Commentary, 9/10 2012

Published Oct 7, 2012
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Cover 9/10 2012

Looking North

For the oil and gas industry, the Arctic is without a doubt the next frontier – especially from the perspective of companies already doing business in the North Sea and across the Norwegian Continental Shelf.

And the North Sea perspective includes a strong sense of doing things safely. With roots that reach deep into maritime history, the North Sea oil and gas industry knows that working offshore means that there is no room for error. As the old sailors’ quote declares, “The sea is a harsh mistress”.

And on the NCS, with an oil era stretching more than 40 years back, experience has grown in dealing with the challenges below the surface, on the seabed and thousands of metres into the Earth.

Taken all together, the challenges of working in the North Sea are great – and moving northwards certainly appears to magnify the risk. On the ocean’s surface, especially, where the annual window for working is smaller, even in ice-free waters, conditions are extreme. Yet these conditions are not insurmountable. Again, a long maritime history teaches what to expect in the Arctic region.

But moving below the surface, conditions are not so very different from what the industry has experienced across the North Sea.

But we should remember that oil and gas activities in the Arctic are not new.

In the US, the state of Alaska has seen oil and gas activities since the late 1970s. And offshore Russia’s Sakhalin Island in the Okhotsk Sea with its winter sea ice, drilling for Sakhalin II first took place in the early 1980s, with production beginning in 1999. And Statoil’s Snøhvit field has been in production since 2007.

But we live in a post-Mocondo world. So it’s no surprise that accident prevention is high in everyone’s minds – both within the industry and among the general public. The Arctic is recognised as an especially fragile environment, so as we all look north, we’re looking through Mocondo-coloured glasses.

And this has been apparent as Royal Dutch Shell has worked to begin a multi-year drilling programme to explore for new oil and gas resources in high-potential blocks in offshore Alaska.

Preparations for the drilling programme have included the development of an Arctic Containment System – a dome not unlike that constructed by BP to tackle with the Mocondo spill in 2010.

Trouble with the containment system and ice floe movement have led Shell to revise its plans for the 2012-2013 exploration program, limiting drilling to top holes that will be capped and temporarily abandoned this year.

As we go to press, Shell expects to begin exploratory drilling in the Beaufort Sea – for top hole drilling following the receipt of the appropriate permits. These operations will follow the conclusion of the fall whale hunt.

It’s understandable that this programme is taking place under an intense media spotlight. And despite all preparations and planning, calls to stop the programme have been made from across the US.

But as Shell points out, not only will the exploration program be a boon for the company, it is “critically important” to America’s energy needs as well as to the economy and jobs in Alaska.

So in addition to the industry’s collective experience and all we already know about overcoming the technological challenges of working in the Arctic, Shell is demonstrating that – in addition to ensuring that the technology functions as expected – maintaining the willingness to adapt to changing conditions while cautiously moving forward may be the best means to ensure safety success.

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