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Unlocking The Arctic: E&P industry warms to the challenge

Mark Thomas: ROGTEC Magazine Correspondent

The Arctic has enormous hydrocarbon resources associated with extreme environments and harsh climatic conditions, in both its coastal areas and the shelves of the northern seas. Russia’s arctic shelf is estimated to hold the equivalent of 100 billion tonnes of oil – a huge amount – but equally colossal are the technological challenges that must be overcome if it is to be successfully and responsibly exploited.

These challenges require solutions to a myriad of new problems, and some will need the development of completely new and ultra-efficient technologies, as well as better ways to minimise any impact on the environment and the fragile ecosystem as a whole.

In addition the Exploration & Production industry must maximise its industrial safety systems and enhance existing industry education systems, professional training and its quality. On top of all this, it must be clearly seen to deliver on its oft-given promise of enabling the participation of local people as active stakeholders in finding solutions to all of these problems.

So what are the challenges to be faced right now, in places such as the Russian arctic continental shelf, the Barents Sea, Chukchi Sea and Kara Sea? The same question, of course, is being considered by other governments and the industry in areas such the Beaufort Sea, the Canadian arctic islands, northern Canada and the east coast of Greenland…

The Arctic presents obvious special physical hurdles – lots of ice, extremely low temperatures, remote locations and long periods of darkness.

Ice conditions can of course vary considerably between regions, within regions and depending on coastal conditions, water depths and distance to shore. The ice also changes through the seasons: freezing up during the autumn, attaining its thickest levels in winter, then melting in spring and creating open water in summer.

During the months when ice forms, wind and water currents can cause it to move considerably and form ice ridges that can be many times thicker than ice that is attached to land.  Protecting the region’s fragile biodiversity poses an additional technical challenge. Advances in technology will be the key to reducing physical footprints, discharges, air emissions and marine sound. So the Arctic region cannot be approached, in terms of its exploration and development, without further advancing engineering solutions. And such advances cannot be done unless there is widespread industry co-operation.

Mr Anatoly Zolotukhin, Vice-Principal at Gubkin State University, stressed the need to raise general awareness of the challenges and “to make everybody understand that developing the Arctic region is not an easy task, and not a task for a single operator, or even a single country. This is a global challenge of developing a whole region. Solutions may only be found in co-operation between the countries, not necessarily just the Arctic and sub-Arctic ones”.

Co-operation means the passing on of learning from those with direct experience. Sergey Brezitsky, Vice President, Exploration & Production at TNK-BP, commented: “This is one of the major regions with undeveloped petroleum resources. Some companies and delegates have relevant experience.” He highlighted companies such as BP and Shell, “who possess real and valuable experience, having begun the development of  Mr Brezitsky flagged up developments such as Prudhoe Bay in Alaska’s North Slope as an example of where such experience, ideas and solutions can come from. “There is no way to approach this region without advancing engineering solutions. This will ignite the advancement of associated industries related to petroleum and energy resources exploration and production in Russia,” he said.

Mr Brezitsky went on to give some examples of engineering solutions that he believes are vital for successful exploration and development in the Arctic, both onshore and offshore. “First, we must have high quality seismic to evaluate the resources. Second, drilling and completion, and smart wells, because the lower the number of wells the better. Finally, production solutions, oil preparation and transportation systems, and the factors needed to deliver the product to the customer. I would also emphasise the proper allocation of investments in resource preparation and development, and related areas, because this is the way that in the future will ensure more appropriate and efficient returns.”

Gubkin State University’s Mr Zolotukhin, stressing the need for co-operation, also highlighted the importance of technology transfer. “At this time, Russia has a limited number of tried and tested technologies that may be reliably applied in the Arctic environments, especially offshore. Very limited – maybe 1% or a fraction of a percent. So far most solutions available were not developed by us. However we should not turn down that experience but use it. How can we do it? Only in co-operation, not in competition. Competition will make everybody lose, while co-operation is likely to make everybody win, first of all, the country that has the greatest Arctic oil and gas resources. And by matter of fact, that is Russia.”

The upstream industry generally has flagged up several other Arctic technology challenges that will need particular focus going forward, aside from those highlighted above by Mr Brezitsky. This is because, despite direct experience with Arctic oil and gas exploration and production gained over the past three decades around the world, significant technology gaps still exist and will have to be bridged in order to enable optimised developments to proceed.

To summarise some of these challenges:
» Geographic Location – the sheer remoteness and darkness of the Arctic creates challenges that directly impact human safety. These include communication problems due to lack of IT infrastructure and satellite coverage, emergency response and contingencies, supply, and working conditions. Logistics are very challenging, and equipment reliability – such as that of a drilling rig – is a major concern.

» Deep Water – Deep water presents real challenges to flow assurance over long distances at low temperature, compression requirements, and power. As the use of gravity base structures becomes very expensive or non-feasible beyond depths of 150 meters, this means that in deeper waters (such as Shtokman, for example), the concepts that will be used will mainly involve long-distance subsea-to-shore tiebacks, or floating production systems. Floating systems need to be developed to either withstand all ice loads, remain permanently on station, or alternatively to be disconnectable so as to avoid the most severe ice or iceberg conditions. Up to date, the majority of arctic projects have been constructed in waters depths of up to 100 meters, such as the Hibernia oil field and the Sable Island gas fields offshore northern Canada. However, greater challenges for ice resistant designs are anticipated upon installation of offshore production facilities in 400 meter water depths, as in the case of Shtokman.

» Large Fields – The remoteness of the arctic is not a barrier to developing large fields. Many of the challenges due to the remote location are similar to those that have been and are being encountered with the industry’s ongoing expansion of its activities into the ultra-deepwater regions of the world. Such projects off West Africa, for example, on Girassol and Bonga where the production of 40-60 subsea wells to an FPSO has been co-ordinated, show this can be done. However, such co-ordination requires very complex control systems and operational scenarios. The inaccessibility of the offshore site requires that systems and components are designed for high reliability and low maintenance. Moreover, because such projects tend to be large multi-billion dollar integrated projects developing remote fields, it always produces technical and financial challenges that require going beyond existing solutions in terms of well sizes, production throughput, system complexity, export distance, and so on.

» Ultra-Long Distance – Since nearby offshore host  facilities do not yet exist in the Arctic, many new offshore facilities may well need to be tied back to new onshore infrastructure. Ultra-long distances demand the production of an efficient power transmission system to drive multiple compressors over such long distances without significant losses, and thus require uncommon power cable design. Again, the Shtokman development located about 600 km from the shore line is an example of what is being faced by the industry right now.

» Gas Transportation – unless Gas-to-Liquid or Floating Liquefied Natural Gas solutions are employed on a project, gas and condensate will have to be transported over long distances and this will normally generate significant slugging problems as liquid accumulates in low sections of the pipeline. Gas/liquid separation and boosting stations can be place at strategic locations to limit the size of slug arriving at the receiving facility, after which the liquid is pumped through a separate gathering line to the shore. Such pumps place another demand on electric power. Moreover, electric power is also needed for boosting system of injected chemicals to be delivered at suitable injection pressure.

» Construction & Installation – Since the arctic is a largely frontier area for oil and gas development, construction and installation experience is still minimal. Construction is a major challenge because of the limited weather windows when ice conditions are favorable. Based on the location of a project, construction may be able to be carried out either in winter or summer. The probability of success, logistics, equipment, cost and schedule are usually evaluated before the selection of the construction season. In winter, the ice sheets are stable and almost stationary, and there is minimal ice movement. In summer, the open waterways allow the use of floating vessels for trenching and pipeline installation. More challenges come from the trenching equipment limitations to water depth and trench depth, as well as from storms and blizzards that cause delays and interruptions in transportation, which lead to cost overruns.

» Leak Detection and Pipe Repair – this is a critical aspect. Leaks in oil pipelines must be detected rapidly due to their environmental cost, and public opinion will not tolerate anything less than zero discharge targets. Thus the further development of advanced and sensitive sensor technology is necessary for the detection of leaks, especially where the sea is frozen over for most of the year. These sea ice conditions render the execution of pipeline repairs due to leaks more complicated, and the logistics for repair more challenging still.

The above list is daunting but not unachievable. The E&P industry has overcome equally tough challenges before, and will continue to do so. Much of this will be done through continual gradual advances in existing technologies, along with careful combination with new enabling technologies developed specifically to overcome the Arctic challenge.

Much will rely upon the sharing of Arctic and sub-Arctic operational experience gained from projects in Alaska, Sakhalin and the North Caspian Sea, as well as from pioneering deepwater remote projects such as Norway’s Ormen Lange development. This will also need to be converted into shared standards, as well as solutions, especially in the areas of safety and environmental protection.

Shell is one operating company that has and is developing and applying technology to overcome the physical demands of working in ice-covered waters. In the area of exploration drilling, for example, its engineers have helped to develop a drillship that it says is easier to manoeuvre and more energy-efficient than traditional drillships. The ‘Noble Bully’ rig design is 25% smaller and 60% lighter than normal drillships, and has a reinforced ice-class hull. It can drill to a depth of 4,000 metres and can also navigate in shallow water. Shell has two units that it will use for long-term contracts around the world, including in deep waterand the Arctic.

The company also owns and operates the Kulluk drill barge, one of the few Arctic rigs capable of year-round operation in severe ice conditions. It also redesigned and refurbished the Frontier Discoverer rig for Arctic service.

The company is also continuously working on the constant problem of moving sea ice, which can exert enormous loads on offshore oil and gas structures. “The design of platforms and other production equipment we use in Alaska, for instance, is based on knowledge of ice conditions gathered over more than 50 years of experience, coupled with the results of leading scientific studies and traditional knowledge,” it says. “These designs also take into account predicted changes in ice conditions such as type, movement, thickness and strength. One example is the Sakhalin II oil and liquefied natural gas project in Russia’s Far East, in which Shell is a partner. Temperatures can drop to minus 45 degrees Centigrade in winter. The production platforms off the coast of Sakhalin Island stand on giant concrete legs more than 20 metres wide and some 56 metres tall. They are extra thick to withstand earthquakes and rounded so that ice floes slide around them.

“Where the sea is less than 30 metres deep the pipelines are buried under the seabed to provide protection against ploughing from ice ridges. The pipeline was reinforced with extra steel. Our experience of Sakhalin II has taught us a lot about measuring ice loads. We use this experience to investigate a number of new design models and approaches to reduce the safe depth pipelines must be laid at, saving costs and reducing the impact of excavation.

“To ensure safe pipeline construction, it is also important to obtain detailed knowledge about the conditions of the seabed, such as the depth of the gouges caused by ice ridges. Shell is testing the use of remote-controlled robots that can help us do these initial under water site surveys while reducing environmental impact and disturbance to marine mammals.”

Environmental impact is of course the biggest single – and most public – focus that the industry must maintain. And that, above all else, means having in place extensive planning for the prevention of oil spills, and the capability to fully deal with any that do occur.

A Joint Industry Programme (JIP) focused on Arctic Oil Spill Response Technology is already underway, backed by the industry’s International Association of Oil & Gas Producers (OGP). Initially backed by eight member companies of the OGP, the JIP is concentrating on the challenges to oil exploration in Arctic and sub-Arctic regions that are not found in more temperate areas. According to OGP Technical Director John Campbell, “The JIP will focus in particular on minimising the risk of offshore spills amidst sea ice and testing the suitability of spill response resources where operators will encounter periods of darkness, extreme cold and the presence of sea ice.”

Overall, he says, the aim will be to improve industry capability and co-ordination in the area of Arctic oil spill response. Over an initial 3-year funding period, the JIP hopes to raise more than US $20 million to carry out research investigations and related field activities in areas such as: Dispersant use in broken ice; The fate of dispersed oil beneath ice; Oil slick trajectory modelling in ice and in poor visibility conditions; Tracking oil in and beneath ice; Mechanical recovery in ice-strewn waters.

Perhaps the last word here should go to Gubkin’s Mr Zolotukhin, addressing the question of reassuring and persuading the global community that operators are able to develop the Arctic’s hydrocarbon resources in a safe and responsible manner: “This is especially important today. However, for professionals in this industry it was essential yesterday, the day before yesterday, and 10 years ago. Today it has become an even higher priority in the light of the recent disaster in Japan and the current events in the Middle East. We see that the world needs reliable primary energy supplies for sustainable development. The Arctic is another unopened energy treasure chest for the long-term.”

He concluded: “In the long-term, we must care and think not only about our energy supply but how to preserve our planet and environment. The majors talk about minimising the environmental impact. Anything we do is a negative environmental impact. This is why solutions must be found that would minimise the impact, and be more efficient from a clean energy perspective. In the long-term, engineering solutions are needed that would be efficient in a broad meaning of the word. And speaking about exploration, obviously, it must be low impact.”

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