Frontier Energy issue 6

OIL, GAS & SHIPPING IN THE ARCTIC AND ICE-AFFECTED REGIONS

NORWAY'S BARENTS REGION The new North Sea?

www.frontierenergy.info WINTER 2014

Radar Navigation Safety in icy seas

Polar shipping routes Short cuts, high costs

ICE Month

Testing new oil spill technology

Nanotechnology

Fighting ice-build

4 1 0

COMMUNICATIONS • LOGISTICS • RECRUITMENT • COMMUNITIES

2 E U

C SS T A I

EM

AGREEMENT

A NC

G NA MA

OFFSHORE SAFETY

E

SAF ET Y

P

GLO BA LS

G CIN VI ER

CTS U D RO

N FI

EN T

The 360˚ servicing solution We revolutionized safety equipment servicing for shipowners.

Now we’re bringing all the benefits to Offshore.

Would you like to handle all your safety servicing needs under one, all-encompassing agreement?

And from a single point of contact? Do you like the sound of fixed, no-surprises pricing, flexible contracts and transparent exit fees?

Our new Offshore Safety Agreements offer equipment leasing and service packages with full POB capacity for offshore support vessels, semi-submersibles, drillships and floating production and offloading vessels.

Discover the advantages of a complete safety solution.

VIKING LIFe-SAVING equIPMeNT - Protecting people and business Idrettsvegen 110 . Straume Naeringspark . NO-5353 Straume (Bergen) . Norway Tel: +47 81 50 03 25 . Fax: +47 56 32 61 10 . www.VIKING-offshore.com

Meet VIKING at OTC 2014 Booth 1601

CONTENTS

14

20

28

22

Winter 2014 OIL, GAS & SHIPPING IN THE ARCTIC AND ICE-AFFECTED REGIONS

NORWAY'S BARENTS REGION The new North Sea?

www.frontierenergy.info WINTER 2014

Radar Navigation Safety in icy seas

IN THIS ISSUE Features

Regulars

Polar shipping routes Short cuts, high costs

06 NORWAY: BARENTS SEA We take a look at the highs and ICE Month

Testing new oil spill technology

Nanotechnology

Fighting ice-build

COMMUNICATIONS • LOGISTICS • RECRUITMENT • COMMUNITIES

14 20 E C SU AT IS

On the cover Honningsvag, Norway, one of the northernmost cities in the world

lows of last year's wildcat activity in the Barents Sea and look ahead to drilling plans in 2014

10 NORWAY: OIL TOWNS As activity levels heat up in the icy reaches of the Norwegian High North, Frontier Energy looks at the towns vying to be the region's main oil hub

12 ARCTIC SHIPPING Our special correspondent analyses the new polar shipping routes

14 ARCTIC BROADBAND Safe operations in the Arctic Circle will require improved communications infrastructure. Frontier Energy looks at moves to deliver broadband

16 RADAR NAVIGATION Melting sea ice makes northern navigation more challenging: the latest radar technology can deliver real-time ice and oil spill detection solutions

04 NEWS Alaska plans equity stake in giant LNG project; Barents Sea seismic JV worries contractors; surprise Arctic sea ice increase

23 EVENTS Frontier Energy's comprehensive events listing helps you plan your calendar and highlight the key upstream, shipping, scientific and research conferences, exhibitions and events

28 INSIGHT Scientist Reinhard Drews provides an insight into what it's really like to live and work in Antarctica

18 ICE MONTH How do the latest oil spill technologies get tested? Frontier Energy takes a look at OHMSETT's test facility

20 GREEN SHIPPING Can Nanotechnology prevent ice build

Cover Photo: Shutterstock

up and reduce the environmental footprint of ships and rigs working in the Arctic? Frontier Energy talks to ABS about its latest JDP

22 LOGISTICS How do rig crews reach remote harshenvironment drill locations? Frontier Energy talks to leading aviation company ACS

24 RECRUITMENT Increased activity in the Alaskan Arctic is creating new openings

26 OUTREACH Successful Arctic operations require community engagement and responsible stewardship www.frontierenergy.info WINTER 2014 01

INNOVATIVE SOLUTIONS FOR COMPLEX CHALLENGES Operations on Northstar Island – six miles offshore in Prudhoe Bay – don’t stop during the shoulder seasons, when marine vessels can’t operate and the ice roads aren’t ready. Equipment still must be delivered and personnel still need to get to work. Complex challenges such as this demand unique solutions – like Crowley’s hovercraft, which was specifically designed to perform in the harsh Alaskan Arctic, and has a proven reputation for safety and reliability. The right equipment. The right knowledge.

And more than 60 years of experience. When you need solutions, count on the people who know.

Crowley.com/FE | 907.777.5505 Worldwide Logistics • Liner Shipping • Petroleum & Chemical Transportation • Alaska Fuel Sales & Distribution • Energy Support Project Management • Ship Assist & Escort • Ship Management • Ocean Towing & Transportation • Salvage & Emergency Response

EDITOR’S LETTER

FRAM* “NGOs are right to ask whether projects in the Arctic meet the highest standards”

www.frontierenergy.info Editor Amy McLellan editor@frontierenergy.info Editor in Chief Bruce McMichael Canadian Correspondent Andrew Safer Publisher Stephen Habermel publisher@frontierenergy.info Design & Layout In The Shed Ltd www.in-theshed.co.uk © 2014 All material strictly copyright, all rights to editorial content are reserved. Reproduction without permission from the publisher is prohibited. The views expressed in Frontier Energy do not always represent those of the publishers.

Every care is taken in compiling the contents, but the publishers assume no responsibility for any damage, loss. The publisher, Renaissance Media, assumes no responsibility, or liability for unsolicited material, nor responsibility for the content of any advertisement, particularly infringements of copyrights, trademarks, intellectual property rights and patents, nor liability for misrepresentations, false or misleading statements and illustrations. These are the sole responsibility of the advertiser.

Printed in the UK. ISSN 2047-3702 Published by Renaissance Media Ltd, c/o Maynard Heady LLP, Matrix House, 12-16 Lionel Road, Canvey Island, Essex SS8 9DE. Registered in England & Wales.

Company number 5850675.

What is the Arctic? A pristine wilderness that should be out-of-bounds to all development? An untapped resource with the potential to provide oil, gas and minerals to support the planet's growing population, 20% of whom still don't have access to electricity?

A hostile environment that will make any mooted development expensive and dangerous? Or a region that has hosted industrial development, from mining to intensive fishing, over many decades?

A home to native peoples who are threatened by new investment, or to people who welcome the opportunity for jobs, development and improved infrastructure?

A wilderness for the world, or one that is increasingly delineated, militarised and patrolled by sovereign nations?

Your answers to these questions depend very much on your perspective.

For some, the debate over the future of the Arctic is black and white. This monochrome view was very much in evidence over the final months of 2013 when Russia arrested 30 Greenpeace campaigners and journalists when they tried to board the Prirazlomnaya platform in the Pechora Sea. For Russia, the campaigners were pirates and hooligans, invading its sovereign territory and taking inappropriate risks in dangerous waters. For Greenpeace, this was a high profile protest to prevent despoliation of Arctic waters and raise awareness of the risks of run-away climate change. For the environmental protest group, the Arctic should be out of bounds to all oil and gas development.

There were no winners in this spat. Greenpeace won the public debate, with its high profile social media campaign making headlines around the world, winning celebrity support and marshalling the Twitterati to its cause. By late December, the Russian Duma had granted amnesty to the now famous Arctic 30.

But while Gazprom's reputation took a beating, its subsidiary Gazprom Neft Shelf started pumping oil from the Prirazlomnoye field, marking Russia's first commercial oil production from the Arctic, with the promise – or threat, depending on your view - of further exploration and development to come.

Life is rarely black and white. There are many shades of grey between the Greenpeace position and that of Putin's Russia. As we report on page 26, for some of those who live and work in the Arctic, development may be welcomed as it brings the benefits of modern life: job opportunities, improved education and health services, better communications, and enhanced search & rescue capabilities. But this development must be responsible, taking careful account of those who live in the region, respectful of its traditions and ever humble in the face of the environmental wonder, and danger, of these northern reaches.

As polar ice melts, the opportunities and challenges of working in the Arctic will become more pronounced. Covetous eyes may see this as the greenlight for an Arctic “land grab” but, as we report on page 16, melting sea ice is actually more treacherous for ships and rigs. There is no race to the Arctic – the pace must be set by best-in-class technology, stringent regulatory oversight and the meaningful engagement of local stakeholders. NGOs are right to ask whether existing and planned projects meet these high standards.

As the new editor of Frontier Energy, I look forward to covering this evolving debate, in all its complexity, and to provide a forum for the many voices and viewpoints of this fascinating region.

Amy McLellan, Editor

*

Fram is not only the Norwegian word for ‘Forward’, it is also the name of the one of the first ice-strengthened and most famous polar exploration vessels of the late 1800s and early twentieth century. It was captained by Norwegian explorer, Fridtjof Nansen, a Norwegian explorer, scientist, diplomat, humanitarian and Nobel Peace Prize laureate.

Sharing his polar travel experiences with fellow adventurers and scientists, his technology innovations in equipment and clothing influenced a generation of subsequent Arctic and Antarctic expeditions. The word encapsulates what we aim to bring you with the magazine – a forward looking guide to the future of oil, gas and shipping activities in the Arctic and other ice-affected regions while keeping environmental protection and safety at the heart of operations.

Get connected!

Follow us at www.twitter.com/frontierenergy for the latest news and comment

www.frontierenergy.info WINTER 2014 03

NEWS

The state of Alaska has signed a heads of agreement with ExxonMobil, BP, ConocoPhillips, and TransCanada Corp agreeing to take an equity stake in the massive Alaska LNG, paving the way for one of the largest export projects of its kind in the world. The agreement between the state and the four companies outlines a framework in which Alaska would take as much as a 25% stake in a proposed gas processing plant, an 800 mile (1,287 km) pipeline from Alaska’s North Slope and a liquefaction facility in the Kenai Peninsula in a “mega project” that could cost between US$45 billion and US$65 billion.

Anchorage's newly appointed natural resources commissioner Joe Balash said the project would unlock “decades-worth” of gas production from the North Slope in a bid to deliver low cost gas to Alaskans and export lucrative LNG to markets in Asia.

This is still some way off. Following approval of the legislation, the state and the companies expect to complete their pre-FEED work in roughly 18 months, with the FEED stage lasting two to three years, after which a final investment decision will be made. First gas shipments could begin in 2021.

IN NUMBERS

71

vessels transited the Northern Sea Route in 2013

4

Chinese research stations built or under construction in Antarctica

24 terabits Capacity of new Arctic fibre optic telecoms project

Adults and chicks at the 15,000-strong emperor colony Photo: International Polar Foundation/Alain Hubert

Alaska's LNG “mega-project” inches forward

The Trans-Alaska Pipeline: the state is no stranger to big infrastructure projects

Antarctica's celebrity penguins In December 2012, a team from Princess Elisabeth Antarctica research station made history - and headlines around the world, when they were the first humans to make contact with a 9,000 strong emperor penguin colony. Twelve months on and scientists Alain Hubert and Christophe Berclaz revisited the colony on Antarctica’s Princess Ragnhild Coast, some km from the open water of the Southern Ocean. The scientists reported the colony is in good health and spotted some Adélie penguins with the emperors as well as the ever present skuas, predators which prey on feeble chicks. The scientists hope to return in 2014.

Statoil and 16 other oil companies are joining forces on a 3D seismic survey in the newly opened area of the Barents Sea. The collaboration is at the request of the Norwegian Ministry of Petroleum and Energy ahead of the 23rd licensing round, which will include the first new area on the Norwegian Continental Shelf since 1994. The south-eastern portion of the Barents Sea was previously out of bounds pending resolution of a border dispute with Russia.

The co-ordinated seismic acquisition, which is expected to start in April and run through to the Autumn, will reduce costs and potential disruption to the fishing industry. More companies are expected to sign up as the licensing round gets underway.

The news has sent shock waves through the seismic industry, which sees the collaboration as a potential threat to its multi-client business model, under which seismic companies acquire data at their own risk and then licence it to interested oil companies. The International Association of Geophysical Contractors, for example, highlighted that the Norwegian authorities are planning to prioritise surveys deemed necessary for the 23rd round and that other survey activities may be stopped or postponed to allow this work to go ahead.

“This statement marks a significant change to the permit system in Norway and significantly impacts an already self-regulating and fully functional market,” warned the IAGC's President Chip Gill, adding that the multi-client data model boosts innovation and improved seismic work and has helped deliver major finds on the NCS. “Recent discoveries such as Skrugard and Havis have relied on a rich diversity of multi-client data sets incorporating the latest technologies, knowledge, understanding and commercial investment by geophysical contractors,” said Gill.

04 WINTER 2014 www.frontierenergy.info

Companies joining Barents Sea 3D seismic project BP Chevron ConocoPhillips Det norske oljeselskap Eni GDF Suez Idemitsu Lukoil Lundin Norske Shell PGNiG Repsol Spike Statoil Suncor VNG Wintershall

Photo: BP plc

Barents Sea 3D collaboration creates seismic ripples

NEWS

9,000 cu km

The volume of Arctic sea ice in October 2013, up 50% on Autumn 2012

17 million tons

The amount of methane released from the East Siberian Arctic Shelf every year

65,000 km

2.6 million

The number of people who wrote to Russian embassies in support of the Arctic 30

US$45 billion

Possible cost of Alaska LNG mega-project, with high case estimate of

US$65 billion

The distance covered by the Sochi 2014 Olympic Torch

-93°C East Antarctica is officially the coldest place on Earth

US$620,000 Day rate on Shell's rig for Chukchi Sea drilling 2014

Sources: University of Alaska, Fairbanks; ESA; NASA; Reuters; NSR Information Office; Greenpeace; Arctic Fibre; Shell

Arctic sea ice jumps by 50% Confounding expectations, Arctic sea ice in Autumn 2013 was 50% higher compared to the previous year.

Measurements from ESA’s CryoSat satellite showed there was 9,000 cubic km of sea ice in October 2013, up from 6,000 cubic km in October 2012. Previously it was difficult to measure sea ice but CryoSat has allowed scientists, for the first time, to monitor the overall change in volume accurately.

About 90% of the increase is due to growth of multiyear ice – which survives through more than one summer without melting – with only 10% growth of first year ice. Thick, multiyear ice indicates healthy Arctic sea-ice cover. This year’s multiyear ice is now on average about 20%, or around 30 cm, thicker than last year.

The scientists warned, however, that this increase in ice volume does not indicate a reversal in the long-term trend of declining sea ice: in the early 1980s the estimated volume of Arctic sea ice each October was around 20 000 cubic km.

Antarctic sea ice flexes its muscles Antarctica hit the news over the festive period following the dramatic rescue of 52 passengers from the Russian-flagged MV Akademik Shokalskiy which had been trapped in sea ice in Commonwealth Bay region for more than a week. Weather conditions had hampered rescue efforts but a helicopter from China’s Antarctic programme vessel Xue Long transferred passengers and essential equipment over 14 nautical miles to a helipad on the sea ice next to the Australian Government icebreaker Aurora Australis.

The Aurora Australis was undertaking resupply at Casey

station more than 800 nautical miles away when asked by the Australian Marine Safety Authority to assist with the rescue on 25 December.

Australian Antarctic Division Acting Director Jason Mundy said the complicated multi-step operation had proceeded without a hitch. He advised that the diversion would “inevitably squeeze” the already tight summer research season.

Following the rescue, the Xue Long also became stuck in the ice. The US ice breaker Polar Star was diverted to help the Akademik Shokalskiy and Xue Long but they managed to free themselves.

Northern Sea Route continues into December Shipping traffic through the Northern Sea Route jumped 54% last year as more vessels used the northern short cut between Asia and northern Europe. Two of Hansa Heavy Lift's P2 Class vessels, the HHL Lagos and HHL Hong Kong, navigated the NSR before its winter closure in December, delivering infrastructure cargo and large tugs from the Russia Baltic to the Far E ast. This is the first time a P-Type vessel has made a journey via the Northern Sea Route, which will re-open in June.

Joerg Roehl, chief commercial officer of Hamburg-based HHL, said despite difficult weather conditions, including temperatures of -35C and strong winds, the NSR had saved the company almost two weeks' steaming time. The voyages were supported by the Russian icebreakers, Yamal and Taymyr.

FE report page 12

WHAT ARE YOUR CUSTOMERS, POTENTIAL CLIENTS AND COMPETITORS DOING? Get YOUR free eNewsletter from Frontier Energy to find out!

SUBSCRIBE at www.frontierenergy.info TO ADVERTISE contact publisher@frontierenergy.com

Benefits • Exclusive news • Events calendar • Targeted audience

BARENTS SEA

First oil in

SIGHT

2013

was something of a mixed bag for drillers in the Norwegian section of the Barents Sea. There were some standout successes, such as OMV's Wisting Central discovery and Lundin Petroleum's Gohta find, but, less positively, there were also a number of dry holes and Statoil's decision to delay its Johan Castberg project.

Sweden's Lundin Petroleum, described by analysts as one of the most exciting companies working offshore Norway following its multi-billion barrel Johan Sverdrup oil find in the North Sea, discovered oil with exploration well 7120/1-3 in PL492. The well, drilled using the Transocean Arctic in 342 metres of water, was testing the Gohta prospect some 185 km northwest of Hammerfest and 65 km south of Statoil's Johan Castberg discovery.

This was the Stockholm-listed company's first discovery in the Barents Sea, with the well flowing 4,300 barrels of oil per day plus gas from a PermoCarboniferous carbonate reservoir although the target Triassic sandstone was water-bearing.

"Lundin is a pioneer of new plays,” says Malcolm Dickson, senior Norway

06 WINTER 2014 www.frontierenergy.info

Look north for oil: The Aker Barents in the Barents Sea

upstream analyst at energy consultancy Wood Mackenzie. “Ghota, which holds about 100 million barrels plus gas, is exciting because the Permian Carbonate hasn't really been seen in this area before."

OMV's Wisting Central well was another breakthrough for Barents Sea explorers, opening up a new play in these northern waters. The discovery well, 7324/8-1 in PL537, was drilled by the Leiv Eriksson in 373 metres of water and found an oil column of 50-60 metres in the shallow Jurassic formation. This play opener is reckoned to host 65-160 million barrels of recoverable oil and 10 to 40 BCF of gas.

“This was the first time that an oil reservoir was proven on the Hoop High and the first time that such shallow reservoirs could hold material reserve volumes,” says a spokesman for Viennabased OMV. “Wisting Central as a play opener de-risked a larger area with several other licenses, which may also hold some promising potential.”

A follow-up well, Wisting Alternative, came back dry and while disappointing, this is, as WoodMac's Dickson points out, one of the risks when working in a frontier area. In Q2 the company plans to drill a separate structure Wisting

Main, about 6-7 km west of Wisting Central. “If we can prove up a similar reservoir and oil quality as in Wisting Central then we will not only add additional resources but also confirm that the accumulations on PL 537 extend over a larger area,” says the OMV spokesman.

However exciting these new finds are, cautions Dickson, they all require further appraisal and more discoveries around them to make them economic. “None of them can be said to be definitely commercial but they are good indications in a frontier area that further oil can be found,” Dickson tells Frontier Energy.

Johan Castberg derailed Indeed, Statoil may have enjoyed the Wisting discovery, which vindicated its decision to farm-in to the project in 2010 and which will help derisk one of its big wells of 2014, the Apollo well, which is targeting the same play type as Wisting Central, but its experience as an operator in the Barents Sea was rather less comfortable in 2013. The Stavangerheadquartered company, operating with a 50% stake alongside ENI (30%) and Petoro (20%), lined up four wells to be drilled in the vicinity of its 2011/2 discoveries Skrugard and Havis, now

Photo: Harald Pettersen/Statoil

Norway's Barents Sea is taking explorers further north in the search for oil and gas. Last year saw some notable successes...while the disappointments don't appear to have dented industry's appetite for further acreage. Amy McLellan reports

BARENTS SEA

Photo: Ole Jørgen Bratland, Statoil

Spinning the drillbit: The West Hercules in the Barents Sea

renamed Johan Castberg.

But shortly afterwards Statoil iced an This discovery, some 240 km north-west investment for Johan Castberg, citing of Hammerfest, is reckoned to hold 400concerns about the project economics 600 million barrels of oil, a large oilfield given recent drilling results and the by most standards but marginal given reduced uplift in the petroleum tax system. the remote and challenging conditions of In May Oslo proposed to reduce the uplift the Barents Sea. Statoil, already mulling in the petroleum tax system from 7.5% to development 5.5%, a moved that concepts and Statoil reckoned even naming would reduce tax Lundin is Veidnes outside deductions on Honningsvåg in the Norwegian a pioneer of Finnmark county as continental shelf by new plays the site for a new oil NOK 38 million terminal for Johan per every NOK 1 Castberg crude, billion invested. The with a view to first oil in 2018 at a rate of proposed change, the first fiscal surprise almost 200,000 barrels of oil equivalent for Norwegian operators in 20 years, not per day, was keen to find more oil to shore only hits the economics of marginal high up the project economics. risk projects like Johan Castberg but also The first of the four wells, 7220/5-2, creates a climate of uncertainty about drilled by the West Hercules to test the the forward fiscal regime for investors Nunatak prospect, encountered gas in planning to make long term multi-billion rocks of Cretaceous age but was deemed dollar investments. non-commercial. The company put a “Costs are high in Norway and they brace face on this setback, with senior have been steadily rising year on year vice president of exploration Norway, and that makes it difficult to make what Gro G. Haatvedt, pointing out that you would call a marginal field like Nunatak had the highest geological risk Johan Castberg economic,” remarks profile of the four prospects, and was Dickson. “That's why Statoil has gone testing a new geological play in the area. back to the drawing board to change the

scope of the development and cut a little bit off the costs.”

He adds: “The tax changes do not make these developments uneconomic on their own, but they don't help.”

There may be some relief on this front.

Oslo has shown itself willing in the past to support challenging developments, as at Snøhvit, so there could be the potential for a tax break to help push Johan Castberg over the commerciality threshold and unlock investment.

“The Norwegian Government is one of the most switched on when it comes to making the most of the country's natural resources,” says Dickson. “There have been some early noises about potential tax breaks and there's precedent with Snøhvit to have a different rate of depreciation.”

High risk drilling In the meantime, Statoil continues to spin the drillbit. The Nunatak dud was followed by drilling on the Iskrystall prospect, an early-middle Jurassic play proven by the Skrugard and Havis discoveries, but at a significantly greater depth. The September 2013 well found a 200 metre gas column but gas is no use to the partners at this stage and the result dealt a further blow to prospects of

www.frontierenergy.info WINTER 2014 07

BARENTS SEA

reviving Johan Castberg in the near future.

2013 ended on a high note for the Norwegian oil giant, however, after the Skavl well, some 5 km south of Johan Castberg, found a 22-metre gas column and a 23-metre oil column in the Jurassic Tubåen formation, and a 133-metre oil column in the Triassic Fruholmen formation. Estimated recoverable oil volumes are put at between 20 and 50 million barrels. This

is being followed by the Kramsnø and Drivis prospects; at the time of writing Kramsnø was still drilling ahead.

Statoil isn't the only company to have had its shares of hits and misses in the Barents Sea in 2013. Total's appraisal well on the Norvarg gas discovery in PL535, made in 2011, proved disappointing. The well, drilled 275 km north of Hammerfest and 5 km northeast of the discovery well, encountered a thick gas interval in the

Awards in the Licensing: Barents Sea On The Map On the licensing front, acreage in the Barents Sea remains hotly contested.

The 22nd licensing round saw 20 licences awarded in the Barents, by far the most extensive yet in the region.

“It's very very competitive and because of the demand for licences we have seen licences given to larger groups of companies than normal,” says Norway expert Malcolm Dickson of Wood Mackenzie. “There's also increased farm-in activity, which is another sign of how attractive this area is to companies. It's on the radar of companies worldwide."

Statoil, for example, was awarded interests in seven licences, three of which it will operate. This includes acreage adjacent to Johan Castberg to the north, new acreage in the Hoop area and acreage in the Bjørnøya Basin with a potential to open a new geological play. The Norwegian company paired with Russian partner Rosneft, with whom it now holds acreage in both the Norwegian and Russian parts of the Barents, leveraging their cross-border acreage position and experiences of operating in frontier areas.

Other acreage winners in the 22nd round are already getting busy. Det Norske, for example, has embarked on a 2,000 sq km 3D seismic shoot over licence 715, which lies in the frontier “Lopphøgda” area.

Companies are already looking ahead to the 23rd round, which will open for the first time acreage in the southeastern Barents following resolution of a border dispute with Russia. Interest here is already high, with 17 oil companies joining forces on a 3D seismic shoot before bidding has even opened.

08 WINTER 2014 www.frontierenergy.info

target Kobbe formation but reservoir productivity was lower than expected, flowing at a maximum rate of 175,000 cu m per day. This suggests the company will need to downgrade its resource estimates for Norvarg. The Total-led JV included North Energy, Ithaca Petroleum, Statoil, Det norske and Rocksource.

Repsol also encountered disappointment with its well on the Darwin prospect in PL531, some 230

22ndLicensing Round

The Barents Sea 718 - 7317/5(p),6(p),8,9:

ConocoPhillips (O) 30% E.ON 30% Statoil 20% Petoro 20% 720 - 7317/4,5(p),6(p)

E.ON (O) ConocoPhillips Statoil Petoro

30% 30% 20% 20%

722 - 7322/6 og 7323/4:

GDF SUEZ (O) Tullow North Rocksource 721 - 7321/4:

723 – 7323/3,7423/12 og 7424/10:

30% 30% 20% 20%

GDF SUEZ (O) ConocoPhillips OMV Petoro

35% 25% 20% 20%

615 B - 7425/10,11:

Statoil (O) ConocoPhillips OMV Petoro 719 - 7321/8,9:

RWE Dea (O) Repsol OMV Wintershall

Centrica (O) LUKOIL North

40% 20% 20% 20%

35% 25% 20% 20% 50% 30% 20%

535 B - 7225/2(p)

Total (O) North Det norske Valiant Rocksouce

40% 20% 20% 13% 7%

709 – 7224/6 (p) og 7225/4 (p): 716 - 7318/11 og 12:

ENI (O) Bayerngas Faroe Petoro

Det norske(O) Tullow GDF SUEZ

40% 20% 20% 20%

708 - 7130/4(p), 7:

Lundin (O) Edison North LUKOIL

711 - 7218/4,5,6(p) og 7:

Repsol (O) OMV PGNiG Idemitsu

40% 20% 20% 20%

710 - 7218/12, 7219/10, 11:

Total (O) GDF SUEZ Maersk Tullow

715 7220/3(p),7221/1,2,4(p),5

Det norske (O) Shell GDF SUEZ Suncor

ENI (O) Statoil BP Petoro

714 - 7220/ 2, 7220/3(p):

30% 30% 20% 20%

712 - 7218/6(p), 7219/4:

40% 20% 20% 20%

40% 20% 20% 20%

707 - 7127/5,6, 7128/4:

40% 20% 20% 20%

706 - 7017/6(p), 7, 8, 9:

Shell (O) BP Det norske Petoro

40% 40% 20%

Statoil (O) ENI Petoro

40% 20% 20% 20%

Edison (O) PGNiG North

50% 30% 20%

717 - 7321/10, 11:

ENI (O) Statoil Rocksource Edison

40%, 20% 20% 20%

50%, 30% 20%

713 -7219/2,3,7319/11, 12:

Statoil (O) Rosneft Edison North

40%, 20% 20% 20%

Source: NPD

BARENTS SEA

km northwest of Hammerfest and 80 km southwest of Skrugard. The well found gas shows in the Paleocene and nothing in the Creteceous and was P&A. The Spanish company's partners here are Concedo, RWE, Talisman, Faroe Petroleum and Marathon.

Looking ahead 2014 promises another raft of exploration and appraisal drilling as operators seek to extend their geological understanding of the region, particularly those areas that have already yielded discoveries. Statoil plans to drill up to seven new wells in the Barents Sea, testing the potential in the Hoop area, where it will drill the Atlantis and Apollo prospects in PL615, about 50 km north of OMV's find in PL537, as well as continued drilling around Johan Castberg.

And in January Det norske spudded its maiden operated well in the Barents Sea, drilling the Langlitinden prospect in PL659 some 165 km northwest of Hammerfest and 80 km northeast of the producing Snøhvit gas field. The well, drilled using the Transocean Barents, is

the challenge of getting the FPSO and looking for hydrocarbons in the Kobbe development wells hooked up within the formation on the Bjarmeland platform. weather window.

The same structure was drilled in 2008, These may not be easy projects to some 6 km away, finding a small gas develop, with operators having to column in the Snadd formation and oil contend with high and gas in two costs, little known zones in the Kobbe geology and harsh formation.

Tax changes do not weather – although Another big make these developments it's worth noting landmark to look that the operating out for in 2014 uneconomic on their own... environment is will be first oil but they don't help less challenging from Eni's Goliat than some extreme development, the places, such as first oil project in Greenland or the Russian Arctic. the Norwegian sector of the Barents Sea. “Around the world developments are The Italian energy group Eni operates getting more challenging, whether that's with 65%, with Statoil holding the other depth of water, harsh environment or 35%. “This is very significant because it political risk and compared to some of introduces infrastructure into the area ,” those Norway has a lot going for it, in says Dickson. “Eni has been one of the terms of prospectivity, political and fiscal pioneers in the Barents.” stability and technology,” notes Dickson.

This is a flagship project for Eni and “The Barents Sea is a frontier area and will be a test of how oil companies can it will take a bit of time before you start execute developments in the Barents to see economies of scale there but if you in a timely and cost-effective manner. have a long term outlook then it's a good Some slippage in the timeline won't be place to do business.” a cause for concern, say analysts, given

ARCTIC JACK-UPS, DRILLSHIPS, SEMI- SUBMERSIBLES & VESSELS. GustoMSC is a renowned design and engineering company. The company specializes in the design of mobile units for the offshore oil and gas market as well as for the offshore construction market: jackups, semi-submersibles and monohull vessels such as drill ships. GustoMSC provides class approved basic designs and supplies associated equipment e.g. jacking, fixation and X-Y skidding systems.

www.GustoMSC.com

GMSC247 ad Frontier Energy 180x120 - Arctic FINAL2.indd 1

26-09-13 15:41

NORWAY'S NEW OIL TOWNS

Melkøya LNG: the Statoil plant was a shot-in-the-arm for Hammerfest

Kimek Offshore: the Kirkenes yard is already benefiting from increased activity in Russian waters

As operators continue to push further north in the search for oil and gas in the Barents Sea, Amy McLellan looks at the towns vying to capitalise on new investment opportunities in Norway's High North

L

iving in Norway's High North isn't for the faint-hearted. The climate is harsh, it's dark for the winter months and there's high unemployment and a declining and aging population. Increased activity in the Barents Sea is widely expected to create opportunities for the remote communities in Norway's High North. And many here are well-placed to support operators as they move ever further north in the search for oil and gas, with local shipping companies having the specialist expertise and experience of working in the dark, in the ice and the unpredictable polar weather systems.

But capitalising on these new opportunities is not without its obstacles, not least the infrastructure limitations.

Norwegian shipowners highlight the lack of docking capacity in the North, with the Oslo-based Norwegian Shipowners Association pointing out there are only four docks in Northern Norway capable of receiving the type of service ship that works with the petroleum industry in the High North. Another constraint is the decline in engineering work-shop capacity over the last 20 years: the main engineering workshops are now at 10 WINTER 2014 www.frontierenergy.info

Sandnessjøen, Nesna, Svolvær, Harstad, Tromsø and Kirkenes.

Even so, many in the region are excited by the future, with some confidently proclaiming the Barents Sea will be the next North Sea. While Tromsø may have made an early bid to be Norway's Arctic oil hub, as activity moves further north so too will the investment. “Tromsø has the engineering and project management expertise but you can't fight geography,” says one oil industry insider with a nod to the small towns even further north.

This remote region already has experience of the needs of the oil and gas industry. The big breakthrough came in 2007 when Statoil brought the Snøhvit gas field onstream, the first development in the Barents Sea. The field, which has no installations visible at the surface, pumps its gas 143 km into the Melkøya LNG facility near Hammerfest, for export around the world. This has had a positive impact on the Hammerfest region: of the plant's annual operational budget of NOK1.4 billion (US$229 million), some 50% is applied locally.

Local government officials say the importance of the Melkøya plant cannot be overstated. “Hammerfest has a head start over other towns in the region when it comes to oil and gas experience because we had the pleasure of being the city where the LNG plant is located,” says Odd-Børge Pedersen of Hammerfest Kommune's Department of Trade and Industry.

Not only has the Statoil plant brought jobs – Pedersen reckons some 1,300 people work for the oil industry – but it has rejuvenated a city brought to its knees

in the late 80s and 90s by the collapse of the local fishing industry. The population shrank and aged as people left to find jobs elsewhere. Now the population is back up at 10,300 and growing at 2.5% a year, says Pedersen. “Close to 100% of inhabitants support the oil industry,” he says.

The benefits are obvious: new dock capacity, new roads, and the rehabilitation of the city centre. The main problem is a lack of space, reports Pedersen, so the City, hemmed in by hills and snow, is building out into the sea. “It's expensive but there's a lot of money in the oil and gas industry,” he acknowledges. Many new companies have been created and NorseaGroup-subsidiary Polarbase, the supply base that took the risk of being an early mover in 1984, is now reaping the rewards.

But it's not just about jobs.

Hammerfest's Mayor Alf E Jakobsen highlights the impact of increased property taxes, running at about NOK150 million, about 13% of the City's budget. “That really means something in a small society,” he says.

“We have been able to rebuild schools, open new kindergarten and a new culture house.”

Pedersen says the town wants to maximise the “ripple effect” of the new oil and gas wealth so it can build a sustainable future. “We are focusing on education and better health care facilities and new schools and new kindergartens opening each year,” he reports.

Is there competition with other towns in the region for industry investment as Barents Sea activity heats up? Yes, says

Photos: Øyvind Hagen/Statoil & Bergen Group

FRONTIER OIL, FRONTIER HOPES

NORWAY'S NEW OIL TOWNS

Pedersen, but this is a good thing. “The development of the Barents Sea is just beginning and there is plenty of scope for skilled communities to benefit from it and build critical mass in the region.”

Besides, he says, Hammerfest's position is secure. “We have the headstart and I see us as the new Stavanger in 40-50 years,” he says, referring to that town's rapid rise in the wake of the North Sea oil boom.

Since Snøhvit, which was helped by a special fiscal arrangement, there have been further discoveries in the Barents Sea. The first oil development, Goliat, which was discovered in 2000 by Italian energy giant Eni, is now moving towards first oil in Q4 2014. The total development cost is NOK30 billion, with annual operating costs of NOK1.6 billion.

Norway's northernmost oil field is being developed using a floating production facility (FPSO), built at Ulsan in South Korea, but a new report commissioned by Eni Norge reckons about 60% of the total contract value for the Goliat development will have been awarded to Norwegian suppliers, including Aker Subsea, ABB, Technip Norge and Aker Pusnes. And according to the report, an additional 38 Norwegian firms have been awarded contracts to supply Hyundai Heavy Industries – the Korean yard building the Goliat platform – at a total value of NOK 2.4 billion.

Map: Claus Hansen

Here for the long term "The report's main finding is that Norwegian firms have secured significant market shares in the Goliat project, especially in the subsea sector," says Trond Nilsen, senior researcher at Finnmarkbased Norut Alta, which produced the report for Eni Norge. "Goliat is the first oil field to come on stream in the Barents Sea. This means that socio-economic lessons learned from the project will surely provide important guidelines for future development decisions."

In October Eni Norge opened a new operations centre in Hammerfest, which will host its 60 employees. With room for 120, it is clear the Italian company has its eye on expansion in these northern waters. "With Goliat and Johan Castberg in our portfolio, Eni Norge now expects to be active in the Barents Sea for several decades," says managing director Andrea Forzoni. "The new operations centre in Hammerfest guarantees us a firm foothold at an early phase in this highly promising oil and gas region."

Other towns looking to capitalise on increased activity in the region include the small port of Kirkenes to the east.

Its position just 15 km from the Russian

border is creating new business as Russia pushes to open its Arctic waters to exploration. As with Hammerfest, this is a much welcomed boost after a period in the doldrums when the local iron ore mines were closed. The turnaround began when Russian fishing fleets began to use the small port and gained momentum as exploration got underway in the Russian Barents Sea and Kara Sea. “In recent years we have had about 80100 ship calls due to the seismic activity of ExxonMobil and Rosneft in the Kara Sea as well as winter lay up work for rigs,” reports Kåre Storvik, partner at Storvik Consult in Kirkenes.

He cites the many benefits of the Norwegian town to Russian explorers, including a sheltered deepwater harbour, efficient logistics and customs services, reduced bureaucracy, no visa issues for western contractors and high H&S standards. A new maritime agreement between Norway and Russia has opened up previously disputed waters to exploration, some of which will be covered by a joint seismic survey ahead of Norway's next licensing round.

Increased activity in the south eastern Barents would inevitably profit Kirkenes and local contractors like Kimek Offshore, which in late 2013 was sold

by Oslo-quoted Bergen Group to local investment company GMTH Holdings for NOK65 million.

Again the town is looking to make sure

the potential northern oil and gas boom brings sustainable benefits. Importantly Kåre Storvik notes that it is no longer a one-industry town as it was when it was dependent on mining. “We are servicing the Russian exploration activity and fishing fleet, there's also fish farming, trading with Russia with Russians crossing the border to come shopping here as well as tourism,” says Storvik. “Today Kirkenes has many feet to stand on.”

The main challenge is attracting people to service the growth of the 10,000 strong town. “Behind the scenes there's a lot of cannibalism, with companies just recruiting from one another,” says Storvik, who says investment is being made in new housing and schools to attract people to the region.

Yet the Barents Sea oil boom is far from guaranteed. There are many risks that may yet derail hopes for opening up this “new North Sea”: just last year the hope for a new oil hub at Veidnes outside Honningsvåg in Finnmark, about 100 km east of Hammerfest, was dashed when Statoil delayed development of the Johan Castberg discovery citing high costs and uncertain fiscal arrangements.

Commerciality thresholds are high in these challenging northern climes and it will take concerted industry effort, many billions of dollars of exploration and appraisal spend plus supportive, stable fiscal arrangements to build a new oil province in the High North.

Heating up: Northern Norway is attracting more investment

www.frontierenergy.info WINTER 2014 11

ARCTIC SHIPPING

Russian investment: Nordic Yards Wismar is building two ice-breaking rescue and salvage vessels for the Russian Ministry of Transport

ICE, SHIPS and politics

Admiral Jonathan Greenert: America needs to protect its Arctic trade interests

12 WINTER 2014 www.frontierenergy.info

G

lobal warming is creating Russian commercial shipment through new opportunities for quicker the Arctic to China in 2010 with the and cheaper vessel transits on 43,732dwt Nordic Barents transporting both the Northern Sea Route and the 40,000 tons of iron ore from Kirkenes to Northwest Passage. The former runs along China between September 4 and 19 at an the Russian Arctic coast from Murmansk average speed of 12 knots. on the Barents Sea to the Bering Strait and Transit of the Northwest Passage – also the Far East, and the latter transits the open only for around two months each Arctic Ocean and the northern coast of year – brings with it new opportunities North America, connecting the Atlantic for the Arctic region and for the coal, and Pacific Oceans. minerals and shipping industries. Using The entire Northern Sea Route lies it cuts more than 1,000 nautical miles off in Arctic waters and parts are ice free the traditional shipping route through the for only two months each year but the Panama Canal, thereby generating crucial potential savings to shipowners are savings in time, fuel and carbon dioxide too high to be ignored. The Northern emissions and full utilisation of vessel Sea Route shortens the distance of capacity adds a crucial 25% extra cargo. traditional transit through the Suez But it also raises sensitive political issues Canal – with Rotterdam to Shanghai, which might curtail future opportunities. for instance 30% In December shorter – meaning 2009 Canada’s owners reduce fuel parliament A panamax type vessel consumption and in Ottawa carbon dioxide unanimously could save US$18,000 a day emissions. renamed the route using the NSR By way of the Canadian example, a Northwest Passage panamax type in the face of vessel burning 30 tons of fuel each opposition from the United States and day at a price of US$600 per ton saves European countries who maintain it is US$18,000 daily: that's US$360,000 if 20 an international strait or transit passage, days are cut from transit time. Norway’s allowing free and unencumbered passage.

Tschudi Shipping Group, in partnership The United States, in particular, is with Denmark’s Nordic Bulk Carriers, determined to protect the lucrative routes.

Prominvest, Sydvaranger Gruve and In January 2014 Admiral Jonathan Rosatomflot, initiated the first nonGreenert warned that America would fall

Photos: Nordic Yards & US Navy

As Arctic ice melts, new shipping routes are opening in the polar region. Special correspondent Christopher Mayer reports for Frontier Energy on the opportunities and the challenges - of these new northern trade routes

ARCTIC SHIPPING

Arctic escort: Russia leads the way in ice-breaking capability

behind in the race to safeguard its share of the Arctic if it failed to deploy a number of naval destroyers and submarines to protect its trade. Admiral Greenert endorsed a report entitled Arctic Road Map, written by the US Navy’s Task Force Climate Change, which warned that there could be ice-free summer seasons within as short a timescale as one dozen years.

Photos: Rosatomflot & USCG

Cost considerations In addition to political considerations, opposition is mounting in Canada to the cost of supporting international owners using the route. Icebreaker escort for any vessel travelling north of the 60th parallel costs approximately US$50,000a-day, according to the Canadian Coast Guard’s Marine Communications and Traffic Services.

Nordic Bulk Carriers’ ice class 1A vessel, the 75,603 dwt Nordic Orion, built in Japan in 2011, made the first Northwest Passage transit by a bulk carrier in September 2013, transporting 73,500 tons of coal for steel producer Ruukki Metals from Vancouver to the Finnish port of Pori. Prior to departure it was estimated that the Nordic Orion’s route would cut an estimated four days of transit time ahead of arrival on October 7.

Nordic Bulk Carriers planned the voyage in close coordination with Transport Canada and the Canadian Coast Guard and the vessel was issued with an Arctic Pollution Prevention Certificate by Transport Canada prior to departure to ensure compliance with Canadian regulations. Canada requires registration for all international ships weighing more than 500 tons using the Northwest Passage, in part as an acknowledgement of its sovereignty over the waterway.

Nordic Bulk Carriers said it had incurred the additional expense of the precedentsetting transit because of encouragement from the Canadian government though

Increased Arctic shipping means more icebreakers, like the USCGC Healy pictured here

icebreaker costs were covered in this from Nordic Yards Wismar are due for delivery in 2015. instance by the Canadian government.

The vessels are 88m long and their “Without them, honestly, we could not ice-breaking capabilities will render have done it nor would we have,” Edward them suitable for the northern Polar Coll, chief executive of Bulk Partners, route, specifically in the region between operational partner of Nordic Bulk Murmansk and Carriers, was quoted Sakhalin. They as saying by The will also be used in Wall Street Journal.

Opposition is mounting extreme weather Statistics from the in Canada to the cost of conditions to Murmansk-based search for and Northern Sea Route supporting international evacuate people Information Office owners using the NWP in emergency reveal that 71 situations, fight vessels transited the fires and oil Northern Sea Route pollution incidents, as well as investigate in 2013, carrying 895,812 tons of cargo the seabed and damaged objects in water eastbound and 460,085 tons westbound, up to 1,000 metres deep. compared with 46 vessels carrying a But it is not all plain sailing for Russia total of 1.3 million tons of cargo in the and its aspirations for the Northern Sea previous year.

Route.

Doubts remain over how Russia By way of comparison, in 2012 the simplifies the application regime and Northwest Passage saw 21 vessels whether icebreaker fees will be open and comprising 18 yachts, two cruise ships standardised. And questions remain as and one tanker. And it was reported at the end of August 2013 that a “scattering to whether the international commercial of yachts” trying to transit the Northwest fleet itself is ready to use the route.

Classification society rules for Polar Passage had been caught by drifting ice Class vessels and ice class vessels have at both the eastern and at western ends also been placed firmly in the spotlight. of Canada’s Arctic Archipelago. This The Japanese society, ClassNK, which effectively closed the passage without is cooperating in a study with Japan Canadian Coast Guard icebreaker escorts Marine United on the performance of for transit. offshore support vessels operating in ice class waters, is updating its Guidelines Russia's headstart for Navigating Ice Covered Seas in Any determination that Canada has Russian Territorial Waters for the entire to rival Russia in making commercial Arctic region. Based on the International shipping in the Arctic economically Maritime Organization code and feasible will depend on political will and International Association of Classification its ability to invest in icebreakers and Societies regulations, the new version will search and rescue services. include hardware and software guidance There is ground to make up. Russia for new entrants into Arctic waters and has invested in ports and has some 25 aims to promote safe and eco-friendly icebreakers at its disposal. And two shipping in the region. The emphasis multi-purpose rescue and salvage vessels will be on preventing human error and ordered by the Russian transport ministry pollution, maintaining on-deck working, sustaining crew health and addressing for Russia’s State Maritime Rescue training issues.

Coordination Centre in December 2012 www.frontierenergy.info WINTER 2014 13

ARCTIC BROADBAND

GEO satellites don't have the reach to cover the Arctic

THOR 7 is dedicated to maritime communications

Only connect:

extending broadband to the remotest parts

C

ommunications north of 70 degree latitude can be difficult, north of 75 seriously difficult. As melting polar ice sees more exploration and production, increased shipping and requires more search and rescue capabilities, these communication issues are going to become serious impediments to safe and effective operations. Arctic nations are waking up to the communications challenge, which is going to require multi-billion dollar investments and multiple satellite launches to deliver the required capacity.

The lower latitudes already enjoy coverage. In Europe, the 1°West satellite fleet, in which Norway's Telenor Satellite Broadcasting (TSBc) operates, presently offers the highest powered coverage for the European part of the Arctic, stretching as far north as is possible with existing geostationary (GEO) satellites, which are placed into the equatorial plane at an altitude of 36,000 km. According to Telenor, this configuration already delivers stable and reliable broadband communication solutions, principally in Norwegian waters, to shipping, oil and gas and governmental sectors that operate in the lower parts of the Arctic region.

But there are ever growing pressures on the system. “This demand is continually increasing and combined with our Ku 14 WINTER 2014 www.frontierenergy.info

band capacity offered today on our THOR 10-02 , THOR 5 and THOR 6 satellites, TSBc intends to increase the capacity available in this region with its latest satellite, THOR 7 , which will provide expansion Ka band capacity,” explains a spokesperson ahead of the launch of THOR 7, the first with a payload entirely dedicated to maritime activities.

And there is growing demand to extend the reach of the service into the high

Current systems don't have the stability to transmit the large volumes of data required by industry in the Arctic Arctic, where angles of elevation from existing GEO satellites means there's limited coverage. Low Earth Orbit (LEO) polar orbiting satellites are capable of providing much better spatial resolution over high latitudes, but on a narrow swathe. Thus, they are unable to cover the whole circumpolar area at once, and it may require up to 6 hours for the satellite to image the same target area.

A HEO (Highly Elliptical orbit) satellite constellation would be required to allow

for maximum coverage across the entire Arctic region.

Getting broadband network will require the launching of two satellites moving in higher elliptical polar orbits to provide continuous coverage. Researchers are also looking into the potential of seamless transition or so-called "roaming" between GEO and HEO satellites. The costs will be eye-watering: think at least NOK2 billion – NOK3 billion (US$0.3 – US$0.49 billion).

There may not be many people north of 75 but the communications needs of those who live there, and the growing numbers who now work there, are increasingly sophisticated, says Beate Kvamstad, project manager and researcher at The Norwegian Marine Technology Research Institute (MARINTEK). These requirements include reporting linked to fisheries, state-of-the-art environmental monitoring, dynamic positioning of exploration vessels, the transmission of large volumes of seismic data, the use of remote control systems for offshore and maritime equipment, and telemedicine.

Air traffic control is also an issue, as helicopters provide transportation to and from oil and gas installations in these remote waters. And then there are the benefits to northern communities, bringing increased connectivity for health,

Photos: Telenor & ESA

Resource development and shipping may be growing in the Arctic but it's still a challenge to deliver the communication systems to support this increased activity

ARCTIC CLASSIFICATION BROADBAND

Delivering Arctic broadband via subsea fibre optics Toronto-based Arctic Fibre is developing a fibre optic telecommunications project that will connect Asia to Western Europe. The ambitious project involves laying a subsea cable through the southern portion of the Northwest Passage through the Canadian and Alaskan Arctic. In addition to providing transoceanic connectivity directly between the two continents, via a 15,700 km backbone cable, Arctic Fibre will bring affordable high speed Internet Access to the Arctic for the first time. The company stresses the health, education and economic benefits of bringing high speed internet to remote Arctic communities. Arctic Fibre is deploying state of the art technology, using 100 gigabit wavelengths to construct a system with a capacity of 24 terabits.

Construction is due to begin in May 2014 and is scheduled to be in service in January 2016.

Cambridge Bay

Chisasibi Seattle Emi

Cork Highbridge

Montreal New York

emergency communications, mobile communications, and data relay from Arctic buoys and automated weather stations. This possible ten-satellite HEO constellation, divided into four subsystems (Arktika-M, -MS1, -MS2 and Arktika-R) would be developed in phases, with the first satellite expected to launch in 2015, although some reports suggest this has slipped to 2016 or 2017.

Global Marine Systems wins Arctic Circle subsea cable contract UK-based Global Marine Systems has won a contract to install a new subsea cable to service the research community of Ny-Ålesund in the Arctic Circle. The specialist cable lay company, which is backed by private offshore fund Bridgehouse Capital Limited of London, was awarded the contract by Trondheimbased Uninett, a non-profit company delivering telecom and data network connections to Norwegian universities and research institutions.

Uninett’s high speed research and education network connects more than 200 Norwegian educational and research institutions and their more than 300,000 users, and links them to international research networks. The Ny-Ålesund research station supports earth and life scientists and is part of an international research community and is the world's northern most research community.

Global Marine Systems previously installed the world’s most northerly commercial fibre cable, connecting the Svalbard archipelago to the Norwegian mainland, and is well used to cable routing, system engineering and cable protection requirements in the Arctic environment.

www.frontierenergy.info WINTER 2014 15

Photo: Shutterstock

“It would be very beneficial to have education and employment. international co-operation on this,” says Current systems don't have the Kvamstad, “we don't need three different stability to transmit the large volumes of systems, we just need one.” data required by industry in the Arctic, Yet with the ASK project still in the says Kvamstad. exploratory stages there are, as yet, no plans In Norway, Telenor, the Norwegian to collaborate with other Arctic nations.

Space Centre and MARINTEK are already Across the Atlantic in Canada, there working on a two-year project named has been work afoot for a number of ASK (a Norwegian abbreviation of Arctic years to develop 24/7 Arctic broadband Satellite Communications), to deliver coverage. An initial concept study, broadband to the Arctic in line with Oslo's sponsored by the Canadian Space Agency Arctic Policy strategy.

(CSA), Environment Canada (EC), the “We are presently in the exploratory Department of National Defense (DND) stage of the project and working on and other government agencies, was an initial user study to identify the completed in 2008 and the following year user requirements for broadband a consortium led communications as

by MacDonald, well as to ascertain Dettwiler and the associated International collaboration Associates of technical solutions British Colombia and costs,” would be beneficial conducted a says a Telenor – we don't need 20-month analysis spokesperson. “We three different systems that confirmed the have completed feasibility of the an initial report project, the Polar with Marintek but Communications & further analysis and Weather mission, which again envisages work is required to conclude demand.” two satellites operating in Highly Norway isn't the only country looking Elliptical Orbit (HEO). at Arctic communications – although Russia already provides various given that as much as up to 80% of communications services in the Arctic shipping traffic in the Arctic takes place region with its molniya systems. In 2010, within areas involving Norwegian Russia announced plans to develop a interests and it has the most advanced molniya satellite cluster called “Arktika” Arctic oil and gas interests, it is taking a for weather and ice monitoring, lead in this area.

RADAR TECHNOLOGY

Sea ice: view from the CCGS Henry Larsen, north of 80-degrees N Latitude.

HIGH TECH

ice and oil spill detection in Arctic waters

Reduced ice cover increases the risks to shipping and offshore structures and means the Northern Sea Route and Northwest Passage are still many years from being regular commercial routes. Andrew Safer reports on how technology is helping vessels safely navigate ice strewn waters and improve oil spill detection in these northern waters

16 WINTER 2014 www.frontierenergy.info

that previously, an icebreaker was required to break through the sea cover, but that the seas are now more open.

“There are these big pieces of ice that are being thrown about in heavier seas,” relates Johnston, “sometimes much higher up, above the ice-strengthened section of the vessel. Navigation has become more of a challenge.”

If a vessel were to strike multi-year ice, Johnston says, it would be like running

Radar can be used to enable real-time multi-year ice discrimination aground on rock, unlike an encounter with first-year ice—comparatively much softer, but still to be avoided. Multi-year ice contains less air and lower salinity, and has an altered ice structure resulting in the formation of a much harder compound. Multi-year ice embedded in large areas of first-year ice presents navigational and operational hazards.

“The oil companies, in particular, are quite keen to address this in real-time,” Johnston notes.

Satellite imagery can be used to identify first-year and multi-year ice, but

this capability is limited to overflights, which occur at intervals during a 24-hour period. To enable real-time discrimination, Rutter has developed a new type of radar hardware that has been tested in two field trials and is currently in the validation phase. The development of cross-polarized radar for multi-year ice discrimination has received funding support from an oil industry-sponsored research and development incentive program. Johnston sees synergies between the new radar technology and satellite imagery. The former provides real-time information, whereas the satellite data enables forward planning, but, he adds, “it doesn’t show you what happens afterwards and how things change between the time the satellite passes and the time the next image is available.”

Highlighting Russia’s Northern Sea Route, Johnston notes that activities on the Russian side, both for shipping and oil and gas exploration and production, are expected to continue to ramp up, supported by investments in infrastructure for the offshore industry.

Northern challenges Nick Pearson, Rutter’s director of sales and marketing, notes that presenters at the Maritime and Arctic Security Conference in St. John’s in mid-November reported that the most notable passages

Photos: Jim Lundy-Rutter

C

hanging Arctic ice conditions have made navigation in the North more difficult. “It’s actually more dangerous to operate in the Arctic now that the ice cover is less solid,” says Brian Johnston, Rutter Inc.’s business development & innovation manager.

“This is a very dynamic environment that is subject to more pronounced sea conditions. There is less predictability.”

Vessels including ships in the Russian coast guard and icebreaking fleets, and more than half of the oil and gas projects offshore Greenland, use Rutter’s radar-based Ice Navigator in Arctic and sub-Arctic regions. The system enables detection of bergy bits (pieces of glacier ice that are visible up to 5 metres above the sea surface, with an area of 100 to 300 square metres) and growlers (smaller pieces of glacier ice visible up to 1 metre above the sea surface, with an area of about 20 square metres).

Ice Navigator enables these hazardous pieces of ice to be seen from a distance, using conventional radar, under most weather conditions in both daylight and zero light conditions. Without requiring dedicated detection hardware, it operates 24/7, independent of both human observation and tools that require daylight, and provides a 360-degree view of the operational/navigational area.

A ship’s captain recently told Johnston

RADAR TECHNOLOGY

Radar-based Ice Navigator on board the CCGS Henry Larsen

through the Northern Sea Route had “To properly deploy containment been made by very high-value carriers equipment and dispersant, to contain or clean up oil,” says Johnston, “you transporting very high-value cargoes, certainly have to have good knowledge with the assistance of icebreaker escorts. of what’s happening in the area, which This suggests that this route is only includes sea conditions and potential ice viable under limited circumstances, says conditions. You can’t put booms out if Pearson, and is not expected to become there’s full ice coverage.” a regular commercial route for the To make a decision on how to proceed, foreseeable future. the captain needs to know if there is ice in Regarding the Northwest Passage, he the area, if it is moving, and its trajectory, cited two reasons why it is not viable in addition to for commercial the location and purposes: (1) the volume estimation charts are very old In heavy seas sometimes of the oil. Rutter and out of date, big pieces of ice are thrown is currently and (2) there is very above the ice-strengthened integrating into one little navigational or piece of hardware port infrastructure section of the vessel its ice and oil to support the detection systems journey. “The with WaMoS II, a feedback we’re system that measures wave height and hearing is that the probability that it will ocean currents developed by OceanWaveS become a very busy passage is unlikely.

GmbH of Lunenburg, Germany, which There has been strong reticence to move, Rutter acquired in October 2012. from a government policy point of view.

A key impetus behind the development Canada is more cautious.” of increasingly sophisticated ice and oil spill detection tools is an increased sense Oil spill detection of environmental responsibility.

Going hand in hand with the opening “We are experiencing around the of the Arctic and the pursuit of the world a heightened awareness of the development of its resources is the importance of minimizing impacts on the requirement for automated oil spill environment,” observes Pearson. “Oil detection. To meet this need, working companies are proactively taking on the in collaboration with Aptomar AS of responsibility of making this part of their Trondheim, Norway, Rutter integrated its operations, even in the absence of an sigma S6 Oil Spill Detection product with external motivator,” such as regulatory or Aptomar’s infrared camera technology. government requirements.

Based on the Ice Navigator technology In the last five years, he says, nations which Rutter adapted for the detection of such as China and Brazil and regions such oil spills, the Oil Spill Detection capability as the Middle East have developed oil spill was paired with a camera to assist in spill detection requirements. He adds: “If you want to be a respected player on the world validation and clean-up coordination.

Shell drilling in Chukchi Sea, 2012

Shell's Chukchi Sea campaign dealt legal blow As Frontier Energy went to press, the threat of oil spills in Arctic waters was again in the news after environmental campaigners won a legal battle to prevent oil exploration in the Chukchi Sea offshore Alaska. 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 2008 lease sale raised US$2.66 billion in bids, of which US$2.1 billion came from Shell, which has rigs booked to drill in the Chukchi Sea this summer.

But the court said the sale had been based on a flawed estimate of 1 billion barrels of economically recoverable oil as estimated by US Interior Department in an environmental review approving the sale. The appeal court said this estimate was "chosen arbitrarily” and that the Interior Department "based its decision on inadequate information about the amount of oil to be produced pursuant to the lease sale".

The court knocked the case back to a district judge in Anchorage, who in 2012 upheld the lease sale. Shell said it was still reviewing the legal opinion.

Greenpeace, which along with other environmental and Native Alaska groups, has long opposed opening these Arctic waters to exploration, said the ruling was “a massive blow to Shell's Arctic oil drilling ambitions”.

stage, you’ve got to demonstrate you are willing to be responsible at home.”

Pearson also points to the leadership role oil and gas majors are taking in the development of standards for Arctic operations, through the International Organization for Standardization’s initiative to collaboratively develop guidelines for operating in Arctic regions. www.rutter.ca www.frontierenergy.info WINTER 2014 17

OIL SPILL RESPONSE

“Ice Month”: Testing in Arctic Conditions

I

ce Month is a unique event.

Sponsored by the Bureau of Safety & Environmental Enforcement (BSEE) at the National Oil Spill Response Research & Renewable Energy Test Facility (Ohmsett) in New Jersey, the month-long event put the mechanical equipment currently used or being evaluated for use by the US Navy, Coast Guard, and oil spill removal organizations through its paces under various simulated Arctic conditions using refined oil.

During the first week of testing, the US Navy Supervisor of Salvage & Diving (SUPSALV) evaluated equipment currently in their inventory, including the Slickbar DIP 400, Desmi SeaMop, and the Lori Mini. For demonstrations during the second and third weeks, Navy representatives requested that Elastec and Lamor bring additional equipment to evaluate for potential purchase.

Elastec brought the X30 Grooved Disc, TDS118G Grooved Drum, and the Magnum 100G Grooved Drum skimmers.

Lamor brought the Multimax (LAM) 50 and Oil Recovery Bucket (LRB) skimmers.

“The Navy-owned skimmers selected for testing are currently used in the Alaska response region. Demonstrations of the new Arctic-specific equipment brought in by vendors also proved to be a valuable tool for selection of future capabilities for the US Navy,” states Stephanie Brown, pollution equipment lifecycle manager for SUPSALV. During the final week of Ice Month, the US Coast Guard National Strike Force Coordination Center brought the Desmi DOP DUAL with the Helix brush adaptor for evaluation and requested Desmi bring the Polar Bear skimmer for evaluation.

18 WINTER 2014 www.frontierenergy.info

The US Navy-owned Desmi SeaMop was tested to optimize techniques for clean-up in ice-infested waters

water increases, it hinders skimming “Over the past three years since the operations,” comments Crickard.

Deep Water Horizon spill response, During the tests, the skimmer the Coast Guard has been focusing on equipment was placed within a boomed evaluating the need for and developing area in the tank that was preloaded with an Arctic oil spill response capability ice and a one-inch layer of Hydrocal 300 for skimming oil-in-ice,” says Mike oil. The equipment started skimming Crickard, logistics management specialist the oil and ran until one third of the oil for the USCG National Strike Force had been removed. A total of three tests Coordination Center. “Partnering with were performed for each skimmer. The BSSE during Ice Month enabled us to last test in each series continued for an test the suitability and effectiveness of extended period to determine how the our Desmi DOP DUAL with Helix brush skimmer’s performance changed as the adaptor skimming system.”

According to Crickard, the DOP DUAL slick thickness diminished in removing the top one third of oil, the middle third, and is designed to be deployed off the USCG ideally the last third.

JUNIPER Class WLB Buoy Tenders, According to Brown, the US Navy which have reinforced hulls for operating gained valuable experience operating in ice. their skimmers in oil and ice and had the The test protocol was an adaptation of opportunity to optimize techniques for ASTM F631 and F2709-08 and designed the most efficient

by Ohmsett’s clean-up in ice engineering staff in infested waters. conjunction with SL The US Navy gained For the USCG, Ross Environmental the initial Research Ltd. of valuable experience from test results of Ottawa, Canada, Ice Month recovering oil a consulting firm in various ice specializing in oil conditions with spill research. the DOP DUAL fitted with the Helix Ohmsett personnel prepared ice brush adaptor are promising. The aim is conditions in the test tank by installing to distribute a system to each National a chiller to maintain the tank water at Strike Force Strike Team as a 'ready-load' 35o F, and placing eight-inch thick sheets system for operational deployment, says of sea-ice in various sizes to simulate a Crickard. broken ice field of either 30% or 70% The findings will be used to ice coverage. The 30% ice coverage was help improve mechanical response selected based on previous testing as technologies, and to initiate the the amount of ice that begins to inhibit development of standards for the skimmer performance and 70% as the maximum coverage that a skimmer would assessment of equipment recovery capabilities and efficiencies when used in be able to operate. broken ice environments.

“As the percentage of ice on the

Photo: MAR Inc

The latest oil spill response equipment and techniques must be rigorously tested to ensure successful deployment in the event of an emergency, writes Jane-Ellen Delgado of Ohmsett, the MAR-Inc operated largest outdoor wave/tow tank facility in North America

@IBCEnergyEvents EnergyEventTV

Exclusive 2 for 1 offer for oil & gas E&P companies

Arctic Oil & Gas Series

IBC Energy’s 5th annual conference

Arctic Oil & Gas

North America 2014 Wednesday 26th & Thursday 27th March 2014 Sheraton Hotel Newfoundland, St. John’s, Canada Oil Spill in Ice Focus Day - Tuesday 25th March 2014

Frontier Energy subscribers receive a unique 10% discount to attend – quote VIP Code: FKA2395FEAD

Innovative and cost-efficient technologies and strategies driving oil & gas development in the final frontier

Network with and learn from oil & gas companies, contractors and Arctic specialists • Gain an insight into global forecasts 2020-2035 and predictions for future growth in the region • Assess the potential for unconventional resources in the Arctic • Review the labyrinth of regulatory issues in the Arctic – do they fit together?

• Address the E&P logistics challenges – from field development to operation • Identify the technology and knowledge gaps • Implement strategies for emergency response • Review the latest subsea technology advances – will they be a game-changer for the Arctic?

Brand new for 2014 4 Industry Panel Session: Earning a social license to operate in the Arctic – the key to success in Arctic resource exploration and development 4 4 Champagne Roundtable Sessions

Technology Incubator R&D Spotlight Session R&D EER Surgery Pre-conference welcome reception 4 Wine-Trail 4 4 4 4

Technical insights from 20+ leading Arctic oil & gas experts including…

Geir Utskot Schlumberger

Ole Øystein Aspholm DNV-GL

Desmond Power C-Core

Shawn Kenny Memorial University of Newfoundland

Kees van Zandwijk Heerema Marine Contractors

Wylie Spicer, Q.C. Norton Rose Fulbright Canada

Robert Brown Offshore Safety & Survival Centre

Stephen Whidden Arcis

John Aronson AATA International

Mark Shrimpton Stantec Consulting

Maximise your time in St. John’s – attend the specialist Focus Day Tuesday 25th March 2014 – Sheraton Hotel Newfoundland, St. John’s

Oil Spill in Ice Innovation and developments in technology and techniques for oil spill preparedness, response and recovery

Organised by

Arctic Oil & Gas Series

@IBCEnergyEvents

Registration Hotline: +44 (0)20 7017 5518 • Email: energycustserv@informa.com For the latest programme or to register please visit: www.ibcenergy.com/FKA2395FEAD

EnergyEventTV

GREEN SHIPPING

Nano size, big potential: water droplets on nanomaterials-coated steel mesh surface

Fighting ice at

THE NANO SCALE

I

n a joint development project that marries the new frontiers of science with new maritime frontiers in the high north, the American Bureau of Shipping is working with academic partners to develop a nanotechnology modified surface that will help to delay or prevent ice formation.

A nanometre (nm) is one billionth of a metre – to get an idea of how small this is, a sheet of paper is about 100,000 nanometres thick, a human hair is roughly 50,000 to 100,000 nanometres in diameter, and your fingernails grow one nanometre every second. Working at this scale means scientists can modify the surface of a material to control and tailor the water-surface interaction. Contact angle and adhesion of water droplets are two key parameters to control, as they strongly influence ice accretion.

Ultimately surface tailoring at the nano scale means ice buildup can be delayed or even completely prevented.

The Houston-headquartered 20 WINTER 2014 www.frontierenergy.info

classification society is keen to develop standards in this area as more activity gets underway in Arctic waters. Industry clients and regulating bodies worldwide have reported concerns about handling ice buildup because of the potential

Nanotechnology could help develop smart and self-healing coatings

environmental impact of using chemicals or intense heat, which is produced at the expense of considerable energy consumption. There also are HSE concerns. Ice accumulation on safetycritical components, particularly escape and evacuation hardware that can be difficult to reach or remove – such as communications, navigation and lifesaving devices – can pose a serious

risk to personnel. With clients reporting high levels of dissatisfaction with the performance of anti-icing coatings, there's an obvious driver to develop technologies that inhibit ice-build up in the first place.

Nanotechnology textured surfaces change the contact angle of water on the surface so that ice-accretion, while not prevented, takes much longer and once ice does begin to form is much easier to remove. This should mean a significant reduction in the use of deicing agents, thereby reducing pollutants in the environment as well as reducing the use of energy-intensive heating systems, again reducing the energy footprint of the vessel.

“It's too early to quantify, but the benefits and implications are obviously very important,” says ABS principal engineer Mario Cordero-Cabrera.

The industry is hoping to learn lessons from the aviation industry, which has embraced the technology to reduce icing and improve fuel burn. “But we need to develop testing conditions, procedures,

Photo: ABS

Nanotechnology is already delivering green breakthroughs for the aviation industry. The Shared Technology team at the American Bureau of Shipping took time out to tell Frontier Energy how this new technology could delay or prevent ice accretion and reduce shipping's environmental footprint in the Arctic

GREEN SHIPPING

equipment and acceptance criteria that are specific to marine conditions, such as wind/ spray, freezing dynamics in a salt-water environment, scale effects and chemical resistance,” says Cordero-Cabrera.

Nano threats While nanotechnology in general has raised health and safety concerns and questions about the possible effects on nature resulting from particles released to the environment, it's worth highlighting that the work ABS is doing to develop icephobic materials involves developing a textured surface on the nanoscale rather than an approach that could involve the release of nanoparticles into the environment. Research into coatings that might pose such a threat is being watched

by ABS, however.

“The particular approach adopted by our academic JDP partners relies on a profiled or textured surface on the nanoscale, but others have different routes for which we need to take a closer look,” says senior engineer Elli Lembessis, adding that ABS is always open to Joint Development Projects to help ensure standards and guidelines keep pace with new technologies and can aid, rather than impede, innovation.

The technology is still a long way from being viable. It is part of ABS' commitment to backing Blue Sky research that could yield the next step change

in maritime and offshore safety. “By getting involved at this early stage, we can streamline materials certification and approvals processes,” says James Bond, ABS Director of Shared Technology. 2014 will see ABS-Houston working on a draft testing standard for the technology.

Interestingly there are many more possible applications of nanotechnology for green shipping. Nanotechnology enhanced products could include superhydrophobic surfaces to promote tank and piping cleaning, and to prevent fouling of components. This could be used to develop biofouling resistant materials which can help to protect the pristine environment of the Arctic.

Mario Cordero-Cabrera, ABS

ABS is working on a draft testing standard for the technology

Elli Lembessis

Nanotechnology could also help develop smart and self-healing coatings for fibre glass polymer matrix structures selected to increase efficiency through weight reduction - these can show ‘bruises’ to visually identify damaged FRP sections and improve condition monitoring using sensors to lead to predictive monitoring and performance management.

James Bond, ABS

Photos: Shutterstock & ABS

Arctic shipping: measuring Black Carbon ABS's Environmental Technology Group, led by director Yoshi Ozaki, has identified the International Maritime Organization's work on Black Carbon (BC) as an area of critical interest to the Arctic environment and one that will require a substantial research effort. BC is the most strongly light-absorbing component of particulate matter (PM) and is formed by the incomplete combustion of fossil fuels, biofuels, and biomass. It can absorb a million times more energy than carbon dioxide, and when deposited on snow or ice, it reduces the reflection of sunlight, causing further warming and accelerating the rate of melting.

The London-based IMO, the UN specialist agency for shipping, is working to understand BC emissions from the shipping industry and its impact on the Arctic with the expectation of one day introducing regulations to reduce BC emission. The IMO is investigating the means to deliver real-life performance and output measurements of BC from shipping, reviewing sampling protocols, test methods and shipboard instrumentation as well as working up a quantitative impact of BC on climate change in the Arctic.

Scientists are working to understand the impact of BC on the Arctic

www.frontierenergy.info WINTER 2014 21

LOGISTICS

Stormy weather: The Falkland Islands tests the mettle of pilots

Frontier drilling, FRONTIER FLYING

C

ompanies drilling in frontier areas face many obstacles, from the costs of mobilising rigs to remote seas to consulting with wary local communities to managing the expectations of fevered shareholders.

Not only must operators handle long and complex supply chains of equipment, chemicals and other fluids, but they also need to move work crews in and out to meet operational requirements whilst also ensuring the health, safety and comfort of the workforce. Given that many drilling operations take place in areas beyond the reach of many airlines, the task of delivering the workforce to the rig site, and home again, often falls to private charter companies capable of finding the right combination of aircraft and landing strip to deliver workers to even the most challenging drillsite.

“Some of the runways are just gravel strips,” says Sam White, commercial jets manager at Air Charter Service, which handled crew movements for the drilling campaigns offshore Greenland.

The drilling work takes place in an April to September weather window before the ice closes in, and by the final weeks of the operation the air logistics become more complicated. While the runway may be open there are occasions when the sea has frozen so the vessel has to take an alternative route into port, creating delays. This adds additional complications, including accommodating on-signers overnight, de-icing of the aircraft and, if weather conditions deteriorate at the airport, further delays.

Dealing with the unexpected is all part of 22 WINTER 2014 www.frontierenergy.info

the job for Air Charter Service, which can provide a range of aircraft from helicopters and light aircraft to Boeing B747 airliners and a 250 tonne-capacity Antonov AN 225. With offices around the world, it has the global reach and experience to react quickly when Mother Nature derails the best laid flight plan or there's an urgent crew movement requirement.

In the Southern hemisphere, for example, the company had to use all its experience to support the drilling campaigns in the remote waters off

In the Falklands, the weather can go from bright sunshine to hail storms and gale force winds in just 24 hours the Falkland Islands. There were many challenges here, ranging from the remote location, which requires a 17 hour flight from London Gatwick to RAF Mount Pleasant in the Falklands, to the complex political situation, which requires sensitive handling. And there's the weather.

“It can go from bright sunshine to hail storms and gale force winds, all in 24 hours,” says Steve Huddlestone, the newly-appointed business development director for oil and gas.

The company has been running a series of charter flights between the UK and the islands since 2010, totalling more than

100 flights, transporting almost half a million tonnes of cargo and more than 4,500 personnel vital to the exploration effort. While the 17 hour flight is a long haul, it's a bespoke and more comfortable option than the alternatives, which could involve four changes, various layovers and more than 48 hours to complete. As Huddlestone points out, it's important to get the crew out there fresh and ready for duty on arrival – and it's also important to ensure a timely crew change to get the off-signers back home to their families as swiftly and as comfortably as possible.

“The weather changes quite dramatically in a short space of time in the Falklands so there are occasions at our re-fuelling stop when the weather forecast offers limited or no windows of opportunity for landing as scheduled but in most cases by the time we reach the Falkland the weather improves and we can land with no problems,” says Huddlestone. “There have been some diversions for which we have detailed contingency planning meaning a swift recovery for the crew change.”

Sitting on the runway in cross winds in excess of 40 knots isn't for the faint hearted but the experienced pilots used

by ACS know the winds can quickly drop away, allowing the aircraft to get airborne and take the explorers home. And with one commercial discovery already made, seismic vessels currently shooting additional data and more wildcat drilling to come, there are no signs that the air traffic between the UK and the Falklands will cease any time soon.

Photo: Air Charter Service

Increased drilling activity in frontier areas means operators are turning to specialist charter companies to deliver equipment and crew to remote drillsites, reports Amy McLellan

EVENTS

Photos: NES & ConocoPhillips

Welcome to the Arctic Technology Conference 2014 On behalf of the ATC Technical Program Committee it is my honour to invite you to the third Arctic Technology Conference & Exhibition 2014, which will be held 10-12 February in Houston.

The Program Committee has selected an attractive portfolio of papers in a variety of key technical categories and has arranged interesting speakers for the various Plenary, Panel, Topical and Technical sessions.

ATC 2014 is building upon the success of the previous events in 2011 and 2012 and thus again is an international forum where scientists and engineers communicate their ongoing research, development and execution in the key areas of Ice Technology; Geology and Geophysics; Drilling and Well Construction; Field Development Structures, Facilities and Pipelines; HSE, EER and Oil Spill Response; Ships and Autonomous Vehicles; Logistics and Terminals. All of this while paying all respect to the people, the land and the sea of the circumpolar areas.

Through the support of the professional engineering societies which every year organize the Offshore Technology Conference (OTC) and our generous Industry Sponsors, ATC 2014 provides a worldwide platform for you to communicate and collaborate with industry colleagues, vendors and academia about challenges and solutions for the Arctic regions.

With a technical program of some 100 presentations, high quality speakers, networking events and an Arctic-focused exhibition area, this event provides opportunities for delegates to enhance their experience and share their expertise.

The three day program will start with the Plenary Session assembling very interesting speakers from academia, regional company, Coast Guard, oil companies and governments devoted to Sustainable Development in the Arctic and High North.

New are four Panel Sessions looking at Arctic Core Technologies, Arctic Trailblazers, Arctic Past Projects and Global Arctic Market Outlook. Topical Luncheons speakers will cover topics ranging from Environment to Seismic Exploration to Drilling and Offshore Energy Development and Shipping.

The Exhibition area provides a perfect opportunity to network and share your views with anyone who has taken an interest in Arctic. We have several winners in the Spotlight on Arctic Technology contest.

We hope that you will register for ATC 2014. Your participation no doubt will make this conference again a memorable success.

Look forward to welcoming you in Houston!

Han Tiebout – Chair ATC 2014 www.arctictechnologyconference.org

10th annual Arctic Shipping Forum 8-10 April 2014 Helsinki Congress, Paasitorni The conference will focus on the future of Arctic shipping:Â what new developments will be seen in the next 10 years? Topics to be discussed include key drivers for insurers in underwriting ice-going voyages, the shipping needs of existing and new energy and mineral projects, updates on the Polar Code, Sino-Russian cooperation in the Arctic, maritime domain awareness, search and rescue, managing offshore operations, latest designs for icebreakers, OSVs and large scale vessels and building infrastructure to support future trade www.informamaritimeevents.com/event/arcticshipping Arctic Summit 2014 4 March, 2014 The HAC, London This one day event organised by The Economist brings together Arctic stakeholders, from mining and hydrocarbon business and investors, Arctic Council members and observer states, to local community representatives and environmental experts. Key speakers include James Astill, political editor of The Economist and Aleqa Hammond, PM of Greenland www.economistinsights.com 14th Annual Arctic Oil & Gas Symposium March 11-12, 2014 Hyatt Regency Hotel, Calgary Brings together key industry players, government officials and community leaders to discuss the progress and challenges around oil and gas development in the Canadian North. www.arcticgassymposium.com 5th Annual Arctic Oil and Gas North America 26- 27 March 2014 Newfoundland, Canada More than 100 delegates from 15 countries will attend this key event, including senior representatives from government, E&P companies, design & engineering contractors, installation contractors, oil response providers and service companies, to learn about cutting edge technology from leading innovators. Includes new pre-event reception www.ibcenergy.com/event/ arcticnorthamerica

Russian Arctic Oil & Gas 14-16 April, 2014 Marriott Grand Hotel, Moscow Updates on major Arctic projects like Yamal LNG, Prirazlomnaya, Shtokman, the latest on exploration in the Kara & Barents Sea plus panel debates and roundtables on big issues like the environment, infrastructure. www.adamsmithconferences.com/ event/arctic-oil-gas-russia 33rd International Conference on Ocean, Offshore and Arctic Engineering 8-13 June, 2014 Palace Hotel, San Francisco OMAE 2014 will bring together researchers, engineers, managers, technicians and students from the scientific and industrial communities to discuss new technology, its application in industry and promote international cooperation in ocean, offshore and Arctic engineering. www.asmeconferences.org/ omae2014 SPE Russian Oil and Gas 14-16 October 2014 All-Russia Exhibition Center, Moscow A showcase for the latest developments in upstream technologies and services, the main theme of this dual technical conference and exhibition is "Sustaining and optimising production: challenging the limits with technology". www.russianoilgas.ru

TO ADVERTISE your event in the magazine, website or eNewsletter, please contact publisher@frontierenergy.info

SKILLS AND RECRUITMENT

Carolyn Stewart: Rewards can be plentiful for oil workers in Alaska

Alaska: Experience of working in Arctic conditions helps

ALASKA: job opportunities, recruitment challenges Increased activity levels in Alaska, and the planned Alaska LNG mega-project, with a potential price tag of US$45-US$65 billion, means there's a growing skills gap in the resource-rich state. Carolyn Stewart, Regional Business Development Manager – North America at manpower specialist NES Global Talent, reports

24 WINTER 2014 www.frontierenergy.info

Department of Energy on 11th December 2013 to resume activities.

ExxonMobil, BP, ConocoPhillips and TransCanada recently selected a site in the Nikiski area on the Kenai Peninsula as the lead site for the proposed Alaska LNG project’s natural gas liquefaction plant and terminal. If approved, the project could provide a host of economic benefits including a raft of new job opportunities and access to significant reserves of domestically-produced natural gas for homes and businesses in the country.

Development of Alaska’s offshore resources could create an annual average of 54,700 new jobs However, as we are aware, the worldwide war for engineering talent is intensifying, with more than half of the workforce due to retire during the next decade. This means that oil and gas skills are in huge demand and that there are an abundance of career opportunities available for those with the necessary skillsets and experience.

In Alaska, we are currently seeing a great deal of demand for people with pipeline, drilling, construction, quality and health, safety and environment (HSE) expertise. There is also a growing requirement for individuals with LNG and general engineering experience.

However, working in this remote region of the world is challenging and not only requires significant oil and gas expertise but also experience of operating in extreme environmental conditions.

Experience required Attracting people to Alaska is not always easy due to its remote and environmental conditions. Companies are managing the talent gap by permanently relocating staff from Houston, the wider US region and Canada, or through a combination of relocation and rotational assignments. Wherever possible, companies prefer to secure local talent from within Alaska and growing the talent pool in the state is a continued focus.

Working in remote frontier locations such as Alaska requires a greater level of experience than might ordinarily be required. Ideally, people will have previously worked in an Arctic environment and have an understanding of camp living conditions. Candidates who work in Alaska need to be flexible and appreciate that travelling to remote locations, such as the North Slope, can be challenging and often involve multiple flights, some of which will be in very small planes.

However, Alaska is also breathtakingly beautiful and provides a unique working environment. With such abundant natural resources and so many opportunities in the pipeline, for those who are willing to embark on a career in oil and gas in this region, the rewards can be plentiful. www.nesglobaltalent.com

Photos: NES & ConocoPhillips

A

s we are all aware, Alaska is blessed with vast natural resources. The North Slope contains more than a dozen of the 100 largest oil fields in the country including Prudhoe Bay, one of the largest in the world, as well as several of the 100 biggest natural gas fields, according to the US Energy Information Administration (EIA). The state remains one of the country’s biggest crude oil producers, despite its maturing assets, and the second largest natural gas producer, although most of this is not brought to market as there is currently insufficient pipeline capacity.

In terms of its future potential, the Alaska Outer Continental Shelf (OCS) may be one of the largest untapped oil and gas basins in the world. According to a study by Northern Economics and the Institute of Social and Economic Research (ISER) at the University of Alaska Anchorage, development of Alaska’s offshore resources could create an annual average of 54,700 new jobs, with 68,600 created during production and over 91,000 jobs at peak employment.

The report states that additional oil development would also prolong the life of the existing Trans-Alaska Pipeline System (TAPS).

Alaska also has a great deal of liquefied natural gas (LNG) potential. For more than 40 years, the Kenai LNG plant in Nikiski was the only existing LNG export terminal in the US. Exports were ceased in 2011 but ConocoPhillips Alaska submitted an application to the US

Frontier Energy subscribers receive a unique 10% discount to attend – quote VIP Code: FKT2624FEAD

LOCAL COMMUNITIES

Offshore world: Greenland's hunt for oil and gas is just beginning

Christian Krarup

GOOD TO TALK Responsible economic development of Arctic resources is going to require the active involvement of local communities, says global environmental and engineering consulting group Golder Associates

“R

esponsible stewardship” is what Hans Christian Krarup, country director in Denmark for global engineering and environmental services group Golder Associates, wants to see as activities increase in the Arctic. Born in Greenland, Krarup has a unique insight into the challenges of these northern climes and the opportunities presented by increased development. “The people who live there do not want to live in a museum,” he notes. “Most of them see it as an opportunity.”

This is something that isn't often heard amid the highly vocal opposition to any new development in the Arctic. “There are communities that might be close to starving or lacking basic supplies at points of the year because they can't get access to food and supplies; responsible development can be the way to liberate those people.”

But any development must be accountable to the very highest standards.

“If you're given something then it's important to be good stewards so 26 WINTER 2014 www.frontierenergy.info

that when we hand it on to the next generation, it is not in a worse condition than when you took it over and maybe improved,” he says.

Achieving the highest standards of environmental and social behaviour means companies must actively engage with local communities. Golder Associates, an employee-owned company which has worked on engaging Arctic communities over many decades and understands the benefits of drawing on their traditional knowledge, recently undertook a social baseline study on behalf of four oil companies working in Greenland's Baffin Bay.

Active collaboration The aim was to help the operators understand the current situation in the areas that could be affected by their activities, how they might impact local communities and what they could do to mitigate those impacts and improve living standards. Unusually, rather than conduct separate studies, four of the companies

- ConocoPhillips, Cairn Energy, Maersk Oil and Shell – agreed to work together so that local communities, many of them living in very remote, sparsely populated areas, only had to answer one set of questions and only have one meeting, rather than having four separate teams conducting interviews and meetings.

“We had to be quite smart to bring together four different corporate strands of CSR,” says Krarup. “The four companies learned from each other and their different approaches and insights.”

The study revealed some startling insights into life in these remote communities – and also previously unseen hurdles to opening new employment opportunities. Those who currently make their living from fishing or hunting, for example, could, under current rules, lose their licences if more than half of their income was to come from other employment as could easily be the case if they were periodically hired to work on projects.

Understanding these issues means taking time to get to know the local

LOCAL COMMUNITIES

Arctic lifestyles: Responsible stewardship means involving local communities

people and that often means working through local mediators and contacts.

“The Arctic isn't just one set of people,” says Krarup. “There are different customs, different languages, different levels of education and different ratios of indigenous peoples.”

Krarup, who last year moderated a business panel for the World Ocean Council business session on responsible economic development in the Arctic at the Arctic Circle Assembly in Reykjavik, recommends opening dialogue, drawing in local communities, the fishing industry and the new oil and gas, mining and maritime industries so that all sides

Photos: Marc Hansen

The people who live in the Arctic do not want to live in a museum

can benefit from increased activity in these waters. The data acquired under surveys can be of great interest to local businesses. The bathymetry acquired by oil and gas companies can help fishing companies, for example, by helping them better understand these uncharted waters while the arrival of seismic ships and drilling rigs means the region's search and rescue capabilities will increase dramatically, says Krarup.

“The oil and gas industry has a completely different focus on health, safety and environment, they have zero

tolerance on accidents, and the industry's involvement will be the most significant development to increase HS&E in the Arctic,” says the Golder director.

Unexpected consequences Equally, however, it's important that the bar isn't raised unrealistically high. “You don't want to be in a position where standards get so high that local fishermen can't use their boats. It's important to be careful how we do things so that good intentions don't have unexpected negative effects.”

This has happened before. Golder's baseline study found that when new regulations on fish waste were introduced to meet sustainability standards, the unexpected consequence was a steep decline in the use of dog sleigh teams.

Communities had tended to feed their fish waste to their dogs: when they were forced instead to rely on expensive imports of canned dog food, the result was that many turned instead to snow scooters and another traditional way of life was eroded.

These kinds of unintended consequences are why it's so important to have discussions that bring together many different industries, communities and NGOs. Local communities have traditional knowledge with insight and experience that will make life much easier for the new companies as they can spot subtle changes in ice conditions and marine life that are beyond the scope of outsiders, no matter how many textbooks they may have read. And

The arrival of the oil and gas industry will dramatically increase the region's search and rescue capabilities

the ice conditions and weather varies greatly across the Arctic: this isn't one homogenous pristine environment. “Your knowledge from Alaska or Russia may not apply in Greenland,” says Krarup.

“There's still a lot to be learned and a key element is that you really have to have humbleness, that's the success factor.” www.golder.com

Greenland: exploration on hold LSE-listed Cairn Energy won't be spinning the drillbit offshore Greenland this year, having deferred drilling its Pitu prospect, which could host more than 3 billion boe, until 2015. The news came as press reports suggested Statoil may exit Greenland in a bid to keep a lid on costs.

December 2013 saw three consortia licence four blocks offshore northeast Greenland: Statoil, ConocoPhillips and NUNAOIL were awarded Block 6; Eni, BP, DONG and NUNAOIL Block 8; Chevron, GreenPex, Shell and NUNAOIL took Blocks 9 and 14.

www.frontierenergy.info WINTER 2014 27

INSIGHT The long hours take their toll

The Princess Elisabeth Antarctica amid the ice: "the unimaginable size of Antarctica"

Ice, ski-doos and CHOCOLATE

“U

pon arrival I am always impressed by the unimaginable size of Antarctica. There is ice everywhere, it makes me feel minuscule. Inside, the station is very cosy - a storm can be comfortably enjoyed.

When we are at the station we sleep very comfortably in bunkbeds. In the field we sleep in tents with a large sleeping bag.

Around this time of the year, the sun never sets, so you get used to going to bed in bright daylight. However, I usually have no problems with that.

Typically breakfast is between seven and eight. The Antarctic cuisine is typically short of fresh ingredients, even though the arriving teams often bring fresh fruits and vegetables with them.

Other than that it is fairly normal breakfast with home baked bread and a variety of spreads. There is also coffee in large quantities.

I am a Geophysicist and interested in measuring ice thickness with radar, and ice deformation with GPS. At home we compare the data with numerical models. On a daily basis in Antarctica this means to either tow a radar system for hours behind a ski-doo, or to set up high precision GPS antennas in various networks. The larger framework of my research ties into a better understanding of the Antarctic mass budget, how it has changed in the past and what it will do in the future (for example with increasing greenhouse gas emissions from fossil fuel burning).

We expect that precipitation patterns and also ocean currents will change in the future, but it is not fully clear how this will affect Antarctica in detail.

Ready for anything The weather in Antarctica is quite variable and it also depends were you go. During austral summer and close to the coast it can be actually quite pleasant, with temperatures a couple degrees below zero and light winds. On the Antarctic plateau, away from the coast towards the centre, the winds are almost always vicious and temperatures are much colder. Princess Elisabeth Antarctica is situated at the transition between these two areas and experiences some of both. When it is cold and windy we wear thick and heavy snow suits and make sure that no skin is exposed.

When we do measurements, we take a sandwich along.

28 WINTER 2014 www.frontierenergy.info

Somehow I also end up eating incredible amounts of chocolate.

Belgian chocolate of course. In the terrain we eat meals that have been prepared and frozen at the station. They can be quickly heated up over a gas burner and taste delicious when you come home from the cold.

Whether you are in the terrain or at the station, there is not much room to be lonely, hence the lifestyle is forced to be communal. In my experience so far this has always been an advantage because it keeps the spirit up-beat even in stressful situations. I feel that collaboration between scientists in Antarctica is exceptional because we are a small community, but also because the shear remoteness and inaccessibility of the Antarctic continent requires that we work together.

We work long hours. In the terrain it totally depends on the day.

If all instruments work, and if the weather is good we can be out for very long days, once the weather turns bad you may be stuck in a container for days. Also the time-frame to do measurements is always confined and you never know if you will ever get back to that region, so if you go, you go, and you go long.

The long hours do certainly take their toll, if you work too much and get too tired you are prone to do mistakes and to damage your equipment. This is never a good idea in Antarctica.

Once the expedition is over you can almost feel the stress falling off your shoulders and you feel like sleeping a lot.

Highs and lows In the evenings we look at the data that we collected during the day. Once this is done a glass of wine, and of course dinner!

We can contact friends and family at the station because there's a strong and fast internet connection that even allows for video conferences. In the terrain there is only the satellite phone which means short and somewhat intermittent conversations.

The highs and lows of this job are close together: if you collect data all day, and in the evening you find out that something didn't work, you are in the valley of despair. If the data look good and you see something new, you are pleased as a mouse. On a larger scale, all expeditions have been a highlight so far and I feel privileged that I have been to Antarctica on numerous occasions.” www.polarfoundation.org

Photo: Reinhard Drews/IPF & Dave Walsh

Reinhard Drews

What is it really like to live and work in Antarctica? Scientist Reinhard Drews, of Laboratoire de Glaciologie, Université Libre de Bruxelles, talks Frontier Energy through a typical day at the International Polar Foundation's Princess Elisabeth Antarctica Research station – the world's first zero emissions polar base

NEW FRONTIERS! NEW TECHNOLOGY! NEW CHALLENGES! Frontier Energy is the world’s first magazine dedicated to the oil & gas and shipping operations in the Arctic and other challenging ice-affected regions.

Each issue will offer an exclusive insight into the technologies being used to overcome the challenges of this unique environment. Supported by a weekly e-newsletter, the magazine brings readers informative special reports and up-dates on all the latest developments.

• • • • • •

Geographic features Project focus Exclusive insight Special events diary New technology Politics and culture

Connect with your existing customers and reach new ones through the pages of the Frontier Energy.

For editorial enquiries, contact Amy McLellan editor@frontierenergy.info For all advertising and sponsorship opportunities, contact Steve Habermel publisher@frontierenergy.info

Frontier Energy is your essential guide to these new markets!

www.frontierenergy.info

NEXT ISSUE Spring 2014

n y.i

fo

rg E e en SIT r e

ti EB n fro W

A Wood Group Kenny Business