Field Developments in the Arctic Offshore Ove T. Gudmestad, University of Stavanger Anatoly B. Zolotukhin, Gubkin University Lecture at Gubkin “Arctic Seminar series” April 15th 2010 at Gubkin University of Oil and Gas, Moscow, Russia

1. Development planning • A typical Exploration and Production venture is carried out in phases • Starting with screening of potential exploration areas and ending with field abandonment • Planning is the key to successful development, without a plan, the delays can be several years • Along with the development there are a number of important milestones, from license award to end of production

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Development of a business case is an integrated multi discipline work process

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Project phases

Exploration

Operation Project development

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Production & Maintenance Operations

End Production -

Project Execution

Start Production -

Appraisal & Develpment planning

Sanction -

Exploration

Discovery -

Concession Round

Licence Award -

PreConcession Work

Abandonment

Appraisal and development planning = Project development planning phases Project planning (period) Feasibility

Concept

Project execution (period)

Pre-engineering Detail engineering

Construction

-Business idea -Exploration

DG(0)

DG1

AP1 DG2

DG3

(BoK)

(BoV)

(BoG)

develop prefe rre d options

select

Business Development

define/mature РГУ нефти и газа им. И.М. Губкина

”architect- o r bra insto rming phase”

Completion

FIELD DEVELOPMENT PLANNING FEASIBILITY PHASE

1. 2. 3. 4. 5.

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6. 7. 8. 9.

RESERVOIR DESCRIPTION PRODUCTION DESCRIPTION PRODUCTION FACILITY TRANSPORT PROJECT EXECUTION OPERATION AGREEMENTS ECONOMICS SAFETY

CONCEPT PHASE

EVALUATE ECONOMIC POTENTIAL

PRE ENGINEERING

FIELD DEVELOPMENT PLAN

DECISION TO START DEVELOPMENT

One reference case during the feasibility study DG = Decision gates, AP = Approval point; FEED= Front End Engineering Screening + Development/selection= Concept phase

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Notes • DG = Decision gates • AP = Approval point • Plan for Development and Operations to be handed to government at end of concept study phase • The earliest phases – Feasibility phase – Concept phase = Screening + Development/Selection

• Next phase: – Pre engineering = FEED phase, Front End Engineering

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Concept study

• During the concept study phase, one will screen alternative scenarios to identify the most suitable development scheme in terms of – Technical solution – Overall economics – Reservoir utilization

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Project phases and commitment to cost and technical issues

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2. Technical basis for design • Emphasis on: – Reservoir specifications – Meteorological and Oceanographic data and other data about the physical environment, for example the ice conditions – Geotechnical data – Materials – Product specification (what product can be sold in the market)

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Product Definitions

Dry gas: Natural gas that has been processed to meet sales specifications. Contains mainly C1(methane) and C2 (ethane), limited quantities of heavier gases. Rich gas: Natural gas as produced at field installations, prior to gas processing. Contains substantial amounts of natural gas liquids (C2 and heavier) in addition to the methane. NGL: (Natural Gas Liquids): C2 and heavier hydrocarbons which are produced as part of the gas at field installations, but separated out in gas processing and sold usually in liquid form. The sales products are ethane (C2), propane (C3), butane (C4) and condensate (C5+). РГУ нефти и газа им. И.М. Губкина

Stable liquids (oil or condensate): Liquids with a vapour pressure lower than 0.8 bar at ambient temperature

Product definitions, cont.

LNG: (Liquefied Natural Gas): Natural gas (Dry gas) which has been liquefied by cooling for the purpose of storage and transportation. Liquefaction is obtained by cooling to -162oC. LPG: (Liquid Petroleum Gas): Propane (C3) and butane (C4). These are relatively heavy gases which are liquefied for the purpose of storage and transportation. Liquefaction is obtained by cooling to -42oC (propane) or by pressure.

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Sales product —

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A: Unstable oil + Sales gas B: Stabilized oil + Rich gas C: Stabilized oil + Sales gas + NGL D: Stabilized oil + Gas re-injection E: Stabilised oil + Gas flaring

Gas pipelines

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Ekofisk

Tjelbergodden

Mongstad Sture Kollsnes

Kårstø Stavanger

St. Fergus

Tommeliten

Ekofisk Valhall Hod

Teesside

Emden РГУ нефти и газа им. И.М. Губкина

Zeebrugge

Statfjord

Tjelbergodden

Statfjord

Mongstad Sture Kollsnes Frigg Kårstø Stavanger 16/11-S

St. Fergus

Tommeliten

Ekofisk Valhall Hod

Teesside

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Zeebrugge

Oil and gas production platform

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Terminal

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Sleipner

Tjelbergodden

Statfjord

Gullfaks

Mongstad Sture Kollsnes

Frigg Kårstø Stavanger Sleipner

16/11-S

St. Fergus

Tommeliten

Ekofisk Valhall Hod

Teesside

Emden РГУ нефти и газа им. И.М. Губкина

Zeebrugge

Gas center

РГУ нефти и газа им. И.М. Губкина

Troll Tjelbergodden

Statfjord

Gullfaks Troll

Mongstad Sture Kollsnes

Frigg Kårstø Stavanger Sleipner

16/11-S

St. Fergus

Tommeliten

Ekofisk Valhall Hod

Teesside

Emden РГУ нефти и газа им. И.М. Губкина

Zeebrugge Dunkirque

Wet gas and dry gas provinces

Tjelbergodden

Wet gas Statfjord

Gullfaks Troll

Mongstad Sture Kollsnes

Frigg Kårstø Stavanger Sleipner St. Fergus

16/11-S

Sales gas Tommeliten

Ekofisk Valhall Hod

Teesside

Emden РГУ нефти и газа им. И.М. Губкина

Zeebrugge Dunkirque

Åsgard Åsgard

Tjelbergodden

Statfjord

Gullfaks Troll

Mongstad Sture Kollsnes

Frigg Kårstø Stavanger Sleipner

16/11-S

St. Fergus

Tommeliten

Ekofisk Valhall Hod

Teesside

Emden РГУ нефти и газа им. И.М. Губкина

Zeebrugge Dunkirque

Modern development

MIDGARD SMØRBUKK

SMØRBUKKSØR

gass ekportrør

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Ormen Lange Sub Sea templates

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3. Particulars for the Arctic • Some key specifics of Arctic developments to be highlighted

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Where is the ice? This SeaWiFS view of sea ice in the Barents Sea includes the island of Novaya Zemlya with the solidly frozen Kara Sea to its east. NASA

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РГУ нефти и газа им. И.М. Губкина

Rapid changes in ice drift, pictures from Pechora •Rapid shifts cause tanker loading difficulties •Frequent detachments •Low loading regularity

Rapid shifts in ice drift direction 700 (m) 600 500 400 300 200 100

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0 0

200

400

600

800

1000 1200 1400 1600 1800 2000 (m)

Polar Lows •

• РГУ нефти и газа им. И.М. Губкина

•

Small, rather intense low pressure systems in the Arctic – Formed at sea in cold air outbreaks winter time. – Often rapid development – Gale or storm force winds, seldom hurricane. – Heavy snow showers, icing, changing wind direction. – Life span 6h to 1-2 days – Diameter 100-500 km Polar Lows are a rare special case of strong troughs, lack of models and data to predict these polar lows Will climate changes influence on intensity of polar lows?

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Sub Arctic versus Arctic conditions

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• The conditions in Sub Arctic could be considered as extension of the harsh Norwegian Sea conditions – Normal operations conditions as further south – Specifics: Icing, Polar Low Pressures, Uncertain weather forecasts, Darkness, Remoteness, Increased awareness of the clean environment – Ice is not expected unless at very rare probability – Onshore treatment rather than offshore developments might be favored • In the high Arctic, the ice conditions will normally set the requirements to the design – Ice loading – Operational window for drilling, installation work and intervention work – Wave conditions to be accounted for. Be aware of floating ice in waves – Darker, more remote, colder than further south

Icing in sub arctic area

Torstein Røssland

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4. Arctic offshore structures in ice • Some examples from – Grand Banks – Sakhalin – Pechora Sea

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Hibernia

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Hibernia in operations

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White Rose development

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Contracts for the Husky White Rose FPSO

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The FPSO disconnectable turret

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The Molikpaq platform off Sakhalin

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Phase I production at the Sakhalin II development

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SALM offloading buoy

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Sakhalin II full field development

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Offshore Sakhalin, Lunskoye

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Sakhalin 1 Long reach wells

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Prirazlom platform

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Prirazlom platform

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Interaction with large First Year ice ridge

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Proposed Drilling and Quarter Platform

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Arctic pipelines

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Arctic Tandem Offloading Terminal, a Statoil design

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5. Selection of technology The selection of technology for an offshore development project is to be based on a number of factors: •Feasible technology/including research results where appropriate •Technology to satisfy environmental and safety requirements •Cost evaluation including development costs, maintenance costs •Consideration of strategically importance for operator/license group and country •Selection of contract strategy •Financing of the development project

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Both technical and economical considerations are important •Bad economic base for a project if inefficient technology is selected •No project can be successful without careful cost considerations and adequate financing

6. Conclusions regarding technology

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• The offshore field development technology can be extended to the Arctic areas where the physical environment puts larger restrictions on the development. • It is a must to obtain a suitable design basis for a project to ensure that the proper technology be selected. • Of main concern is the extreme design event that can appear very rarely and which easily can be overlooked. • The lack of experience of working the Arctic climate and the excessive stress on humans due to cold climate, darkness, fog and remoteness must be understood. • Emphasis has been on safe and environmental friendly technology. • The aspects of thorough work in the early project phases as well as good project planning are strongly highlighted

7. International education program • University of Stavanger and the Gubkin University suggest that a common education program be established, Master of Science in Offshore Field Development Technology

• http://www.gubkin.ru/en/international/OT.php • Funding is needed for such a program • Objectives:

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– Align education for the common development of the Barents Sea – Give the students TWO diplomas, from Russia and from Norway – Improve relations between the younger generation in the neighbor countries

Semster I, at Gubkin 1. Probability, statistics and stochastic modeling of uncertainty. (5 ECTS) 2. Natural Gas Industry: Economics and Management. (5 ECTS) 3. Oil, and gas well drilling technology.(5 ECTS) 4. Offshore field development. (5 ECTS) 5. Decision making and risk analysis. (5 ECTS) 6. Computer-Aided Engineering, Data Management and Engineering Business Processes. (5 ECTS)

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Semester II at Gubkin 1. 2. 3.

РГУ нефти и газа им. И.М. Губкина

Flow of fluids in pipes. (5 ECTS) Marine technology. (5 ECTS) Challenges in offshore project development. (5 ECTS) 4. Arctic gas. (5 ECTS) 5. Measurements in oil and gas production. (5 ECTS) 6. Specialisation subjects at student’s choice: i. Sub sea structures and manifolds. Design, manufacturing and installation. (5 ECTS) ii. Non-conventional hydrocarbon resources. (5 ECTS)

Semester III, Stavanger 1. 2. 3. 4. РГУ нефти и газа им. И.М. Губкина

Sub sea technology. (10 ECTS) Marine Operations. (5 ECTS) Pipelines and Risers. (5 ECTS) Arctic Offshore Engineering.(10 ECLES)

Semester IV • Thesis at Home University, see home page for requirements

Admission requirements

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