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№ 10 (October 2009)

Exploration of the Arctic Shelf Is a Global Task

In the second half of this century, traditional reserves of crude oil (and partially – natural gas), such as Western Siberia or Persian Gulf, will run low. At the same time, energy demand in the world is predicted to go off-scale. The only option to solve global energy problems is to tap into Arctic hydrocarbon fields, which hold up to 30 percent of global gas and 13 percent of oil reserves, U.S. scientists estimate.

By Alexander Serafimovich

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    Yet, to counter the looming post-2050 energy collapse, the key to this marine “cellar” must be found today.

   There is much in common between outer space exploration and marine exploration – the main similarity being that both environments are hostile to humans. Indeed, complexity of the technology used in Arctic E&P projects is on par with that used in space exploration. To continue the parallel, space exploration requires international teams and the support of all developed countries – so, maybe, Arctic shelf development projects, which are highly labor- and cost-intensive, also require a joint effort of all technologically developed states. Because solving such a challenge as Arctic shelf development would serve the whole mankind.

   Recently St. Petersburg hosted the 9th International Conference and Exhibition focused on developing Russia’s Arctic projects and the shelf of Russia and CIS – RAO CIS Offshore 2009. “At such conferences we sum up the results of the work done, evaluate the perspective, and discuss new technologies required for the successful shelf development. Taking part in the conference would help the general public to grasp the issue, in parallel helping experts to understand the direction for development,” says head of the venue’s administration panel, member of the Academy of Sciences Aleksei Kontorovich. The RAO CIS Offshore Conference and Exhibition, which started off in 1993 in St. Petersburg, has been recognized by the global oil and gas community in parallel with the largest venues of similar flavor in Aberdeen, Stavanger, Houston and Baku, and is seen as one of the largest events of both national and international level. Throughout the existence of the forum it was attended by over 4,500 delegates and over 1,000 companies.

   Sergei Smirnov, general director of the Association of oil and gas industry suppliers “Sozvezdie”, made a presentation on the round table within the conference. The Association was formed in 2006 on the initiative of Archangelsk regional administration and with the assistance of Statoil ASA (Norway). The Association founders include such region-based industrial giants as Sevmash Production Association and Zvezdochka shipbuilding center. Sergei Smirnov elaborated on Belkomur long-distance railway project, which would help to develop Archangelsk transportation network, linking the area with industrial enterprises of Urals region. Further plans include construction of a new deep-water Archangelsk marine port, and large-scale real and industrial estate development near Teriberka village in Murmansk region. The Association cooperates closely with Shtokman Development Company, aiming to help the local producers to win tenders within the giant Shtokman project.

   Grigoriy Stratiy, general director of the Murmanshelf Association of the oil and gas industry suppliers, marked the positive approach of StatoilHydro to the engagement of Russian suppliers and said that Shtokman Development had documented the priority clause on the project participation for the Murmansk regional organizations.

   As Alexei Kontorovich noted in his conference presentation, “Oil and gas production at the Arctic shelf presents Russia with the opportunity to become in future the largest exporter of energy resources to the global market in the context of the new economic order taking shape now.” The scientist noted the paramount role of the state in the development of the Arctic. Today the largest Russian companies Gazprom and Rosneft have taken up only 5 percent of the Arctic shelf, the other 95 percent are still considered to be a part of the unallocated fund. To ensure adequate growth of the shelf reserves, some 17 million meters of difficult deep-drill wells are required, as well as huge investments with a relatively long payback period. According to Alexei Kontorovich, this means that Russia will need a powerful state-owned company to study the subsoil and to implement exploration and evaluation projects in the Arctic Ocean. Besides, the country will also need a well-balanced shelf research state program.

   Conference papers also touched upon the global warming and its impact on the Arctic. Russian scientists forecast that in second half of the century Russia’s Arctic would experience strong and lasting warming-up of the climate, which would be of significant disadvantage to Russia. Thus, the Northern Sea Route, currently accessible only to Russian icebreakers, will be open for navigation the whole year, turning into Eurasian Marine Transport Corridor. As a result, the Arctic region will gradually gain the strategic importance.

   Norway-based FMC Kongsberg Subsea AS used the RAO CIS Offshore 2009 conference to officially launch in St. Petersburg its engineering center on underwater technologies for oil and gas projects. The ceremony was attended by Robin Martin Kass, State Secretary of Royal Norwegian Ministry of Petroleum and Energy, and by representatives of FMC and St. Petersburg Polytechnic. This unique for Russia center will target engineering analysis, as well as scientific and engineering support of offshore projects. The center will employ some 25-30 engineers – university graduates, who will take part in preparation for tenders on Shtokman project, as well as in prequalification of Russian companies – oil and gas equipment suppliers and service providers – for subsea operation.

   One of the larger stands at the exhibition was presented by Sevmash. Sevmash specialized in manufacturing nuclear submarines, but in 1989 the company used first conversion programs to switch to manufacture of civilian production. Now Sevmash produces tankers and tow boats for oil and gas industry, as well as semisubmersibles for Mosmaritime Company. These are tailor-made for exploration drilling and now operate all over the world.
The company takes pride in its unique rig which will be installed in the Pechora Sea at the Prirazlomny field – the rig has been designed and will be manufactured by Russian specialists.

   The project has been done by Morneftegazproekt R&D center jointly with Rubin (St. Petersburg) and Koral (Sevastopol). Weighing 110,000 tons, it is the first construction of its type in the world. This is a gravity platform, and its own weight enables it to hold its place. The platform  has to  withstand the pressure of up to 5 meters of ice. Its length is 126 meters, width – 126 m as well.

   According to Igor Dubin, head of oil and gas prospective projects at Sevmash, “It is not just a rig, it’s a self-contained business enterprise. Using this platform, we may drill, produce, treat and unload crude.  There is also a large storage facility. This structure simply has no analogues.” According to schedule, the platform’s construction should be completed in 2010. Next year, in 2011, it should be installed at the production site.

   The company also has rather ambitious plans for the future. Together with the Italian Saipem this Russian manufacturer prepares a design for production platform with underwater structures, to be used at Shtokman project. “We’ll win the tender on Shtokman project,” confidently notes Igor Dubin. The production platform will be placed 650 kilometers offshore; its compressor station will treat the received gas, sending it onshore under 270 atm pressure using the underwater pipeline with no intermediate compressor stations.

   The production platform is shaped as a ship steadily fixed to underwater structures, which will turn around the central axis in order to meet possible ice attacks nosefront. The most complex part of the construction is the rotating pipe joints linking the pipes which supply gas from the underwater base and the pipes receiving the treated gas for supplying it to the shore. Saipem’s competitor on the production platform project is the Aker Company.

   On Gazprom’s request another large northern company, Zvezdochka Shipbuilding Center builds SEFDR Arcticheskaya, designed to drill exploration and production wells up to 6,500 meters deep on the sea shelf between 7 and 100 meters deep. And the company is already keen on manufacturing the next SEFDR if required. Zvezdochka plans reconstruction hydraulic structures and covered berths, as well as enhancement of outfitting quay for construction of the Arctic class rig modules. This would boost the manufacture of metal structures to 25,000 tons, in parallel axing the manufacture time. The company also plans to establish a joint Russian-Norwegian Project Office, which would use 176 SPZ in Archangelsk as its base.

   Bengt Lee Hansen, president of Statoil Hydro in Russia, in his presentation noted that Arctic projects of Norwegian companies had grown from 5 percent in early 1970s to some 75 percent in the recent projects. Apparently, Russia will have to do just the same.

   “Shtokman project has every chance to play the same role for Russia, as Ekofisk project played for Norway 45 years ago,” Pierre Nerguararian, head of Total E&P Russia, stated at the conference.

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