of time after formerSiumut Premier Aleqa Hammond, a key advocate of resource development to drive economic growth and independence, stepped down after admitting she usedgovernment funds privately.
TGS to expand coverage of 3D electromagnetic data over the Barents Sea
Norway's TGS and Electromagnetic Geoservices ASA have expanded their previous cooperation agreement in the Barents Sea, with seismic group TGS set to partner EMGS to acquire electromagnetic (EM) data over ten new blocks in the Nordkapp and Tiddly areas.
The new 3D EM data will be acquired by the Atlantic Guardian in a survey supported by industry funding.
"As the 23rd Norwegian licensing round approaches, it is imperative for clients to have high quality, integrated EM and seismic data available," said Stein Ove Isaksen, senior VP eastern hemisphere for TGS
Polar Star en route to Antarctica
America's last heavy icebreaker, the Polar Star, left Seattle at the weekend bound for a four-month mission to Antarctica as part of the annual operation to resupply the McMurdo station. The US Coast Guard said the mission will require the aging Polar Star to break through more than 12 miles of ice in McMurdo Sound, as much as 10 feet thick.
Statoil under pressure as prices fall
Falling oil prices are putting more pressure on Statoil, which has been stalling key projects and shedding excess rig capacity in order to conserve cash to pay dividends. With oil prices down by more than a third since June, the company has delayed key projects and cancelled expensive rig contracts, mainly in Norway and Angola. The shares have been under pressure as the company has battled high costs and poor exploration results, including a string of high profile wells in the Barents Sea, where its Johan Castberg field remains on hold as the company seeks ways to improve the economics of the marginal development.
Analysts at consulting firm GlobalData said further progress in the frontier Barents Sea will require oil prices of around US$110 per barrel and further tax breaks to support development in this remote region.
"For the Barents Sea project to progress, oil prices must return to levels of around $110 per barrel, if no tax allowances are forthcoming from the Norwegian government, to achieve a full-cycle net present value of $318 million and an internal rate of return of 11.1%,” said Matthew Ingham, GlobalData's Upstream Analyst covering Europe. “Assuming that Johan Castberg is sanctioned in 2015, Statoil will aim to commence production in 2020, two years behind schedule."
UK Parliaments examines Arctic issues
The UK House of Lords Committee on the Arctic this week held a “bumper day of evidence” on shipping, energy and Russia's role in the Arctic.
Witnesses called on by the committee were, among others, Lord Fairfax of Cameron, Chairman of Sovcomflot Overseas Holding, Rob Hindley, lead specialist in Arctic technology at Lloyd’s Register, Tom Paterson, Senior Vice-President at Fednav and a series of academics including Professor Mike Bradshaw, Professor of Global Energy at Warwick Business School, Dr Richard Powell, Associate Professor of Human Geography at the University of Oxford and Professor Frances Wall, Associate Professor in Applied Mineralogy, University of Exeter.
The Arctic Committee will publish its final report on the impact of Arctic sea ice change on British foreign policy by March 2015.
DWF partner wins prestigious Lloyd's List Global Award for Arctic work
Michael Kingston, insurance partner at DWF, has been announced as Maritime Lawyer of the Year at the prestigious Lloyd’s List Global Awards, which review outstanding contributions to the global shipping community. Michael's work on risk, opportunity and best practice in the Arctic and Antarctic in particular has contributed to these issues being moved to the forefront of industry and governmental agenda. In August 2014 Michael was invited by the US Navy and US space agency NASA to assist their understanding of how satellite missions can reduce risk and enable safer navigation in Polar waters. Michael recently reported for Frontier Energy on the status of the IMO's Polar Code and will provide another update in our forthcoming issue.
Polar cruise operators develop hydrographic crowdsourcing system for safer navigation
The Association of Arctic Expedition Cruise Operators (AECO), the International Association for Antarctica Tour Operators (IAATO) and Lindblad Expeditions have developed a new system that allows cruise operators to share years of depth soundings from the Arctic and Antarctica.The hydrographic crowdsourcing system allows operators to share seafloor depth information, both historical and present. In some areas of Antarctica and the Arctic, official sea-charts are limited and these historical crowdsourcing files are considered extremely valuable add-ons to the official hydrographic charts.
Captain Leif Skog of Lindblad Expeditions, a long-time member of IAATO and one of the institutors of AECO, said: “It has taken considerable work and time to set up this system but now ten years of continuous, historical, hydrographic data are available, including hundreds of mud maps from the Arctic and Antarctica covering most expedition destinations”.
“We are very happy that the industry associations, through joint effort and cooperation, are able to contribute to enhancing safe navigation in polar waters”, said Dr. Kim Crosbie, Executive Director of IAATO.
Rosneft plans Kara Sea return...with or without Exxon
The Universitetskaya-1 wildcat in the Kara Sea found “almost a billion barrels of oil” and exceeded expectations, according to a Bloomberg interview with Rosneft boss Igor Sechin. The Rosneft CEO, who is a target of the US sanctions regime imposed for Russia's role in the Ukraine crisis, said the well was “of exceptional significance, showing that Western Siberian deposits continue into the Arctic.”
Rosneft was the lead partner in the well, the most northerly well drilled in the world, with US oil giant ExxonMobil holding a 33 per cent stake. The well was drilled in record time and require a US Treasury exemption to allow the oil companies to secure the well and comply with new US sanctions targeting Russia's Arctic oil ambitions. Sechin, however, told Bloomberg that Rosneft would go it alone if Exxon is forced to withdraw from the project.
“Of course we will do it on our own and attract the necessary technologies and different partners who don’t have limitations on cooperation,” said Sechin. “But, as I said, we won’t stop working with Exxon. The project’s operator is our joint venture with Exxon and we’re not planning on changing the venture’s ownership structure...They will always have the possibility of returning to the project, as soon as the regulatory bodies allow.”
Sechin said Rosneft plans to return to its Kara Sea licences in the next drilling season. He pointed out that the Universitetskaya is just one of more than 30 structures identified on the acreage. ‘‘We’ll continue drilling here next year and the years after that,’’ he said.
Alaska lease sales set for November 19
Federal and state agencies will hold jointly scheduled oil and gas lease sales next month for territory across Arctic Alaska. The Alaska Division of Oil & Gas and the US Bureau of Land Management have scheduled lease sales for November 19: TheAlaska sales will open state territory on the the central North Slope, in the Brooks Range foothills and in near-shore waters of the Beaufort Sea while the BLM sale will offer leases in the National Petroleum Reserve-Alaska on the western North Slope.
Russia ends Arctic 30 investigation
Russia’s Investigative Committee (IC) has ended a year-long investigation into the September 2013 Greenpeace protest against Gazprom Neft's oil activities in the Pechora Sea. The Greenpeace protest made headlines around the world after the arrest of the “Arctic 30” group of campaigners and journalists. The group were released under an official amnesty in December 2013 and their ship, the icebreaker Arctic Sunrise, pictured here, was released in June 2014.
Rosneft hails "Victory" in the Kara Sea
Rosneft has drilled the northernmost well in the world, Universitetskaya-1, and claimed a major oil discovery. The well was drilled in record breaking time - one and a half months - in order to allows its JV partner ExxonMobil comply with recently imposed US sanctions that target Russia's Arctic oil ambitions. The well was drilled in 81 metres of water in the East-Prinovozemelskiy-1 licence area in the Kara Sea, some 250 km off the mainland.
A pilot borehole was drilled using the West Alpha rig and horizontal drill samples were collected. Rosneft boss Igor Sechin said this was the first oil/gas-condensate field in the new Kara sea oil province. He said the first extraction of oil is comparable to the Siberian Light oil and estimated the resource base to be 338 bcm of gas and more than 100 million tons of oil. "This is an outstanding result of the first exploratory drilling on a completely new offshore field," said Sechin, who said the new field would be named Pobeda, which means victory.The giant Universitetskaya structure stretches for 1,200 km with a 550 metre high hydrocarbon trap, with the potential to host more than 1.3 billion tons of oil equivalent. And this is just one of some 30 structures identified in this part of the Kara Sea, where the total resource base could be as much as 87 billion barrels.
US puts climate change at heart of Arctic Council agenda
The US State Department's special US representative to the Arctic, Admiral Robert Papp Jr, the recently retired head of the US Coast Guard, said climate change will be a main priority for the US when it takes over chairmanship of the Arctic Council next year. In a speech at the Center for Strategic and International Studies, Papp said it "is imperative to address the effects of climate change before it's too late".
Papp said the US would pursue conservation in the Arctic with the same drive as John F. Kennedy's call to send a man to the moon after the Soviet Union's launch of Sputnik. "We have an obligation to protect this area of our earth for future progress, for the people that live there," he added.
If it weren't for the "warming of the Arctic," Papp said, no one would be up there exploring, shipping cargo or drilling for oil and gas, which is why the council will need to set more "actionable items and goals."
Papp laid out broad details of the programme that Secretary of State John Kerry will oversee as chairman of the council from next Spring, citing three main themes: ocean governance, climate change mitigation and adaptation and improvement of the economic and living conditions of Arctic residents.
Alaska to build new ferries
Two new Alaska Class day ferries are to be built by Vigor Industrial at Ketchikan, Alaska for US$101 million. The two ferries will be owned and operated by Alaska Marine Highway System to serve the Lynn Canal route between Juneau, Haines and Skagway.
"These vessels will be the largest ships ever built in Alaska," said Governor Sean Parnell said, who noted this would be a major boost for the local economy. "This has been our intent during the entire process and will help create hundreds of new year-round jobs at the Ketchikan shipyard, while helping Ketchikan develop a highly capable workforce, not only for the growing marine economy of Southeast Alaska, but with skills that can translate into work across the state," said the Governor.
The vessels will be 280 feet long, seat up to 300 passengers and carry 53 standard vehicles. Scheduled for delivery in 2018, the ships will incorporate a modified hull and design to improve passenger comfort during rough weather.
ConocoPhillips uses Alaska's export exemption to ship oil to Korea
A ConocoPhillips tanker full of North Slope crude is on its way to South Korea, the first oil export from Alaska in a decade.
Alaska's North Slope region has been exempt from the overall ban on nearly all crude oil exports since 1996, but no shipments have left since 2004. By exporting the crude, the state of Alaska and ConocoPhillips are expected to realise a higher value for the oil.
Alaskan Senator Lisa Murkowski welcomed the news and said she hoped lower 48 oil will soon follow. The Republican senator is keen to see the US ease its 40 year ban on crude exports in the rest of the country, where shale drilling has led to a surge in production.
EMGS licenses more Barents Sea data
Norway's Electromagnetic Geoservices ASA (EMGS) has entered into a data licensing agreement with an international oil company. The US$3.7 million contract covers the provision of 3D EM data from EMGS's multi-client data library for the Barents Sea. This data library now covers 42,000 sq km.
It builds on a similar data-licensing agreement worth US$3.5 million. CEO Roar Bekker said the library was providing value for new and existing clients in the Barents Sea. "An increased acceptance of EM as a value-adding exploration tool in the region, and our vast coverage coupled with customer's success, bode well for the future," said Bekker.
PSA OKs Saturn well in Barents Sea
Norway's Petroleum Safety Authority has given Statoil consent to drill the Saturn prospect in PL230 in the Barents Sea. The drill will use the Transocean Spitsbergen, which the Norwegian oil giant has kept busy in the Barents Sea all summer. The well, which is expcetd to spud later this month, will drill in 232 metres of water some 116 km from the nearest land at Kinnarodden in Finnmark.
Harper says Franklin "laid foundations of Canada's Arctic sovereignty"
Canada's Prime Minister Stephen Harper has hailed the discovery of one of the ships belonging to the ill-fated Franklin Expedition which was lost in 1846. Harper said the Victoria Strait Expedition has "solved one of Canada's greatest mysteries" and was a "truly historic moment" given that Franklin's expeditions laid the foundations of Canada's Arctic sovereignty.
Sir John Franklin led the two ships and 129 men in 1845 to chart the Northwest Passage in the Canadian Arctic. The expedition's disappearance became one of the great mysteries of the age of Victorian exploration, with tales of terrible conditions and cannibalism.
Sonar images from the waters of Victoria Strait, just off King William Island, show the wreckage of a ship on the ocean floor. It is not yet known whether the discovery, made using an ROV, is HMS Erebus or HMS Terror.
The discovery comes in the sixth year of Canadian-led searches for the vessels. This year's Government-backed expedition involved Parks Canada, the Royal Canadian Geographical Society (RCGS), the Arctic Research Foundation (ARF), the Canadian Coast Guard (CCG), the Royal Canadian Navy and the Government of Nunavut. The Canadian government began searching for Franklin's ships in 2008 as part of a strategy to assert Canada's sovereignty over the Northwest Passage as melting polar ice makes the fabled northern short-cut accessible.
Papps seeks Alaskan input in US Arctic policy
The newly appointed US special Arctic representative, former Coast Guard Commandant Admiral Robert Papp, has issued a call for ideas about policies that should be promoted at the Arctic Council when the nation assumes chairmanship next year. The US is due to take over the rotating chairmanship from Canada in Spring 2015.
Speaking in Anchorage, Alaska, Papp said a major goal for him would be to convince the American public that the Arctic is important to the nation. The meeting was attended by representatives of state and local governments, tribes, community groups, academia and business.
Read the next issue of Frontier Energy, out next week, for an interview with Bruce Harland of Crowley Maritime and US representative to the new Arctic Economic Council.
Kongsberg wins Johan Castberg contract
Kongsberg Oil & Gas Technologies AS has been awarded a contract to deliver an Extended Concept Study and Pre-Front End Engineering Design (FEED) for Statoil's stalled Johan Castberg project in the Barents Sea. Statoil and its partners paused the project last year because of marginal economics and concerns about costs. Kongsberg will perform design optimisations, value engineering on alternative technical solutions and mature the design further, for delivery by June 2015.
"This is an important break-through for KONGSBERG in providing integrated pre-FEED engineering services on both flowlines and risers for a major development projects", said Pål Helsing, President of Kongsberg Oil & Gas Technologies.
NOAA, Coast Guard in joint Arctic oil spill simulation research
Washington's National Oceanic and Atmospheric Administration (NOAA) and the US Coast Guard are conducting a simulation-based research exercise designed to bolster security and environmental protection in the Arctic. USCG researchers aboard the Healy icebreaker are set to simulate an oil spill and test unmanned airborne and underwater sensing technologies.
The NOAA team will evaluate systems for oil spill reconnaissance and mapping and fly the Puma unmanned system to measure the extent of the simulated oil spill scenario during the month-long Arctic Shield operation.
NASA to research Arctic summer sea ice melt
NASA is due to start flights over the Arctic later this month to study the effect of sea ice retreat on Arctic climate. The Arctic Radiation IceBridge Sea and Ice Experiment (ARISE) will conduct research flights through to October 1st , covering the peak of summer sea ice melt.
This is NASA's first Arctic airborne campaign designed to take simultaneous measurements of ice, clouds and the levels of incoming and outgoing radiation, the balance of which determines the degree of climate warming. The campaign team will fly aboard NASA’s C-130 aircraft from Thule Air Base in northern Greenland for the first week and from Eielson Air Force Base near Fairbanks, Alaska, through the remainder of the campaign.
Canada tests search and rescue capabilities offshore Baffin Island
Canada's armed forces are undertaking search and rescue exercises in the Baffin Island region of Nunavut. Operation NANOOK 14 will involve more than 800 participants, including personnel from all branches of the Canadian Armed Forces as well as federal and territorial governments, a ship from the Royal Danish Navy, and a surveillance aircraft from the US Navy.
Two scenarios will take place off the coast of Baffin Island in the Davis Strait and York Sound: a search and rescue exercise involving a simulated fishing vessel in distress in the Davis Strait and a simulation involving a 50 passenger cruise ship grounded due to mechanical difficulties in York Sound.
Arctech lands US$380m Sovcomflot contract
Arctech Helsinki Shipyard has secured an order worth US$380 million from Russian shipping giant Sovcomflot for three ice-breaking stand-by vessels. The ships will be built to serve Sakhalin Energy, the operator of the Sakhalin II project off the Russian East Coast, with delivery between September 2016 and March 2017. This contract builds on a previous order from Sovcomflot in April 2014 for a larger PSV.
The ice-breaking stand-by vessels are designed for stand-by and rescue duties and for oil spill recovery as well as for the transfer of low flashpoint fuels. Measuring 95m in length and 22m in breadth, with propulsion power of 13,000 kW, the vessels will operate in thick drifting ice in temperatures as cold as -35 C° and will be able to proceed independently in 1.5m thick ice.
These orders from Sovcomflot take the number of icebreakers under construction at the yard to six: it is also building a 16 MW icebreaker for the Russian Ministry of Transport and and LNG icebreaker for the Finnish Transport Agency. In Spring 2014 it delivered the world's first oblique icebreaker, the multipurpose emergency and rescue vessel NB 508 Baltika, to the Russian Federal Agency of Sea.
Aker Solutions boss mulls sanctions-related “lost market opportunities”
EU and US sanctions on Russia could see Norway's Aker Solutions miss out on opportunities in the newly opening Russian Arctic. Speaking at an EGM to approve the demerger of the Norwegian engineering giant to focus on its subsea and engineering businesses, chairman Oeyvind Eriksen said “if the political situation continues and the sanctions are long-term, they will mean lost market opportunities.”
“Russia is one of the world’s biggest oil and gas producers, with large resources not least in the Arctic region, which is part of the core competence of Aker Solutions,” said Eriksen. “I hope the political situation is clarified quickly, and not only for commercial reasons.”
While Norway isn't a part of the EU, its government said it would comply with the sanctions, which have been designed to target Russia’s energy, finance and defence industries as the conflict between pro-Russian separatists and Ukrainian government forces escalates.
Rosneft and ExxonMobil spud Kara Sea well
The sanctions, including a ban on the transfer of technology for deepwater and Arctic oil exploration, come as Rosneft and its US partner ExxonMobil began drilling the Universitetskaya-1 wildcat in the Kara Sea. This is the northernmost well in the Russian Federation and was hailed by Rosneft boss Igor Sechin, himself on the sanctions list, as “the most important event of the year for the global oil and gas industry”.
Symbolic of the national importance of this Arctic campaign, the signal to begin drilling was given by Russian President Vladimir Putin in a video link to the Kara Sea.
“As a result of this work we hope to discover a new Kara Sea oil-bearing province,” said Sechin. “Developing of the Arctic shelf has a huge multiplicative effect on the whole Russian economy.”
The well is being drilled using North Atlantic Drilling's West Alpha rig, which travelled more than 1,900 miles to reach the drill site in the East Prinovozemelskiy-1 Licence Area. The giant Universitetskaya structure could host more than 1.3 billion tons of oil equivalent and is one of just 30 structures identified on Rosneft's three East Prinovozemelskiy areas in the Kara Sea, where the resource tally could be 87 billion barrels or 13 billion tonnes of oil equivalent.
Wärtsilä Corp wins another Arctic supply contract
Wartsila has won a second design order for its new series of Arctic platform supply vessels. The latest order is for a multi-purpose platform supply vessel being built by Tersan Shipyard in Turkey on behalf of US-based Tidewater Inc. The vessel is scheduled for delivery in 2016. There is an option for further three similar vessels.
A key element in the award of this contract was Tidewater’s requirement for a compact design yet with a high deadweight for maximum cargo capacity. Operational efficiency and reduced fuel consumption were among the other reasons why the Wärtsilä solution was selected. The vessel is designed to fit three Wärtsilä 8-cylinder in-line Wärtsilä 26 main engines, propulsion systems, a ballast water management system, and inert gas generators. The ship will be strengthened and equipped for Arctic conditions, with the hull and propulsion in compliance with DNV ice class ICE 1A.
Statoil completes disappointing Hoop area campaign
Statoil's controversial exploration campaign in the Hoop area of the Barents Sea has finished for this year. The Norwegian oil giant, which was involved in a stand-off with Greenpeace about its plans to drill the most northerly wells in the Barents, said its third and final well has made a small gas discovery at the Mercury prospect in PL614. The company also made a small gas find at the Atlantic prospect while the Apollo well was dry. The company had been hoping to find significant reserves in the Hoop area after its partner in neighbouring block, OMV of Austria, last year made a play-opening discovery with the Wisting Central wildcat in PL537. OMV added to its tally there this year with a discovery on the Hanssen prospect.
Irene Rummelhoff, Statoil senior vice president for exploration on the Norway continental shelf, said the company was “naturally disappointed” with the outcome of its operated wells but pointed out that “is a frontier area of more than 15,000 square kilometres with only six wells completed to date”.
“We know from experience that exploring for hydrocarbons in the Barents Sea takes time and stamina,” said Rummelhoff.
Next-generation nuclear-powered icebreakers set for delivery from late 2017
The next-generation nuclear-powered Russian icebreakers scheduled to be put into operation in 2017-2021 have been named “Arctic,” “Siberia” and “Ural”. Rosatomflot Director General Vyacheslav Ruksha told agency reports that the first vessel will be in operation no later than the end of 2017. The first LK-60 nuclear icebreaker, the largest of its kind, is being constructed at the Baltiysky Zavod shipyard. The contract is valued at more than US$1 billion. The ships will be able to navigate through ice up to almost three metres thick.
Rosneft steps up Arctic infrastructure investment
Rosneft plans to set up a land base to support its offshore projects in the western Arctic. According to the acting governor of Murmansk Region Marina Kovtun, in comments reported by Russian news agencies, the Russian oil giant plans to use the shore of the Kola Bay to establish a shore base at the existing Shipyard 82 along with new production plants for subsea fittings, concrete blocks, a heliport, logistics, warehousing and trans-shipment facilities.
The investment is likely to create 2,000 new jobs over the next five years, said the governor. "The large-scale implementation of Rosneft projects creates the environment for economic stability of the entire region," Kovtun was reported as saying.
It comes as Rosneft, under threat of sanctions as the West steps up pressure on Moscow over the crisis in Ukraine, prepares to spud its first well, Universitetskaya-1, in the Kara Sea as part of a joint venture with ExxonMobil.
Reduced sea ice is tempting more cruise ships to venture into the Arctic, prompting experienced mariners to voice concern about the risks of increased traffic in these challenging waters. Los Angeles-based Crystal Cruises will be the first luxury cruise line to offer a cruise through 900 miles of waterways from Anchorage in Alaska through the Northwest Passage to the Atlantic Ocean and on to New York City.
Departing in August 2016, the Crystal Serenity and its escort vessel will use low sulphur marine gas oil fuel and the escort will carry additional safety and environmental protection equipment, including a helipad.
Crystal President Edie Rodriguez said the company's inaugural Northwest Passage would offer guests "the opportunity to begin a new story of thrilling adventure" while Executive Vice President Thomas Mazloum said the company had spent two years "diligently gathering the field experts, information, resources, and support to ensure an epic experience that is exceptionally rewarding and safe for guests and crew, and respectful of local lands and cultures".
But maritime experts have expressed concerns about the challenges of reacting should something go wrong given the remote location, the unpredictable sea and ice conditions, and the lack of search and rescue infrastructure in the region.News of Crystal's NWP ambitions come as passengers on a cruise ship run by Arctic Adventures had their trip to Greenland and the Canadian Arcticcut short because of engine trouble. The Sea Adventure's secondary engine encountered mechanical difficulties off the west coast of Greenland and the ship is being put into the the shipyard in Nuuk for repair.
Statoil ready for another spin of the drillbit in the Barents Sea
Statoil has got the greenlight from the NPD to start drilling a third wildcat in the Hoop area of the Barents Sea.
The wellbore 7324/9-1 will be drilled from the Transocean Spitsbergen, pictured right, in PL614. Statoil operates with 60% alongside Idemitsu Petroleum Norge with 40%. The well will be drilled about 20 km southeast of the 7324/8-1 oil discovery and about 300 km north of Hammerfest.
WWF Canada releases Beaufort Sea oil spill scenario research
WWF-Canada has released new research mapping a range of oil spill scenarios in the Canadian Beaufort Sea. The wildlife campaign group said it was sharing the research, which was conducted by RPS Applied Science Associates, to help advance discussions about development in the Canadian Arctic, informing northern residents and decisions-makers about the potential impacts of spills so they can make well-informed choices to reduce these risks.
The research used sophisticated computer modelling to estimate the spread and fate of future potential oil spills associated with increased ship traffic and offshore petroleum exploration and development in the Beaufort Sea.
Various scenarios were analyzed for four types of oil spills - shipping spill, trans-boundary spills, shallow water blowouts and deep water blowouts - resulting in a total of 22 scenarios of unique oil spills, mapping their spread, the potential impact on the water and shoreline, and interaction with the sea ice, wildlife and ecologically significant areas in the region.
"This is an issue of great concern. Development in the Arctic is fraught with risks, and drilling for oil in the Beaufort Sea is exceptionally risky, especially in deep waters," said David Miller, President and CEO of WWF-Canada. "We want to ensure that Beaufort Sea communities and other decision-makers have the best possible information to shape their choices. This work will help ensure that we all can see how even minor spills can have major impacts, and that these potential consequences are fully considered in planning decisions."
Frank Pokiak, chair of the Inuvialuit Game Council, said "one spill in the Beaufort would be devastating to the Inuvialuit and the marine species and wildlife that we harvest".
OMV adds to Hoop area resource tallywith Hanssen oil discovery
OMV Norge has struck oil in the Hoop area of the Barents Sea, with its wildcat on the Hanssen prospect 315 km north of Hammerfest finding up to 50 million boe of recoverable resources. This was the third well in PL537, about 7 km northwest of last year's breakthrough Wisting Central oil discovery, and takes the confirmed resource in the Wisting area to 200-500 million boe.
Jaap Huijskes, the Austrian company's board member for E&P, said he was "excited about the confirmation of the potential of the Wisting area". The well was drilled in 417.5 metres of water and terminated in the Middle Jurassic Snadd Formation at a depth of 1,679 metres.
The well encountered a 20-25m gross oil column in the main target (Stø Formation), which showed good reservoir properties. The well also encountered hydrocarbon-bearing sandstones in the Late Triassic and Middle Triassic (Snadd Formation) but in poor reservoirs. Extensive coring and sampling have been carried out in all hydrocarbon bearing formations.
A short interval was tested and produced at rates of more than 2,000 bpd of oil and 325,000 cf/d of gas. Joint venture partner Tullow Oil said it anticipates that production rates from future development wells would be significantly higher. Tullow's exploration director Angus McCoss said the Hanssen discovery gives "further confidence that we are on track towards proving up a major new commercial oil resource"Preliminary calculations estimate the Hanssen discovery in the Stø Formation to be between 20 and 50 million boe of recoverable resources, largely oil. The well, which was drilled by the Transocean Barents, will now be permanently P&A.
OMV operates with 25% on behalf of Petoro, Idemitsu, Tullow (each with 20%) and Statoil (15%). The partners plan to drill the Hassel and Bjaaland wells in the eastern part of the Wisting cluster next year.
Polarcus busy in the Barents Sea
After a successful winter campaign in West Africa, the high spec Polarcus Asima seismic vessel has arrived in the North Sea and has been mobilised for two 4D surveys for Statoil in the Norwegian and Barents Seas.
She is not Oslo-listed Polarcus' only ship working these northern waters: the Polarcus Nadia is acquiring the 3,000 sq km of high-density broadband Fedynsky 3D survey in the Russian Barents Sea.
Greenpeace takes "Save the Arctic" campaign to LEGO
Greenpeace has taken its protest against Shell's Arctic drilling ambitions to those companies with ties to the oil giant. This includes the toy company LEGO: 16 million Shell-branded LEGO sets have been sold or given away at petrol stations in 26 countries. Greenpeace's latest campaign involved setting up mini 'Save the Arctic' protest scenes at locations around the world, showing LEGO figures protesting against Shell.
NOAA updates Arctic nautical chart
"This chart is important to the Arctic economy, providing navigational intelligence for the vessels shipping zinc and lead concentrate from Red Dog Mine and offers vastly more navigational information than the only other available chart of the area," said Rear Admiral Gerd Glang, director of NOAA's Office of Coast Survey. "The shipping season from the terminal only lasts about 100 days, so maritime efficiency is vital, and this chart will improve shipping safety during that time."In operation since 1989, Red Dog Mine, a joint operation between Inupiat-owned NANA Regional Corp and a subsidiary of Canadian mining group Teck Resources, is about 50 miles inland. The terminal uses self-loading barges to ferry the ore concentrates to the deep draft ships anchored several miles offshore.
Previously, the only official nautical chart available to transit the nearshore area was on the 1:700,000 scale, whichshows one depth measurement within three nautical miles of the approach to Delong Mountain Terminal. The new NOAA chart offers a much more usable 1:40,000 scale coverage, with updated shoreline measurements and newly acquired NOAA hydrographic information. It shows dozens of depth measurements, representative of thousands of soundings, to give the mariner accurate depths for navigation.This is NOAA's third new Arctic chart issued in the past three years, building on charts of Alaska's Kotzebue Harbor, issued in 2012, and the Bering Strait North, issued in 2013.scription
Gazprom begins production drilling at Novoportovskoye
Gazprom has started production drilling at its Novoportovskoye field in the Russian Arctic Yamal-Nenetsk Autonomous Region, with nine wells due to be drilled this year. A three-year development plan atNovy Port, scheduled torun to2016, envisages the construction offive multi-well pads and the drilling of60wells.
Over the past year Gazprom Neft subsidiary Gazprom Neft Novy Port has completed apilot production project at the field, which included the first use of multi-stage fracking technology.Some35,000 tonnes ofoil were transported from Novy Port inwinter 2014, much ofthis across winter ice roads, with the crude delivered tothe rail station atPayuta for onward shipment toend-users.
Harding wins contracts with Statoil and A.P. Møller Mærsk
Safety equipment supplier Harding has landed framework agreements with Statoil and shipping giant A.P. Møller Mærsk. Statoil is Harding's biggest client on the Norwegian continental shelf, with more than 120 lifeboat systems in operation. Statoil has now entered into a framework agreement with Harding for the delivery of new lifeboat systems, modifications, maintenance and onshore services. The agreement has of five years, with an extension option for a further three plus three years.
A.P. Møller Mærsk has signed a framework agreement with Harding for the replacement of lifeboat hooks in its whole fleet. Initially, 82 vessels with a total of 164 lifeboats will be equipped with new hooks, which are vital components of the release systems for davit-launched lifeboats. With new hooks installed, the lifeboats will meet the new safety standards in the international MSC 1392 regulations. The framework agreement with A.P. Møller Mærsk also includes regular inspections of the life-saving equipment on all Mærsk vessels every fifth year, as well as the delivery of spare parts.
Antarctic sea anemone makes top ten new species discovery
A sea anemone that lives under an Antarctic glacier has made the top ten of species discovered last year, according to the US's SUNY College of Environmental Science and Forestry's International Institute for Species Exploration.
An international committee of taxonomists and related experts selected the top 10 from among the approximately 18,000 new species named during the previous year. The annual list, established in 2008, calls attention to discoveries that are made even as species are going extinct faster than they are being identified. Scientists believe 10 million species await discovery, five times the number that are already known to science.The sea anemone, Edwardsiella andrillae, lives under a glacier on the Ross Ice Shelf in Antarctica. It is not clear how the species withstands the harsh conditions in its habitat. It is the first species of sea anemone reported to live in ice. It was discovered when the Antarctic Geological Drilling Program sent a remotely operated submersible vehicle into holes that had been drilled into the ice. This revealed the presence of small creatures, less than 2.5 cm long with most of their pale yellow bodies burrowed into the ice shelf and their roughly two dozen tentacles dangling into the frigid water below.
Statoil gets NPD ok to drill next Hoop area well
The Norwegian Petroleum Directorate (NPD) has given Statoil the greenlight to drill well 7325/1-1 in the Barents Sea. The well will be drilled using the Transocean Spitsbergen in PL 615 as part of Statoil's three well campaign targeting the Apollo, Atlantic and Mercury prospects in the promising Hoop area of the Barents Sea, where last year OMV made the Wisting oil discovery some 50 km to the south. Statoil operates PL 615 with 35% alongside ConocoPhillips (25%), OMV (20%) and Petoro (20%).
Gazpromneft set to spud Dolginskoye exploration well
Despite the attentions of Greenpeace, the GSP Saturn has arrived at the Dolginskoye field in the Pechora Sea to begin drilling work for Gazpromneft Sakhalin. The Russian oil company plans to drill an exploration well to learn more about the field, which lies in waters 40 metres deep some 75 km off the coast of the Nenets Autonomous Region, where the local authorities approved the project in December 2013. Further drilling is planned for the ice-free summer seasons of 2015 and 2016.
The GSP Saturn was towed to the drillsite by a special Ice Class B vessel, accompanied by a rescue vessel, which will remain on duty 24-hours a day while the rig is operational. Gazpromneft Sakhalin has also chartered four vessels specially designed for the Arctic environment to carry out ancillary drilling operations. “All of these are Ice Class and equipped with DP-2 dynamic positioning systems that allow them to maintain a fixed position for loading in extreme weather conditions,” the company said in a statement.
The GSP Saturn is authorised to drill on the Arctic shelf and, said the company, underwent “cutting-edge refurbishment” in 2009. ABS inspected the unit in April 2014 and confirmed its compliance and the following month Lloyd's Register approved it for Arctic operations.The Russian Federal Service for Ecological, Technological and Nuclear Supervision (Rostekhnadzor) has also confirmed its compliance with Russian industrial and environmental safety.
The field was discovered in 1999 and is covered by 2D and 3D seismic and three exploration wells. Recoverable reserves are currently estimated at over 200 million tonnes of oil equivalent.
ABB wins contract to power Yamal LNG carriers
Swiss power and automation group ABB has secured a contract to supply electrical power and propulsion systems for the first of 16 Yamal LNG carriers, with options to equip 15 further vessels. The contract is part of the Yamal LNG project, headed by Russian gas producer Novatek, to monetise gas from the Yamal peninsula north of the Arctic Circle in Northwest Siberia and deliver it to customers in Asia and Europe. The LNG will be shipped out of Sabetta port using the new 170,000 cbm LNG carriers built to ice-breaking capability of ARC 7, an ice-class scale that goes up to 9.
Shipment will be made to Asia via the Northern Sea Route in summer months resulting in substantially reduced delivery times when compared to transit via traditional routes, as well as cutting fuel consumption and ship fuel emissions.
The ships are being built at Daewoo Shipbuilding and Marine Engineering in South Korea.
ABB’s scope of supply includes turbochargers, generators, switchboards, transformers,
electric drives, propulsion control and the Azipod propulsion units that will power the vessels through the Arctic conditions, making them the most powerful LNG carriers in the world. The design will allow ship operations in temperatures as low as -50 degrees Celsius.
“Operating LNG carriers in ice-locked waters year-round requires the highest standards in safety and efficiency,” said Veli-Matti Reinikkala, head of ABB’s Process Automation division. “Azipod propulsion has proved to be the technology of choice for more than 30 ice-going vessels, including shuttle tankers operating for Sovcomflot out of Varandey and for Norilsk Nickel’s ‘Arctic Express’ container ships.”
Statoil and Rosneft bosses discuss Arctic exploration projects
The west's stand-off with Russia over its activities in Ukraine has not dented Statoil's appetite to do business with its oil companies. This week the Norwegian oil company's CEO Helge Lund held talks with Rosneft president and chairman of the management board Igor Sechin about joint exploration projects in the Barents Sea and the Sea of Okhotsk, and development projects in the Samara region.
The latest talks build on a strategic cooperation agreement signed in May 2012 to jointly explore four blocks in the Barents Sea and the Sea of Okhotsk.
Eni Norge enters into agreement with DNV GL AS
Eni Norge has hired DNV GL, the world's largest shipping and offshore classification society, to supply inspection services to the Goliat platform in the Barents Sea. The three year contract, with an option for a two-year extension, will involve planning and carrying out inspections of static equipment, load-bearing structures and offloading and anchoring systems aboard the Goliat FPSO during its operational life. Goliat is the first field to be developed in the Norwegian sector of the Barents Sea, and one of the biggest industrial projects ever undertaken in Northern Norway. The cylindrical Goliat platform is a floating production, storage and off-loading unit (FPSO), and is full of unique technological systems, specially adapted to conditions in the Barents Sea. The estimated reserves in the field are 174 million barrels of oil and 8 billion standard cubic metres of gas. Eni Norge operates Goliat with a 65% stake alongside Statoil with 35%.
Latest edition of National Geographic Atlas highlights Arctic ice loss
The shrinking of the Arctic ice sheet in the upcoming 10th edition of the National Geographic Atlas of the World is one of the most striking changes in the publication's history, geographers say. The reduction in multiyear ice – ice that has survived for two summers - is so noticeable compared with previous editions that National Geographic geographer Juan José Valdés calls it "the biggest visible change other than the breakup of the USSR."
Since the late 1970's, the ice has retreated by 12% per decade, worsening after 2007, according to NASA. May 2014 represented the third lowest extent of sea ice during that month in the satellite record, according to the National Snow and Ice Data Center (NSIDC).
Ice loss is accelerated in the Arctic because of a phenomenon known as the feedback loop: thin ice is less reflective than thick ice, allowing more sunlight to be absorbed by the ocean, which in turn weakens the ice and warms the ocean even more. Because thinner ice is flatter, it allows melt ponds to accumulate on the surface, reducing the reflectiveness of the ice and absorbing more heat.
"You hear reports all the time in the media about this," Valdés said. "Until you have a hard-copy map in your hand, the message doesn't really hit home."
The multiyear ice is shown on the map as a large white mass. The maximum extent of sea ice—the pack ice that melts and refreezes with the seasons—is depicted as a line on the map, according to Rosemary Wardley, National Geographic's senior GIS cartographer. In the 10th edition, which will be released Septmber 30th, the multiyear ice is much smaller in area than on previous maps.
Rosneft-ExxonMobil research initiative completes its Kara-Winter Ice expedition
Rosneft-ExxonMobil research initiative completes its Kara-Winter Ice expedition
The Arctic Research and Design Centre, a joint initiative of Rosneft and ExxonMobil, has completed its Kara-Winter-2014 Ice Expedition, the largest expedition in the Arctic Ocean since the collapse of the Soviet Union. Over 63 days scientists on the Yamal ice-breaker studied the Laptev, Kara, and East-Siberian Seas as well as conducting studies off the coast of Novaya Zemlya, Severnaya Zemlya archipelagoes, and De Long Islands.
There have been ice and meteorological measurements at 35 stations, 40 drifting buoys have been installed at ice fields and icebergs to allow constant monitoring of ice features and to determine their trajectory.
This was the first time when the physical and chemical properties and morphometric parameters of icebergs and hummocks of the Laptev Sea were studied, as well as water mass distribution, stream, and variability of temperature. Iceberg drift along Severnaya Zemlya archipelago was studied for the first time. Around 2,000 icebergs were recorded along the eastern coast of the archipelago and in Matusevich inlet the team discovered a giant iceberg measuring 3 km by 1 km.
The scientists used remote-piloted vehicles, a helicopter and ROVs to explore the sea floor. Scientists also observed oceanic mammals and birds in order to evaluate potential impact of oil production on Arctic nature and to develop environmental regulations for shelf development.
The data collected will be used to build 3D models of ice features to help Rosneft, which plans to invest US$400 billion in its Arctic shelf programme over the next 20 years, determine safe points for exploration, design drilling platforms for oil production and choose the best routes for shipping hydrocarbons and possible offshore pipelines.
BP will use drones to survey Prudhoe Bay assets
BP has got the greenlight to use an unmanned drone to provide day to day information about its assets on the Prudhoe Bay oilfield on Alaska's North Slope. The Federal Aviation Administration has approved the use of AeroVironment's unmanned aircraft system (UAS) over a five year period.
The contract marks the first time unmanned aircraft systems will perform routine commercial services over land in compliance with FAA regulations.
AeroVironment will use its proven Puma AE UAS, which is capable of up to 3.5 hours flight time per battery and has a wingspan of about nine feet, equipped with either a custom integrated LiDAR (Light Detection and Ranging) or its standard electro-optical and infrared sensor payload, to produce imagery and data for processing into 3D computerized models of roads, pads and pipelines at the Alaskan oilfield.
Tim Conver, AeroVironment chairman and chief executive officer, said the use of the UAS was a “safer, better and more cost-effective solution for managing critical infrastructure and resources”. “Integrated into BP’s routine operations, this new solution is now helping BP manage its extensive Prudhoe Bay field operations in a way that enhances safety, protects the environment, improves productivity and accomplishes activities never before possible,” he said.
The Puma AE’s ability to fly low, at 200 to 400 feet above ground level, and slowly, at less than 40 knots, provides BP with highly accurate location analytics capabilities to help manage its complex.
By surveying the 200 miles of roadways built to support North Slope activities the data and maps delivered by the unit will help drivers keep the drillrigs, that can span up to 28 feet wide, 132 feet long and weigh up to 3.5 million pounds, stay centered on the roadways, even in low visibility conditions. There are also environmental benefits: its electric propulsion, low acoustic signature and small operating footprint mean the PUMA AE is suitable for ecologically sensitive areas.
EMGS stays busy in the Barents Sea
Electromagnetic Geoservices ASA has received a signed contract from a repeat customer worth NOK10 million (US$1.7 million) for 3D EM data acquisition in the Barents Sea. It will use the BOA Thalassa to fulfill the contract. This builds on earlier contracts to acquire 3D EM data in the region.
The company is also working with seismic company TGS on EM data in the Hoop area and the southeastern area of the Barents Sea. The integration of 3D EM data and seismic data will help reduce risk and improve discovery rates in the Barents Sea.
Last year, for example, OMV found oil at its Wisting Central prospect, its first wildcat in the Hoop area of the Barents Sea. OMV's partner in the well, Tullow Oil, said in September 2013 the discovery demonstrates the effectiveness of exploration techniques that combine shallow seismic and electromagnetic survey data.
Speaking last year, EMGS CEO Roar Bekker said the Wisting Central find once again proves our technology. “Our EM data now covers 15 exploration wells that have already been drilled in the Barents Sea,” he said. “The drilling results on all 15 wells match the conclusions from our predictions. This gives us a very strong value proposition."
Polarcus busy in Russian Arctic
Seismic vessel Polarcus Nadia, pictured here, has left Kirkenes in northern Norway for a 3D seismic survey in the Russian sector of the Barents Sea. Oslo-listed Polarcus, in collaboration with Russia's Dalmorneftegeophysica, will acquire 3,000 sq km of high-density broadband 3D data.
Arctic Sunrise goes free
Greenpeace's ice-breaker Arctic Sunrise has been released by the Russian authorities. The vessel had been in custody in Murmansk since September 2013 when 30 activists protesting against Gazprom's Prirazlomnaya oil platform in the Pechora Sea were arrested and held for three months.
The release of the ship last week came as a surprise as Russia's investigative committee has extended its investigation into the protest at the Prirazlomnaya platform by two months until July 24th.
Greenpeace International executive director Kumi Naidoo welcomed the release of the ship. “After months without proper maintenance our ship will need careful repairs, but like our campaign to protect the Arctic she will emerge better, fitter and stronger from this,” he said.
Canada lags on Arctic infrastructure and investment, warns report
Canada could miss out on new development opportunities in the Arctic because of lack of infrastructure and investment, a new report warns. The policy brief from Centre for International Governance Innovation (CIGI), a Canadian think tank, says the Northwest Territories (NWT) is arguably the most promising economic region in the Canadian Arctic but to realize its full potential, national infrastructure planning and investment is urgently required.
In The Northwest Territories and Arctic Maritime Development in the Beaufort Area, authors John Higginbotham, a senior fellow at Carleton University, and Marina Grosu, a master's graduate at Wilfrid Laurier University, highlight the importanace of Arctic marine transport and infrastructure to sustainable development. Yet, they say, Canadian federal economic support for development in the Arctic is “modest and fragmented by domestic Arctic governance issues, despite laudable goals in Canada’s Arctic Council program”.
The report recommends that Ottawa develops a comprehensive long-term plan and timetable for responsible Canadian Arctic maritime development, develops marine corridors, including strategic charting, harbour improvements, search and rescue and oil spill mitigation, aids to navigation and communications capabilities, provides more robust funding for the Canadian Coast Guard, lifts federal Canada-US bilateral Arctic marine cooperation to a new level, supports the creation of a Beaufort business council and examines the possibility of a joint North American Safe Arctic Marine Corridor Administration, similar to the St. Lawrence Seaway.
Rosneft acquires stake in NADL as it tees up rigs for Arctic campaigns
Rosneft is to acquire a “significant equity stake” in North Atlantic Drilling Ltd, the harsh environment drilling subsidiary of Bermuda-based Seadrill. It comes as the companies sign an agreement to work together offshore and onshore Russia through at least 2022, with Rosneft already hiring NADL for its first two wells in the Kara Sea in 2014/15 as part of its JV with ExxonMobil. Overall, the agreement envisions initial employment of up to 9 offshore units to Rosneft with a total commitment of 35 rig years.
Alf Ragnar Lovdal, NADL's chief executive, said this was a “landmark transaction”. “The Russian market is one of the most attractive opportunities in the world and offers tremendous growth potential for North Atlantic Drilling,” said Lovdal. “By partnering best in class drilling with a supermajor who produces over 5 million barrels per day, we, after closing of this transaction, will have created a powerful force in the Russian market and for Arctic regions on a global basis.”
Australia approves new Hobart-based ice-breaker
Australia's federal Government has approved the budget to procure a new icebreaker to be crewed and based in Hobart. Minister for the Environment Greg Hunt said the new icebreaker would “further expand Tasmania’s role as the gateway to the Southern Ocean and Antarctica”.
The new ship will conduct deep-sea Southern Ocean research and sea-ice experiments, as well as deliver critical fuel and cargo to Australian stations in Antarctica. The new vessel will replace the aging Aurora Australis, which has struggled to break through the thick ice in recent seasons. The new ship will have an icebreaking capability of 1.65m of ice whilst maintaining a speed of three knots, will have a cargo capacity of at least 1200 tonnes, an increase of around 50%. The new icebreaker is expected to be ready for operation in late 2019.
The Budget also commits A$9.4 million for 2014-15 to ensure the continued operation of Australia’s three Antarctic and one sub-Antarctic station maintaining Australia’s presence in the frozen continent. A longer term strategy for Australia’s presence in Antarctica is currently being developed through the Government’s 20 Year Strategic Plan for Antarctic and Southern Ocean Research to be released later in the year.
Lundin Petroleum has started drilling a much-anticipated appraisal well of its Gohta discovery in PL492 in the Barents Sea. The well lies 155 km northwest of the Norwegian coast and 5.7 km northwest of the original Gohta discovery well of 2013, which was a play-opener in the Barents Sea. The main objective is to test the reservoir properties and hydrocarbon potential of the Permian carbonates in the Gohta karst Røye formation and the overlying Kobbe formation sandstones. The well is being drilled to a TD of 2,930 metres using the Island Innovator rig.
The Gotha discovery found a 25 metre gross gas column above a 75 metre gross oil column in karstified and dolomitized limestone and tested 4,300 bpd. The Swedish company reckons the find could hold gross recoverable oil and gas resources of between 105 and 235 million barrels oil equivalent.
Lundin Norway operates with a 40% interest alongside Det norske oljeselskap with 40% and Noreco Norway with 20%.
UK set to commission new polar research ship
Britain is to get a new state-of-the-art polar research ship after the Government agreed to commit funding more more than £200 million. The Natural Environment Research Council (NERC) is to commission the ship to keep the UK at the forefront of environmental research in both the Antarctic and the Arctic. The ship, which will be ready for operation by 2019, will have enhanced ice-strengthened capability and longer endurance than NERC's existing polar research ships which are coming to the end of their operational life.
Professor Duncan Wingham, chief executive of NERC, said the vessel would be equipped to support “oceanographic, marine ecosystem, geophysical and other research activities that help us make sense of the changing polar environments”.
Professor Jane Francis, director of British Antarctic Survey, which will operate the ship, said the ship will “offer a step-change in Britain's capability to deliver bigger and better science”.
Greenpeace tackles two Arctic-bound rigs
Greenpeace activists have boarded two rigs bound for Arctic waters. The GSP Saturn, which is due to work for Gazprom in the Pechora Sea, was occupied by 30 activists in the Dutch port of Ijmuiden before their removal. In Norwegian waters, activists boarded the Transocean Spitsbergen, which is under contract to Statoil for the drilling of the Apollo prospects in the Hoop area of the Barents Sea, the most northerly well yet in the Barents.
Greenpeace is calling for a ban on oil drilling and unsustainable industrial fishing in the whole of the Arctic, as well as a protected sanctuary around the North Pole. Last year its attempt to board a Gazprom platform in the Pechora Sea led to the arrest of 30 activists and journalists, who made headlines around the world as the “Arctic 30”.
Statoil said it “respects the right for legal protests and believes it is important with a democratic debate on the oil and industry” and said it has been in dialogue with Greenpeace in recent months. “We have informed about our exploration plans in the Barents Sea and the emergency response setup for the operations on several occasions, and Greenpeace has been given the opportunity to explain their views and ask questions,” said Statoil in a statement, adding that it believes these kinds of actions against a rig in open waters are “irresponsible and illegal” because of the risks.
“The rig is now about 300 kilometres offshore and there is a dialogue between the crew onboard the rig and the activists,” the company added.
New environmental review planned for Chukchi Sea leases
The US Interior Department has laid out a timeline for completion of a new environmental review surrounding leases in the Arctic waters off Alaska. Earlier this year a federal appeals court panel sided with environmental groups that claimed the government had failed to conduct proper environmental risk assessments before the Chukchi Sea lease sales, which netted US$2.7 billion from oil and gas companies. The ruling prompted Shell, already under fire following the grounding of its Kulluk drilling unit offshore Alaska on new year's eve 2012, to abandon plans to return to the Arctic this summer.
Last week the government said the department's Bureau of Ocean Energy Management is undertaking a new review and will update the modelling for the oil spill risk analysis. Plans call for publication of a draft report by early October and a final decision next March.
Read more here: http://www.adn.com/2014/05/23/3483394/interior-releases-timeline-for.html#storylink=cpy
Polarsyssel to head to Svalbard this summer
The state-of-the-art Arctic rescue and emergency vessel Polarsyssel is having equipment fitted in the Havyard shipyard in Leirvik, Norway. The hull of the 88 metre vessel was built by Cemre Shipyard in Turkey and will be completed at Havyard, before delivery to Icelandic shipping company Fafnir Offshore at the end of August. It will then head north to work in the waters around Svalbard under a €4.4 million a year contract with the Svalbard Governor's office. The ship replaces the Nordsyssel rescue ship and later this year will be joined by enhanced helicopter capacity in a bid to upgrade rescue services around the islands as tourism and fishing activities increase in these Norwegian Arctic waters. The Polarsyssel will be operated by the Svalbard authorities six months of the year and for the rest of the year will work as a regular platform supply vessel.
The ship has an ice-reinforced hull with ice class ICE 1B and Winterized Basic class.
Steingrímur Erlingsson, CEO of Fafnir Offshore, says they chose Havyard`s design because of low fuel consumption and the ship`s very efficient fins.
The Icelandic company has signed a NOK350 million contract for a second ice-class platform supply vessel from Havyard. The vessel will be designed by Havyard Design & Solutions in Fosnavaag and will be constructed at Havyard Ship Technology`s yard in Leirvik, Norway. The vessel will be delivered in July 2015.
Antarctic ice sheet melting faster, says ESA...
The Antarctic ice sheet is now losing 159 billion tonnes of ice each year, twice as much as when it was last surveyed, according to the European Space Agency's CryoSat satellite. The polar ice sheets are a major contributor to the rise in global sea levels and these newly measured losses from Antarctica alone are enough to raise global sea levels by 0.45 mm each year. Between 2010 and 2013, West Antarctica, East Antarctica and the Antarctic Peninsula lost 134, 3 and 23 billion tonnes of ice each year, respectively. The average rate of ice thinning in West Antarctica has increased compared to previous measurements, and this area’s yearly loss is now one third more than measured over the five years before CryoSat’s launch in 2010. The findings were published in Geophysical Research Letters.
Imperial Oil seeks permission to drill deepest Arctic well
West Antarctica glaciers “pass the point of no return”
A new study by researchers at NASA and the University of California, Irvine, finds a rapidly melting section of the West Antarctic Ice Sheet appears to be in an irreversible state of decline, with nothing to stop the glaciers in this area from melting into the sea. According to glaciologist Eric Rignot of UC Irvine and NASA's Jet Propulsion Laboratory in Pasadena, the study, based on 40 years of obserbations, indicated the glaciers in the Amundsen Sea sector of West Antarctica "have passed the point of no return".
These glaciers already contribute significantly to sea level rise, releasing almost as much ice into the ocean annually as the entire Greenland Ice Sheet. They contain enough ice to raise global sea level by 1.2 metres and are melting faster than most scientists had expected. Rignot said these findings will require an upward revision to current predictions of sea level rise.
"This sector will be a major contributor to sea level rise in the decades and centuries to come," Rignot said. "The collapse of this sector of West Antarctica appears to be unstoppable. The fact that the retreat is happening simultaneously over a large sector suggests it was triggered by a common cause, such as an increase in the amount of ocean heat beneath the floating sections of the glaciers. At this point, the end of this sector appears to be inevitable."
Statoil responds to Barents Sea concerns
Statoil's exploration VP for the Barents Sea has been responding to concerns about the oil giant's plans to drill the northernmost wells on the Norwegian Continental Shelf. This summer the company will drill three wells in the Hoop area of the Barents Sea - Apollo, Atlantis and Mercury—with Apollo and Atlantis being the most northerly yet. VP Dan Tuppen highlighted the company's experience of working in these waters for more than three decades, with Statoil involved in 98 of the 109 wells drilled in the Barents Sea.
He stressed that the waters will be ice-free over the summer months. “So the ice is not really the challenge, but rather the considerable distance from land and the associated logistics that complicate the operation,” he said. “Here we have learned a great deal from Newfoundland, Canada, and we also operated far from shore in a cold climate when we made the Bay du Nord discovery last year.”To handle the distances, the company will have extra fuel tanks on the helicopters as well as improved survival suits and stricter regulations for warm clothing. It will also set up a telemedicine facility to enable the medic on board the rig to directly communicate with the hospital in Tromsø.
Tuppen described the Hoop area as the “workable Arctic”, with little or no ice and where well-known technologies can be used. “At the time we are planning to drill, we expect the ice to be more than 100 kilometres from the drilling location,” he said, adding that should ice appear the rig will disconnect and depart from the site. “The monitoring systems will enable us to do this long before it becomes an issue.”
He also discussed oil response plans. Should there be an incident and oil spill, the company could have the first external barrier would be in place within two hours and the second within 17 hours. He added this was a shallow reservoir with low pressure so doesn't face the same risks as BP's high pressure Macondo in the deepwater Gulf of Mexico.
US sanctions target Rosneft boss as Ukraine tensions remain high
With tensions still high in Ukraine, the West is ratcheting up the pressure on Russia, this week extending sanctions to prominent allies of the Putin Government.
These include the head of Russia's largest oil producer Rosneft, with its CEO Igor Sechin now subject to US sanctions.Western oil companies with close links to Rosneft are now weighing the implications of the latest sanctions - as well as the threat of more to come.
Russian President Vladimir Putin has said that further sanctions may force Russia to reconsider Western companies' participation in key industries, including energy.
Statoil, which this week released a strong set of Q1 results with a net profit of NOK23.6 billion (US$3.94 billion), said it was too early to say what impact the sanctions would have on its joint ventures with Rosneft, which include co-operation in the Russian parts of the Barents Sea and Sea of Okhotsk, heavy oil and shale explorations.Other companies with ties to Rosneft include BP, which has a near 20 per cent stake in the Russian group, and ExxonMobil, where the companies are set to drill the Universitetskaya-1 wildcat this summer. Sechin said earlier this week that the Kara Sea drilling campaign with ExxonMobil was "unquestionably one of our key projects".
"Monetization of Russia's enormous resource potential in the offshore Arctic is the key priority for the Company," he said.
The incident didn't cause any injuries or material damage, although production was shut down for three days. But had the leak ignited, an explosion could have caused two fatalities, damaged equipment and structures and led to a lengthy shutdown, the PSA ruled.
The investigation identified one nonconformity with safety regulations – this related to the time which elapsed between the sounding of the alarm and the start of pressure blowdown.
Imperial Oil seeks permission to drill deepest Arctic well
Greenpeace accuses Total of Arctic oil hypocrisy
Total, one of the few supermajors to publicly decry Arctic oil exploration for being too high risk, has felt the ire of environmental campaign group Greenpeace after it emerged the French oil giant had bought the first ever shipment of offshore Arctic oil. The green group has been tracking the Mikhail Ulyanov, pictured right, as it transports the crude from Gazprom's Prirazlomnaya oil platform in the Pechora Sea. Greenpeace International oil campaigner Ben Ayliffe said Total's action "smacked of hypocrisy".
In 2012 Total's CEO Christophe de Margerie told the FT that an Arctic oil spill would be a disaster and do too much damage to the image of the company.
TGS announces 2D reprocessing project in Barents Sea Southeast
With industry interest high in the newly opened southeast portion of Norway's Barents Sea, TGS has announced it is reprocessing a 2D dataset in readiness for the Norwegian 23rd licensing round.
The underlying data, acquired in 2011 and 2012, is owned by the Norwegian Petroleum Directorate (NPD) and covers an area of more than 18,000 km.
TGS has been applying the latest Clari-FiTM Totus processing solution to deliver seamless, fully de-ghosted broadband data, which will be available to holders of the original NPD data in Q3 2014.
"We are pleased to see continued strong demand from our customers for TGS' broadband processing solutions," said Stein Ove Isaksen, TGS senior VP, Eastern Hemisphere."The Barents Sea Southeast has been nominated for inclusion in the upcoming 23rd licensing round and access to high quality 2D seismic data will be an important tool for oil companies interested in this area."
Washington's climate agency is advancing its US$11 billion next-generation polar-orbiting environmental satellite system, known as JPSS, with the first of five advanced instruments completing a key review.
The instrument, known as the Clouds and the Earth's Radiant Energy System (CERES), was developed by Northrop Grumman and will help scientists understand the Earth's energy balance.
The National Oceanic and Atmospheric Administration said it was on track to have the first of two planned satellites under the JPSS programme launch in 2017.
The ambitious programme is a priority for NOAA because the agency faces a potential gap in polar orbiting satellite coverage: it currently relies on a converted demonstration satellite for much of its real-time storm data yet this has a short life expectancy.
Navis Engineering delivers DP system for innovative icebreaker
The successful launch of an innovative new ice-breaking rescue and emergency vessel Baltika is a coup for Navis Engineering, which supplied the dynamic positioning control systems. The state-of-the-art icebreaker, commissioned in early April, is fitted with the Nav DP4000 (DP System) and the Navis AP4000 Heading control system (autopilot).
Designed by Finnish company Aker Arctic, Baltikawas built by the Arctech shipyard in Helsinki. The new vessel involved a profound rethink in icebreaking capability: it can cut through ice at oblique angles of up to 45 degrees (forward and astern) in channels up to 50 metres wide - far wider than a conventional icebreaker of the same size.Sea trials confirmed that dynamic positioning control and heading control systems met their declared performance of being accurate at 6 Beaufort Sea State and wind of 14 m/s to a positioning accuracy of 1 m and a heading accuracy of 1 degree, said Vantaa, Finland-based Navis in a statement this week.
Spike Exploration extends its Barents Sea footprint to the Hoop area
Privately-owned Spike Exploration has increased its exposure to the Barents Sea through an asset swap with Tullow Oil. Spike, which is backed by private equity firm HiTecVision, is swapping a 15% stake in PL494/B/C in the North Sea for a 15% interest in PL722, which lies in the Hoop area of the Barents Sea where last year OMV made the breakthrough Wisting oil discovery. Work is currently underway to mature and rank prospects, ahead of a drilling decision in 2016.
"Following participation in the Barents Sea South-East seismic group shoot, purchase of multiclient seismic data and the acquisition of an interest in PL230, Spike is now increasing its Barents Sea presence further with the ambition to be an active player in this exciting region," said Spike's CEO Bjørn Inge Tønnessen.
Following the swap, the PL722 group of partners will consist of operator GDF Suez (30%), Spike Exploration (15%), Rocksource Exploration (20%), North Energy (20%) and Tullow Oil (15%).
First oil cargo from Prirazlomnoye
Gazprom has loaded its first cargo oil from the Prirazlomnoye, the first commercial oilfield in Russian Arctic waters. Russian president Vladimir Putin gave the order to start loading oil via a tele-link with Gazprom chief Alexey Miller. The first cargo of 70,000 tons of crude is being delivered to customers in North West Europe by the specially built super ice-class double-hulled tankers Mikhail Ulyanov and Kirill Lavrov.
The field, which was at the centre of the Arctic 30 controversy, is produced via the Prirazlomnaya offshore ice-resistant stationary platform. The produced oil isstored inthe caisson with three-metre-high concrete walls covered with two-layer corrosion- and wear-proof clad steel plate. The caisson isable tostore some 94,000 tons ofoil.
"Gazprom has opened anew stage inthe development ofthe Russian oil industry," said Miller last week. "From this moment the return onthe investments inPrirazlomnoye will start."
The Prirazlomnoye oilfield lies in the Pechora Sea, 60km from the coast where there's an emergency centre in the Nenets Autonomous Area. Two special-purpose ice-breakers Yury Topchev and Vladislav Strizhov are always oncall safeguarding the waters near Prirazlomnaya. Gazprom says it has provision for oil containment booms, high-capacity oil skimmers, outboard oil-in-ice skimmers, anoil-in-ice recovery bucket and other facilities.
Putin calls for Arctic push
PresidentVladimir Putins aid Russia should step up its presence in the Arctic and challenge other nations in exploring the world's largest untapped natural reserves.His call will ruffle feathers among other Arctic nations following the Kremlin's recent activities in Ukraine's Crimea Peninsula. Russia sees the potential to power economic growth by developing energy resources in Arctic waters and reviving Soviet-era shipping routes.
"Over decades, step by step,Russiahas built up, strengthened its positions in the Arctic," Putin told a meeting of hisSecurity Councilin the Kremlin. "And our goal is not only to regain them, but also to qualitatively strengthen them."
NOAA releases Arctic Action Plan 2014
Russian oil companies back new maritime risk rating system
A new maritime risk rating system for oil tankers has been launched by London-based International Maritime Risk Rating Agency (IMRRA), which uses complex mathematical calculations and shipping databases to identify, analyse and score risk for any given vessel. The new system has the backing of Lukoil, Primorsk Oil Terminal, Novorossiysk Commercial Sea Port, Gazprom Neft Trading, and OTEKO Group, which have together cumulatively shipped over half a billion tons of hydrocarbons per year under the Risk Rating System - with zero spillages and zero accidents.
Chairman of IMRRA, Captain Andrey Voloshin, said the new system was "completely unique" and based on risk rating models used in the financial markets. "It's this model that calculates the risk rating, which then goes out to the public in the form of a reliable figure," said Voloshin. "The division of risk factors enables our users to weigh and emphasise the factors that are more significant for the business and identify the key 'driving' factors that are controlling the result."
He added: "Our objective is to establish an industry standard that promotes better global shipping practices, places health and safety and regulatory peace-of-mind at the top of the agenda, while raising environmental expectations."
Alaska LNG moves to pre-FEED
The Alaska Legislature has passed Bill 138, the key piece of legislation that sets the stage for the state to become an owner in the giant Alaska LNG project, which could cost up to US$65 billion. Governor Sean Parnell said this was "truly a historic moment for Alaskans".
The project will now move into the Pre-FEED phase to further refine the cost and engineering aspects of the project. Senate Bill 138 affirms the commercial agreement signed by the state, the Alaska Gasline Development Corporation (AGDC), the oil producers and TransCanada, and empowers AGDC to carry the state's equity interest in the project's infrastructure, particularly the liquefaction and marine facilities. Importantly, AGDC will continue to aggressively pursue the advancement of the Alaska Stand Alone Pipeline (ASAP) Project parallel to the Alaska LNG Project.
"SB 138 is a huge validation of the Legislature's decision to create an Alaskan-owned pipeline development company," AGDC President Dan Fauske said. "AGDC will now lead the state's participation in this exciting LNG export project, while continuing to advance ASAP, the smaller in-state alternative."
Fugro wins Barents Sea survey work
Dutch group Fugro has been awarded a €3.6 million hydrographic survey contract by the Norwegian Hydrographic Service to cover more than 13,200 sq km of the Barents and Norwegian Seas. The award, which includes an option to extend the survey area by two-thirds, is part of Norway's MAREANO project, designed to fill knowledge gaps related to seabed conditions and biodiversity along the northern Norwegian coast and help with resource management of fishing and oil and gas exploitation.
The area in the Barents Sea is located at the northern-most part of Norway, near the Russian border, in water depths between 150 and 250 metres. In the Norwegian Sea the survey area is located 100 miles offshore with water depths between 400 and 800 metres. Data processing will take place onboard the survey vessel and at Fugro's processing centre in Bremen, Germany.
KCA Deutag wins Hebron contract
Aberdeen's KCA Deutag has made its debut in Canada with the award of a multi-million dollar contract to supply drilling operations and maintenance services to ExxonMobil's Hebron oil development.
Hebron is a 700 million barrel heavy oilfield which lies in "Iceberg Alley" off the coast of Newfoundland and Labrador. The field is due onstream in 2017. The KCA Deutag contract starts with a three year pre-operations phase, followed by a nine year operations and maintenance program, with option to extend.
Rune Lorentzen, president of offshore for KCA Deutag, said: "The award of our first contract in Canada by ExxonMobil Canada Properties is an excellent result. We look forward to continuing to develop a strong working relationship as we work on this project together."
Turnover of Russian Arctic sea ports falls 18% in Q1
Another Barents Sea dry hole
GDF SUEZ has plugged and abandoned a wildcat in PL607 in the Norwegian Barents Sea after it came back dry. The result is another blow for hopes that additional drilling would shore up volumes near Statoil's Johan Castberg discovery, which remains on hold while the Norwegian oil giant seeks ways to cut costs and firm up development economics.
GDF Suez's well was 65 km southwest of Johan Castberg, and found just traces of gas in the primary Upper Cretaceous target.
The well was drilled by the Transocean Barents, pictured here, which will now move to PL 537, also in the Barents, to drill for OMV.
ConocoPhillips to renew Alaska LNG exports
Washington has given the greenlight for ConocoPhillips to renew LNG exports from its Kenai terminal in Alaska's Cook Inlet, after its previous permit lapsed in 2013. The US oil company will be able to export up to 40 BCF of gas from Kenai over the next two years.
'Today's announcement by DOE ... highlights the growth that's occurring in Cook Inlet, where there is now ample gas supply to both meet local needs and help out our friends overseas," said Alaskan Senator Lisa Murkowski.
Arctic oil JVs on track despite Ukraine crisis
Tensions escalated in Ukraine this week as troops clashed with pro-Russian militants that had seized public buildings in the east of the country. Despite tough talk from western governments and the threat of further sanctions, there are, as yet, few signs that Western oil companies are retreating from their alliances with Russian oil giants in the Arctic.
This summer will see Kremlin-aligned Rosneft and Houston-based ExxonMobil start drilling in the Kara Sea while Norwegian oil giant Statoil, which also has a JV with Rosneft, declared it is "business as usual". Lars Christian Bacher, Statoil's head of development and production international, told the Reuters news agency that the activities it has underway with Rosneft in Russia "are continuing as before".
Rosneft-Exxon survey work underway in Russian Arctic
The Arctic Research & Design Centre, a joint venture between Rosneft and ExxonMobil, has started its Kara-Winter-2014 Expedition, with the Yamal ice-breaker leaving the Port of Murmansk for a 55-day survey of the Laptev, Kara and East Siberian Seas. This is the largest ice expedition by the sea area coverage and duration since the collapse of the USSR. The studies are to be conducted in winter to determine the ice as well as weather and water mass conditions. For the first time iceberg drift will be studied by means of placing buoys on their bodies and engineering surveys will be conducted for the East Siberia and Laptev Seas. The expedition will also use satellites, a helicopter, an unmanned air drone, an underwater camera and buoys.
The expedition route runs along some of the least explored sea areas of the Arctic Ocean and the knowledge gained will be used to support exploration and subsequent oil and gas field facility design activities. Marine mammal and bird observations will be conducted to help develop environmentally friendly Arctic oil and gas exploration and production technologies.
FedNav deploys drones to help polar shipping
Montreal-based Fednav has become the first shipping company to employ drones, or Unmanned Air Vehicles (UAV), to help navigate ice-bound seas on a commercial voyage. The Umiak I, one of Fednav’s most powerful icebreakers, used a variety of video-equipped drones to scout ahead of the vessel in the ice-covered waters of the Labrador Coast. The goal was to provide the captain and officers with detailed real-time visual information on the local ice conditions.
The company's subsidiary Enfotec, which provides advanced ice imagery and analysis based on the latest radar and satellite technology to vessels operating in difficult ice conditions, says the drones deliver critical high-quality, short-range visual observations that allow navigators to see beyond the normal horizon for strategic navigation. The bulk shipping company trialled the emerging technology off the Labrador Coast, where navigators have to contend with the challenges of thick first-year ice that is heavily deformed under wind-induced pressure as well as remnants of multi-year and glacial ice that are embedded in the ice cover.
“The use of UAVs is proving to be extremely beneficial to identify many ice features that should be avoided ahead of the vessel, as well as identifying open water leads to improve voyage efficiency,” says Thomas Paterson, a senior VP at Fednav, which operates three powerful ice-breaking bulk carriers that support Canada's northern mines. “In addition, the deployment of drones fitted with top-quality cameras, gives the ice navigator another useful aid when making important decisions while transiting heavy ice regimes, and in turn, improved safe navigation."
You can see a video of the drone in action here http://www.fednav.com/en
Falkland Islands to retain favourable fiscal regime, says new report
A new report predicts the attractive fiscal regime in the Falkland Islands, designed to encourage exploration in these remote waters of the Southern Atlantic, will remain stable through the short and medium term. Research and consulting firm GlobalData said the ongoing uncertainties surrounding the Falkland Islands, including a delay in an FID on the Sea Lion project until 2015, as yet the only potentially commercial discovery in the region, and the Argentina situation, mean it is unlikely the Government will risk tampering with the fiscal regime.
“It is unlikely that detrimental changes would be made to the fiscal terms before any development has proven commercial and production has commenced,” said Mike McCormick, GlobalData's Upstream Analyst for Latin America. “This is particularly due to the high exploration costs in the area, as well as uncertainties surrounding the islands' relationship with Argentina.”
He highlights that wells to the north of the islands cost around US$50 million to drill and those to the south and east can cost upwards of US$100 million.And investment may be deterred as international oil companies keen to stake a claim to Argentina's Vaca Muerta shale prospect will steer clear of the Falklands out of fear of political and financial repercussions from Buenos Aires.
According to GlobalData, the most significant event related to the Falkland Islands' fiscal and regulatory regime in the medium term could be the Government's decision of when to re-open applications for production licenses, since large areas of the offshore area remain unlicensed.
Will Scargill, Upstream Fiscal Analyst for GlobalData, says: "It is likely that the application process will be re-opened if news from the current licenses generates significant interest, but this will depend on the results of drilling programs, such as that expected in early 2015. The long run could bring tougher fiscal terms if the sector undergoes substantial growth, but even then the regime is likely to remain comparatively attractive for its level of hydrocarbon potential."
BSEE tops up funding for oil spill response research
Washington's Bureau of Safety and Environmental Enforcement (BSEE) has announced that it is investing up to US$600,000 for targeted oil spill response research in drift ice conditions. The bureau called for white papers on new mechanical technologies for cleaning up oil spills in drift ice conditions that could be found in an Arctic environment and will select up to three designs for prototype development and testing at Ohmsett, the bureau's National Oil Spill Research and Renewable Energy Test Facility in New Jersey. White papers are due by April 21, 2014.
This is the third BAA from BSEE for oil spill response research proposals within the last year. The first announcement, with up to US$7 million in support, closed in January, while the second, announcing an additional U$5 million, closes today.
Coast Guard says Shell to blame for Kulluk grounding
Poor risk assessment and management were among the factors that led to the grounding of a Shell drilling unit offshore Alaska in December 2012, according to a report released by the US Coast Guard. Shell and Edison Chouest Offshore come under fire for their failure to assess and manage the high risks of undertaking a tow of the Kulluk, with its unusual conical-shaped hull, through Alaskan waters in winter. Damningly, the report says the decision to tow the Kulluk to Seattle at this time was influenced by Shell's desire to avoid tax because it believed the drilling unit would have qualified as taxable property had it still be in Alaskan waters on January 1st 2013
Other problems highlighted by the report include failures to report marine casualties and safety-related vessel issues, improper/illegal bridge and engineroom watch-keeping systems and potential evidence of negligent conduct aboard the OSV AIVIQ.
The report recommends the US Coast Guard Commandant partner with the Towing Safety Advisory Council to establish a working group to draft and accept a task statement addressing, but not limited to, the issues raised by this marine casualty, the towage of mobile offshore drilling units in the Arctic marine environment and several other concerns.
Shell hires Endeavour Management for return to Chukchi Sea
Shell has hired Houston-based Endeavor Management to provide support and advice ahead of resuming its controversial drilling campaign in the Chukchi Sea off Alaska. The Houston consultancy worked with Shell's Venture Team in 2013 to develop an Integrated Operations Plan, covering the full scope of operations in the Chukchi Sea, which was submitted to the US Bureau of Ocean Energy Management (BOEM). Shell Alaska has also utilized Endeavor to help them establish their development program for advisory personnel for ice management in support of their future drilling operations.
Bruce Crager, Executive Vice President of Endeavor Management, said many of its consultants were retired from the US Coast Guard with “many years of experience with Arctic operations and bring extensive expertise to bear on this project.”
Shell's 2012 drilling campaign in the Beaufort and Chukchi Seas ended with a near miss when in early 2013 one of its drilling rigs, the Kulluk, ran aground while under tow. The company decided against drilling in the 2013 summer season but had hired rig time for drilling in summer 2014. By February 2014, however, under pressure to keep a lid on costs after its shock Q4 profits warning, Shell cancelled its drilling plans after the Ninth Circuit Court of Appeals in San Francisco ruled that the government had acted illegally in opening up nearly 30 million acres of US Arctic waters to oil exploration six years ago. The case was knocked back to the district judge in Anchorage.
UN blocks Japan's whaling programme in the Antarctic
The UN's International Court of Justice (ICJ) has ruled that the Japanese government must halt its whaling programme in the Antarctic. The case was launched in May 2010 by Australia, which claimed the programme was commercial whaling in the guise of scientific research. The ICJ has agreed, noting that Japan had caught some 3,600 minke whales since its current programme began in 2005, but the scientific output was limited. Japan said it would abide by the decision but added it "regrets and is deeply disappointed by the decision".
NSR ice-free for 125 days by 2050
The Northern Sea Route could be ice-free for 125 days each summer by 2050, according to a UN climate panel. “The Northern Sea Route (NSR) is predicted to have up to 125 days per year suitable for navigation by 2050,” said the Intergovernmental Panel on Climate Change (IPCC). “Increased shipping associated with the opening of the NSR will lead to increased resource extraction on land and in the sea, and with two-way commodity flows between the Atlantic and Pacific,” the IPCC said.
New research highlights West Antarctic glacial loss
Six massive glaciers in West Antarctica are moving faster than they did 40 years ago, causing more ice to discharge into the ocean and global sea level to rise. The research, from Washington-based American Geophysical Union, found the amount of ice draining collectively from those half-dozen glaciers increased by 77% from 1973 to 2013. Pine Island Glacier, the most active of the studied glaciers, has accelerated by 75% in 40 years while Thwaites Glacier, the widest glacier, started to accelerate in 2006, following a decade of stability. Jeremie Mouginot, a glaciologist at University of California-Irvine (UC-Irvine) who co-authored the paper, said almost 10% of the world’s sea-level rise per year comes from just these six glaciers.
Hunger and malnutrition an “emerging crisis” in Canada's Arctic
It comes as a new report highlights growing hunger and malnutrition in Canada's Arctic territories, with calls for immediate action to stop an "emerging public health crisis." The report from the non-profit Council of Canadian Academies found that Aboriginal households across Canada experience food insecurity at a rate more than double that of non-Aboriginal households - 27% versus 12% while households with children have a higher prevalence of food insecurity than households without children. A 2007-2008 survey indicated that nearly 70% of Inuit preschoolers aged three to five lived in food insecure households, and 56% lived in households with child-specific food insecurity. Preliminary evidence also indicates that more women than men are affected.
The expert panel warned there is no silver bullet solution, and that addressing the problem would require a range of holistic approaches. “To fully understand the issue of food security, consideration must be given to the many factors that influence life in the North, such as environmental change, culture, governance, and economies,” said Dr Harriet Kuhnlein, Chair of the Expert Panel.
Yellowknife meeting agrees new Arctic Economic Council
Senior officials of the eight nation Arctic Council, meeting in Yellowknife last week, agreed on the creation of an Arctic Economic Council (the AEC) to foster sustainable development in the region. The Council said the aim of the AEC include economic growth, environmental protection and social development in the Arctic Region with strong participation from indigenous businesses. Arctic Council members first approved of the initiative at a ministerial meeting in Kiruna, Sweden in May 2013, when Canada took over the council’schairmanship. Greenpeace has accused the Council of pursuing a “pro-oil agenda” under Canada's chairmanship.
SBI delivers modified support vessel to US ice-breaker Healy
SAFE Boats International, which is based just outside Seattle in Washington state and has a 104 boat contract with the US Coast Guard, has delivered a harsh environment support craft, the Cutter Boat-Over the Horizon-IV (CB-OTH-IV) POLAR, to the 420-foot ice breaker, USCG Cutter Healy. The vessel has a reinforced hull, SBI’s patented collar system, 480hp inboard diesel engine with a water jet, tactical communications equipment and unique lifting accommodations for launch and recovery. It will support cutter missions in open water and operates as a critical support craft with a mission scope of law enforcement, security, search and rescue, and environmental protection of natural resources. The delivery comes as the USCG’s seeks to maintain a polar presence due to an increase in commerce and traffic in the Arctic and Antarctic.
Alaska now accounts for less than 7% of US crude oil production
Five states and the Gulf of Mexico supplied more than 80%, or 6 million barrels per day, of oil production in the USA last year. According to the latest figures from the EIA, Texas alone provided almost 35% of US crude oil production, followed by North Dakota with 12%, California and Alaska at close to 7% each and Oklahoma at 4%. The federal offshore Gulf of Mexico produced 17%.
Total crude oil production grew 15% in 2013 to 7.4 million barrels per day, led by production gains in Texas and North Dakota which both have booming shale industries. In the three years since 2010, North Dakota's crude oil output has grown 177% and Texas's output 119%, the fastest in the nation.
The Gulf of Mexico, Alaska, and California, which together in 2008 supplied nearly half of the country's crude, provided less than one-third of national output in 2013. Alaska last year introduced a controversial new tax break for oil producers in a bid to stem the declines in output.
Norwegian Environment Agency wants limit on Barents Sea licensing
There are signs of discord in Oslo after the head of the Norwegian environment Agency said the country should withdraw more than a dozen blocks from the upcoming Barents Sea licensing round. Ellen Hambro, director general of the agency, which advises the Government but cannot block its decision, also said the country shouldn't award any more blocks to the north until there's been more rigorous assessment of ice conditions.
"It is necessary to have a thorough scientific process to set a limit to the ice edge, which also covers the more extreme years," said Hambro. "The northernmost blocks nominated in the southern Barents Sea ... are located in areas where there may be ice."
"Before such a limit is set, no blocks further north in the Barents Sea south should be awarded," she added.
Norway plans to award 61 blocks in its new area licencing round, including 54 in the Barents Sea. Companies have been exploring the Barents Sea for decades: Snohvit, the first commercial development came onstream in 2007 and Eni's Goliat oilfield is targeted for first production in late 2014. Exploration activities have gradually been creeping north: OMV made the northernmost discovery last year and Statoil's exploration targets for 2014 will take it further north still. Greenpeace, which calls Statoil an "Arctic aggressor", said this year's exploration plans could threaten Bear Island.
Exxon Valdez 25 years on...Greenpeace targets Kara Sea rig
This week marks the 25th anniversary of the Exxon Valdez oil spill in Alaska. The disaster in 1989 occurred when the Exxon Valdez oil tanker hit a reef and began spilling 11 million gallons of oil into Alaska's Prince William Sound, wreaking devastation that made headlines around the world.
The disaster prompted many changes in how the industry handles oil shipments in these sensitive environment: all tankers in Prince William Sound must be double-hulled by the year 2015, there is increased monitoring and support of tankers navigating these waters and oil spill response and readiness has been vastly improved since 1989.
Exxon Valdez is the spectre that hangs over all talk of development in Arctic waters and to mark the anniversary of the spill Greenpeace climbers this week scaled the Seadrill-owned West Alpha semi-submersible, which is under contract to ExxonMobil for drilling in the harsh waters of the Kara Sea in the Russian Arctic this year. The US supergiant is exploring these remote and challenging waters with its JV partner Rosneft of Russia. In 2013 the two companies signed an agreement to create and fund the Arctic Research Center, an investment commitment of US$450 million, to build on current best practice and create more environmentally safe and efficient technologies for Arctic operations.
GNWT takes over onshore oil and gas regulation
April 1st will see the Government of the Northwest Territories (GNWT) assume responsibility for the regulation of onshore oil and gas activities in the NWT outside of the Inuvialuit Settlement Region and the Norman Wells Proven Area. The National Energy Board will provide the GNWT will technical services and advice to support projects and the transfer of records post-devolution.
World's largest jack-up joins Maersk Drilling rig fleet
The world's largest jack-up has been named at a cereony at the Keppel FELS shipyard in Singapore. The Maesrk Intrepid is the first in a series of four ultra harsh environment jack-ups to enter the Maesrk Drilling fleet as part of a total investment of US$2.6 billion. The rig, which has been designed for year-round operation in the North Sea, will now join Total on a four year contract worth US$550 million drilling the demanding and complex wells on the Martin Linge field in the Norwegian North Sea.
Gazprom Neft joins Arctic Oil Spill Response JIP
Gazprom Neft has become the first Russian company to join the Arctic Oil Spill Response Technology Joint Industry Programme (JIP) run by the world’s largest oil and gas companies. The four-year JIP was launched in December 2012 to carry out research in several areas, including studying the fate of dispersed oil under ice, dispersant testing under realistic conditions as well as oil spill detection and mapping in low visibility and ice. Vadim Yakovlev, First Deputy CEO of Gazprom Neft, said the JIP would help the company “employ international best practice and global expertise in constant improving environmental security systems in the Arctic.”Gazprom Neft will this summer drill an exploration well atthe Dolginskoye field in the Pechora Sea, having already started producing oil from the Prirazlomnoye field in December 2013, the project which was at the centre of last year's high profile protest by Greenpeace.
Ice cracks close navy's ice camp in Alaska
Cracks in polar sea ice north of Alaska have forced an early end to the US Navy's Ice Camp Nautilus, which was supporting submarine exercises in Arctic waters. The ice camp was a temporary structure built into the ice floe north of Prudhoe Bay especially for Ice Exercise 2014.
Large shifts in wind direction created instabilities in the wind-driven ice floes of the Arctic Ocean, leading to multiple fractures in the ice near the camp which prevented the use of several airfields. "The rapidly changing conditions of the ice, along with extremely low temperatures and poor visibility hampered helicopter operations and made sustaining the runway potentially risky," the Navy said in a statement.
The Virginia-class attack submarine USS New Mexico, pictured here surfacing through Arctic ice as part of ICEX-2014, and the Los Angeles-class attack submarine USS Hampton will continue to gather data and conduct ice-related exercises until they transit out from under the ice.
Submarines have conducted under-ice operations in the Arctic regions for more than 50 years. USS Nautilus made the first submerged transit to the North Pole in 1958. The US Submarine Force has completed more than 120 Arctic exercises with the last being conducted in 2012.
Crowley wins H&S recognition for its work in Alaska
Florida-headquartered Crowley Maritime Corporation’s petroleum distribution group in Alaska has been recognized by Shell Oil Products as the 2013 Health, Safety, Security & Environment (HSSE) wholesaler of the year. As Shell’s sole wholesale distributor in Alaska, serving 17 Shell-branded retail stations, privately-owned Crowley faces unique challenges including remote locations, harsh environments, a diverse product and customer base, limited supply options and large fluctuations in seasonal demand.
“Safely delivering product to Shell retailers across 475 miles of Alaskan highway network requires the support of Crowley’s entire organization - from dispatchers to mechanics to drivers – all personnel are focused on safe, efficient operations,” said Bob Cox, vice president, petroleum distribution, Alaska.
The company was also named Alaska Trucking Association’s “Safe Fleet of the Year” in 2013 , having driven 125 trucks, 1.8 million miles while delivering 100 million gallons of fuel with zero reportable accidents.
Arctic Council officials meet in Yellowknife
This week Senior Arctic Officials from the Arctic Council met in Yellowknife in the Northwest Territories. The meeting will include an outreach event in the community of Dettah to enable discussion between Arctic Council representatives and community members on climate change adaptation, followed by a community feast.
A number of issues will be on the agenda, including reducing short-lived carbon pollutants, actions to respond to a changing Arctic, the IMO's work to develop a mandatory Polar Code for shipping, scientific cooperation and the establishment of a circumpolar business forum, the Arctic Economic Council. Canada's Arctic Council Minister Leona Aglukkaq has previously said the new economic council will facilitate business opportunities and “contribute to a stable, predictable, transparent business climate”.
Canada is currently chair of the Arctic Council and its theme is Development for the People of the North, with a focus on responsible resource development, safe Arctic shipping and sustainable circumpolar communities. This has led to charges by Greenpeace that under Canada's leadership the Arctic Council is pushing a pro-oil agenda.
The State's exploration plan was submitted to the Secretary of the Interior Sally Jewell in July 2013, calling for 3D seismic to provide more information about the potential resources of the area.
"It is both disappointing and disturbing that the Obama administration, which claims that it is pursuing an 'all of the above' energy policy, is afraid to let the people of the United States learn more about ANWR's oil and gas resources," said Governor Sean Parnell.
"The modern technology that we are seeking to use is responsibly utilized all across the North Slope with extremely limited environmental impact, and would dramatically improve our understanding of ANWR's resources."
As a result of post-crash recommendations, safety improvements have been made, including a dedicated Search and Rescue response capability at Cougar Helicopters, with "wheels up" in 15-20 minutes; a new simulator for Helicopter Underwater Egress Training; enhanced Basic Survival Training; and improvements in helicopter transportation suits, with a requirement that every individual must have a properly fitted suit and underwater breathing apparatus attached to the suit.
Efforts continue in a number of areas, including research and development into side floatation on helicopters and sea state measurement. The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) is currently working on a multi-tiered, performance-based Safety Oversight Management System. An operational safety review of Cougar Helicopters is also underway and the next generation of helicopter transportation suits is being tested.
The C-NLOPB said there is no doubt that part of the legacy of those lost in these tragedies includes improved safety for those who travel to and from offshore installations. "While the risk of such travel can never be totally eliminated, the C-NLOPB remains committed to working with its partners in Canada and around the world in the hope of preventing another accident," the organisation said in a statement.
This new design of icebreaker can vary draft and operate both in deep waters of western Arctic areas such as the Barents, Pechora and Kara Seas, as well as in shallow waters of river estuaries, such as the Yenisey's mouth and the Gulf of Ob.
The icebreaker will be capable of breaking heavy ice of up to 2.8 metres thick. Two more icebreakers of this series are planned to be built to RS class in the future.
During the construction of the icebreaker, RS experts will perform survey of hull, machinery, equipment, devices, radio navigation and electrical facilities, automation equipment in compliance with RS rules, RS-approved project documentation as well as with the applicable requirements of international codes and conventions. Upon the completion of construction, Saint Petersburgh-based RS will continue survey of the icebreaker under operation.
The Russian classification society is a world-leader in nuclear icebreakers, with five nuclear-powered vessels currently operated under the RS survey: Rossiya, Taimyr, Vaygach, Yamal and 50 Let Pobedy.
The contract initially named the GSP Jupiter for the job in 2013 but the work was postponed and then reassigned to the GSP Saturn, which the company's CEO Gabriel Comanescu said is one of its most technologically advanced MODUs.
OMV's 2013 Wisting oil discovery in the Hoop area of the Barents Sea has provided encouragement for Statoil, which this year plans to drill the northerly Apollo and Atlantis prospects some 50 km further north.
Following a study with the Norwegian Meteorological Institute last year, Greenpeace claims an oil spill from Statoil's northernmost drill site could hit the ice edge in only 14 days, and the nature reserve Bear Island in 80 days.
Work is expected to start in April and will continue through until September, with processing work to run through until summer 2015. The oil companies have collaborated on this coordinated seismic survey to reduce costs and impacts on fishing industry.
Dry well in the southwest Barents Sea – 7016/2-1
Eni Norge, operator of production licence 529, is about to complete drilling of wildcat well 7016/2-1. The well was drilled in the Barents Sea about 185 kilometres southwest of the Snøhvit field and 160 kilometres northwest of Tromsø. The objective of the well was to prove petroleum in Eocene and Paleocene reservoir rocks (the Sotbakken Group). The well did not encounter reservoir rocks in the Sotbakken Group. The well is dry.
Data acquisition has been carried out. The well is the first exploration well in production licence 529. The licence was awarded in the 20th licensing round. The well was drilled to a vertical depth of 4025 metres below the sea surface and was terminated in the Upper Palaeocene. Water depth is 1366 metres. This is the first deepwater well in the Barents Sea. The well will now be permanently plugged and abandoned.
Well 7016/2-1 was drilled by the Scarabeo 8 drilling facility, which will now proceed to production licence 229 in the Barents Sea to drill production wells on the Goliat field, where Eni Norge is the operator.
Second CGG BroadSeis survey in Barents Sea
French seismic company CGG has completed a second BroadSeisTM multi-client survey offshore Norway. The survey covers a 2,300 km2 area in the Barents Sea. Fast-track processing deliverables will be available by the end of 2013 and final processing products by August 2014.
This second BroadSeis 3D survey is located in the south-eastern part of the Barents Sea adjacent to the recent eastward extension of Norwegian territory as a result of the border agreement between Norway and Russia. New data is required to assess the petroleum potential in this region.
The Barents Sea BroadSeis survey follows on from CGG’s recent first BroadSeis multi-client survey offshore Norway which targeted the Halten Terrace. The industry has shown strong interest in this new multi-client data acquired with CGG’s broadband technology and initial results just released show a significant improvement in the imaging of deeper targets.
Jean-Georges Malcor, CEO, CGG, said: "CGG regards Norway as an important region for the expansion of its multi-client activities and is working on several new projects including the Barents Sea survey. Our geologists are optimistic about this region’s oil potential and we consider it to be a strong candidate for inclusion in Norway’s 23rd licensing round set to take place in the second half of 2014. Our recently expanded team of multi-client experts in Norway drew on their extensive knowledge of the Barents Sea region to design this BroadSeis survey and we are convinced that the resulting images will enhance the industry’s geological understanding of this promising region."
Lundin Norway, operator of production licence 492, has completed drilling of wildcat well 7120/1-3. The well was drilled about 35 kilometres northwest of the Snøhvit field.
The primary exploration target for the well was to prove petroleum in Middle and Early Triassic sandstone rocks (Snadd formation) and in Permian limestone (Røye formation). The secondary exploration target was to prove petroleum in Middle Triassic reservoir rocks (Kobbe formation).
In the primary exploration target, the well encountered a gross oil column of about 75 metres and a gross gas column of about 25 metres in limestone rocks in the Røye formation. The reservoir quality was better than expected. The reservoir rocks encountered in the Snadd formation are of expected reservoir quality, but the formation was aquiferous.
Preliminary calculations of the size of the discovery are between 10 and 23 million standard cubic metres (Sm3) of recoverable oil and between 8 and 15 billion standard cubic metres of recoverable gas. The results confirm for the first time recoverable oil and gas in a Permian play in the Norwegian part of the Barents Sea. Further delineation of the discovery is planned.
A successful formation test has been carried out in the Røye formation. The maximum production rate was 683 Sm3 oil and 222300 Sm3 associated gas per flow day through a 44/64 inch nozzle opening. The gas/oil ratio is 190 Sm3/Sm3. This is the first successful test in Permian limestone rocks on the Norwegian shelf.
The well is the first exploration well in production licence 492. The licence was awarded in APA 2007.
The well was drilled to a vertical depth of 2515 metres below the sea surface, and was terminated in the Røye formation in Permian. Water depth is 342 metres. The well will now be permanently plugged and abandoned.
Well 7120/1-3 was drilled by the Transocean Arctic semi-submersible.
Statoil Canada and co-venturer Husky Energy have announced that the first Bay du Nord exploration well has discovered between 300 and 600 million barrels of oil recoverable. The Bay du Nord discovery, located approximately 500 kilometres northeast of St. John's, Newfoundland and Labrador, Canada, was announced in August. A sidetrack well has been completed this week and confirms a high impact discovery. Additional prospective resources have been identified which require further delineation.
The Bay du Nord discovery is Statoil's third discovery in the Flemish Pass Basin. The Mizzen discovery is estimated to hold a total of 100-200 million barrels of oil recoverable. The Harpoon discovery, announced in June, is still under evaluation and volumes cannot be confirmed at this stage.
The Bay du Nord well encountered light oil of 34 API and “excellent Jurassic reservoirs with high porosity and high permeability,” said the company.
"It is exciting that Statoil is opening a new basin offshore Newfoundland," says Tim Dodson, executive vice president of Statoil Exploration. "This brings us one step closer to becoming a producing operator in the area."
"With only a few wells drilled in a large licenced area, totalling about 8,500 square kilometres, more work is required," adds Dodson. "This will involve new seismic as well as additional exploration and appraisal drilling to confirm these estimates before the partnership can decide on an optimal development solution in this frontier basin."
The successful drilling results from the Flemish Pass Basin demonstrate how Statoil's exploration strategy of early access at scale and focus on high-impact opportunities is paying off. As an early player in the area, Statoil has confirmed its understanding of the basin and has opened a new oil play offshore Canada. The Flemish Pass has the potential to become a core producing area for Statoil post-2020.
All three discoveries are in approximately 1,100 metres of water. Mizzen was drilled by the semi-submersible rig Henry Goodrich (2009). The Bay du Nord and Harpoon wells were drilled by the semi-submersible rig West Aquarius (2013).
Statoil is the operator of Mizzen, Harpoon and Bay du Nord with a 65% interest. Husky Energy has a 35% interest.
23 September 2013
Norway’s Statoil with its partners Eni Norge and Petoro made a gas discovery in the Iskrystall prospect in PL608 in the Barents Sea. Well 7219/8-2, drilled by the drilling rig West Hercules, has proved an approximately 200 metre gas column. Statoil estimates the volumes in Iskrystall to be between 6 and 25 million barrels of oil equivalents (o.e.).
Iskrystall was the second of the four prospects to be drilled in the Johan Castberg area this year with the aim of proving additional volumes for the Johan Castberg field development project. The first prospect Nunatak resulted in a small gas discovery.
"Our main goal was to find oil in Iskrystall, but unfortunately it did not materialize. We still believe we can prove more oil resources in the Johan Castberg area and will continue our exploration effort with two more wells in the Skavl and Kramsnø prospects", says Gro G. Haatvedt, senior vice president exploration Norway.
A comprehensive data acquisition program was performed in the Iskrystall well including coring, wire line logging and fluid sampling. This gives valuable geological information about the Johan Castberg area.
Statoil and the partners in the Johan Castberg project in the Barents Sea decided in June 2013 to delay the investment decision for the project to further mature the resource base and field development plans for the project. In addition there are uncertainties in the tax frame work for the project. It is necessary to conclude the remaining exploration wells and ongoing work on field development plans, until the partners are ready to make an investment decision for the project.
After completion of Iskrystall, the West Hercules rig will move back to the production license 532 to drill the Skavl prospect. Skavl is situated approximately 5 km south of the Skrugard discovery (now part of Johan Castberg).
Statoil is operator for production licence 608 with an ownership share of 50%. The licence partners are Eni Norge AS (30%) and Petoro AS (20%).
NPD maps north-eastern Barents Sea
The mapping of the new Norwegian sea area in the eastern Barents Sea which started in 2012 is set to be continued. The Norwegian Petroleum Directorate (NPD) started acquisition of 2D seismic in the north-eastern Barents Sea.
According to the plan, the acquisition will take place for two and a half months. The NPD is conducting the acquisition on assignment from the government. Only the NPD is allowed to acquire seismic data in areas that have not been opened for petroleum activity. The acquisition is part of the authorities’ work to gain an overview of potential petroleum resources on the Norwegian shelf.
The acquisition activity, which is a 2D seismic acquisition, is being carried out by the Artemis Atlantic seismic vessel, operated by the company Dolphin Geophysical.
Russia enery giant Rosneft has started seismic prospecting at the license blocks Lisyansky, Kashevarovsky and Magadan-1 in Okhotsk Sea in the country’s far east. Rosneft holds geological study at the blocks jointly with its partner Statoil of Norway. Currently 2D seismic along with shipborne gravity magnetic survey are planned for the blocks. The data is to be collected by geophysical methods from a specialized research vessel Academik Fersman. The works will cover a total of 10,000 linear kilometers: 5,300 km on the Lisyansky licensed block, 2,000 km on the Kashevarovsky block and 2,700 km on Magadan-1. Environmental and fishery research are to be performed at all the three blocks in 2013 by LLC Environmental Company of Sakhalin, a contractor for this work. Another planned environmental protection measure is studying the subsea wellhead of the Khmitevskaya-2 well drilled on the Magadan-1 block in the 90's.
Russian energy company Novatek has signed a cooperation agreement with, Sovcomflot and Vnesheconombank to build two LNG carriers for Yamal LNG project. Vnesheconombank will manage project financing, while Sovcomflot will operate the tankers as a bare-boat charterer and a technical manager. Novatek will now tender for the construction of the vessels with delivery scheduled for 2016. Yamal LNG project will export 16.5 million tonnes per annum based on the feedstock resources of the South-Tambeyskoye field. According to the PRMS reserve standards, the proven and probable reserves of the South-Tambeyskoye field as of 31 December 2012 were appraised at 907 billion cubic meters of natural gas. The Project also requires the construction of transport infrastructure including a sea-port and an airport located at Sabetta (north-east of the Yamal Peninsula). Yamal LNG is currently owned by Novateck(80%) and Total (20%).
Norway has awarded 24 production licenses in the 22nd licensing round – 20 in the Barents Sea and four in the Norwegian Sea. Twenty-nine companies will be offered participating interests, while 14 companies will be offered operatorships.
Two of the 24 production licences are extensions to existing production licences.
Although activity levels in the petroleum industry on the Norwegian continental shelf are currently high, it is crucial to maintain exploration levels to ensure future activity through the discovery of new resources. The new production licences awarded in the 22nd licensing round will only begin contributing to production in 10 to 15 years’ time.
Twenty-three of the 24 production licences on offer lie north of the polar circle. Twenty of the licences relate to the Barents Sea.
“Interest in our northernmost seas has increased in recent years. We are now laying the foundation for long-term and efficient exploration of our northern seas, in both the Barents Sea and Norwegian Sea. This will promote further growth and employment not only in the north of Norway but also in the rest of the country,” says Minister of Petroleum and Energy Ola Borten Moe.
The 22nd licensing round was announced on 26 June 2012, and comprised 86 blocks in the Barents Sea and Norwegian Sea. By the application deadline on 4 December 2012, 36 companies had applied for production licenses.
NOIA 2013; Play on the Edge
NOIA 2013; Play on the Edge
June 17 – 20, St John’s Newfoundland
NOIA’s, Newfoundland & Labrador Oil & Gas Industries Association, annual conference and exhibition kicks off this Monday with over 1,100 delegates and speakers expected to attend. The focus of this year’s event will be on oil and gas developments offshore east coast Canada and how the region can get further involved in supporting activity in the Arctic region. Lessons learnt from the Deepwater Horizon accident and subsequent response will also be debated with environmental and safety the main issues discussed. The city of St John’s is well located for upstream activity as it goes further north to the deeper, colder and very challenging environments in the Arctic Region.
Delegates will hear from a high level range of industry experts including Malcolm Maclean, senior vice-president of Husky Energy; Atle Aadland, vice president of Statoil Canada Offshore and Andrew Barry, president of ExxonMobil Canada. Francois Durvye, chief economist of Schlumberger will give a presentation discussing how one of the world’s biggest service companies assesses the market outlook for the world’s oil and gas markets.
The conference will provide updates on all the major regional offshore projects including Hebron and will hear from Amy Myers Jaffe is a leading expert on the geopolitics of oil, energy, security, and risk and author of a new book published by Cambridge University Press, titled ‘Oil, Dollars, Debt, and Crises’.
Established in 1977, and now with more than 600 members, NOIA is Canada's largest offshore petroleum association. NOIA’s core members provide products and services for the petroleum industry and associate members represent operators, trade associations, educational institutions and government bodies.
For more details about the event, click here.
A Polar Code regulating shipping in the high Arctic, where maritime traffic is expected to increase as the ice cap recedes, is due to be implemented in 2016, the U.N. shipping agency said, reports Reuters. Shipping along the Arctic northern sea route is set to grow more than 30-fold over the next eight years and could account for a quarter of the cargo traffic between Europe and Asia by 2030. “We are preparing a mandatory code for polar navigation,” Koji Sekimizu, secretary-general of the United Nations International Maritime Organisation (IMO), said this week. “It will be operational in 2015 (and) will probably be implemented in 2016.” The code aims to ensure safe navigation in a fragile ecological environment, where infrastructure is few and help in case of an accident is far away.
“A new code will govern all technical requirements covering design and operations,” Sekimizu told reporters.“It will ensure the competence of seafarers … We will ensure that unless we have trained competent seafarers on board to navigate, then that vessel cannot be allowed to navigate.” With global warming thawing sea ice, the route, which runs along Russia’s northern coast and links Europe with ports in East Asia, is opening for longer and longer each year.
Nearly two dozen applications have been sent to Russian regulators to explore for reserves in the Arctic, energy company Gazprom said, reports UPI. Gazprom said it sent applications to subsurface resources agency Rosnedra for 20 licenses for blocks in the Barents, Kara, East Siberian and Chukchi seas. Gazprom said parts of the Russian continental shelf haven't been explored well. It estimated the continental shelf could hold as much as "100 billion tonnes of fuel equivalent, of which some 80% is (natural) gas." The company this year produced its first volumes of oil from the Prirazlomnoye oil field in the Pechora Sea using a stationary platform designed specifically for operations in Arctic conditions. Melting Arctic sea ice is exposing areas believed to hold deposits of oil and natural gas. Greenpeace campaigners last year occupied the Prirazlomnoye oil rig, saying it was trying to stop "the destruction of the planet'". Gazprom said it was looking to tap into the estimated 527 million barrels of reserves in the Pechora Sea. Regarding its ambitions, the company said it was paying "special attention" to safety issues as it looks to tap into Arctic reserves.
Alaska would put up $50 million to share the costs of a seismic program and exploration planning that would be part of a new oil and gas resource assessment in the coastal plain of the Arctic National Wildlife Refuge, Governor Sean Parnell, reports Platts. "The Department of the Interior is now developing a long-range conservation plan for ANWR and it is disappointing to us that an updated oil and gas resource assessment is not included in this," Parnell, a Republican, said during a press briefing in Washington, which was available on teleconference.
"Alaska has always offered its geologic expertise to the department and now we are offering financial resources," Parnell said.The state's offer, which must be approved by Alaska's legislature, is one-third of the estimated cost of a proposed winter three-dimensional seismic program the state is suggesting, Parnell spokeswoman Sharon Leighow said. The remaining funds could come from the federal government or the private sector, she said.
In the 1980s, oil and gas companies contributed to a two-dimensional seismic program in ANWR's coastal plain, a 1.5-million-acre section of the Arctic refuge, which totals 18 million acres overall.
The federal Alaska National Interest Lands and Conservation Act, which created the Arctic refuge in 1980, kept the so-called "Section 1002" coastal plain out of a wilderness designation on most of the refuge because of its oil and gas potential.
Technip awarded two subsea contracts in Canada
International cpontracting firm Technip was awarded by Husky Oil Operations two contracts, with a combined substantial value, for the planned subsea tieback of the South White Rose Extension field. The field is an extension of the White Rose field, located in the Jeanne d’Arc Basin, approximately 350 kilometers southeast of St. John’s, Newfoundland and Labrador, Canada. The first contract will be executed in 2013 and will include the supply and installation of gas injection flowlines, umbilicals, and subsea structures. The second contract will take place in 2014 and will cover the supply and installation of flowlines and subsea structures to support oil production and water injection.Technip’s operating center in St. John’s will perform the management and engineering of both projects, with various materials and equipment being supplied from within the Group and local supply chain. Knut Boe, Senior Vice President of Technip’s North Sea-Canada Region, commented: “These two awards reinforce Technip’s continuous involvement in Atlantic Canada’s offshore oil and gas projects. They also mark a new step in the relationship between Technip and Husky Oil Operations, for whom we successfully completed the subsea production system contract for the White Rose field development in 2005.”
Aker Solutions has won a £30m ($46m) contract to provide hook-up, commissioning and facility management services to Premier Oil at the operator's Solan field development, west of Shetland. The hook-up project will see two subsea production and two subsea injection wells tied back to a fixed production platform located in block 205/26a of the UK North Sea, the first of its kind west of Shetland. The platform, which will not be permanently manned, will produce oil that will be stored in a subsea tank before being exported via an oil-offloading system to shuttle tankers. The contract is valid for three years from first oil, with two one-year extension options. Work will be led from Aker Solutions in Aberdeen. First oil is expected in the fourth quarter of 2014. The UK government’s Department of Energy and Climate Change approved Premier's plans for the Solan oil field in April 2012. Once brought online, Solan is expected to produce 40 million barrels of oil at an initial rate of 24,000 barrels per day.
New Arctic group formed
The non-profit forum, Arctic Circle, will hold its first meeting in Reykjavik, Iceland's capital, in October. Such a gathering is needed, Iceland President Ólafur Ragnar Grímsson said, because, while most countries have a stake in the melting of Arctic ice, only eight - Canada, Denmark, Finland, Iceland,Norway,Russia, Sweden and the United States - are members of the Arctic Council, an intergovernmental group set up in 1996. Some non-Arctic countries can observe the deliberations, but they have no formal voice on the Council about sustainable development and environmental protection in the region, reports Reuters. The group’s first meeting of the Arctic Circle will take place at the Harpa Reykjavík Concert and Conference Center from October 12-14, 2013. Also, China and Iceland signed a free trade agreement this week, offering financial support to the small North Atlantic country for its recession-battered economy and giving Beijing another foothold in its drive for influence in the Arctic.
Russian energy giant Gazprom's oil arm and Royal Dutch Shell PLC are planning to jointly develop two sections of Russia's Arctic shelf in the Chukchi and Pechora Seas, Russian Natural Resources Minister Sergei Donskoi said. The agreement between Shell and Gazprom Neft is expected to be signed on April 8. The companies are preparing to sign an agreement that will cover joint offshore drilling in the Russian Arctic as well as shale oil projects onshore in Western Siberia. Mr Donskoi said the terms of the deal are likely to be the same as for other foreign firms that have partnered with state-controlled oil company Rosneft, including Exxon Mobil, Interfax news agency reported. Those deals see the foreign firms provide capital for initial exploration in exchange for one-third of eventual production. State oil giant Rosneft has struck a series of deals with the likes of ExxonMobil, Statoil and ENI for Arctic exploration and last month confirmed it was also now looking at projects with BP, its 20pc shareholder. The companies have yet to comment publicly on the proposal.
Russia's gas giant Gazprom expects to reach an agreement on the price of gas to be supplied to China via the eastern route in June, and sign a deal by the end of this year, Gazprom chairman Viktor Zubkov said in an interview. "I think that some time in June, the final price [of gas to be supplied to China] will be determined, and by year-end, all the documents regarding the agreed supply volumes and the price will be signed," Zubkov said, reports Platts. At the end of March, Gazprom and China National Petroleum Corporation (CNPC) signed a memorandum of understanding on Russian pipeline gas supplies via the eastern route from East Siberia. Under the 30-year deal, supplies are expected to start in 2018 at a rate of 38 billion cubic meters/ year, with a possibility to increase volumes to up to 60 bcm/year, Gazprom CEO Alexei Miller said at the time, adding that there is a possibility of pre-payment for the gas supplies.
Ratings agency Fitch noted that the gas deal "will dramatically improve [Gazprom's] position in Asian gas markets, which is currently represented only by a 50% share in the 9.6 million mt/year Sakhalin-2 project." Gazprom had previously expected to sign a final contract on supplies of 30 Bcm/year of pipeline gas over 30 years via the so-called western route, from West Siberia to western China, in mid-2011, but that project was repeatedly delayed as the parties failed to agree on a gas price, reports Platts. Earlier this year, Gazprom also approved a decision to build a three-train, 15 million mt/year LNG plant in the Russian Far East near Vladivostok, with the first train to be commissioned in 2018, and plans to supply LNG from there to Asian markets.
Kvaerner wins EPC contract for Hebron GBS project
ExxonMobil Canada has the option for Kvaerner's joint venture company Kiewit-Kvaerner Contractors to provide the full scope of engineering, procurement and construction (EPC) services for the Hebron Project gravity based structure (GBS), offshore east Canada. The contract value for Kvaerner's share of the full EPC contract is approximately $1.5 billion and includes work conducted to date on the Hebron project. The work will be performed in Newfoundland and Labrador, Canada, with engineering in St. John's and construction at the Bull Arm fabrication yard. The completed GBS will be installed at the Hebron field on the Grand Banks in the Atlantic Ocean located 350 kilometers offshore from St. John's, Newfoundland and Labrador, Canada. First oil is anticipated by the end of 2017.
Spain’s Repsol and Russian energy company Alliance Oil have begun commercial gas production from the Syskonsyninskoye (SK) field in the Khanty-Mansiysk region in central Russia, marking the first success of the A&R Oil and Gaz (AROG) joint venture created to explore for and produce hydrocarbons in Russia. Initial daily gas production is 855,000 cubic metres (5,350 barrels of oil equivalent per day) and is being shipped via the Gazprom transportation network. To date, five production wells have been drilled and three of them have been put into operation. Further development of the field in the coming year envisages drilling six more wells from five locations by early 2014. AROG’s total output currently stands at 25,000 boepd and its proven and probable reserves amount to 278 million barrels of oil equivalent. "The first successful start-up through AROG is especially satisfying for us as we contribute to unlock the great potential of an area which will continue to supply large volumes of gas to the domestic market in coming years," said Fernando Martinez Fresneda, general manager Repsol Russia. "The launch of the Syskonsyninskoye gas field illustrates the strategic and operational synergies that can be extracted through our joint venture with Repsol. Through the combined efforts of our teams, this first integrated project was managed in a highly professional manner. With this new field on stream we have taken another step towards the realization of our upstream targets," said Arsen Idrisov, Alliance’s managing director.
TGS to run 3D seismic in Barents Sea
Norwegian seismic company TGS is kicking off its the Europe 2013 acquisition season with two 3D multi-client surveys in the Norwegian Barents Sea; Finnmark Platform 2013 (FP13) covering 3,500 km2 and the Hoop to Fingerdjupet 2013 (HF13) covering 8,600 km2. Data from both surveys will be processed utilizing TGS' Clari-FiTM broadband processing technology. The HF13 survey will also tie-in TGS' successful Hoop 3D in the east. The FP 13 survey is scheduled to start this month and will be acquired by the Geo Barents towing 8 streamers. The HF13 survey is scheduled to commence in early Q2 2013 and will be acquired by the Oceanic Challenger with 12 streamers. Data processing for both surveys will be performed by TGS and initial data will be available to clients during Q3 2013. The surveys are supported by industry funding.
Recent historic observed lows in Arctic sea ice extent, together with climate model projections of additional ice reductions in the future, have fuelled speculations of potential new trans-Arctic shipping routes linking the Atlantic and Pacific Oceans, according to the US-based National Academy of Sciences (NAS). However, numerical studies of how projected geophysical changes in sea ice will realistically impact ship navigation are lacking. To address this deficiency, NAS researchers have analysed seven climate model projections of sea ice properties, assuming two different climate change scenarios and two vessel classes, to assess future changes in peak season (normally September) Arctic shipping potential. By around 2050, changing sea ice conditions are expected to enable increased September navigability for common open-water ships crossing the Arctic along the Northern Sea Route over the Russian Federation, robust new routes for moderately ice-strengthened (Polar Class 6) ships over the North Pole, and new routes through the Northwest Passage for both vessel classes. Although manyother non-climatic factors also limit Arctic shipping potential, these findings have important economic, strategic, environmental, and governance implications for the region. www.pnas.org
Canada invites Arctic drilling interest
Canada invited oil and gas companies to nominate drilling lands in the country's Arctic archipelago for inclusion in a future property auction and said one small oil field that was discovered in the tax-dollar-fueled exploration rush that swept the region 40 years ago will also be up for grabs, reports Reuters. The government's nomination process asks oil companies to select blocks of land they would like to see posted for bidding in a future auction. The remote region, part of Canada's Nunavut territory, has been little explored since the 1970s, when high oil prices, protectionist energy policies and government grants encouraged oil companies to drill there. That exploration boom led to the discovery of 16 fields containing 300 million barrels of oil and 14 trillion cubic feet of natural gas, including the 12-million barrel Bent Horn field, reports Reuters. The field, on Cameron Island about 1,600 kilometers (1,000 miles) south of the North Pole, produced 2.8 million barrels of crude from 1985 to 1996 before it was abandoned by Petro-Canada, the former government-owned oil company acquired by Suncor Energy Inc in 2009. The government gave notice that Bent Horn would be included in the next drilling-rights auction. The call for nominations runs until April 24.
A US Army Corps of Engineers permit giving US oil major ConocoPhillips access to leases within the National Petroleum Reserve-Alaska has been challenged in federal court by seven residents of Nuiqsut, the only village within the reserve, according to local reports. Through a lawsuit filed this week by non-profit environmental law firm Trustees for Alaska, the villages contend the Corps violated the Clean Water Act by not explaining why it reversed its original decision to deny ConocoPhillips' request for a bridge and above-ground pipeline access across the Colville River. The lawsuit also claims the agency did not consider new information about the effects of petroleum development. Nuiqsut residents in an announcement of the lawsuit said petroleum development on the Colville River Delta is harming their subsistence life of hunting and fishing.
Shell will not drill for oil offshore Alaska's Arctic this year following a series of high-profile setbacks in 2012. The company is now focused on repairing its two drillships ready and answers to U.S. federal investigators. The postponement of Shell's drilling in the Chukchi and Beaufort Seas comes after the company said in February 2013 its two Arctic offshore rigs would head to Asia for repairs an upgrades. At the same time, ConocoPhillips reaffirmed that it will continue with its own plans to drill one or two exploration wells in the Chukchi Sea in 2014, and expected to submit more information on it to the federal regulator by the end of March. Shell has spent more than $4.5 billion searching for oil in Alaska's Arctic seas since it won licences to drill in 2005. Yet its season last year was delayed by problems with equipment, and 2012 then ended dramatically with the grounding of the Kulluk drillship in a storm, while it was towed south for the winter.
New figures for SE Barents Sea and Jan Mayen
The Norwegian Petroleum Directorate’s (NPD’s) mapping of the southeastern Barents Sea and the area surrounding Jan Mayen will result in an approximate increase of 15 per cent in the estimates of undiscovered resources on the Norwegian shelf. This corresponds to about 390 million standard cubic metres (Sm3) of oil equivalents (o.e.). The figures were released as part of the government’s work to open these areas to oil and gas exploration. The mapped area in the south-eastern Barents Sea along the Russian border constitutes about 44000 square kilometres. The NPD’s calculations show that expected resources total approx. 300 million Sm3 o.e., with an uncertainty range of 55 – 565 million Sm3 o.e. This means that the most pessimistic estimates lie at the low end of the spectrum, but that the petroleum volumes present could be considerably greater. Most of the resources in this part of the Barents Sea are expected to be gas. About 15% are expected to be oil. In the resource analysis for the south-eastern Barents Sea, the NPD assessed the probability of discovering oil and gas in various geological areas. The Bjarmeland Platform furthest north and the Fedinsky High in the east are considered to be pure gas provinces, while the Nordkapp Basin, Tiddlybank Basin and Finnmark Platform are considered to be combined oil and gas provinces. On the Fedinsky High, there is a possibility of petroleum deposits that span across the border between Norway and Russia.
Wildcat Darwin well spudding this quarter
A Barents Sea wild cat well is scheduled to be spudded in March by operator Repsol Exploration Norge. Well no 7218/11-1 (Faroe 12.5%) is located on the Veslemøy High in the frontier western part of the Barents Sea approximately 70 kilometres to the south west of Statoil’s recent Skrugard and Havis oil discoveries. This is a high impact wildcat well targeting a large closure at multiple levels and is expected to spud in Q1 2013. Junior oil company Faroe Petroleum has a 12.5% stake in the well.
Final approval for a license to export LNG export license from a Royal Dutch Shell planned LNG export plant on British Columbia's Pacific coast, reports Reuters. The approval, which was expected, was given this week by Canadian Natural Resources Minister Joe Oliver and allows exports of up to 670 million tonnes of LNG over the 25-year period covered by the license, or 3.23 billion cubic feet of gas per day. The license was given to LNG Canada Development Inc, a Shell-led consortium that includes Mitsubishi Corp, PetroChina and Korea Gas Corp. While a number of LNG plants have been proposed for the northern British Columbia coastline, the license is only the third given out by Canada, reports Reuters. Kitimat LNG, co-owned by Apache Corp and Chevron Corp was granted a license in 2011, while privately owned BC LNG Export Cooperative received one early last year.
Inocean has developed an Arctic-ready drillship, based on the company's INO-80 concept. The new unit has been named IN-ICE, by the Norwegian/ Polish maritime design and engineering outfit. The ship is completely enclosed and winterized, is environmentally friendly, and has enhanced logistics/ storage facilities, says Inocean. The ice class is for a substantially extended drilling season for a large part of the Arctic – with a PC-4 ice class. “This gives us the opportunity to keep a conventional bow for operations in rough open water wave conditions, as well as to implement a moderate stern for aft-way operations in managed ice,” says Jørgen Jorde, Project Manager for Inocean. “We envisage the stern more optimized for avoiding ice into the moon pool than for ice breaking, but also because drilling operations in Arctic areas are expected to be conducted primarily in ‘managed ice’. “Positioning will be done through ‘thruster assisted turret mooring in the shallow parts of the operational area, and by DP in the deeper parts,” says Jorde. As there is a lack of experience with drilling operations in heavy ice conditions with a floating drilling unit, in addition to the limited qualified rescue- and oil collection concepts in ice, Inocean believes a heavy ice class (e.g. PC-1/2) will not come into use for some years yet. “We are very aware of the environmental challenges related to Arctic Operations and all the requirements that will apply for activities in this area. This aspect has been crucial for the development of our IN-ICE concept,” says Jorde.
Rosneft and ExxonMobil have agreed to expand their cooperation under their 2011 Strategic Cooperation Agreement to include approximately additional 600,000 square kilometers (150 million acres) of exploration acreage in the Russian Arctic, and potential participation by Rosneft in the Point Thomson project in Alaska. They have also agreed to conduct a joint study on a potential LNG project in the Russian Far East. The agreements, which include plans to explore seven new blocks in the Chukchi Sea, Laptev Sea and Kara Sea, were signed by Igor Sechin, president of Rosneft and Stephen Greenlee, president of ExxonMobil Exploration Company, in the presence of Russian President Vladimir Putin. The license blocks include Severo-Vrangelevsky-1, Severo-Vrangelevsky-2 and Yuzhno-Chukotsky blocks in Chukchi Sea, Ust’ Oleneksky, Ust’ Lensky and Anisinsko-Novosibirsky blocks in Laptev Sea and Severo-Karsky block in Kara Sea, which are among the most promising and least explored offshore areas globally. A separate Heads of Agreement was signed providing Rosneft (or its affiliate) with an opportunity to acquire a 25 percent interest in the Point Thomson Unit which covers the project of developing a remote natural gas and condensate field on Alaska’s North Slope. It is estimated that Point Thomson contains approximately 25 percent of the known gas resource base in Alaska’s North Slope.
Norway’s Ministry of Petroleum and Energy has announce the APA (awards in pre-defined areas) 2013, with blocks in the North Sea, the Norwegian Sea and Barents Sea. The application deadline for is 12:00 a.m. hrs on Wednesday, 11 September 2013. The awards are planned to be made in early 2014. The predefined areas (APA boxes) have been extended with more blocks since APA 2012, with new areas are in the Norwegian Sea. Applications can be made for any blocks or parts of blocks within the predefined areas which are not already included in a licence at the closing date for application. This entails that acreage which is relinquished in the application period is regarded as announced at the time of governmental approved relinquishment. For more details, click here.
Dolphin Geophysical of Norway has entered into two heads of agreements with GC Rieber Shipping, the Norwegian offshore support company, for two high-end 3D seismic vessels. The first vessel, Geo Atlantic, is an existing 3D seismic vessel built in 2002 which will be upgraded by the owner to a 14 streamer seismic vessel at a yard in Singapore. The vessel is expected to be delivered to Dolphin in late 2013. The agreement has a fixed contract term of three years and 6 months, with additional options for 2+2 years extensions. The second vessel, newbuild, is a top-end 22-streamer 3D seismic newbuild vessel with highest ice-class, to be constructed at Kleven yard in Norway and expected delivery to Dolphin in March 2015. The vessel is based on an upgraded version of the proven design used for Polar Duke and Polar Duchess. The agreement has a fixed contract term of five years, with additional options for 2x3 years extensions. As part of the two new charter agreements, Dolphin has extended the firm contract term for Polar Duchess with 2 years to give a total initial firm period of 5 years. At the same time, Dolphin says it intends to redeliver Artemis Arctic following the expiration of its fixed contract term.
Kleven wins ice-class seismic vessel build contract
Norwegian shipbuilder Kleven has won a contract with GC Rieber Shipping for the building of an advanced ice-class seismic vessel. The vessel is actype ST 324 XT from Skipsteknisk, and will be delivered from Myklebust Verft yard in March 2015. The contract value is worth around NOK700 million (US$126m) and includes an option for a second vessel. The advanced seismic vessel will meet ice class ICE 1A*, providing a solid base for operations in Arctic areas, says Kleven. Irene Waage Basili, chief executive of GC Rieber Shipping says this is, “a unique competence in operations in harsh environments has always been GC Rieber Shipping’s trade mark. In order to offer our customers the best solutions for demanding operations in vulnerable waters, quality, safety and environment is on top of our agenda." Kleven has 15 vessels on order, at a total value of around NOK8.1 billion.
The Polar Research Board (part of US-based National Academy of Sciences) has named the people and companies whom will make up an committee hoping to answera key question – ‘Emerging research question in the Arctic’. The study will include a community workshop to be held in Alaska in late spring of 2013, and the Committee's report is expected to be released by spring 2014. The committee membership is: Co-Chair: Stephanie Pfirman, Barnard College; Co-Chair: Henry Huntington, Pew Charitable Trusts; Carin Ashjian, Woods Hole Oceanographic Institution; Jennifer Francis, Rutgers University; Sven Haakanson, Alutiiq Museum and Archaeological Repository; Robert Hawley, Dartmouth College; David Hik, University of Alberta; Larry Hinzman, University of Alaska, Fairbanks; Amanda Lynch, Brown University; Michael Macrander, Shell Alaska; Gifford Miller, University of Colorado, Boulder; Kate Moran, NEPTUNE Canada; Ellen Mosley-Thompson, The Ohio State University; Samuel Mukasa, University of New Hampshire; Thomas Weingartner, University of Alaska, Fairbanks. More information about the committee members can be found here.
Buccaneer starts gas production at Kenai Loop, Alaska
Buccaneer Energy has started production production from its 100% owned Kenai Loop # 4 well and is currently producing at an initial rate of 2.0 million cubic feet per day (mmcfd). The long term deliverable production rate from the Kenai Loop # 4 well is estimated to be 3 - 4 mmcfd, says the company. The gas production is in addition to the Company’s current production of 6.5 mmcfd from the Kenai Loop # 1 well. The majority of the current total production of 8.5 mmcfd (1,400 boepd) is being sold to the local gas utility Enstar. Buccaneer hope that permanent facilities will be completed by the end of April and once permanent production facilities are in place, it is anticipated that the Kenai Loop field’s total production rate may be increased to 10-11 mmcfd (1,666 – 1,833 boepd). This represents a near 100% increase over the average production rate achieved in 2012.
Royal Dutch Shell is to tow its two drill vessels from Alaska to Asian drydocks for significant repairs. The extra time needed for repairs may delay the energy super-group’s drilling plans for 2013. In addition, it may cause the Obama administration to rethink its Arctic exploration policy, which is currently a hot topic in Washington. “We have not made any final decision on 2013 drilling in Alaska,” said Curtis Smith, Shell’s spokesman in Alaska. “The outcomes of inspections and the scope of repairs needed in Asia will decide that.” Shell’s Kulluk drilling rig ran aground on an Alaskan island on New Year’s Eve and the drillship Noble Discoverer experienced propulsion problems pulling into Seward, Alaska last November. Inspections of the 29-year-old Kulluk conical drilling unit have revealed hull damage that warrants major repairs and further assessments, Shell said. The Discoverer is destined for a shipyard in Korea, and Shell is planning on sending the Kulluk to an undetermined Asian shipyard with a suitable dry dock, said spokesman Curtis Smith. Shell used the Kulluk and Discoverer to drill the first half of two wells in the Beaufort and Chukchi seas last summer, seven years after buying drilling leases in the region for $2.2 billion.
Statoil and its partners have chosen a development concept for the Skrugard field in the Barents Sea. The concept includes a floating production unit with a pipeline to shore and a terminal for oil from the Skrugard and Havis fields at Veidnes outside Honningsvåg in Finnmark, in the Barents Sea. The field is scheduled to come on stream in 2018, with Skrugard and Havis assets having a common infrastructure. Production from the two fields will be tied in to a semi-submersible floating installation through a subsea production system located in about 380 metres of water. The production is estimated at almost 200,000 barrels of oil equivalent per day. In 2011-2012 Statoil and its partners discovered Skrugard and Havis, which are two independent structures within the same licence and represent the Skrugard field development. 400-600 million barrels of recoverable oil have been proven in this area.
Abundant, affordable, clean, diverse and secure energy is in the U.S. national interest. So finds a report on the future of the country's energy system published on Monday by Senator Lisa Murkowski, the highest-ranking Republican on the Senate Energy and Natural Resources Committee, reports UPI. "Energy 20/20: A Vision for America's Energy Future" is a thoughtful attempt to discuss some of the energy choices and opportunities the United States will face by the end of the decade. Murkowski's report starts from the premise "energy is good" and the consumption of energy is and will remain the basis for rising living standards. It is positive towards the development of fossil fuels like oil, gas and coal -- natural for a Republican from the hydrocarbon-producing state of Alaska. Murkowski devotes only 31 pages out of 122 to fossil fuels. There are also intelligent sections dealing with renewables, nuclear, investment in gas and electricity transmission infrastructure, efficiency and links with water use as well as the need for regulatory reform (Click here for report.). Murkowski's recommendations included promptly approving the proposed Keystone XL crude oil pipeline project's cross-border permit, opening the Arctic National Wildlife Refuge's coastal plain for leasing, and reforming permitting processes for energy, natural resources, and infrastructure projects.
Tax and safety concerns for Arctic – Ernst & Young
Interest in the Arctic is growing among the Big Oil operators, despite limited infrastructure, high royalties and taxes and safety concerns in the harsh environment that continue to challenge commercial success, according to an Ernst & Young report published this week. (Click here for report.)
Approximately 61 large oil and natural gas fields have been discovered so far within the Arctic Circle — 43 are in Russia, 11 in Canada, 6 in Alaska and 1 in Norway. Royal Dutch Shell, one of the first companies to attempt drilling in the U.S. Arctic, hasinvested $5 billion in the effort, but has faced regulatory, environmental and technical challenges.
Now changes n the oil industry may work against it, Ernst & Young said.
Shell started buying its US Arctic leases to drill in Alaska’s Beaufort and Chukchi seas in 2005, banking that the U.S. desire for energy security would trump environmental concerns. The shale oil and gas boomin North America, however, has made the perceived need for complicated Arctic explorationless pressing.
Shell frames Arctic work as a race for international resources. “The Arctic is really a global issue, not an Alaska issue,” said Marvin Odum, president of Shell North America, at a Shell technology conference in January. “There are a number of companies going into the Arctic. Russia, for example, has big plans to go in and explore and go after that very massive resource space.”
Argentina vows to prosecute Falklands oil explorers
Argentina stepped up its row with Britain over the Falklands with its foreign minister thanking God for the decline of the British Empire and vowing to prosecute oil firms exploring off the remote South Atlantic islands, reports Reuters. In a defiant news conference, held in London on February 6 but conducted in Spanish, Hector Timerman called Britain the "greatest colonial empire from the 19th century ... that thank God has been defeated worldwide".
He insisted the islands' roughly 3,000 British inhabitants should not be referred to as Falklanders, but as "British inhabitants of the Malvinas islands", the name Argentina uses for the remote territory some 300 miles off its coast. Britain fought a 10-week war to eject Argentinian forces who invaded the islands in 1982. The Falklands are part of Britain's self-governing territories, and Buenos Aires has ramped up efforts to stake its claim to the territory as London-listed firms seek to tap oil and gas deposits around the islands.
A referendum on the Falklands' future is scheduled for March, a vote in which the islanders are almost certain to choose to remain British, and which Timerman likened to asking Israeli settlers whether they want to be Israeli or Palestinian. Argentina has tried to deter ships from travelling to the Falklands, banning Falklands-flagged ships and other vessels involved in trade with the islands from stopping at its ports, report Reuters. On Wednesday Timerman vowed to take legal action to stop energy firms from exploring for oil and gas around the islands, accusing them of stealing Argentine resources and not being capable of guarding against accidental oil spills.
"We will continue the legal action against the oil companies who are doing hydrocarbon-related exploration activities in the south Atlantic, because they are stealing part of the natural resources of Argentina," he said. Argentine hostility has not deterred companies and the islands are set to start producing their first oil in 2017. Rockhopper Exploration has formed a $1 billion partnership with Premier Oil to pump oil from its find north of the islands. Last month, another British firm, Borders and Southern Petroleum, said its gas condensate discovery in the Falkland Islands was also commercially viable.
Former Mobil Oil executive named US Interior Secretary
US president Obama has nominated Recreational Equipment Inc. (REI) chief executive Sally Jewell to head the Interior Department. The choice of Jewell, who began her career as an engineer for Mobil Oil and worked as a commercial banker before heading a nearly $2 billion outdoors equipment company, represents an unconventional choice for a post usually reserved for career politicians from the West. Jewell replaces Ken Salazar in the post. The Department of the Interior oversees more than 500m acres (202m hectares) of national parks and other public lands. It is responsible for 1bn acres offshore, including Alaska.
Actress Lucy Lawless says her sentence for boarding a drilling ship while protesting against Shell's oil exploration plans is "a total victory". Lawless and seven other Greenpeace activists were sentenced on February 7, 2013 to community work and ordered to pay reparation after earlier pleading guilty to being unlawfully on a ship, reports the News Zealand Herald. The group were arrested last February after they boarded the Noble Discoverer at the Port of Taranaki and spent 77 hours up a 58-metre tower in protest against Shell's oil exploration operation in the Arctic. In New Plymouth District Court this morning, Judge Allan Roberts sentenced each of the activists to 120 hours of community work and ordered them to each pay $651.44 in reparation to the port. But the protesters avoided paying more than $600,000 in reparation to Shell Todd Oil, the joint venture between Shell and Todd Energy which contracted the ship. The reparation to Shell Todd Oil had been sought by police but was dismissed by Judge Roberts.
Greenpeace urges debate on purpose of Arctic Council's lack of spill response
Norway ruling party to back Arctic islands drilling
Norway's ruling Labour Party is set to support oil exploration off a pristine northern archipelago, bringing to a head controversy over drilling in the Arctic in the run up to elections this year reports Reuters. The seas off the Lofoten islands, perched some 200 km (124 miles) north of the Arctic Circle, have unique cold water reefs and are the spawning grounds of the world's largest cod stock. The islands are also popular with tourists. But the seabed may hold some 1.3 billion barrels of oil equivalent, making it a prime area of interest for oil firms, such as Norway's Statoil, which has pushed for the areas to be open to drilling as oil production in the North Sea tapers off. Two years ago, and after months of dispute, Labour struck a deal with its small coalition partners to forbid oil exploration off the islands until the parliamentary term ends in 2013. "Given all the knowledge we have of the area, we believe it is a natural step to conduct an impact assessment study," Helga Pedersen, Labour's deputy leader, told Reuters. They will also lobby members of the Labour Party, which has to formally adopt the new policy at its party conference in April. "Drilling in Loften ... not only threatens precious natural resources, it also threatens several thousands jobs in the fishing and tourism industries," said Nina Jensen, head of the Norwegian branch of the World Wide Fund for Nature (WWF). With Labour's new stance, Norway's top three parties all now support drilling around Lofoten but government support is not yet ensured.
Deep Panuke suffers small fire offshore Canada
A small fire hit the Encana-operated Deep Panuke platform offshore east coast Canada in mid-January, said the regulatory body, the Canada-Nova Scotia Offshore Petroleum Board. Safety officers have visited the platform twice since January 19th, when a blaze broke out and was contained within an electrical cabinet in the emergency switchboard room (ESR) platform. The CNSOPB, along with the certifying authority Lloyd’s Register, have confirmed that necessary electrical repairs have been completed, and that the CO2 fire suppression system has been tested and put back in service. Natural gas from Deep Panuke will be processed offshore and transported, via subsea pipeline, to Goldboro, Nova Scotia for further transport to market via the Maritimes & Northeast Pipeline. First gas is expected from Deep Panuke in 2013.
Oil shipments from Nenets, Arkhangelsk and Murmansk regions in northwestern Russia to the European markets continue to drop for the second year in a row. While 14,8 million tons were exported by tankers through the Barents Sea in 2010, it dropped to 11,9 tons in 2011 and 11 million tons last year. The amount of oil is down, but the numbers of vessels grow by 10 percent to 301, nearly one tanker per day, shows the statistics provided to BarentsObserver by the Norwegian Coastal Administration’s Vessel Traffic Service in Vardø. The traffic center is located on Norway’s easternmost point to Russia and has a panorama view of all voyages along the coast. They have a special focus on risk transports, like oil, reports BarentsObserver. 2012 was the first year when oil tankers from Asia to Europe used the transit lane along Russia’s northern coast. Three vessels transported aircraft fuel from South Korea to Finland via the Northern Sea Route and a LNG tanker sailed the opposite route, from Hammerfest to Japan.
ConocoPhillips, the US oil and gas group, has urged Norway to open up more of its Arctic waters for development just months before a vote in the parliament in Oslo on whether to push ahead with such a move. “There is certainly potential for greater Arctic activity in Norway,” said Steinar Vaage, president of ConocoPhillips Europe, reports the Financial Times at the Arctic Frontiers conference held in Tromso, Norway. “We would like to see Norway open more areas,” he said, adding the country had a number of important advantages over others, such as ice-free waters, access to the European natural-gas market and a highly skilled workforce. Mr Vaage, whose company has been active in oilfields in the Norwegian sector of the North Sea for many years, said ConocoPhillips intended to remain a significant player and wanted to expand into new areas, including the Barents Sea. “Currently about 40 per cent of Norway’s continental shelf is closed for exploration,” he told the Arctic Frontiers conference of scientific, business and policy figures, adding it was estimated those areas contained about two-thirds of the undiscovered resources remaining on the Norwegian continental shelf.
Top US safety official positive on Arctic exploration
Tom Hunter, chairman of the US-governments Ocean Energy Safety Advisory Committee, says if Arctic exploration and drilling is done at a measured pace, learning and improving “it can be done in a balanced way and effectively” He said he is happy for oil companies to continue to explore and develop in the Arctic with a lot of oversight, regulatory and legislation coverage and a “lot of engagement with stakeholder , particularly in the local community. I am not uncomfortable if it proceeds in a very balanced way and with a significant amount of oversight by the regulatory organisations with the federal government, and a lot of engagement with the stakeholders in the local area there,” said Hunter. His comments were made during the Platts Energy Week conference and can be seen here. Hunter worked closely with BP during the 2010 Macondo oil spill in the Gulf of Mexico.
Cairn Energy is to postpone exploration offshore Greenland and focus its drilling efforts in 2013 in the North Sea, and off the Atlantic coast of Morocco. The Edinburgh-based oil exploration and production firm is to wait until summer 2014 before re-starting its drilling efforts in Greenland waters on the Pitu Baffin Bay block and elsewhere to the south of the island. Cairn works there in partnership with Norwegian energy company Statoil and Greenland’s national oil company Nunaoil. This year, Cairn should complete analysis of data from other exploration blocks off the west coast of Greenland, and will then seek exploration investment partners. Simon Thomson, the chief executive of Cairn Energy, said: "Our balance sheet strength means we are funded for all planned exploration and development, whilst retaining the flexibility to consider further opportunities”.
8 January 2013
Wismar, Germany-based shipyard Nordic Yards, has signed a contract to build two ice-breaking rescue and salvage vessels, sized 86 metres long and 19 metres wide. The contract is worth Euros 150 million ($196 m). The vessels have been ordered Russian Ministry of Transport and will support vessels transiting the Northern Sea Route in the Arctic particularly around Murmansk in north-western Russia and in Sakhalin Island in the far east of the country. The vessels will be used for patrols and rescue operations in offshore oil and gas fields. They can be used both for icebreaking operations in harbours and waters with an ice thickness of one metre as well as for fire-fighting and combating oil spills from the sea. Due to their specialised equipment, the vessels can study the ocean floor and damaged objects in water depths of up to 1,000 metres. Delivery is planned for spring 2015.
7 January 2013
A salvage and rescue team has refloated the Kulluk drilling rig that ran aground last week offshore Alaska island. Towing is expected today (January 7) during daylight hours, Alaska time. Ongoing aerial and onboard inspections by recovery and response teams assessing the Shell-owned Kulluk drillship through the weekend confirmed the vessel remains firmly aground and stable with no sign of environmental impact and no leakage of the diesel fuel or hydraulic fluid stored onboard the vessel.
The US Coast Guard and Shell hope the rig can be towed from its grounding site on the coast of tiny Sitkalidak Island to a sheltered bay nearby, so experts can make a better assessment of its sea worthiness.“Following this initial step forward, we will continue to remain cautious while we assess the Kulluk’s condition,” said Martin Padilla, incident commander for the Kulluk responders. “We will not move forward to the next phase until we are confident that we can safely transport the vessel."”Sean Churchfield, Shell's Alaska ventures manager, has said salvage teams found no signs of breaches to any of the Kulluk's fuel tanks and only one area where seawater leaked onboard. The tow plan has been approved by government regulators.
The rig had been en-route for winter maintenance near Seattle when it grounded on December 31.
7 January 2013
Iceland has awarded two licences for oil and gas exploration and production in the waters off the north east coast of the Atlantic island. The licences have gone to Faroe Petroleum and Valiant Petroleum, with Norway taking a 25% stake in both through state-owned oil firm Petoro. Experts have predicted the Arctic could be the next major oil-producing region. Iceland is hoping it will be able to generate much-needed revenues from any discoveries of oil and gas. "This is of course an important step, [as] these are the first real licences that we believe will be used, and they call for extensive research in the area," said Steingrimur Sigfusson, Iceland's Minister of Industries and Innovation."The Norwegian participation is also important - we think that it strengthens the matter in every way, not least to have the support of Norway and its massive knowledge in this field."
7 January 2013
Temperatures in China have plunged to their lowest in almost three decades, cold enough to freeze coastal waters and trap 1,000 ships in ice, official media said at the weekend. Oil and gas production at the prolific northern Bohai Bay has also been hit, with up to 13 ice breakers being deployed to help free stuck vessels and maintain production. Since late November the country has shivered at an average of minus 3.8 degrees Celsius, 1.3 degrees colder than the previous average, and the chilliest in 28 years, state news agency Xinhua said, citing the China Meteorological Administration. Bitter cold has even frozen the sea in Laizhou Bay on the coast of Shandong province in the east, stranding nearly 1,000 ships, the China Daily newspaper reported.
21 December 2012
Norway-based DNV and Germany-based GL classification societies have agreed to merge and will be known as the DNV GL Group. It will be one of the world’s leading ship classification societies and risk experts in the oil and gas, renewable energy and power sectors, and among the global top three within management system certification.
“The merger rests on a strong strategic rationale, and responds to challenges of increased globalisation, rapid technological change and the need for sustainable development. Our customers will benefit from an increased service offering and global competence base as well as one of the densest networks,” says DNV’s Group CEO, Henrik O. Madsen, who will be the CEO of the combined new company. “The merger with DNV supports our long-term goal of being recognized as one of the most respected technical assurance and advisory companies in the world," adds GL Group CEO, Erik van der Noordaa.
Canadian tug gets Ecospeed coating
The 31-meter tug boat Ocean Raymond Lemay has been coated with Ecospeed on the Isle-aux-Coudres in Quebec, Canada. The vessel is owned by Ocean Group,which supplies harbour towing services in a number of ice-affected ports including Quebec, Montreal, Toronto. Ecopseed is a specially developed coating designed to handle very cold and abrasive conditions. Ocean Raymond Lemay is both an Ice Class and a Firefighting Class vessel, The ship is also used to open up the frozen passageways in ports during the winter season. Ecospeed is developed and marketed by Antwerp, Belgium-based Hydrex.
A high level meeting of scientists, indigenous group, explorers, policy makers, diplomats and politicians, business representatives raised a number of Arctic issues at the heart of Europe in Brussels, led by Arctic explorer and founder of The Polar Foundation, Alain Hubert led a two day summit, A topical issue raised at The Arctic Futures 2012 meeting was how the European Union could work with the Arctic Council, the eight-country group of Arctic nations. "The time has come to work together, constructively and with determination on the future of the Arctic," said Maria Damanaki, the European Commissioner for Maritime Affairs and Fisheries, who argued for more cooperation between the EU and Arctic states. Speaking at Arctic Futures, Damanaki said: The EU itself is "an Arctic actor by virtue of three Arctic states, Denmark, Finland and Sweden," she said - "four, if Iceland accedes to the EU." Keynote speaker Caroline Broun, economic officer for environment, science and technology at the US mission to the EU, gave the US view of Arctic co-operation: "The thing people have to remember is that, in the US, we do not have any national legislation on climate issues. We also work closely in the US with the private sector. "We are very different from the EU which, on issues such as emissions trading, has a 'top-down' approach. wever, all this is not to say that significant efforts have not been made. They have and they paid off. In the US we just work on more diverse levels than in Europe." German glaciologist Reinhard Drews was presented with the prestige €150,000 InBev-Baillet Latour Antarctica Fellowship for his proposal to investigate how melting ice shelves could contribute to increased ice flow, during a gala reception at the summit. A full report of the meeting will be published in Issue 3 of Frontier Energy, to be published in November.
The European Parliament's industry committee has thrown out attempts to introduce a moratorium on offshore oil and gas drilling in the Arctic, overruling a contrary vote by its environment committee cast in September. This week's key vote in the industry committee instead proposed a new directive to ensure that companies have "adequate financial security" to cover the liabilities that could be incurred by any accidents. Drilling companies would also have to submit to national authorities a safety hazard and emergency response report at least 24 weeks before starting operations. The EU is seeking a role in the Arctic because three EU countries have territory in the Arctic - Denmark, Finland and Sweden - while Iceland is an EU candidate. Last week, speaking at the Arctic Futures Symposium Gunnar Wiegand, a director at the EU's External Affairs Action Shttp://cdn.sansir.net/SiteFiles/Public/23/Temp/51bdf931-c0f7-45f8-9f26-7f8619dbaa01.jpgervice, said that he hoped EU legislation could inspire Arctic nations to firmer environmental legislation. "The acquis [accumulated legislation] in the Arctic Council doesn't go as far as any of the environmental legislation of the EU," he said. Elsewhere, Norway's deputy oil and energy minister, Per Rune Henriksen, said that for the EU to claim jurisdiction over the Arctic by banning drills there "would almost be like us commenting on a camel operations in the Sahara."
|Faroes Petroleum working offshore Iceland|
Iceland has awarded two licences for oil and gas exploration and production in the waters off the north east coast of the Atlantic island. The licences have gone to Faroe Petroleum and Valiant Petroleum, with Norway taking a 25% stake in both through state-owned oil firm Petoro. Experts have predicted the Arctic could be the next major oil-producing region. Iceland is hoping it will be able to generate much-needed revenues from any discoveries of oil and gas. "This is of course an important step, [as] these are the first real licences that we believe will be used, and they call for extensive research in the area," said Steingrimur Sigfusson, Iceland's Minister of Industries and Innovation."The Norwegian participation is also important - we think that it strengthens the matter in every way, not least to have the support of Norway and its massive knowledge in this field."
Sovcomflot launches ice-breaker Vitus Bering
2 January 2013
Russian shipping group Sovcomflot has launched the Vitus Bering, the first ship in a new series of multi-functional icebreaking supply vessels ordered from Arctech Helsinki Shipyard Oy (a joint venture of United Shipbuilding Corporation and STX Finland). The Vitus Bering series was ordered following an agreement signed in December 2010 following Sovcomflot winning a tender with Exxon Neftegas Limited (operator of the Sakhalin-I project). Sovcomflot will provide two new supply vessels on a long-term charter to the company-operator of the project for the year-round servicing of the Arkutun-Dagi platform. The construction of the Vitus Bering series is a joint project involving both Russian and Finnish shipbuilders. Around 90% (by weight) of the structural components for the vessels were produced in Russia at Vyborg Shipyard (part of ÎÀÎ OSK). Final hardware installation will be carried out by OAO OSK in Saint-Petersburg and will include navigation systems from Russian manufacturer Transas, as well as a Glonass satellite navigation system. Both vessels will be registered in Russia, will sail under the flag of the Russian Federation and will be manned by Russian crews. Future plans include the continued construction of a series of multifunctional icebreaking supply vessels at OAO OSK enterprises for work on the Sakhalin-II project (operated by Sakhalin Energy). According to maritime tradition, the lead ship in the series was given the name of a distinguished figure – Russian explorer of the Far Eastern seas, the Danish-born Captain-Commodore Vitus Bering.
Deadweight: 3,950 tonnes
Maximum length: 99.2m
Beam size: 21.7m
Maximum depth: 7.9m
Crew members: 22
ABB, the power and automation technology group, has won a $35 million order from the Baltic Shipyard Ltd. to supply powerful propulsion and energy efficient electrical systems for a new icebreaker vessel under construction for Russia's state shipping company Rosmorport FSUE. The 25 megawatt (MW) line diesel-electric icebreaker is the next-generation multifunctional diesel-electric icebreaker. The navigation area of the icebreaker is the Northern Sea Route, the Arctic seas and estuaries of rivers discharging into the Arctic Ocean. The icebreaker is able to proceed continuously both ahead and astern at the speed of 2 knots in compact ice field up to 2m thick with 20 cm of snow cover and temperatures as low as minus 35 degrees Celsius. Delivery is due to start in 2013 and the vessel will be delivered to Rosmorport in 2015. ABB will provide integrated power generation and distribution systems, thruster motors, fire-fighting pump motors as well as 25 MW propulsion systems. The propulsion system of the vessel features two Azipod® thruster units (power output 2 x 7,5 MW) and one centerline arranged shafting with a fixed pitch propeller generating additional 10MW output. All Azipod propulsion units for this project are specifically designed for extreme Arctic ice class RMRS Icebreaker-8.
US interior secretary Ken Salazar has launched a lease sale scheduled for November 7 in Anchorage to make available some 400 tracts covering 4.5 million acres in the NRPA for oil and gas leasing. This follows a December 2011 sale involving 283 tracts and about 3 million acres. In August, Salazar announced a long-term management plan for NPRA that Alaska Senator Mark Begich and the rest of the Alaska delegation objected to because of its restrictions on acreage available for development and options for a pipeline corridor. Alaska-based senator Mark Begich welcomed the decision to hold a second NPRA lease sale. At the same time, Begich continues to push the Obama administration to revise its proposed management plan for the NPRA to ensure development of new oil and gas projects and a pipeline to carry oil from Alaska's Arctic offshore to the Trans-Alaska Pipeline. However, a group of senators have voices their concern about the sale, wrtign a letter to interior secretary Ken Salazar, urging him not to schedule new Arctic Ocean lease sales until a plan is in place that prioritizes protection of the Arctic's fragile and abundant marine ecosystem. The letters were signed by several senior politicians including Senator Jeff Merkley (D-OR), Senators Richard Durbin (D-IL), Patrick Leahy (D-VT), Barbara Boxer (D-CA), Frank Lautenberg (D-NJ) and Sheldon Whitehouse (D-RI), addresses the 2012-2017 Outer Continental Shelf drilling programme. The senators ask Secretary Salazar to ensure that exploration and drilling would not harm either the Arctic ecosystem or opportunities for subsistence by the people of Alaska's Arctic coast by deferring any additional Arctic Ocean lease sales from the five-year schedule.
Click here to request a Frontier Energy Media Pack.
Subscribe to our FREE, weekly eNewsletter – exclusive news and comment straight to your in box!
Arctic Frontiers 2016
January 24-29, 2016
Arctic Frontiers 2016 will discuss the balance between resource utilisation and preservation, and between industrial and environmental interests in the Arctic.
Please click here for more information
12th Annual Arctic Shipping Forum
April 19-21, 2016
Paasitorni Congress Centre, Helsinki
The 2015 Arctic Shipping Forum, will reviewstrategies for maximising opportunities and identifying future commercial, technical and transportation developments for the Artctic region.
Please click here for more information.
Arctic Oil & Gas North America Conference
Arctic Oil & Gas North America Conference 2016: developing innovative solutions to overcome unique technical and environmental challenges in the Arctic.
Please click here for more information.