Frontier Energy, Autumn 2019 by Frontier Energy

OIL, GAS & SHIPPING IN THE ARCTIC AND ICE-AFFECTED REGIONS www.frontierenergy.info AUTUMN 2019

RUSSIA A global LNG hub emerges in the Arctic

ALASKA Hilcorp hungry for BP assets

ICEBREAKERS Worldâ&#x20AC;&#x2122;s most advanced ice ship

NORWAY Strong interest in APA 2019

GREENLAND The next mining frontier

ARCTIC CIRCLE The next wild card tourism destination

ATLANTIC CANADA Resources potential hiked + SHIPPING + COMMUNICATIONS + 5G + TOURISM + LNG

T N E GS V E TIN S LI

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CONTENTS

Autumn 2019

IN THIS ISSUE

OIL, GAS & SHIPPING IN THE ARCTIC AND ICE-AFFECTED REGIONS www.frontierenergy.info AUTUMN 2019

RUSSIA A global LNG hub emerges in the Arctic

ALASKA

Features

Regulars

RUSSIA A global LNG hub emerges in the Arctic: Russia’s Arctic LNG 2 project edges

04 NEWS Qilak LNG signs up Exxon for Alaska export project; Sovcomﬂot agrees ship deal for Arctic LNG 2; Hammerfest LNG marks 1,000th cargo milestone; Polar cruise vessel launches with new bow design; Novatek increases gas shipments via the NSR

Hilcorp hungry for BP assets

ICEBREAKERS World’s most advanced ice ship

NORWAY Strong interest in APA 2019

GREENLAND The next mining frontier

FE 06

forward after a ﬁnal investment decision is taken by Novatek and its partners. The development marks a big step in Moscow’s long-term gas export plans

ARCTIC CIRCLE The next wild card tourism destination

ATLANTIC CANADA Resources potential hiked + SHIPPING + COMMUNICATIONS + 5G + TOURISM + LNG

T EN GS EV TIN LIS

FE 10

ATLANTIC CANADA Canada pushes offshore exploration amid new resources estimates. ExxonMobil and all the usual players have applied for more blocks offshore Canada’s eastern ﬂank in areas off Newfoundland and Labrador, though it is a disappointing turnout overall

FE 12

MINING Is Greenland the next global mining frontier? On January 1, 2020, the rights to Greenland’s mineral resources transfer from Denmark to the local government. It could spur a new level of interest and investment in the island’s untapped mining sector

FE 14

ICEBREAKERS Launching the world’s most advanced icebreaker. The world’s icebreaker ﬂeet is expanding rapidly, as all sides get to grips with the harsh realities of the polar environment. It is bringing with it a raft of great maritime industry innovation

FE 16

NORWAY Strong interest in APA 2019 bidding points to an upturn in activity in Norway’s Barents Sea region, with the country keen to secure its long-term economic future after 50 successful years as an oil nation

FE On the cover The icebreaker Zapolyarny on the frozen Yenisei river in Siberia on route from Norilsk to Murmansk.

FE 20

ALASKA Concrete plans to auction more blocks in the National Petroleum Reserve in Alaska have been released, a move designed to stimulate interest across the industry and revive production from the state

FE 22

BP-HILCORP DEAL End of an era as BP quits Alaska: private oil ﬁrm Hilcorp snaps up all of the super-major’s assets in the state in a landmark deal valued at around $5.6 billion

FE 24

COMMUNICATIONS Making the right connections: new investment is pouring into the

28 EVENTS Frontier Energy’s comprehensive listing of essential trade events and conferences for the Arctic oil and gas industry and shipping sector

polar region to expand the Arctic’s strategic data infrastructure. This includes new projects in Alaska in the US and a 5G pilot in Svalbard, Norway FE 26

ARCTIC TOURISM Visit the North Pole in ﬁve-star comfort: luxury polar cruising ﬁrms have tipped the Arctic to be the next ‘wild card’ tourism destination for 2020. It is driving demand for new ice-class cruise vessels

www.frontierenergy.info AUTUMN 2019 1

21 – 24 APRIL 2020 Paasitorni Congress Centre, Helsinki

NEW PERSPECTIVES ON THE WORLD’S MOST CHALLENGING ARENA FOR MARITIME COMMERCE Developing technological capabilities. Improving emergency response. Securing a sustainable future for shipping in the arctic.

150+

Operators from the global shipping industry

60+ Renowned speakers

FIND OUT MORE www.maritime.knect365.com/ arctic-shipping-forum/

15+

Maritime nations

EDITOR’S LETTER

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“What is doable now in the Arctic was inconceivable 50 years ago when Norway made its ﬁrst steps as an oil nation. The coming decades will no doubt bring more incredible advances.”

www.frontierenergy.info Editor Martin Clark editor@frontierenergy.info Canadian Correspondent Andrew Safer Publisher Stephen Habermel publisher@frontierenergy.info Design & Layout Nick Blaxill © 2019 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.

FRAM* Milestones abound in the Arctic

hile Arctic oil and gas production remains comparatively small in global terms, it is growing. What’s more, there is a sense that things are moving faster in terms of economic activity across the region more generally. That includes the advent of new icebreaking technology, more vessels built to cope with the arduous conditions of the region as well as the roll out of robust communications infrastructure. Even in the nascent tourism sector, there are improvements to make cruising ever more comfortable and luxurious for a new generation of Arctic explorers. Perhaps it is fitting then that Norway is celebrating 50 years as an oil country. It was 1969 when Philips made the first major discovery; just a couple of years later Norway pumped its first oil from Ekofisk in 1971. What a journey it has been since then: firstly to achieve that early success and then, over five decades, to build upon it into the energy industry of today. Officials in Oslo are now looking to the future, with intensifying interest in frontier areas such as the Barents Sea. This is reflected in the latest wave of applications for acreage in the APA 2019 round. Potentially, it represents a new territory for drillers to continue and expand the country’s hydrocarbon journey in the decades ahead. This is a different challenge to 50 years ago though, amid heightened environmental pressure and scrutiny. All involved in Norway’s energy sector are acutely aware of these sensitivities as steps are taken to expand oil and gas development above the Arctic Circle. The same is true in Russia, the USA and Canada. All are looking to exploit resources in the far north at a time when environmental issues weigh heavy. To tread this difficult path will call for more industry firsts and yet more pioneers. Not the explorers of old, but instead an industry committed to making the impossible possible through a dedication to excellence and innovation. This is already coming through in the advent of new technologies, state-of-the-art communications and ice-proof shipping. What is doable now in the Arctic was inconceivable 50 years ago when Norway made its first steps as an oil nation. The coming decades will no doubt bring more incredible advances with them. But doing all of this in the era of climate uncertainty will call for collaboration, patience and cooperation, as well as more technology breakthroughs. And yet, as the polar cruising firms now plying their trade in the Arctic seas will also affirm, there still remains a need for that good old-fashioned spirit of adventure.

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.

www.frontierenergy.info AUTUMN 2019 3

NEWS

Qilak LNG signs up Exxon for Alaska export project

2023

The agreement with ExxonMobil would provide at least 560 million standard cu ft per day (mmscfd) of natural gas to Phase 1 of the Qilak LNG project, to export 4 million tons per year (mtpa) of LNG over a 20year term. “ExxonMobil sees the development of the Qilak LNG 1 Project as an opportunity to develop Alaska’s gas resources,” said Darlene Gates, president of ExxonMobil Alaska. “As the largest holder of discovered gas resources on the North Slope, ExxonMobil has been working for decades to tackle the challenges of bringing Alaska’s gas to market.” In an October 23 statement, Qilak LNG said the project is to be supported by Japan’s Bank for International Cooperation (JBIC), as it helps fulﬁl Japan’s commitment to foster investment in the US and to bring new LNG supplies to the IndoPaciﬁc region.

– first cargo expected from Arctic LNG 2

10 years – Terra Nova FPSO life expectancy extended to 2031

Hammerfest LNG plant at Melkøya

Hammerfest LNG marks 1,000th cargo milestone

Sovcomflot

Arctic shuttle tanker Shturman Albanov

Sovcomflot agrees ship deal for Arctic LNG 2 Sovcomflot and VEB.RF Group, a Russian financial institution, have signed an agreement for lease financing of the lead ship in a series of icebreaking LNG carriers expected to serve the Arctic LNG 2 project. The Russian shipper has also signed a long-term time charter agreement for the tanker with project sponsor Novatek. The vessel, to be constructed at Zvezda shipbuilding complex in

Russia’s Far East, is designed for year-round operations in the challenging ice conditions of the Kara Sea and the Gulf of Ob and will be able to sail independently through ice over 2 m thick. All the LNG carriers in the new series will be operated under the Russian ﬂag. The Russian Maritime Register of Shipping will provide technical supervision during the construction of the vessel series.

4 AUTUMN 2019 www.frontierenergy.info

///////////////////////////////////////////////////////////////////////////////////////////////////////

Harald Pettersen / Equinor

A new LNG venture is taking shape in Alaska after Qilak LNG Inc announced it had signed a heads of agreement (HoA) with ExxonMobil Alaska Production Inc for the supply of gas to its project. The HoA covers the potential supply of natural gas from the Point Thomson ﬁeld to Qilak LNG’s proposed Alaska North Slope export terminal. “The Qilak LNG 1 Project would deliver on Alaska’s long-held goal of commercialising North Slope natural gas,” said former Alaska Lt Governor Mead Treadwell, chairman and chief executive of Qilak LNG. “With this HoA and our recently completed pre-feasibility study, Qilak will now begin extensive feasibility efforts, including preliminary permitting, with a target of reaching ﬁnal investment decision (FID) by 2021.” Alaska-based Qilak LNG is a venture of Dubai-based LNG group Lloyds Energy.

IN NUMBERS

Equinor’s Hammerfest LNG plant on Melkøya – dubbed the Snøhvit (Snow White) plant – reached its 1,000th cargo milestone in October. The 140,500 cu m of liquefied natural gas was carried by the Arctic Discoverer to Bilbao in Spain. The plant first came on stream in 2007. Since then, total sales of all the LNG cargoes is in the range of NOK130-150 billion; the plant also exports liquefied petroleum gas (LPG) and condensate. “The value created from Snøhvit and Melkøya so far has been fantastic,” said Andreas Sandvik, vice president of the

Hammerfest LNG plant. Every ﬁfth day a tanker arrives at the LNG plant for loading, with LPG and condensate loaded around every third week and shipped to markets around the world. “LNG is increasingly balancing regional gas markets and helps set global gas prices,” added Anders Bjordal, manager of LNG trading at Equinor. “The recent development makes Europe a natural market for LNG from Melkøya. In addition, we have delivered some cargoes to other markets in the Atlantic Basin, such as Brazil.”

Worley renews wells deal Australia’s Worley has signed a two-year contract extension for well support services and ﬂuids hauling on BP’s North Slope operations in Alaska. The extension was granted prior to BP’s agreement to sell its North Slope assets to Hilcorp in a $5.6 billion deal. Under the contract, Worley will continue to provide well support services and ﬂuids hauling, which includes maintenance,

modiﬁcations, operations and drilling support for new and existing wells and well sites for BP’s Alaska wells and ﬂuids organisation. The contract value was not disclosed. It follows an original contract awarded in 2012. “We are pleased this contract has been renewed so we can continue to support BP in the challenging and remote conditions on the North Slope,” said Andrew Wood, Worley’s chief executive.

NEWS

– natural gas from ExxonMobil to Qilak LNG 1

– Hilcorp to purchase BP assets in Alaska

19.8 mtpa

650

– Arctic LNG 2 total capacity from three trains

– leads and prospects mapped off Newfoundland & Labrador

6,300 acres – size of Atlantic Canada’s largest industrial fabrication site, Bull Arm Fabrication

Polar cruise firm Aurora Expeditions recently christened its new ship, the Greg Mortimer, the world’s first passenger vessel featuring the patented Ulstein X-BOW technology. The inverted bow design enables a ship to pierce waves with greater stability than a traditional bow. The company says it will transform the experience of navigating the world’s heaviest seas, particularly the Drake Passage. The novel-shaped XBOW, created by Norwegian ship designer Ulstein, absorbs the force of waves more consistently across its surface, drastically improving steadiness and comfort, fuel efficiency and minimises vibrations and disruption to marine life. The new vessel was named in a

Aurora Expeditions

Polar cruise vessel launches with new bow design

Greg Mortimer: cruising in style ceremony, set against the snowcapped mountains of Ushuaia, Argentina, after the founder of the Australian-owned adventure company, Greg Mortimer, a renowned mountaineer and explorer. Robert Halfpenny, managing director of Aurora Expeditions, said it sets a new standard for the expedition cruise industry. “Integral

to Aurora Expeditions’ DNA is sustainability and preservation of natural areas, and that is showcased in the design of the Greg Mortimer with anchor-less technology and reduced emissions. With our small expedition ships, lower environmental impact and improved comfort, Aurora Expeditions really is leading the way in expedition cruising.”

Advancing oil spill response science and technology through …

Novatek increases gas shipments via the NSR Russian LNG exporter Novatek is stepping up gas transit via the Northern Sea Route (NSR). The company shipped 15 LNG cargoes from its Yamal LNG plant eastbound to Asia-Pacific markets directly via the NSR during third quarter 2019, it said on October 1. The eastbound shipments represented about 25% of all LNG dispatched from Yamal LNG during the quarter. Overall, planned 2019 volumes of LNG delivered eastbound via the NSR will be four times up on the previous year. “The increase of LNG delivered eastbound via the NSR confirms the commercial priority of the AsiaPacific region as a strategic direction

for future deliveries of Novatek’s LNG,” said Lev Feodosyev, first deputy chairman. “Developing further the navigational efficiency via the NSR, combined with the construction of LNG transhipment complexes in Kamchatka and Murmansk, will optimise the company’s logistics chain.” A current fleet of 13 Arc7 ice-class tankers, along with lower ice-class designated tankers to transport LNG cargoes, supports the Yamal LNG project. The full complement of 15 Arc7 ice-class tankers is expected to be in operation by the end of 2019, which will increase the number of direct LNG deliveries eastbound via the NSR.

Research

• Measurable and repeatable parameters • Independent and objective test facility • Cold water and ice conditions

Managed by the Bureau of Safety and Environmental Enforcement

Testing • • • •

Full-scale testing with oil Protocol development Controlled marine environment Accurate and reliable results

Training

• Increase proficiency using boom and skimmers • Practice removing real oil

732-866-7183 • www.ohmsett.com/frontier.html www.frontierenergy.info AUTUMN 2019 5

Sources: BP, Novatek, Qilak LNG, Total, Nalcor Energy, Government of Newfoundland & Labrador

560 mmscfd

$5.6 billion

RUSSIA

Work to commence on Arctic LNG 2

Russia’s Arctic LNG 2 project edges forward after final investment decision taken by Novatek and its partners

fter years in the planning, the Arctic LNG 2 project has been given the green light at last. The group of shareholders led by Russia’s Novatek approved a final investment decision (FID) in September, paving the way for construction to begin for real. “Total, Novatek and the other project shareholders have approved the final investment decision for Arctic LNG 2, a major liquefied natural gas (LNG) development located on the Gydan peninsula, Russia,” French oil giant Total announced on September 5. The project will have a production capacity of 19.8 million tons per year (mt/y) and is expected to export its first LNG cargo by 2023. Further expansions are planned already, 6 AUTUMN 2019 www.frontierenergy.info

with a second and third LNG train set to start up by 2024 and 2026 respectively. Novatek holds a 60% interest in the venture, with Total holding 10%. Other coinvestors include China’s CNOOC (10%) and CNPC (10%), plus the Japanese MitsuiJogmec consortium, Japan Arctic LNG, (10%).

Arctic LNG hub The mega project, which is estimated to cost in the region of $21.3 billion, will consolidate Russia’s earlier success in LNG developments in the far north. “Arctic LNG 2 will leverage the success of the Yamal LNG project and will deliver competitive LNG to the markets in four years’ time,” said Total boss Patrick Pouyanné. According to research by consultant Rystad

Energy, the project’s breakeven price is around $5.3 per mcf. Pouyanné said that the project “adds to our growing portfolio of competitive LNG developments based on giant low cost resources primarily intended for the fast growing Asian markets”. Arctic LNG 2 production will be delivered to international markets by a fleet of ice-class LNG carriers that will be able to use the Northern Sea Route and the transshipment terminal in Kamchatka for cargoes destined for Asia and the transhipment terminal close to Murmansk for cargoes destined for Europe. Significantly, the new plant will benefit from low upstream costs with the development of the giant resources of the Utrenneye onshore gas and condensate field. This is expected to result in lower output costs than the existing Yamal LNG plan, according to the shareholders. The installation of three concrete gravitybased structures (GBS) in the Gulf of Ob, on

Total

A GLOBAL LNG HUB emerges in the Arctic

RUSSIA

each of which will be located a 6.6 mt/y liquefaction train, will contribute to signiﬁcant capex reduction (more than 30% per ton of LNG) compared with Yamal LNG, a Total press statement noted. Also, the proximity to Yamal LNG will allow Arctic LNG 2 to leverage synergies with existing infrastructure and logistics facilities, it added.

Great expectations //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

The development of Arctic LNG 2 marks a big step in Moscow’s long-term gas export plans

Contract awards The advance of Arctic LNG 2 will further establish Russia’s far north as a leading global gas supplier to the rest of the world. It follows the Yamal LNG plant, as well as additional gas export facilities around Sakhalin, off the country’s eastern shores. The new project will also consolidate Novatek’s position in the LNG segment, especially as a leading player supplying the high-growth markets of Asia. “Novatek has emerged as one of the key players in the global LNG market with the successful launch of Yamal LNG,” said the company’s chairman Leonid Mikhelson.The decision to move forward with the Arctic LNG 2 project will move the group forward in its goal “to become one of the largest LNG producers in the world,” he added. “We are conﬁdent that the accumulated construction experience, state-of-the-art technologies, proven logistics solutions and partnerships with best-in-class international companies will ensure the effective implementation of our new LNG project,” said Mikhelson. And there could be more to come. “Our long-term strategy is to develop our vast lowcost hydrocarbon resources on the Yamal and Gydan peninsulas, as well as to maximise our cost competitiveness across LNG markets.” Moscow hopes to raise its global LNG market share from less than 10% now to

20% by 2035, mainly thanks to increased output by non-state producer Novatek and its partners in the Arctic.

Sakhalin delay Plans for the expansion of the Sakhalin 2 LNG plant, however, are on hold — a potential setback to Russia’s LNG ambitions. That is according to three sources involved in the project, cited in a November 5 report by Reuters. The report stated that the main reasons for the hold-up are the lack of gas resources and international sanctions, as well as plans by Gazprom to boost pipeline gas sales to China. Shareholders in the Sakhalin Energy consortium include Gazprom, together with Shell, Japan’s Mitsui and Mitsubishi Corp. Sakhalin-2 is Russia’s ﬁrst LNG plant with a capacity of over 10 million tonnes per year, launched in 2009. A third train expansion would lift capacity by another 5 million tonnes per year, but this does not appear imminent, nor by the 2021 target earmarked previously by Gazprom. “There have been no movements on the third line,” a source from within the consortium was quoted by Reuters as saying. It also reported that shareholders have considered several options for the expansion, including buying gas from the neighbouring Sakhalin-1 project led by ExxonMobil. Sakhalin-1, where state oil ﬁrm Rosneft is also a shareholder, is aiming for its own LNG plant.

Yamal LNG: global gas exports

Total

Similarly, Arctic LNG 2 will bring with it a bonanza of work for the industry. Engineering procurement and construction (EPC) contracts for the GBS fabrication and the LNG plant construction have been signed, while most of the equipment for the project is already contracted. Front-end engineering design (FEED) work was completed in October 2018. The GBS construction, assembly and installation of LNG modules will be performed at Novatek-Murmansk’s LNG construction centre, located near Belokamenka in the Murmansk Region. A consortium of TechnipFMC, Saipem and NIPIGAS (Russia) was awarded the EPC contract for the LNG plant, with the GBS design and build going to Russian company SAREN, a joint venture of RHI Russia and Saipem. “As of today, more than 90% of long-lead items (including cryogenic heat exchangers, gas turbines, and the compressors for the liquefaction trains) have been ordered,” a Novatek statement read on September 5. Drilling of production wells, construction of roads and the field’s production infrastructure have also commenced, it said. More recently, US energy group McDermott International, Inc reported that its China-based joint venture Qingdao McDermott Wuchuan Offshore Engineering Co Ltd (QMW) has been awarded “a large contract” to provide three complex modules for the project in Russia’s Yamal-Nenets Autonomous Region. McDermott defines a large contract as between $50 million and $250 million. The scope of work includes the fabrication of three pre-assembled unit complex process modules. QMW will undertake the fabrication engineering, partial procurement, construction and pre-commissioning. Fabrication for the modules is scheduled to commence this year and to be completed in mid-2022. “This award recognises QMW’s experience and excellent performance in the Arctic on the earlier Yamal LNG project,” said McDermott’s senior vice president Asia Pacific, Ian Prescott. “It is further evidence that QMW is a tier one module fabricator in the LNG market. Fabrication will be completed in QMW’s mega module workshop which provides increased certainty for safety, schedule and successful project delivery.” FE

www.frontierenergy.info AUTUMN 2019 7

RUSSIA

Rosneft’s giant Vostok project hinges on

TAX BREAKS /////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Moscow is exploring way to subsidise the vast Rosneft project as it seeks to expand Arctic oil production

rilling for oil in the harsh Arctic climate is neither easy, nor is it cheap – and yet the region is so fundamental to growing Russia’s overall longterm production. For major new projects that means looking not only for external investment, but also to the state for backing. Oil giant Rosneft’s plans to expand its footprint include one of its most ambitious Arctic endeavours yet, Project Vostok Oil, or East Oil. Vostok Oil is a joint venture between state-owned Rosneft and Russian owned private oil producer Neftegazholding (NGH), which is run by a former Rosneft executive, Eduard Khudainatov. Russia’s deputy energy minister Pavel Sorokin told reporters at the end of October that the 2 million barrels per day (bpd) multiﬁeld Arctic scheme could cost as much as $157 billion. And its success may hinge on how much ﬁnancial support Rosneft can

attract from Moscow. The Moscow Times reported on October 10 that the company’s plans could be held up if it fails to secure as much as $40 billion in tax cuts from the government. The Russian oil company is looking to sell a large stake in the project to various Indian and Chinese investors in order to move forward, though this seems contingent on it securing the huge tax break. Fortunately, the government is listening and has broadly agreed a new tax relief package,

Government support for Rosneft may cost the budget up to $1.1 billion a year over the next few decades.

Gunboat diplomacy //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Russia’s new combat icebreaker, the Ivan Papanin, points to an increase in militarisation in the Arctic region Russia has invested massively in its ice-class ﬂeet in recent years. That includes plans for a ﬁrst combat icebreaker — the Ivan Papanin — laden with cruise missiles, guns and an antisubmarine helicopter, due in service in 2021. The vessel, launched at the Admiralty Shipyard in St Petersburg in October, is the

8 AUTUMN 2019 www.frontierenergy.info

ﬁrst of two such ships capable of smashing through ice up to 1.7 m thick. At 114 m in length, it has a crew of 60 people and a speed of 18 knots. The new vessel highlights how keen Russia is to assert ownership over its territory and huge offshore oil and gas supplies, though it

according to deputy prime minister Yuri Trutnev, cited by Interfax news agency. He said projects in the Arctic will be exempt from mineral extraction tax for the first 12 years and will then gradually switch to paying the normal rate over the course of five years. Government support for Rosneft may cost the budget up to $1.1 billion a year over the next few decades. While it is welcome news for Rosneft, there are those that question the sustainability of Russia’s heavy support for oil production with tax breaks. It comes at a time when Moscow is raising other taxes on its citizens and extending pension ages. FE further raises concerns about the militarisation of the Arctic. “We wanted to create a ship that would ensure the safety of our fleet in the Arctic,” Viktor Cherkov, an admiral at the state-owned United Shipbuilding Corporation was quoted as saying by the Tass news agency. “At the same time, we wanted the ship to carry out scientific research in the Arctic ice and, of course, for it to reliably ensure the safety of our national interests there.” The naval vessel is a step up from the Norwegian Coast Guard’s Svalbard-class icebreaker offshore patrol vessel, which carries a small deck gun and supports helicopter landings.

RUSSIA

Russia has identiﬁed the Arctic as critical to long-term production growth

Navigating sanctions ////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Gazpromneft

Sanctions against Russia have adversely impacted the shipping lines exporting the country’s Arctic gas output

Gazpromneft

Shipping underpins the nation’s energy exports

International oil and gas firms are quite used to the ebb and flow of sanctions that come from working in Russia’s energy sector. That is especially true in what has become a more challenging geopolitical climate over the past few years or so. Adhering to complex trade and investment rules, either from the US or Europe, has provided plenty of work for in-house legal teams and called for a good dose of creative thinking. But sanctions have also affected some of the major shipping lines sailing in and out of Russia’s big Arctic ports. That includes the Yamal LNG Joint Venture, which plays an integral part in shipping liquefied natural gas (LNG) out of Novatek’s vast Yamal LNG plant. Shippers Teekay LNG and China LNG Shipping each own half of the Yamal LNG Joint Venture, which owns four specialised Arc7 LNG tankers and has two more on order. But it ran into bother in late September when the joint venture was blocked after the US imposed sanctions on two units of COSCO Shipping Energy Transportation Co Ltd, including COSCO Shipping Tanker (Dalian) which owns China LNG Shipping. The sanctions caused a spike in shipping costs for oil and LNG. But on October 22, Teekay LNG announced a “resolution” to the problem following an “ownership restructuring” at its partner China LNG Shipping (Holdings) Ltd. Teekay LNG said in a statement that China LNG Shipping is no longer “classified as a ‘Blocked Person’ under Office of Foreign Assets Control (OFAC) rules.” OFAC is a financial intelligence and enforcement agency of the US Treasury Department. The Teekay statement added: “The four existing ARC7 LNG carriers are continuing to operate under their long-term contracts transporting gas from the Yamal LNG project and the remaining two ARC7 LNG carrier newbuildings are expected to deliver in the fourth quarter of 2019.”

www.frontierenergy.info AUTUMN 2019 9

ATLANTIC CANADA

Canada is investing in its icebreaker ﬂeet

Canada pushes offshore exploration amid

NEW RESOURCES ESTIMATES ////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Exxon and all the usual players have applied for more blocks offshore Canada’s eastern flank in areas off Newfoundland and Labrador, but it is a disappointing turnout overall

2 in the Jeanne d’Arc basin. Husky and Suncor jointly bid $18 million for Parcel 3 in the Jeanne d’Arc region. All awards are subject to approval by the federal and provincial governments.

xxonMobil is stepping up its presence offshore Canada, with two new blocks in the frontier Atlantic area. The Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) announced the results of its 2019 call for bids in the south-eastern Newfoundland region and in the Jeanne d’Arc region in November. The industry regulator said ExxonMobil had been successful in two blocks, with a third being allocated to a partnership of 10 AUTUMN 2019 www.frontierenergy.info

Husky Oil and Suncor Energy. Overall, the awards were disappointing, however, with 13 parcels offered in total across both offshore regions. There was a cumulative total of $38.6 million in bids. C-NLOPB said Exxon had bid in excess of $10 million – the minimum acceptable bid for each parcel in work commitments – for each of its blocks. It lands the US super-major a 100% stake in Parcel 4 in the south-eastern Newfoundland region, and the same in Parcel

Exxon is already a lead player in the frontier region but has had its hands full in recent months following problems at the Hibernia platform, located approximately 315 km offshore the east coast of Newfoundland, which resulted in a shutdown. Production restarted on September 27, following reported discharges of oil and water from the platform in August, which were investigated by ofﬁcials. “Hibernia Management and Development Company Ltd (HMDC) brought production online following a comprehensive review of its

CCG

Upstream activity

ATLANTIC CANADA

systems and operations and discussions with the regulator,” a statement read. Exxon is also a partner in the Hebron group, another of eastern Canada’s major fields. Here, partner Suncor Energy reported a ramp-up in output during the year, in its most recent earnings statement. Elsewhere, Husky reported in October that the SeaRose floating production, storage and offloading (FPSO) vessel is now “back up to full rates”, while the West White Rose Project is now 52% complete. The West White Rose Project is to be developed through a fixed drilling platform consisting of a concrete gravity structure (CGS), built by the SNC-Lavalin-DragadosPennecon General Partnership (SDP), and integrated topsides facilities. Once completed and installed on the White Rose field, the 145 m high CGS – equivalent to a 35-storey building – will support a topside module to enable drilling and oil extraction 350 km away from the coast of Newfoundland and Labrador.

Husky Energy

West White Rose Project ﬁeld plan

Long-term potential Despite the modest turnout for the new acreage, Canadian officials gave the bid round a positive spin, highlighting the strong underlying potential of the region. Newfoundland and Labrador currently has four producing fields, plus more than 650 leads and prospects, and an ongoing seismic programme with more than 20 basins mapped. According to a statement released by Siobhan Coady, the Minister of Natural Resources, in less than 9% of the province’s offshore, there is a combined resource potential of 52.2 billion barrels of oil and 199.6 trillion cu ft of gas. There have been eight new entrants in the past three years, and $3.9 billion in recent exploration work commitments, it noted. “We are pleased with the news that a total of $38.6 million has been received in the calls for bids,” said Coady. “While results vary each year, all commitments to explore our offshore are significant as we work to meet our goals of over 100 new exploration wells drilled by 2030. We are continuing to add to our geoscience storyboard and to expand on the already incredible potential that exists in our offshore.” Coady said the most recent oil and gas resource assessment identified an additional 3 billion barrels of oil and 5.8 trillion cu ft of gas potential offshore Newfoundland. “We are positioning the province as an internationally-preferred location for oil and gas exploration and development – one that values safety and environmental responsibility, works together with all industries that depend on our ocean, including the fishing industry, and maximises benefits to the people of the province.” FE

2020 bidding /////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

New resources estimates could drive further interest in the coming year It is easy to understand why officials remain bullish in the face of a somewhat disappointing turnout for the 2019 bid round. Hopes have been raised by the findings of an independent resource assessment released in October charting a combined resource potential of 52.2 billion barrels of oil and 199.6 trillion cu ft of gas across just 9% of Newfoundland and Labrador’s offshore territory. The assessment was conducted by specialist firm Beicip-Franlab. Its chief executive, Jean Burrus, said the company carried out detailed interpretations of past and new data, well and seismic, in the Carson-Bonnition-Salar basins. “The data integration approach applied was designed to rigorously assess uncertainty and risk, which allowed the generation of various probable alternative resource evaluation scenarios, confirming significant hydrocarbon potential in the area.” The hope is that these findings might be factored into new bidding coming up next year. The oil and gas industry already plays a key role in the growth and development of Newfoundland and Labrador’s economy. Since 1997, the industry has accounted for

approximately 25% of cumulative provincial GDP and as of June 2019, over 8,900 people were directly employed in construction and operations. 2020 licensing round: NL01-NEN Located 400 km north-northeast of St John’s, the 2020 licence round will occur over the NL01-NEN sector, which will be divided into parcels by the C-NLOPB in early 2020. The sector rests in the central south portion of the north-eastern Newfoundland region and covers an area of approximately 18,000 sq km. Water depths range from 270 to 3,100 m within the sector. 2020 licensing round: NL01-SN Located 300 km south-southwest of St John’s, the 2020 Licence round will occur over the NL01-SN sector, to be divided into parcels by the C-NLOPB in early 2020. The sector lies in the central portion of the south Newfoundland region and covers an area of approximately 21,700 sq km. Water depths range from 100 to 3,500 m. Resource assessments for both regions are expected in early Q3 of 2020. Source: Nalcor Energy Oil & Gas

www.frontierenergy.info AUTUMN 2019 11

MINING

MINING EXPLORATION AND EXPLOITATION IN GREENLAND //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

On January 1, 2020, the rights to Greenland’s mineral resources transfer from Denmark to the local government. It could spur a new level of interest in the island’s untapped mining sector. By Ian R. Coles, Head of Global Mining Practice, Mayer Brown

potential global mining frontier that increasingly receives attention is Greenland, an island whose icesheets, glaciers and icebergs are used as a barometer for global warming. Of course, this summer Greenland dominated the headlines for another reason, when the idea of the US acquiring Greenland from Denmark was ﬂoated by Donald Trump. To his dismay, the suggestion was described as “absurd” by the Danish prime minister, which promptly put an end to any plans for a modern-day land deal by the US that surpasses those for Louisiana and Alaska, which were purchased in the 19th century. Greenland is vast; however it is home to only 56,000 residents. Its land area is equal to that of Austria, Belgium, France, Germany, Britain, Italy, Spain and Switzerland combined. While it was once a Danish colony, Greenland has exercised some self-governance over its domestic affairs since in June 2009. The rights to mineral resources will transfer from Denmark to the local government in January 2020. As a result, the administration of a broad array of domestic affairs, including mineral resource activities, ﬁnancial and investment regulation, will be controlled by the Greenlandic government. The Danish government will continue to control foreign policy and defence.

Navigating Greenland’s mining potential

12 AUTUMN 2019 www.frontierenergy.info

Mining in Greenland is not new. A range of minerals such as uranium, copper, graphite and gold have been mined since the 1800s at a modest scale. Greenland’s growing strategic value is based on the fact that it is mineral rich. The island is estimated to hold 38.5 million tonnes of rare earth minerals, which is more than a quarter of the world’s total reserves of 120 million tonnes. Platinum, nickel, uranium, copper, anorthosite, ilmenite, zinc and gold are also in abundance. Little wonder then that mining and exploration activity has increased over the years.

Highly prospective, Greenland is described as “a highly prospective, yet under-explored emerging mining destination” by Blue Jay Mining PLC, a Greenland centric exploration and resource development company involved in advancing the Dundas Ilmenite Project in the north-west of the island. This renewed interest in Greenland’s mining potential can be attributed to a number of factors. Firstly, access to land has become easier as a result of climate and environmental changes. Then there is the increasing worldwide demand for the rare earth minerals that are used as components in a host of manufactured items, from smart phones and electric vehicles to LED lights and aerospace

technology. Another catalyst is economic independence. Greater resource development would make the semi-autonomous Greenlandic government less dependent on Denmark. The prospect of Greenland as a new source of rare earth minerals has also been revived in light of the ongoing trade row between the US and China. The Greenlandic government has put in place some interesting measures to attract mining investment and progress its plans to develop the mineral resources sector. Low tax on dividends, low corporate tax and ease of foreign ownership, combined with a streamlined licensing process for exploration and exploitation help to attract investment. Stable investment has also been encouraged by the adoption of a flexible approach to the employment of foreigners and absence of local beneficiation constraints. Greenland issued a dozen prospecting licences and 61 exploration licences in September 2019. A further 10 prospecting and exploration licence applications were under consideration. Despite this, little more than a handful of exploitation licences have been issued and only two mines are currently in operation. More mines are to be expected, although the cost and technical challenges of mining in remote, harsh terrain with under-developed infrastructure have clearly limited exploration efforts. Interested parties have highlighted that the Greenlandic government needs to develop its technical capacity to regulate mining activities and reduce red tape. Advocates of the rapid development of the mining sector argue this would create the job opportunities for Greenlanders and the infrastructure needed to stem the flow of emigration, particularly among the young. On

Hudson Resources: project view from fjord

the opposite side of the argument many, including politicians, are opposed to the mining sector being opened up fully due to concerns about its effects on pollution, global warming, the environment and animal habitats.

Cautious approach Greenland may be open for business but, given the divides in the country, the Ministry of Mineral Resources and Labour is taking a cautious approach to avoid any risk of

unplanned or unintended consequences. The main piece of legislation pertaining to the exploitation of mineral resources in Greenland is the Mineral Resources Act 2009, with issues such as licences and royalties being addressed in successive amendments. The regulation and administration of the industry is overseen by the Mineral Licence and Safety Authority, but matters concerning the environment and labour are the domain of other departments. A licence from the state, the owner of all

underground minerals, is required for prospecting, exploration or exploitation activities. Exploration licences are valid for five years. They can be extended, although there is a “use it or lose it” stipulation. Exploitation licences are only granted to limited companies domiciled in Greenland. The licence is granted for 30 years and can be extended for a further 50 years. Challenges and drawbacks aside, a number of mining companies are stepping up their exploration and exploitation plans in Greenland. In Kvanefield – a location which is widely reported to be home to the world’s secondlargest deposit of rare-earth oxide – Greenland Minerals is developing a rare earth mine that could generate significant amounts of uranium as a by-product. Meanwhile in 2019, Hudson Resources Inc and Blue Jay Mining PLC made the first large shipments of anorthosite and ilmenite from Greenland. Will Greenland live up to its potential as the next global mining frontier? That remains to be seen. However, the market will continue to track the ventures of the market’s early movers for clues. FE Ian R. Coles is Head of Global Mining Practice at Mayer Brown (mayerbrown.com)

www.frontierenergy.info AUTUMN 2019 13

Hudson Resources Inc

MINING

The Ob: Russia’s new icebreaker

Vyborg Shipyard

ICEBREAKERS

The world’s icebreaker fleet is expanding rapidly, as all sides get to grips with the harsh realities of the polar environment. It is bringing with it a raft of great maritime industry innovation Tech deck: state-of-the-art ship

14 AUTUMN 2019 www.frontierenergy.info

hat is being dubbed the ‘world’s most advanced icebreaker’ is about to enter service in support of Russia’s growing Arctic energy industry. The 12-megawatt diesel-electric port icebreaker Ob was delivered to FSUE Atomflot at Vyborg Shipyard in October. It is designed to operate in the harsh Arctic winter conditions with ambient air temperatures as low as -50° C and provide safe and comfortable living and working conditions for the crew all through the polar night. After commissioning, the vessel will be stationed at the Sabetta LNG terminal in the Gulf of Ob to provide icebreaking assistance to liquefied natural gas (LNG) carriers transporting natural gas year-round from the Yamal Peninsula. The Yamal LNG project is now a major and established provider of critical gas to international markets. Finnish ice specialist Aker Arctic began developing the port fleet for Sabetta LNG terminal in co-operation with the Yamal LNG team back in 2012. The initial evaluation included three alternative designs for the port icebreaker: a conventional design with two azimuthing propulsion units in the stern, an asymmetric oblique icebreaker with three

Vyborg Shipyard

Launching the world’s most ADVANCED ICEBREAKER W

thrusters, and a novel concept with two propulsors in both bow and stern. It was determined that the most suitable port icebreaker design for the heavy brash ice conditions prevalent in the Arctic LNG terminal would be the quad-screw variant. The Aker ARC 124 design incorporates multiple advanced features from general design to individual technical solutions, giving this relatively small icebreaker of 89.2 m in length exceptional operational capability in the difﬁcult ice conditions in and around the port of Sabetta.

Innovations Ob has a diesel-electric propulsion system consisting of four ABB Azipod ICE 1400 propulsion units: two in the bow and two in the stern. This propulsion configuration, which has previously not been used in any icebreaking vessel, was selected to provide maximum operability in thick consolidated ice that forms in the harbour basin. Despite having a total propulsion power of just 12 MW, the vessel can break up to 1.5 m thick level ice in both ahead and astern directions, an unprecedented capability for such a small ship. Furthermore, the allazimuthing quad-screw propulsion configuration provides superior manoeuvrability and control when operating in close proximity to large LNG carriers. The main power plant consists of three Wärtsilä 8V31 medium-speed diesel generator sets. In addition to being powered by the world’s most efficient four-stroke diesel engines, Ob features ABB’s Onboard DC Grid to further improve efficiency and reduce fuel consumption. The direct current (DC) system allows the diesel engines to operate at variable speed, resulting in lower specific fuel consumption (grams of fuel per kilowatt-hour of energy produced) when operating at partial load. In addition, the system components have a smaller footprint compared with a traditional alternating current (AC) system, saving space within the already compact machinery spaces. FE

RSV Nuyina at Damen Shipyard

Australian Antarctic Division / Nisha Harris

ICEBREAKERS

Antarctic research support ///////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Australia has been unveiling its new fleet in support of its Antarctic research programme

Vyborg Shipyard

Landing barge 2 in Hobart

Australian Antarctic Division / Nisha Harris

Night vision: the Ob in darkness

Australia also provided a glimpse recently of its new icebreaker, RSV Nuyina, which is now undergoing internal fit-out. The ship will serve as a home away from home for scientists, expeditioners and crew, predominantly for research work in Antarctica. The mess and galley (dining/kitchen), cabins, gym, conference room/movie theatre, lounge, library and laundries are almost complete, as are the science facilities, including a science office, adjoining meeting rooms and a science operations room. The interior design was undertaken by Damen shipyards in conjunction with its specialist sub-contractor, Maritime Interiors. Australia is also testing new Antarctic landing barges destined to work alongside the new icebreaker. Recent sea-trials of the two aluminium landing barges took place on Hobart’s River Derwent. Built by historic Hobart marine engineering company Taylor Bros, the barges are designed to carry up to 45 tonnes of cargo from ship to shore at Australia’s Antarctic and sub-Antarctic stations. “This is the first chance we will have to see these ‘heavy-lift’ vessels in action, so it is a pretty exciting time,” said Nick Browne, Australian Antarctic division icebreaker project manager.

Testing will consist of open water trials on the river to demonstrate a range of requirements relating to speed, propulsion and manoeuvrability, as well as the ability of the barges to carry big trucks ashore as part of the roll-on, roll-off capability. The barges will be aboard the RSV Nuyina, along with three purpose-built personnel transfer tenders and a scientiﬁc research tender, which is due into its home port of Hobart in 2020.

www.frontierenergy.info AUTUMN 2019 15

NORWAY

LOOKING TO THE FUTURE

Strong interest in APA 2019 bidding points to an upturn in activity in Norway’s Barents Sea region, with Norway keen to secure its long-term economic future

orway’s energy ministry has reported a high level of interest in its Awards in Predefined Areas (APA) 2019 bid round, which includes a strong focus on the Barents Sea. The Ministry of Petroleum and Energy said in a September statement that it had received a “great number of applications” from 33 oil companies in the licensing round. Some 48 Barents Sea blocks are up for grabs, alongside five others in the North Sea and 37 in the Norwegian Sea. The applicants constitute a broad variety of companies, ranging from large international companies to mid-sized and smaller exploration firms. “This shows that there is a high interest from the companies, and that they want to contribute to long-term value creation on the Norwegian Continental Shelf (NCS),” said 16 AUTUMN 2019 www.frontierenergy.info

Norwegian petroleum minister Kjell Børge Freiberg. He added that Norway’s “predictable and stable framework conditions” and ongoing licensing efforts – the APA round is held annually – were attractive for would-be oil investors. “The high interest in the licensing rounds over the last few years shows that the NCS is competitive, and that the government’s petroleum policy has the desired effect.” The ministry intends to award new production licences at the beginning of 2020.

Disappointing year The positive response to the bid round marks a highlight in what has been a largely disappointing year for all sides in the Barents Sea. While Equinor achieved some exploration

NORWAY

There is high interest in Norway’s 2019 APA round

Ole Jørgen Bratland / Equinor

“The high interest in the licensing rounds over the last few years shows that the NCS is competitive, and that the government’s petroleum policy has the desired effect.”

success in August with its Sputnik discovery, other wells have turned up dry. Recoverable resources at Sputnik, in PL855, about 30 km north east of the Wisting discovery, are estimated at 20-65 million barrels of oil. OMV and Petoro are joint stakeholders in the discovery. Others have been less fortunate, however. Lundin Petroleum, for example, has overseen a run of dry holes during a fairly busy period in which hopes were high at the start of the year. In a report on the first nine months of 2019, the company chronicled its Barents Sea drilling activity. In February, the Gjøkåsen Shallow prospect in PL857 and the Pointer/Setter dual target prospect in PL767, were drilled and both wells were dry. In April, the Gjøkåsen Deep prospect in PL857 was drilled and came up dry. Then, in June, the Korpfjell Deep prospect in PL859 was drilled and was dry. All targets were located in the southeastern Barents Sea. Still, the results from the Sputnik field – which analysts give a high chance of commerciality – on top of other historical finds, give cause for ongoing optimism, hence the bullish early interest in the APA round.

The West Hercules rig in the Barents Sea

Ole Jørgen Bratland / Equinor

Into the future

APA 2019 Companies that have applied for acreage in the APA 2019 licensing round: Aker BP ASA A/S Norske Shell Capricorn Norge AS Chrysaor Norge AS Concedo ASA ConocoPhillips Skandinavia AS DEA Norge AS DNO Norge AS Edison Norge AS Equinor Energy AS Idemitsu Petroleum Norge AS Ineos E&P Norge AS Lime Petroleum AS Lotos Exploration & Production Norge AS LUKOIL Overseas North Shelf AS Lundin Norway AS M Vest Energy AS Neptune Energy Norge AS OKEA AS OMV (Norge) AS ONE Dyas Norge AS Pandion Energy AS Petrolia NOCO AS PGNiG Upstream Norway AS Repsol Norge AS RN Nordic Oil AS Source Energy AS Spirit Energy Norge AS Suncor Energy Norge AS Total E&P Norge AS Vår Energi AS Wellesley Petroleum AS Wintershall Norge AS Source: Norwegian Ministry of Petroleum & Energy

Indeed, despite recent disappointments, it is clear that officials and the industry at large from the NCS is expected to hit the record see long-term potential in frontier areas such high levels of 2004. as the Barents Sea. The intention will be to sustain this by Fifty years have now passed since the first unlocking new areas commercial discovery for exploration and of oil on the Norwegian shelf – development. The petroleum sector is Norway’s when Philips made “The petroleum the first major sector is Norway’s biggest industry and the most discovery in 1969 – biggest industry and important contributor to the and Oslo is no doubt the most important financing of the welfare state. looking to the future. contributor to the Government financing of the number crunchers welfare state,” said will be well aware of the industry’s Freiberg. “For the foreseeable future it will significance for the economy – both in the remain our largest industry.” He said this is due to a policy that past and in the future. stimulates new fields to be discovered, and The Norwegian state’s net cash flow from resources that can replace existing, depleting the petroleum industry in 2020 is estimated fields. to be about NOK245 billion ($27 billion). It may well be that the exploration and New fields expected to start in the next exploitation of the Barents Sea has only just few years, including the Sverdrup and Castberg fields, mean 2023 total production begun. FE www.frontierenergy.info AUTUMN 2019 17

NORWAY

Vår Energi swoops for

EXXON ASSETS //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

The operator of the Goliat platform, the most northerly oil field in the world in Norway’s Barents Sea, is expanding its footprint

år Energi AS – owned by Eni and Norway-based private equity investor HitecVision – is to acquire the upstream assets of ExxonMobil in Norway. The transaction includes ownership interests in more than 20 producing ﬁelds, mostly operated by Equinor, with a combined production of around 150,000 barrels of oil equivalent per day (boepd). The ﬁelds, across the North Sea and Norwegian Sea, include

Grane, Snorre, Ormen Lange, Statfjord and Fram. The deal is estimated to be worth in the region of $4.5 billion and will make Vår Energi the second largest exploration and production company on the Norwegian Continental Shelf (NCS) after Equinor, with total reserves and resources of about 1,900 million boe. In a statement, Vår Energi reported that

Arctic projects Norway’s Goliat oil field is the first in production in the Barents Sea, following its launch in 2016, but has faced a number of problems since. It reached peak production of 100,000 bpd in January 2018, but had declined to 70,000 bpd by the year-end, Vår Energi reported in its 2018 annual statement. Uptime (production versus capacity) was approximately 80% in 2018, it said. Vår Energi holds a majority stake in the project alongside Equinor. Both are involved in the Johan Castberg development project in the Barents Sea, which is situated approximately 100 km north of the Snøhvit field. The development project’s resource base consists of the three oil discoveries – Skrugard, Havis and Drivis – located in PL 532. Proven reserves are estimated at between 400 and 650 million barrels of oil. The project is to be developed with a floating production, storage and offloading vessel, with additional subsea solutions. FE

Johan Sverdrup production launched /////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Oil production commences from Norway’s third-largest field Nine years after the field was proven, production commenced on October 5 from the North Sea giant Johan Sverdrup. Already producing 200,000 barrels per day (bpd), it is the third largest oil field on the Norwegian shelf, measured in reserves, after Ekofisk and Statfjord. Production will eventually climb to as much as 660,000 bpd when a second phase is completed in 2022. First oil from the North Sea field arrived at the Mongstad plant north of Bergen on October 21, ready for sale to the international market — the first cargo was sent to China.. For the next 40 years, oil from the Equinor-operated field will secure

18 AUTUMN 2019 www.frontierenergy.info

substantial new revenues for the Scandinavian country. Based on current forecasts, Johan Sverdrup will be responsible for more than one-quarter of total Norwegian oil production in 2023. As well as Equinor, the Johan Sverdrup partnership includes Lundin Norway, Petoro, Aker BP and Total. “Johan Sverdrup is proof that looking at old available data with fresh new eyes and testing new ideas yields results,” said Bente Nyland, director general of the Norwegian Petroleum Directorate (NPD). He said it would take more than 50 years of exploration in the area before Johan Sverdrup was discovered. “Our analyses showed there were still signiﬁcant undiscovered oil volumes in the North Sea — but the fact that so many resources were gathered in a single ﬁeld came as a surprise to all of us.” He added: “The oil saga on the Norwegian shelf is far from over, Johan Sverdrup is proof of that.”

Vår Energi AS

The iconic Goliat platform

total production is expected to be about 300,000 boepd in 2019, growing organically to more than 350,000 boepd in 2023 as the company invests $7 billion in development projects such as Johan Castberg, Balder X and Grand in the 2020-23 period. With the acquisition, Vår Energi continues to expand its material and diversiﬁed portfolio of producing assets, development projects and attractive exploration licences. It is already the largest oil producer in the Barents Sea, and will be strengthening that position through its participation in the Johan Castberg development. Claudio Descalzi, chief executive of Eni, said the deal delivers a key strategic objective for the group. “The acquired assets complement and strengthen Vår Energi in core areas well known to management and open up new opportunities for growth.”

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ALASKA

ALASKA GEARS UP

for oil bid round //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Concrete plans to auction more blocks in the National Petroleum Reserve in Alaska have been released, a move designed to stimulate interest across the industry and revive production from the state

20 AUTUMN 2019 www.frontierenergy.info

energy development in Alaska,” he said. This will be the 15th oil and gas lease sale in the NPR-A since 1999 and there are currently 215 leases covering more than 1.5 million acres

Opening other areas Separately, the BLM is also detailing draft plans to overturn Obama-era limitations that put half of the 23 million-acre reserve off limits to oil sector development – measures intended to protect wildlife, such as caribou and migratory birds, as well as the region’s indigenous people. There are calls among the oil industry and the Trump administration to relax the rules

Leasing in Alaska

BLM

he US government intends to complete a huge oil lease sale in the National Petroleum Reserve in Alaska (NPR-A) by the end of the year. The Bureau of Land Management (BLM) announced in November that it will offer 350 tracts in total, covering an area of about 3.98 million acres, in a competitive oil and gas lease sale. The auction closes on December 11, 2019, with the sealed bids opening to be conducted via video livestream. The lease sale is in keeping with the Trump administration’s goal of promoting America’s energy independence and bolstering Alaska’s economy. The state is still a notable contributor to overall US oil and gas output, but its production is way down on yesteryear. Alaska’s current oil production is estimated to be hovering at a little above 500,000 barrels per day (bpd) – compared with closer to 2 million bpd years earlier. BLM Alaska state director Chad Padgett said the live video stream bid opening was all part of a general attempt to raise awareness of the potentials of the area. “This is one of several actions we are taking to further expand

in the area. Bids received for the 14 previous sales generated more than $283 million, half of which was paid to Alaska state. What the appetite for leases will be remains to be seen. The number of bids awarded in previous lease rounds has waned in recent years, prompting the fresh call to action. In the 2018 bid round, just 16 tracts received bids out of a total of 254 that were offered. The year before that, in 2017, just seven bids were received for a whopping 900 tracts offered.

BLM

National Petroleum Reserve – Alaska

ALASKA

covering the so-called Arctic National Wildlife Refuge (ANWR), arguing that they are too restrictive. In July, the BLM called for general input into draft plans to do just that. “We are working on a new Integrated Activity Plan for the NPR-A,” added Padgett. “With advancements in drilling technology, it was prudent to develop a new plan that provides for greater economic development of our resources while still providing protections for important resources, such as subsistence uses.” The area in question lies to the west of the long-established Prudhoe Bay and Kuparuk oil ﬁelds. Several recent discoveries have sparked a westward expansion of oil development on the North Slope, which is now seen as a promising new region for new Alaskan production. It has brought with it a wave of opposition, however, from a mix of environmental groups with a powerful message to the oil industry: do not become the company known for the demise of America’s polar bears. “We will not tolerate the administration’s brazen attempt to paper over the impacts of this disastrous proposal,” said Jamie Rappaport Clark, executive director of Defenders of Wildlife, cited by Associated Press, “and we will see them in court.” FE

Joined-up thinking

State of Alaska teams up with the Bureau of Ocean Energy The Bureau of Ocean Energy Management (BOEM) has signed a Memorandum of Understanding (MoU) with the State of Alaska designed to ensure continued close cooperation in matters relating to resource exploration and development on the Outer Continental Shelf (OCS). Areas for cooperation and collaboration include the process of planning lease sales. “The State of Alaska and BOEM have always worked hand-in-glove when it comes to safely developing resources from Alaska’s OCS lease areas,” said deputy commissioner of the Alaska Department of Natural Resources, Sara Longan. “This MoU will facilitate better and more frequent coordination with our federal counterparts. The State of Alaska will continue to offer our expertise and support for holding routine lease sales in Alaska’s proliﬁc OCS basins.” Part of the US Department of the Interior, BOEM’s mission is to manage development

Pantheon farm out

UK-listed Pantheon Resources has reported strong interest from other companies as it seeks to farm out some of its Alaskan upstream assets UK independent Pantheon Resources is making headway on plans to ﬁnd a farm-out partner for its Alaskan business. On November 6, the company told investors that the process to farm out a working interest in “some or all” of its Alaskan projects is now well under way. On the North Slope, it holds a 90% to 100% working interest in all of its projects, with the exception of the Western Blocks area in which it holds a 10% interest. Pantheon reported that it had received interest from an undisclosed number of local and international oil ﬁrms, with various site visits and data gathering still taking place. “The scale of the opportunity – that is, multibillion barrels of oil in place, and the geographic location of the discovered resources – has attracted the interest of some major companies,” the company said in a statement. It also said that the planning and permitting process for both the Alkaid and Talitha wells has already commenced, which would expedite any drilling operation at these

locations. Whilst the Talitha exploration well is limited to winter drilling, the Alkaid/Phecda wells can be drilled at any time of the year. “There has been over $200 million invested in the project area to date where significant oil accumulations have been identified and a host of exploratory opportunities are continually being evaluated,” said Pantheon’s chief executive Jay Cheatham. “The farm-out process is designed to find a partner to evaluate the commercial potential of these accumulations and to progress the exploration, appraisal and future development efforts.” Cheatham said he was “encouraged by the quality of parties” who have either visited or are planning to visit its Houston data room. Asset base Overall, Pantheon, which is listed on London’s Alternative Investment Market, holds a majority working interest in around 177,000 gross acres on the North Slope, with potential for an estimated 1.2 billion barrels of recoverable oil. This includes two discovered

of OCS energy and mineral resources in an environmentally and economically responsible way. The OCS begins three miles offshore; the submerged lands between this boundary and the shoreline are managed by the State of Alaska. As well as lease sales, other areas earmarked for greater cooperation include environmental work, air emissions and airquality monitoring, and wastewater discharges from oil and gas activities. “The different jurisdictions aside, both the state and BOEM understand that this is one big ocean,” said Dr Walter Cruickshank, acting director for BOEM. “To manage these resources and protect the environment in a responsible way, it is critical the state and federal agencies involved communicate with each other and work together whenever possible. This MoU codiﬁes and formalises those practices and gives both parties a blueprint for moving forward.” FE

accumulations which contain significant oilin-place resources. The acreage is also bisected by both the Dalton Highway and the Trans Alaskan Pipeline System (TAPS), the primary distribution network for Alaska’s oil. The Pantheon statement called this a “differentiating factor” to all other undeveloped oil accumulations in Alaska “and offers significant financial and operational advantages, with the potential for year-round development activity, materially lower capital costs, and shorter time horizons to first production.” A successful development well at Pantheon’s recent Alkaid discovery, for example, scheduled to be drilled in 2020, could be put into production soon after completion. “Our successful testing of Alkaid upgraded our P50 technically recoverable resource to 100 million barrels of oil, and in the past few weeks we concluded a transaction to increase our working interest in Alkaid/Phecda by one third, to 100%,” added Cheatham. “This transaction delivered Pantheon an additional 25 million barrels of P50 technically recoverable resource.” On October 17, the company said it had executed a contractual agreement with Halliburton to acquire its 25% working interest in the six leases jointly held with Pantheon in the area. FE

www.frontierenergy.info AUTUMN 2019 21

ALASKA

BP Alaska’s Prudhoe Bay operations

End of an era as BP QUITS ALASKA Hilcorp snaps up all of BP’s assets in Alaska in a deal valued at around $5.6 billion

laska’s oil and gas industry has long faced a period of uncertainty and transformation, amid production declines, controversial lease sales and the rising volume of environmental opposition. While the icy northern state remains an important contributor to overall production in the US, it is way down on previous years. Now BP, a company that been present in Alaska for more than 50 years, is calling it a day. The company announced in August that it had agreed to sell its entire business in Alaska to Hilcorp for a total consideration of $5.6 billion. The ﬁrm has faced pressure from environmental groups to stop drilling in the area, but BP said its decision was not connected to this. Whatever the reason, it is a signiﬁcant bit of business for both sides. The sale includes BP’s entire upstream and midstream business in the state. That includes BP Exploration (Alaska) Inc, which owns all of BP’s upstream oil and gas interests in 22 AUTUMN 2019 www.frontierenergy.info

Alaska, and BP Pipelines (Alaska) Inc’s interest in the Trans Alaska Pipeline System (TAPS). BP’s group chief executive, Bob Dudley, said it marked the end of an era. “Alaska has been instrumental in BP’s growth and success for well over half a century and our work there has helped shape the careers of many throughout the company. We are extraordinarily proud of the worldclass business we have built, working alongside our partners and the State of Alaska, and the signiﬁcant contributions it has made to Alaska’s economy and America’s energy security.”

Divestment strategy While the company is withdrawing from Alaska, he said there were no implications for any of the group’s other interests elsewhere in the US, where it also maintains a heavy footprint. For BP, the deal forms a signiﬁcant part of its plan to divest $10 billion of assets globally

over 2019 and 2020. “We are steadily reshaping BP and today we have other opportunities – both in the US and around the world – that are more closely aligned with our long-term strategy and more competitive for our investment,” said Dudley. “This transaction also underpins our twoyear $10 billion divestment programme, further strengthening our balance sheet and enabling us to pursue new advantaged opportunities for BP’s portfolio within our disciplined ﬁnancial framework.”

High-profile deal for Hilcorp It’s a massive commitment for Hilcorp. Under the terms of the agreement, it will pay BP $4 billion in the near-term and a further $1.6 billion through an earn-out thereafter. Subject to state and federal regulatory approval, the transaction is expected to be completed during 2020. Hilcorp has been operating in Alaska since 2012 and is today the largest private oil and gas operator in the state, currently operating more than 75,000 barrels of oil equivalent a day (boepd) gross production. In 2014, it purchased interests from BP in four operated Alaska North Slope oilﬁelds. The deal will nonetheless massively upgrade

ALASKA

BP bids farewell BP began working in Alaska in 1959, drilling the confirmation well for the Prudhoe Bay oilfield in 1968 and in the mid-1970s helped build the 800-mile TAPS pipeline. It began producing oil from Prudhoe Bay in 1977. The giant oilfield – the most prolific in US history – has to date produced over 13 billion barrels of oil and is estimated to have the

potential to produce more than 1 billion further barrels. BP’s net oil production from Alaska in 2019 is expected to average almost 74,000 barrels a day (bpd). It operates Prudhoe Bay, with a working interest of 26%, and holds non-operating interests in the producing Milne Point and Point Thomson ﬁelds. It also holds nonoperating interests in the Liberty project and exploration lease interests in the Arctic National Wildlife Refuge (ANWR). In addition to shares in TAPS and the Alyeska Pipeline Service Company, BP is divesting its midstream interests in the Milne Point Pipeline and the Point Thomson Pipeline. Janet Weiss, regional president, BP Alaska, said the deal marks the start of an exciting new chapter for Prudhoe Bay. “Alaska has been a core part of BP for 60 years and saying goodbye will not be easy. Our people have achieved incredible success over the decades developing and maintaining these hugely important assets, but we are conﬁdent this sale is in BP’s and the state’s best interests and the business will be best positioned for the future with Hilcorp. We will do all we can to ensure it is able to

quickly build on the strong foundation that we and others have built here.”

Other US investment Elsewhere, BP continues to develop its US business, where between 2005 and 2018 it invested over $115 billion, more than any other energy investor. In the second quarter of 2019, BP’s net oil and gas production from the US averaged over 921,000 boepd, from major interests in Alaska, onshore Lower 48 and deepwater Gulf of Mexico. In late 2018, the company acquired a portfolio of high-quality onshore US oil and gas interests from BHP for $10.5 billion, adding 190,000 boepd net production. BP also continues to develop its business in the deepwater Gulf of Mexico, bringing on a series of new projects on its major producing assets. The new $9 billion Argos platform on the Mad Dog ﬁeld is expected on stream in 2021. “Our exit from Alaska does not in any way diminish BP’s commitment to America,” added Dudley. “We remain very bullish on the US energy sector. In just the last three years we have invested more than $20 billion in the US and we will continue to look at further investment opportunities.” FE www.frontierenergy.info AUTUMN 2019 23

its Alaskan business. Approximately 1,600 employees are currently associated with BP’s Alaska work. BP has stated that it is committed to providing clarity about the future on all jobs as soon as possible as part of the transition process with Hilcorp. “As a highly-capable operator with extensive Alaskan experience, Hilcorp is ideally placed to take this important business on into the future, continuing to optimise its performance and maximise its value for the State of Alaska,” said Dudley. “We are committed to a safe and smooth transition of operations so that our employees, partners and local, state and federal government ofﬁcials all feel that we have handed over these important assets in the right way.”

COMMUNICATIONS

Making the right CONNECTIONS //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Quintillion Networks and ATLAS Space Operations are to expand strategic data infrastructure in the Arctic as new investment pours into the polar region

nvestment and development continues into expanding and upgrading the Arctic’s communications infrastructure. It comes as business activity grows across the polar region, both in the oil and gas sector and across many other areas, from shipping to tourism. It includes greater connections for the Alaska region in support of increased US activity. Quintillion Networks and ATLAS Space Operations in October announced plans for North America’s highest latitude ground station, to be located 250 miles inside of the Arctic Circle in Utqiagvik, Alaska. The partnership will bring unprecedented availability, capacity, bandwidth and low latency to LEO satellites on multiple existing and planned ﬁbre routes to major global internet exchanges, the two companies have said. Upon its completion in the ﬁrst quarter of 2020, the new Quintillion-ATLAS 3.7 m ground station will be put to use immediately by a variety of customers, including the US government as well as commercial organisations. George Tronsrue, interim chief executive at Quintillion, said that it would drive momentum in a part of the world that has historically been under-served. “The Arctic has traditionally been a digital bottleneck, or ‘black hole’, negatively impacting residential, commercial and government clients living and working in the region and slowing economic, information and commerce activity around the world,” said Tronsrue. “Our developing Arctic infrastructure, located in one of the highest latitude regions of the world, coupled with a resurging international push to launch thousands of new satellites over the next decade, strongly positions us to be the leading infrastructure provider to US and North American partners and clients, and to global satellite ground station operators.” The new ground station will also offer 24 AUTUMN 2019 www.frontierenergy.info

support to space operators, which is poised to be another growth sector in the coming decade. “Additionally, we can offer a unique and cost-effective solution to the international space community in the months and years ahead,” said Tronsrue. “We expect our project with ATLAS will be the ﬁrst of many, as we believe the forecasted data explosion in space will make what we have experienced here on Earth over the last two decades seem miniscule by comparison.”

Data network expansion By utilising Quintillion’s existing fibre optic infrastructure, ATLAS adds a valuable new and geographically diverse site to its growing global FREEDOM network to provide greater data access from space. This is essential in supporting nascent industries in the Arctic, especially the oil and gas sector and shipping, which rely on dependable data and communications services. Connectivity and coverage remain patchy, however, in comparison with other more developed parts of the world. Businesses and consumers worldwide use billions of internet-connected devices every day and rely on vast infrastructure that makes modern telecommunications possible. Thousand-mile long undersea fibre cables, powerful data centres, and increasingly dense satellite constellations all work together to move data traffic around the world at the speed of light. Due to Quintillion and ATLAS’ efforts, for the first time, the US will have a competitive solution for accessing data created in and transmitted through space. The polar nature of ATLAS’ Alaskan ground station, connected through Quintillion’s fibre network, fills an important network gap that is not served by sites in lower latitudes. Because many satellites pass over the Arctic during their orbit, and because the sheer number of satellites is skyrocketing

with declining launch costs, polar ground stations give owners the mission-critical ability to communicate with their satellites more frequently, preserving the value of the data collected in space. According to both firms, US government customers whose guidelines require that partners be US-based will be delighted by the new polar access, while the remoteness of the location minimises the risk of interference from other signals. “Access to high-speed connectivity in the Arctic has been a challenge until now,” said Sean McDaniel, chief executive and cofounder of ATLAS. “Our partnership with Quintillion enables ATLAS to overcome this challenge while providing a significant capability to our customers on US soil. It is significant because this project is entirely privately funded, which gives our US government and commercial customers a more affordable option for secure, resilient high-speed connectivity to polar orbiting satellite missions. We look forward to expanding our network across the Quintillion subsea cable system, whenever we are able to leverage their Arctic presence and capabilities.” FE

COMMUNICATIONS

5G pilot testing on Svalbard

Drones can play a completely different role to their present one thanks to 5G. – Petter Furberg, Telenor

corners of the world where a changing climate requires us to both utilise resources better and work in new ways with partners and communities to transform.”

Major benefits

ON TOP OF THE WORLD //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Telenor has launched the world’s northernmost 5G pilot on the Norwegian archipelago of Svalbard, where a new standard will be tested against the rigours of the Arctic climate

hen 4G was introduced to Norway in 2012, residents of the Arctic archipelago of Svalbard were among the ﬁrst to test the technology. As the dawn of the 5G standard breaks, residents of the island community will again be among the ﬁrst in the country to test the next generation network. Telenor is now running a 5G pilot trial on Svalbard, active since October 20, 2019, to explore and learn as much as possible about the technology. Svalbard’s Arctic landscape of glaciers,

mountains and fjords, and the tundra climate present unique conditions for the telecoms ﬁrm to learn as much as possible about the geographical and topographical challenges faced by the new mobile network prior to commercial launch in 2020. “Extreme weather conditions in remote locations populated by a small but industrious community makes Svalbard a dream test case for 5G,” said Sigve Brekke, president and chief executive of Telenor Group. “The experiences we gain from here will be critical as we bring connectivity to more

Avalanche warning Since early 2019, Telenor has been running another pilot project in Svalbard, using innovative technology to provide better indications of impending avalanches. In partnership with the University Centre in Svalbard, snow measurers equipped with IoT sensors have been developed. The ﬁrst of these measuring stations has been deployed in the area around Longyearbyen using Telenor’s 4G network and the Narrowband IoT technology. With the launch of the 5G pilot on Svalbard, there is an evaluation under way to determine how avalanche warning work can be further developed and enhanced. Svalbard is one of 10 Norwegian locations to get 5G over the course of the year; others include Elverum, Kongsberg, Oslo and Trondheim. FE www.frontierenergy.info AUTUMN 2019 25

Einar Jenssen / Telenor

Telenor to pilot 5G

Telenor’s 5G pilot in Svalbard will include testing of broadband via 5G as well as 5G on mobile handsets. Petter Furberg, chief executive of Telenor Norway, believes that Svalbard is the ideal location for testing the super network of the future. “We are starting small, and will extend the pilot to include some very interesting user areas in the longer term. This is an exciting time for the residents of Svalbard, as well as us at Telenor.” Already subject to extreme weather conditions, rendered even more difficult as a result of climate change, 5G can prove a particularly vital technology in a location such as Svalbard. As a result, Telenor is considering testing drones, emergency networks and 360 degree cameras over 5G on the archipelago. “Drones can play a completely different role to their present one thanks to 5G,” said Furberg. “For example, it will be possible to communicate and share real-time data with teams on the ground far more efficiently. This will strengthen preparedness, response times and efficiency for rescue missions. An emergency network based on 5G will inspire far more confidence in the emergency services, as they will have better control of its use, capacity, security and monitoring.”

Abercrombie & Kent

ARCTIC TOURISM

Le Boreal: cruising the Arctic in style

The next ‘wild card’ TOURISM DESTINATION ////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Visit the North Pole in fivestar comfort: luxury holiday firm Abercrombie & Kent tips the Arctic to be the next ‘wild card’ tourism destination for 2020

26 AUTUMN 2019 www.frontierenergy.info

Ponant

ith the polar seas more accessible than ever, it has not taken long for holiday-makers to hunt down new adventures in the Arctic. While this remains every bit a niche destination – and only affordable to those with deep pockets – one major tour operator is tipping the region to become better known in the coming year. Abercrombie & Kent, an established operator in the luxury holiday segment, has tipped the Arctic Circle to be a ‘wild card’ destination for 2020. “Imagine exploring a sweeping arc at the top of the world and ﬁve distinct Arctic regions – the wild Svalbard archipelago, stunning Iceland, magical Greenland, the remote Canadian Arctic, and vast Bering Sea – on one all-encompassing adventure,” it said in a recent press statement. “Sailing alongside an award-winning team of modern explorers on

New look: Le Commandant Charcot

Ponant Foundation Ponant announced the launch of its new foundation this year in an effort to help protect the oceans, the polar regions and indigenous populations and reinforce its commitment to responsible tourism. The foundation will work in three core areas:

supporting innovative initiatives for the conservation of the ocean; helping with the acquisition of scientiﬁc knowledge about the polar regions along the way; and encouraging exchanges with indigenous populations. “We protect best what we know best,” said Jean Emmanuel Sauvee, Ponant’s chief executive.

ARCTIC TOURISM

The emergence of high-end Arctic tourism has fuelled the demand for more vessels equipped to contend with the unique challenges of this harsh icy environment. Ponant, for example, has under order the first electric hybrid icebreaker, propelled by liquefied natural gas (LNG) – a first in the cruising world. The company appointed Vard Holding Limited, Fincantieri’s Norwegian subsidiary, to build the ship, to be named Le Commandant Charcot. The launch is planned for 2020, before the vessel’s final delivery in 2021. It will include technology from well-known leading experts in the Arctic marine environment. That list includes the likes of: Aker Arctic, an internationally-renowned company specialising in the development and design of the most demanding icebreaking vessels; Wärtsilä for its prized dual fuel diesel engines; GTT, the supplier of an innovative storage technology for LNG fuel; and ABB, a supplier of powerful Azipod units and electric hybrid structures. The ship’s design was created by Stirling Design International and Aker Arctic, with the keel laying taking place in Tulcea, Romania, at the end of 2018. Designed for all polar expeditions, and with PC2 Polar Class certification, Le Commandant Charcot will be able to reach destinations such as the Geographic North Pole and remote sites of the Antarctic continent including the Ross Sea, Charcot Island and Peter I Island. Ponant opened first bookings for the vessel back in June. Its ‘Geographic North Pole’ cruise, from Reykjavik to Lonyearbyen, via the pack ice to the holy grail of all polar explorers, lasts 15 nights and costs from around £25,000. FE

The latest addition to the Arctic’s emerging travel scene After an extensive planning and construction period, the long-awaited Arctic Bath Hotel and Spa, located in Lulea in Swedish Lapland, is now receiving bookings. Travel expert Off the Map Travel and the team behind the famous Treehotel in Sweden are accepting reservations for travel to the floating hotel and spa, Arctic Bath, between February 2020 and February 2021. Designed by architects Bertil Harström and Johan Kaupp, the hotel freezes into the Lule River in the winter and floats on top of the water in the summer. The Arctic Bath and Spa offers wellness, mindfulness and cleansing treatments through spa partners Kerstin Florian. The spa complex and cabins float on waters ranging from 6.5 to 14 ft deep and are connected by floating walkways. The circular-shaped Arctic Bath houses one spa treatment room, four saunas, an outside cold bath, a hot bath, outdoor and indoor showers, and two dressing rooms. It is a fantastic place to sunbathe, ice bathe or just sit back to view the Northern Lights or starfilled skies. A dip in the bath itself is consistent with the Arctic tradition of a cold-water plunge

Arctic Bath: new tourism destination

Anders Blomqvist

Le Commandant Charcot

Floating Arctic Bath Hotel & Spa

with the water maintained at 39º F and combines well with the warmth of a sauna and spa. A special technique has been developed to keep the centre of the bath open during wintertime, adding to the drama of the setting and the guest experience. “The opening of the Arctic Bath has been eagerly anticipated over the last year ever since plans were ﬁrst announced,” said Jonny Cooper, founder of Off the Map Travel. “The serenity of the location combined with this distinctive wellness experience makes this a ﬁrst in the travel world.”

Anders Blomqvist

a luxuriously all-inclusive cruise aboard exclusively chartered Le Boreal.” Le Boreal is a cruiseship owned and operated by the French cruise line company Compagnie du Ponant, a robust mega yacht perfectly matched to the Arctic’s challenging nautical landscape. Its 14-night Grand Arctic Voyage lets you explore the remote archipelago of Svalbard, Iceland, Greenland, the Canadian Arctic, Reykjavík and Nuuk – both equally unique capital cities – and the glittering landscapes that surround them. But at a cost of more than £50,000, it is clearly targeted at a small, exclusive market. There are alternatives though for those on more of a budget. The company also lists a separate 14-night cruise for around £13,000 taking in Spitsbergen, Greenland and Iceland. Abercrombie & Kent also hosts a series of Antarctica cruise expeditions.

Grand designs: how the spa hotel will look

www.frontierenergy.info AUTUMN 2019 27

EVENTS, CONFERENCES & EXHIBITIONS /////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

15th Arctic Shipping Summit December 4-5, 2019 Hamburg, Germany Bringing together stakeholders from all parts of the Arctic shipping sector to discuss their involvement in the ever-changing Northern Shipping Route. This two-day conference will bring together companies and organisations such as national coastguards, senior government ofﬁcials, shipping ﬁrms, LNG projects, lawyers, P&I clubs, Arctic researchers and lecturers, and many more. The summit will allow for an interactive and open conference in order to facilitate as much networking and discussion as possible, and to explore key advancements in policy and regulation, as well as updates on the Polar Code. https://www.wplgroup.com/aci/event/arctic-shippingsummit-europe/ /////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

20th Annual Arctic Oil & Gas Symposium March 18-19, 2020 Calgary, Canada A major milestone for this successful annual gathering. Building on a legacy of 20 years, this event brings together political leaders and senior decision makers from government and northern communities, as well as executives from the resource industry for candid discussions on the future of oil and gas development in Canada’s far north. Taking place at Calgary’s Hotel Arts and put together by The Canadian Institute, it is the perfect opportunity to learn about all the key developments in the rapidly-evolving Arctic oil and gas industry. https://www.canadianinstitute.com/20th-annual-arctic-oil-gassymposium/ /////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Arctic Shipping Forum April 21-24, 2020 Helsinki, Finland An event that brings together experts from industry, government, science and academia to explore new perspectives on the world’s most challenging arena for maritime commerce. The Arctic Shipping Forum takes place in the Paasitorni Congress Centre in Helsinki with 60-plus speakers and more than 150 operators from the global shipping industry expected to attend, including technology experts and regulators. Over 15 maritime nations will be represented, including all key Arctic states. As well as shipping, the event also includes insight into the oil and gas industry and the region’s complex geopolitics. https://maritime.knect365.com/arctic-shipping-forum/

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28 AUTUMN 2019 www.frontierenergy.info

Arctic Frontiers 2020 January 26-30, 2020 Tromso, Norway Arctic Frontiers started out in 2006 assembling the first global scientific conference on economic, societal and environmental sustainable growth in the far north. In January 2020, it will arrange the 14th conference under the theme ‘Power of knowledge’. The conference has a pan-Arctic perspective and builds new partnerships across nations, generations and ethnic groups. Arctic Frontiers provides a forum for dialogue and communication between science, government and industry across the Arctic. https://www.arcticfrontiers.com/eve nt/arctic-frontiers-2020-power-ofknowledge/ 6th International Symposium on Arctic Research March 2-6, 2020 Tokyo, Japan An Arctic research forum exploring change in the region and its cascading impacts, as well as how research has contributed to sustainable development. General sessions to be addressed during the event include the following topics: atmosphere; ocean and sea ice; rivers, lakes, permafrost and snow cover; ice sheets, glaciers and ice cores; terrestrial ecosystems; marine ecosystems; geospace; laws, politics and economy; language, culture and health; engineering for sustainable development. https://www.jcar.org/isar-6/ 16th Arctic Shipping Summit March 11-12, 2020 Montreal, Canada This two-day conference will explore the latest developments in technology, policy and infrastructure affecting the Arctic shipping industry. Key industry figures will address emerging markets and increasing trade, geopolitical issues and minimising the ecological impact of Arctic activity, with a

focus on collaboration and sustainable development. It brings together senior representatives from key industry stakeholders including shipowners and managers and associated solution providers, coastguards and governmental transport authorities, meteorologists, consultants and technology providers. https://www.wplgroup.com/aci/even t/arctic-shipping-summit/ OTC 2020 May 4-7, 2020 Houston, USA Now over 50 years old, OTC’s ﬂagship conference is held annually at NRG Park (formerly Reliant Park) in Houston, Texas. OTC is where energy professionals meet to exchange ideas and opinions to advance scientiﬁc and technical knowledge for offshore resources and environmental matters. The franchise has expanded technically and globally since its inception with the Arctic Technology Conference, OTC Brasil, and OTC Asia. The largest industry event of its kind, featuring approximately 2,000 exhibitors and attendees from across the globe. www.otcnet.org Ocean Arctic Energy June 14-19, 2020 Shanghai, China The 30th International Ocean and Polar Engineering Conference takes place in Shanghai, China. One of the world’s largest technical conferences of its kind, the event is being organised by the technical committee of the International Society of Offshore and Polar Engineers (ISOPE) with 30-plus cooperating bodies. Its objective is to provide a timely international forum for researchers and engineers. Topics under the microscope include offshore engineering, Arctic science, advanced ship technology and highperformance materials. www.isope.org

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