frontier energy, summer 2014

ONS 2014

ISSUE

OFFSHORE SAFETY • SUPPORT VESSELS • ALASKA LNG • EVENTS

RUSSIA Arctic ambition

ICEBREAKERSPushing the limits

POLAR CodeFilling in the gaps

Oil spill responseJIP moves to second phase

Arctic Economic CouncilReady for business

OIL, GAS & SHIPPING IN THE ARCTIC AND ICE-AFFECTED REGIONS www.frontierenergy.info SUMMER 2014

Crowley.com/FE | 907.777.5505

Worldwide Logistics • Liner Shipping • Petroleum & Chemical Transportation • Alaska Fuel Sales & Distribution • Energy SupportProject Management • Ship Assist & Escort • Ship Management • Ocean Towing & Transportation • Salvage & Emergency Response

Operations on Northstar Island – six miles offshore in Prudhoe Bay – don’t stop during the shoulder seasons, when marine vessels can’t operate and the ice roads aren’t ready. Equipment still must be delivered and personnel still need to get to work. Complex challenges such as this demand unique solutions – like Crowley’s hovercraft, which was specifi cally designed to perform in the harsh Alaskan Arctic, and has a proven reputation for safety and reliability. The right equipment. The right knowledge. And more than 60 years of experience. When you need solutions, count on the people who know.

INNOVATIVE SOLUTIONS FOR COMPLEX CHALLENGES

Features

IN THIS ISSUESummer 2014

Regulars

On the coverIcebreaker in the White Sea, Russia

ONS 2014

ISSUE

OFFSHORE SAFETY • SUPPORT VESSELS • ALASKA LNG • EVENTS

RUSSIA Arctic ambition

ICEBREAKERSPushing the limits

POLAR CodeFilling in the gaps

Oil spill responseJIP moves to second phase

Arctic Economic CouncilReady for business

OIL, GAS & SHIPPING IN THE ARCTIC AND ICE-AFFECTED REGIONS www.frontierenergy.info SUMMER 2014

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04 NEWS Arctic Economic Council announces Nunavut meet; luxury cruise liner plans NWP transit; new Arctic seismic company formed; mixed drilling results from the Barents Sea

27 EVENTS Frontier Energy's comprehensive events listing helps you plan your calendar and highlight the key upstream, shipping, scientific and research conferences, exhibitions and events. Includes a special look at key conferences planned for Newfoundland & Labrador 2014-2016

32 INSIGHT Working in the Arctic requires a new mindset, argues Stein Haugen of ABS

06 RUSSIA Sanctions fail to dent enthusiasm for Arctic drilling as the high profile Rosneft/Exxon joint venture spuds Kara sea well

08 POLAR CODE Arctic and maritime law expert Michael Kingston of DWF discusses the gaps in international law and how industry must learn from the lessons of history when it comes to regulation

10 ICEBREAKERS: RUSSIAN ADVANTAGE We look at Russia's investment programme that will increase its ice-breaking dominance

12 ICEBREAKERS Frontier Energy assesses the ongoing concerns about the looming ice-breaking capability gap in the US

13 ICEBREAKERS The global fleet, an infograph from the USCG

14 ICEBREAKERS Arto Uuskallio of Aker Arctic discusses some of the design issues for icebreakers past, present and future

16 FOSS MARITIME The Seattle company is 125 years old – and is looking to the Arctic for the future. Frontier Energy talks to senior vice president Gary Faber

18 OFFSHORE SUPPORT Frontier Energy talks to Bruce Harland of Crowley Maritime, who has just been named US representative to the new Arctic Economic Council

20 OFFSHORE SUPPORT New engine technology means Viking Supply Ships' CAT-powered AHTS can undertake some ice-breaking duties

22 OIL SPILL RESPONSE Jennifer Wyatt of the high level Arctic Oil Spill Response Technology Joint Industry Partnership discusses progress to date and next steps

24 OFFSHORE SAFETY Frontier Energy talks equipment and training with VIKING Life-Saving Equipment

30 ALASKA LNG Jeannette Lee of the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects looks at the issues around reaching FID on this kind of mega-project

Crowley.com/FE | 907.777.5505

Worldwide Logistics • Liner Shipping • Petroleum & Chemical Transportation • Alaska Fuel Sales & Distribution • Energy SupportProject Management • Ship Assist & Escort • Ship Management • Ocean Towing & Transportation • Salvage & Emergency Response

Operations on Northstar Island – six miles offshore in Prudhoe Bay – don’t stop during the shoulder seasons, when marine vessels can’t operate and the ice roads aren’t ready. Equipment still must be delivered and personnel still need to get to work. Complex challenges such as this demand unique solutions – like Crowley’s hovercraft, which was specifi cally designed to perform in the harsh Alaskan Arctic, and has a proven reputation for safety and reliability. The right equipment. The right knowledge. And more than 60 years of experience. When you need solutions, count on the people who know.

INNOVATIVE SOLUTIONS FOR COMPLEX CHALLENGES

01www.frontierenergy.info SUMMER 2014

CONTENTS

FRAM*

“Even at a 15.9%, the project would still lag the 16-17% IRR typically

expected by major oil companies”

www.frontierenergy.info

EditorAmy [email protected]

Editor in ChiefBruce McMichael

Canadian CorrespondentAndrew Safer

PublisherStephen [email protected]

Design & LayoutIn The Shed Ltdwww.in-theshed.co.uk

© 2014 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.

As the industry moves northwards in the pursuit of the much-quoted resources that the US Geological Society claims lie in Arctic waters, so the costs of working there creep ever higher. The industry's stepwise approach, proving itself in the “workable Arctic” before tackling more extreme environments, means the Norwegian Barents Sea is witness to a flurry of activity. It is also witness to the cost barriers to commercialising discoveries in these northerly latitudes.

The Norwegian Continental Shelf is already a high cost place to work and while the generous exploration tax rebate helps keep the drillbit spinning, it is more challenging to push a project over the commerciality threshold.

Statoil's Johan Castberg field was discovered in 2011-2012, opening a new oil province in the Barents Sea, and is reckoned to host between 400 and 600 million barrels. Anywhere else on the NCS, this would be a dead cert for development but given the remote location, the project partners Statoil, Eni and Petoro have repeatedly delayed making a decision. In 2013 the partners committed to drilling more wells in the vicinity in a bid to find more oil to shore up project economics – but the results of the five-well campaign were far from convincing.

This year the partners said they wanted to spend more time on the final concept selection: the original development scenario of a 280 km pipeline to an onshore oil terminal at Veidnes, while having the longer term benefit of installing infrastructure in the High North to unlock small oilfields in the Barents, is seen as prohibitively expensive, with a price tag of more than US$2 billion.

“The companies will continue efforts to mature the technical development solution, updating the resource basis and reducing cost leading up to the summer of 2015,” said Statoil's executive VP for development and production in Norway Arne Sigve Nylund. “The partners will also further assess the financial basis for an oil terminal at Veidnes.”

Analysts have suggested that an alternative development scenario, involving an FPSO, would be viable. Tax breaks are also being sought: there is precedent for this with the Snohvit gas field which produces to the Melkoya LNG plant near Hammerfest. Snohvit is still the only producing field in the Barents Sea, with first oil from Eni's Goliat development now pushed back to mid-2015.

Analysts at Wood Mackenzie reckon an FPSO solution plus a Snohvit-style tax break would achieve an IRR of 15.9% and breakeven of less than US$60/barrel. Even at 15.9%, however, the project would still lag the 16-17% IRR typically expected by major oil companies.

Even here, in the workable Arctic, it seems talk of a northern oil rush is over-stated: for 600 million barrels, it is just too expensive.

Amy McLellan, Editor

Get connected!

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.

Follow us at www.twitter.com/frontierenergy for the latest news and comment

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EDITOR’S LETTER

www.frontierenergy.info SUMMER 2014

IN NUMBERSNunavut: host to the first AEC meeting

The first meeting of the Arctic Economic Council will be held in Iqaluit, Nunavut on 2-3 September. The creation of the Arctic Economic Council has been a flagship policy of Canada's chairmanship of the Arctic Council (2013-2015). The Honourable Leona Aglukkaq, Minister of the Environment, Minister of the Canadian Northern Economic Development Agency and Minister for the Arctic Council, will host the meeting. The aims of the AEC are to foster sustainable development, including economic growth, environmental protection and social development in the Arctic. However, opponents say the Arctic Council has been pursuing a pro-oil agenda under Canada's lead.

Each Arctic state and permanent participant organization will name up to three business representatives to attend the founding meeting. Canada’s representatives are Tom Paddon, CEO of Baffinland Iron Mines Corporation, Lillian Brewster, VP of Aboriginal business at ATCO Structures & Logistics, and Peter Tapatai, president of Peter’s Expediting Ltd.

For the US, its members are Lori Davey, general manager of Fairweather LLC, an Anchorage-based natural resources company, Bruce Harland, vice president of business development at Crowley Marine Services, and Gail Schubert, president and CEO of Bering Straits Native Corporation.

Interview with Bruce Harland, page 18

Arctic Economic Council: September launch

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The Crystal Serenity, pictured here in Antarctica, can host more than 1000 guests

Reduced sea ice is tempting more cruise ships to venture into the Arctic, prompting experienced mariners to voice concern about the risks of increased traffic in these challenging waters. Los Angeles-based Crystal Cruises will be the first luxury cruise line to offer a cruise through 900 miles of waterways from Anchorage in Alaska through the Northwest Passage to the Atlantic Ocean and on to New York City. Departing August 2016, the Crystal Serenity and its escort vessel will use low sulphur marine gas oil fuel and the escort will carry additional safety and environmental protection equipment, including a helipad. Crystal President Edie Rodriguez said the company's inaugural Northwest Passage would offer guests “the opportunity to begin a new story of thrilling adventure” while Executive Vice President Thomas Mazloum said the company had spent two years “diligently gathering the field experts, information, resources, and support to ensure an epic experience that is exceptionally rewarding and safe for guests and crew, and respectful of local lands and cultures”.But maritime experts have expressed concerns about the challenges of reacting should something go wrong given the remote location, the unpredictable sea and ice conditions, and the lack of search and rescue infrastructure in the region.

Luxury cruise liner to transit North West Passage in 2016

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Oceanic Vega: CGG already has ice-class capabilities

Seismic group CGG is joining forces with Russia's largest energy shipping company Sovcomflot to provide high spec 3D marine seismic acquisition services in Arctic and sub-Arctic waters. The joint venture, to be called Arctic Geophysical Exploration (AGE), will be 51% owned by Sovcomflot and 49% by CGG. The company will be incorporated in Russia with its headquarters in Moscow. Under the terms of the agreement, CGG, which has Arctic experience offshore Greenland, the Beaufort Sea and Alaska, will charter a fourteen-streamer ice-class vessel while Sovcomflot, the largest operator of ice class LNG carriers in the world, will add the capabilities of an eight-streamer ice-class vessel.AGE will offer world-class 3D marine seismic acquisition services to operators during the Arctic navigation season. For the rest of the year, its advanced vessels will be available to work in the international market. It is expected to be operational in Q4 2014.

CGG and Sovcomflot form new Arctic seismic company

37,405visitors to

Antarctica in the

2013/14 season, up 9%

Statoil's most northerly well in the Barents Sea, Apollo, was

350 km north of Hammerfest

World needs US$48 trillion to meet energy needs to 2035

04

NEWS

SUMMER 2014 www.frontierenergy.info

Greenpeace boarded the Transocean Spitsbergen

in May 2014

The summer months of 2014 have seen a flurry of drilling activity in the Norwegian section of the Barents Sea but results have, again, been mixed. Statoil led a controversial push northwards into the Hoop area, where last year OMV made a breakthrough discovery with its Wisting Central oil strike. Statoil was drilling 45 km north of OMV's discovery, attracting the ire of Greenpeace which staged a profile at the Transocean Spitsbergen drilling rig. When drilling did get underway, the Apollo wildcat was dry while Atlantis and Mercury yielded two small gas discoveries. The Norwegian oil giant's senior VP for exploration on the NCS Irene Rummelhoff said the company was “naturally disappointed” with the results but pointed out that the Hoop area extends for more than 15,000 sq km yet has only been tested by six wells. “We know from experience that exploring for hydrocarbons in the Barents Sea takes time and stamina,” she said. Other operators were also busy this summer. Austria's OMV struck oil with its wildcat on the Hanssen prospect 315 km north of Hammerfest finding an estimated 50 million boe of recoverable resources. This was the third well in PL537, about 7 km northwest of Wisting Central, and takes the confirmed resource in the Wisting area to 200-500 million boe. Sweden's Lundin Petroleum spudded an exploration well on the 261 million boe Alta prospect in August 2014. The well lies 20 km northeast of its Gohta discovery in the Barents Sea and will test for

A busy Barents Sea delivers mixed results

Sources: NADL, IAATO, NOAA, IEA, Wood Mackenzie, Statoil, Eni, Greenpeace, ASRC

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hydrocarbons in Triassic sandstones and Permo-Carboniferous carbonates. Earlier in the summer the Swedish company appraised its Gohta discovery, about 35 kilometres northwest of the producing Snøhvit gas field. The well was drilled by the Island Innovator 5.3 km northwest of the 2013 discovery well. A test of the oil zone was inconclusive – although it did flow 6.4 million cf/d of gas – while the gas-condensate zone produced 26.4 million cf/d of gas and 880 barrels of condensate per day. Meanwhile Eni Norge, operator of the 170 million barrel Goliat oilfield development, has confirmed that first oil has been pushed back to mid 2015. There had been hopes that the field might be commissioned in Q4 2014 but the Goliat FPSO will now not leave its Hyundai yard in South Korea until early 2015. The FPSO will be fully commissioned at Hyundai, which means there should be a fast ramp to peak capacity once it is in position at Goliat. The NOK45 billion (US$7.2 billion) project is a joint venture between ENI (65%) and Statoil (35%).

DNV GL to inspect Goliat

Eni Norge has hired DNV GL, the world's largest shipping and offshore classification society, to supply inspection services to the Goliat platform in the Barents Sea. The three year contract, with an option for a two-year extension, will involve inspections of static equipment, load-bearing structures and offloading and anchoring systems aboard the Goliat FPSO.

ABB wins Yamal LNG contract

ABB has secured a contract to supply electrical power and propulsion systems for the first of 16 Yamal LNG carriers, with options to equip 15 further vessels. The contract is part of Novatek's Yamal LNG project to monetise gas from the Yamal peninsula north of the Arctic Circle.

UK gets new polar ship

Britain is to get a new state-of-the-art polar research ship after the Government agreed to commit funding of more than £200 million. The Natural Environment Research Council (NERC) will commission the ship for operations by 2019.

OSRL signs Greenland MoU

Greenland Oil Spill Response (GOSR), Greenland’s nationally owned oil spill emergency response company, has signed an MoU with Oil Spill Response Limited (OSRL). Nuuk-based GOSR was set up in 2012 as part of capacity-building as Greenland continues to open its challenging waters to exploration.

Antarctica visits up

The International Association of Antarctica Tour Operators (IAATO) has reported a 9% increase in visitors to Antarctica in the 2013/14 season. The trade body said 37,405 visitors travelled to the icy continent.

Briefs

US$11 billion Cost of JPSS, America's

next-generation polar-orbiting environmental satellite system

Analysts predict thin margins on Statoil's Johan Castberg project unless it opts for FPSO solution10.4%

North Atlantic Drilling signs six binding contracts

with Rosneft worth

US$4.25 billion

Eni hits

25,000 bpd production milestone

from Nikaitchuq offshore Alaska, its first operated

Arctic oilfield

Statoil conducted +70,000 different oil spill trajectory scenario

calculations ahead of Hoop area drilling

Russian authorities release the Arctic Sunrise, Greenpeace's

ice-breaker, after

300 days in custody in Murmansk

Shells signs breakthrough

participation agreement

with 7 native Alaskan corporations for

Chukchi Sea leases

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NEWS

The platform has a unique oil loading system to allow year-round shipments via the Mikhail Ulyanov and Kirill Lavrov super ice-class oil vessels with double hulls. The first oil shipment was made in April 2014, with the tanker's journey to buyers in Europe tracked by Greenpeace.

The efforts of the environmental campaign group have failed to dent Russian pride in the venture. “Gazprom is Russia’s outpost in the Arctic,” said Gazprom boss Alexey Miller in late 2013. “Last year we conquered Yamal, having created an unparalleled in the world, new onshore gas production centre in the Arctic. And today we have pioneered the Russian Arctic shelf development.”

The company returned to these waters in the summer of 2014, with the company drilling a new exploration well to a depth of 3,500 metres on the Dolginskoye field, where there are reckoned to be 200 million tons of recoverable oil equivalent. The well is being drilled by the GSP Saturn jack-up, which was the scene of a Greenpeace protest earlier this year.

Russian oil giant Rosneft is also

Pechora Sea and hosts recoverable oil reserves of almost 72 million tons. Production is currently running at around 300,000 tons this year and is projected to ramp to 6 million tons a year after 2020.

The Prirazlomnaya platform is the world's first stationary platform in Arctic waters. The ice-resistant platform was built using special alloys resistant to corrosion,

low temperatures, high humidity and an aggressive marine environment. All wellheads are inside the platform so they are protected from wave and ice exposure. Produced oil is stored in the caisson within three-metre-high concrete walls covered with two-layer corrosion- and wear-proof clad steel plate.

Russia has made no secret of its offshore Arctic ambitions, with President Vladimir Putin

seeing the High North as a key plank of sovereignty, economic growth and national prestige. In April 2014, for example, the self-styled Moscow hard man told a meeting of the Russian Security Council that the Arctic “is a concentration of practically all aspects of national security – military, political, economic, technological, environmental and that of resources.”

A big breakthrough came in late December 2013 when Gazprom Neft brought the controversial Prirazlomnoye field in the Pechora Sea onstream – the site of Greenpeace's now famous protest in September 2013 and the arrest of the “Arctic 30”. The launch of oil production in the Arctic, which is seen as vital to help replace production from depleted West Siberian fields, hasn't been easy, with the project suffering cost overruns and technical difficulties. Analysts have long pondered the economics of the oilfield, which required tax breaks to get to first oil.

The field lies 60 km offshore in the

While relations with the West may have hit a new post-Cold War low, Russia is steaming ahead with its plans to tap Arctic oil and gas riches, writes Amy McLellan

SANCTIONS FAIL to dent Kara Sea spud

Rosneft reckons its Kara Sea wildcat is the most important event of the year for the global

oil and gas industry

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The ice-bound Prirazlomnaya platform

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ARCTIC RUSSIA


spearheading frontier exploration in Arctic waters. It has signed a series of joint ventures with international oil companies, including ExxonMobil, Statoil and Eni, enabling it to draw on their capital, technology and credibility in Arctic shelf operations. The most high profile of these joint ventures is with US oil giant Exxon, which undeterred by Washington's barrage of sanctions against the Russian company in the wake of the Ukraine crisis, in August 2014 spudded their first well in the Kara sea. The Universitetskaya-1, the most northern well in the Russian Federation, is being drilled by the West Alpha rig (again Greenpeace made its presence felt).

The rig, just one of six units hired by Rosneft through a mutli-billion dollar long term supply agreement with North Atlantic Drilling, was mobilised over 1900 miles through the Barents, Pechora and Kara Seas to reach the drill site. In a signal of the importance of this spud at a time when western-Russian relations have hit a new low in modern times, the operation was initiated by Putin during a teleconference with Rosneft boss Igor Sechin and Exxon's Russian head Glenn Waller.

Sechin said the well was “the most important event of the year for the global oil and gas industry”. “As a result of this work we are planning to discover a new Kara sea oil province,” said Sechin.“Development of the Arctic shelf has a huge multiplicative effect on the whole Russian economy.”

The rig is equipped with infrared, radar and satellite data to track sea ice conditions and the companies have developed an iceberg collision prevention plan. The well is being drilled 2,350 metres deep in 81 metres of water. The partners reckon the Universitetskaya structure could host more than 9 billion barrels of oil and it's just one of 30 structures identified in the East Prinovozemelskiy blocks – the total resource could be 87 billion barrels.

The publicity surrounding the spud of the well was designed to demonstrate that recently imposed sanctions designed to put pressure on Moscow over the Ukraine crisis would not derail Russia's oil giants. Rosneft and even Sechin himself are on the US sanctions list. While sanctions have yet to stop any of the joint ventures so far underway, longer term analysts expect to see a slow down in investment as international partners stall for time to assess their risk exposure and imports of specialist drilling equipment are blocked.

SANCTIONS FAIL to dent Kara Sea spud

The sub-Arctic conditions of Sakhalin off Russia's East Coast mean its oil and gas companies have garnered decades of experience of working in harsh offshore conditions, writes Amy McLellan.

The oil and gas fields at Sakhalin – the projects here are numbered one to five - have pioneered a number of techniques that will help as companies push north in the Pechora and Kara Seas. And massive investments and world-firsts are still being set at Sakhalin. In April 2014, for example, the Z-40 well at Chayvo field, part of the Sakhalin I complex, set a new world record for extended reach drilling at a total measured depth of 13,000 metres. Then in the summer of 2014, Exxon Neftegas, operator of Sakhalin I (the other consortium members are Rosneft, Japan's SODECO and ONGC Videsh of India), installed the giant Berkut platform topsides, built in South Korea, onto the gravity-based structure at the Arkutun-Dagi field, setting a new world record for the heaviest integrated topsides installed by float-over method in open sea. The giant structure weighed 42,000 tons and contained over 1,900 km of cables and over 97 km of piping. Production startup is expected in late 2014, almost 20 years after Sakhalin I's first production from the Chayvo field in Q4 2005.Then there's Sakhalin II, a consortium that brings together Gazprom, Shell, Mitsui and Mitsubishi and that this April celebrated its 20th anniversary. Sakhalin II draws oil and gas from three gravity base offshore platforms – the ground-breaking Molikpaq, Piltun-Astokhskoye-B and Lunskoye-A – with the gas feeding Russia's first LNG plant: exports started in 2009 and a third train is now being considered.

Exploration drilling offshore Sakhalin

Exploration drilling offshore Sakhalin

The GSP Saturn working in the Pechora Sea

ARCTIC RUSSIA

07www.frontierenergy.info SUMMER 2014

More work is required to link the various elements coherently, tying together ice regime, the Polar Code and Ice Class, research and industry best practice. Discussions at a recent conference in London, attended by IMO Secretary General Koji Sekimizu and organised by the Swedish Ministry of Foreign affairs, resulted in strong recommendations about an ice regime that were then made to the Arctic Council in time for its meeting with Mr Sekimizu in Yellowknife, Canada.

At the most recent intercessional meeting of the IMO the need for an ice regime was debated and hard work is now taking place to prepare proposals in time for the next intercessional meeting.

History has taught us that it usually takes a disaster to instil urgency in implementing previously suggested

regulation. In the 1970s SOLAS was amended to take into account the need to rectify inadequacies in oil tanker safety. But the amendments were not ratified until after the loss of 50 people when the Betelgeuse exploded off South West Ireland in 1979. The ratification in 1980 arrived too late to impose a simple requirement that would have prevented the disaster.

The marine and energy industries need to demonstrate to the world that they are being responsible if public opinion is to support operations in the Arctic. It is the duty of those considering the Arctic as the next frontier to push for uniform, international regulation of the highest standards. If not, we risk the future of the industry, and the Arctic itself.

recommendations at present and the question of whether the guidelines go far enough, and whether the approach is too prescriptive, have yet to be answered.

One of the shortcomings of the Polar Code is that, at present, there is no ice regime applied to the Arctic or Antarctic. This will make it very difficult to complete the Polar Waters Operating Manual, a requirement under the Polar Code. If you cannot determine what the prevailing or periodic ice conditions are in a given area, it is impossible to determine or mandate what consequent operating requirements should be enforced. To determine the worst case scenario and to plan for safe operations accordingly, companies will need to identify the ice that, as the Polar Code says, ‘may be encountered’.

Canada operates an ice regime with zones and ice classes depending on ice conditions. Russia also has a system of ice regime. However, the USA, Norway, Denmark/Greenland and Iceland all lack ice regimes. Sweden and Finland operate a Baltic system, but this is not applicable to the Arctic.

In the high North, an Arctic ice regime should be established in order to have an effective application of the IMO Polar Code, enabling a universal application of the rules across the Arctic. For the Polar Certificate and Polar Waters Operation Manual to make sense, this is essential.

This gap in international law means companies will have to lead the way in creating and policing standards of safe operation in Polar waters in order to protect their industry.

There is, at present, no International Maritime Organization (IMO) convention that governs operations

in polar waters. What is apparent is that the International Convention for the Safety of Life at Sea (SOLAS), as it stands, is not fit for this purpose. Life raft requirements are nowhere near the standard required in the harsh Arctic environment.

It is also clear from the events of the Macondo spill that there is no coherent approach internationally to oil pollution and safety legislation. The International Convention for the Prevention of Pollution from Ships (MARPOL) does not apply to oil rigs or FPSO units. The Convention on Civil Liability for Oil Pollution Damage Resulting from Exploration for and Exploitation of Seabed Mineral Resources, which aimed to deal with pollution from drilling operations on a worldwide basis, has been lying on government shelves gathering dust since 1977.

The IMO is working on a draft Polar Code, which, it is hoped, will be agreed later this year. Agreement has been reached in principle on definitions for the different categories of ship and the requirements for safe operation in different ice types in the Arctic. It has also been agreed that all ships operating in polar waters should have a Polar Ship Certificate and a Polar Waters Operation Manual which is intended to give guidance for a range of planned and possible situations to determine the worst case scenario in the conditions that may occur.

The IMO Guidelines are merely

Lessons from HISTORY

The unique challenges presented by one of the world’s last frontiers are significant yet current regulations fail to answer them. Michael Kingston, Partner in the Marine, Trade & Energy Group at DWF LLP and shortlisted by Lloyd’s List for Global Maritime Lawyer of the Year for his work on the Arctic, discusses next steps to make sure the Polar Code is fit for purpose

This gap in international law means companies will have to lead the way in creating

and policing standards of safe operation in Polar waters in

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Arctic waters present unique challenges for mariners and energy operatorsMichael Kingston

08 SUMMER 2014 www.frontierenergy.info

POLAR CODE

Gazprom Neft anticipates output of 120,000 barrels a day after 2020.

Russia’s ambition and drive are in sharp contrast to the shortcomings of successive administrations in Washington. Arctic policy has only relatively recently become a US national priority after years of seeming indifference to issues including environmental degradation, illicit activity, economic competition and restricted freedom of navigation for US military and commercial vessels in Arctic waters.

Stirred belatedly into action, in May 2013 the Obama administration published a National Strategy for the Arctic Region and a companion Implementation Plan for the Arctic Region. Then, in November, the US delegation to the International Maritime Organization urged the General Assembly to adopt the IMO Polar Code

and with it, uniform standards promoting seafarer, passenger and cargo safety in these regions.

Nonetheless, these overdue actions failed to allay considerable unease at the highest levels. In March this year a policy brief from the Washington DC-headquartered Center for a New American Security warned that the US government was not adequately equipped to achieve comprehensive Maritime Domain Awareness, key to reducing the risk of vessel accidents, oil and chemical spills.

The US Coast Guard has been responsible for polar ice-breaking activities since 1965 but, at present, the US owns just three polar class icebreakers. Two, the heavy icebreaker Polar Star and Healy, primarily a scientific research support vessel, are in operation and the

While the United States and other nations scramble to develop and protect their commercial and strategic interests in the Arctic, Russia continues to pursue its own carefully planned agenda for the

development and exploitation of the region. Christopher Mayer reports on Putin's ice-breaking headstart

COLD WAR:Russia's ice-breaking advantage

Gazprom Neft, the oil arm of Russia's leading gas producer Gazprom, delivered a major

statement of intent when it shipped the first 70,000 tonnes of oil from the Prirazlomnoye platform in April 2014. The shipment marked the beginning of “great and large-scale extraction of minerals and oil by our country in the Arctic”, according to Vladimir Putin, and prompted the president to declare that the entire project would positively influence Russia's presence in the global energy markets and strengthen its entire economy and energy sector.

Recoverable oil reserves of the Prirazlomnoye field, located 37.5 miles off Russia's northernmost shores and the target of the recent Greenpeace protest, are estimated at 72 million tonnes and P

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Ice-breaking power: ABB won a US$25 million contract to supply the marine propulsion system to Russia's new rescue and salvage icebreakers

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third, due to age and wear, is in what is termed ‘caretaker status.’

“Compared with Russia’s fleet of 25 icebreakers, the US Coast Guard cannot meet the growing demand for increased polar presence for year-round search and rescue operations and spill response,” the report warned.

“Additionally, it cannot support maritime mobility for non-ice capable ships or deter illegal harvesting of natural resources. In short, the US will have to closely consider how to improve MDA in the region, and the Coast Guard, National Oceanic and Atmospheric Administration and other agencies will likely need greater resources to do so.”

The stakes could not be higher, particularly as the revolutionary €76 million (US$104m) Oblique icebreaker NB 508, constructed for Russia’s Ministry of Transport, makes its debut. The 1,150 dwt vessel, operating from its home port of St Petersburg, is the first of its kind to travel sideways through ice rather than head-on, cutting a channel up to 30% wider than conventional icebreakers.

Three rotating azimuth propulsors capable of turning 360 degrees have been placed asymmetrically along the ship's keel, with two propulsion units at the back and one at the front to give the icebreaker a high degree of manoeuvrability. Total propulsion power is 7.5 MW and even though the vessel moves forward at a speed of just 2 knots and can only tackle ice up to 0.6m deep while operating sideways, its ability to cut a path of 50m is the crucial selling point. In addition, the NB 508 can also undertake firefighting, towing and rescue operations.

In December 2012 the Russian Transport Ministry ordered two rescue and salvage icebreakers from Nordic Yards in Germany. The 88m long, 19m

wide vessels have Russian Maritime Register of Shipping Icebreaker 6 class notation and delivery is scheduled for 2015 when they will be deployed by Russia’s State Maritime Rescue Coordination Centre on rescue tasks in offshore oil and gas fields.

Their ice-breaking capabilities make them particularly suitable for the region between Murmansk and Sakhalin and the vessels could also be used if and when required in extreme weather conditions and in emergency situations, for fire-fighting duties and oil pollution incidents as well as investigating the seabed and damaged objects in waters up to 1,000m

deep.Last September

Zurich-headquartered ABB, a global leader in power and automation technologies, revealed it had won an order

worth around US$25 million to supply its marine propulsion system, Azipod, and complete electric power plants to the icebreakers. Total power for each vessel will be 7MW.

ABB, a major player in the Russian market, first delivered Azipod technology to icebreakers in the 1990s since when it has met the requirements of more than 30 ice-going vessels. On average, two out of three high ice-class vessels built today are fitted with ABB systems, according to Veli-Matti Reinikkala, head of the group’s Process Automation division.

Russia bears the distinction of being the only nation operating a nuclear icebreaker fleet, with five vessels deployed in the Arctic. The fleet, built between 1985 and 2007, is to be joined by the world's largest nuclear-powered icebreaker, the LK-60, ordered in August 2012 by the state nuclear power corporation Rosatom.

At 173m long and 34m wide, the US$1.2bn vessel is some 14m longer and 4m wider than the largest icebreaker

in operation, 50 Year Victory and, on delivery from the Baltiysky Zavod shipyard in St Petersburg towards the end of 2017 or early in 2018, it is expected to be deployed on the Northern Sea Route with the ability to crack 3m-thick ice.

The so-called Arctic type vessel is powered by two RITM-200 pressurised water reactors and the design will allow the icebreaker to alter its draught or the depth of the loaded vessel in water between 8.5 to 10.8m meters, enabling it to navigate shallow river waters in Siberia, currently the domain of the shallow-draft nuclear-powered icebreakers Vaygach and Taymyr.

Russia’s ambition and drive are in sharp contrast to the shortcomings of successive

administrations in Washington

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Cutting steel at Nordic Yards: the Russian Ministry of Transport has ordered two rescue and salvage icebreakers

The UK Government has committed more than £200 million to a new polar research vessel for delivery by 2019. The new polar ship will provide a cutting-edge research facility with greater ice-strengthened capability and longer endurance than the Natural Environment Research Council's existing polar research ships, which are coming to the end of their operational life. The ship will be operated by NERC's British Antarctic Survey and will support oceanographic, marine ecosystem, geophysical and other research activities, using the latest in marine robotic and remotely operated instruments. The vessel, which will be 129·6 metres long and 25 metres wide, is expected to have ice-breaking capabilities that will allow it to break ice of up to 2 metres when travelling at 3 knots. Professor Duncan Wingham, chief executive of NERC, said the ship's advanced capability will put the UK in a leading position to work nationally and internationally on polar science research in both Antarctica and the Arctic.

UK orders new icebreaker to maintain polar science position

New icebreaker for UK

ICEBREAKERS

www.frontierenergy.info SUMMER 2014 11

Operator USCG USCG USCG NSF (which leases it from owner Edison Chouest Offshore)

Operational status

Yes (reactivated December 2012)

No (currently non-operational in Seattle)

Yes Yes

Entered service 1976 1978 2000 1992

Length (feet) 399 399 420 308

Displacement (tons)

13200 13200 16000 6500

Ice-breaking capability(ice thickness in feet)

6 6 4.5 3

Ice ramming capability(ice thickness in feet)

21 21 8 N/a

Polar Star Polar Sea Healy Palmer

US Polar icebreakers

program that has been plagued with cost overruns and delays. The service’s yearly acquisition, construction and improvements budget hovers around US$1.1 billion, but officials and the Government Accountability Office (GAO) have said they need at least US$2 billion to fulfil their programs as currently planned in the years ahead. Last year the Coast Guard initiated a new project for the design and construction of a new polar icebreaker, with funding of US$7.609 million in FY2013 and US$2 million in FY2014. The Coast Guard’s proposed FY2015 budget requests US$6 million to continue initial acquisition activities for the ship.

Ronald O’Rourke, a specialist in naval affairs for the Congressional Research Service, said the service has advocated funding for another polar icebreaker to be split among several agencies, but he cautioned that this is a risky strategy because other agencies are facing budget shortfalls as well.

There is talk of spending US$100 million to reactivate Polar Sea as a temporary solution until a decision on a new polar icebreaker is made. Polar Sea is in non-operational status in Seattle, and has been out of service since 2010 following an engine failure. Polar Star is the service’s

The Coast Guard’s two existing heavy polar icebreakers — Polar Star and Polar Sea — have

significantly exceeded their originally intended 30-year service lives. Yet steel has yet to be cut on a replacement.

Concerns about the US Coast Guard's looming ice-breaking capability gap have been mounting for a number of years. In 2006 the National Research Council wrote a report that called for the nation to “immediately begin to program, design, and construct two new polar icebreakers to replace the Polar Star and Polar Sea”.

The report, Polar Icebreakers in a Changing World: An Assessment of US Needs, estimated that the US needed a minimum of three multimission ships and one single mission research ship to meet the nation's future ice-breaking needs.

Subsequent reports also warned of the need to replace aging ice-breaking assets. In 2010 the US Coast Guard's High Latitude Study informed Congress that “the increasing obsolescence of the Coast Guard’s icebreaker fleet will further exacerbate mission performance gaps in the coming years”. By January 2011 the Department of Homeland Security was warning there was a risk “the United States will have no heavy ice-breaking capability beyond 2020 and no polar ice-breaking capability of any kind by 2029.”

Later that year, the then commandant of the Coast Guard, Admiral Robert Papp, said there was a minimum requirement for three heavy icebreakers and three medium icebreakers but to maintain a persistent presence in the Arctic would require six heavy and four medium icebreakers. Three years on and there's no sign that even that minimum requirement will be met any time soon.

The service is in the midst of a multi-decade, US$30-billion-plus acquisition

only active heavy icebreaker. The Healy counts as a medium icebreaker.

There has some signs, however, that Washington is warming to the Arctic. In July 2014 the recently retired Admiral Papp was appointed US Special Representative for the Arctic, which was interpreted by Washington watchers as important move in building an “Arctic Team” at the State Department ahead of the US taking over the Chairmanship of the Arctic Council in May 2015.

Analysts at The Arctic Institute welcomed the appointment, not only because of Papp's experience and understanding of Arctic issues but also because the creation of the position is a firm signal of Washington's intent.

“The creation of the special representative position, which reports directly to the Secretary of State, denotes that the US government considers the Arctic to be a top-level foreign policy issue,” said The Arctic Institute in a briefing last month.

The analysts also said the appointment suggested that, unlike Canada, the US will place less emphasis on economic development and more on maritime issues, security and shipping. And a upgraded icebreaking fleet would be central to such a vision. Watch this space.

In contrast to Russia's full-steam ahead approach to building an ice-breaking capability in the Arctic, the US fleet is already under pressure. Amy McLellan reports

Waiting on Washington

Source: Congressional Research Service

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Healy: The USCG medium icebreaker breaks ice in Nome Harbour


ICEBREAKERS

An electronic copy of the chart is located at:Updated:

KEYVessels were selected and organized based on their installed power measured in Brake Horse

Power (BHP). Vessels with less than 10,000 BHP were not considered to be capable of

Data derived from various sources

26 June 2014

UnavailableN

NNuclear Power

BB Designed for Baltic use

Government ownedor operated

Been to the North Pole*

NOTES

http://www.uscg.mil/hq/cg5/cg552/ice.asp

COLOR GUIDE

≥ 45,000 BHPPower Plant

Name

≥ 20,000 BHP< 45,000 BHP

Power Plant

Name

≥ 10,000 BHP< 20,000 BHP

Power Plant

Name

Under ConstructionName

(anticpated completion)

PlannedName

(anticpated completion)

Direct Questions and Comments to: CDR Eric Peace - 202 372-1540

e-mail: [email protected]

LATVIAVarma

B(1)

NORWAYSvalbard

(2002)Polar Research Vessel

(Estimated 2015) (1)+ 1 planned

Agulhas II(2012)

SOUTH AFRICA(1)

SOUTH KOREAAraon(2009)(1)

JAPANShirase(2009)(1)

GERMANYPolarstern

(1982)Polar Research Vessel

(Estimated 2016)(1)+ 1 planned

ESTONIATarmo(1963)

B

(2) Botnica(1998)

CHILE Almirante Oscar Viel

(1967)(1)

AUSTRALIAAurora Australis

(1990)(1)

ARGENTINAAlmirante Irizar

(estimate return 2013)(1)

Polar Support Vessel(Estimated 2014)

Xue Long(1993)

(1)CHINA+ 1 planned

DENMARKNjord Viking

(2011)

BLoke Viking

(2011)

BMagne Viking

(2011)

BBrage Viking

(2012)

B

(4)

Nathaniel B. Palmer(1992)

Polar StarPolar Sea

Aiviq(2012)

Healy(2000)

USA(5)

Louis st. Laurent)

Terry Fox(1983)

John G.Diefenbacher(TBD)

Henry Larsen(1988)

Des Groseilliers(1983)

Pierre Radisson

(1978)Amundsen

CANADA(6)+ 1 planned

VoimaB

Urho(1975)

BSisu

(1976)

BOtso

(1986)

BKontio(1987)

BFennica(1993)

Nordica(1994)FINLAND

(7)+ 1 planned

Tor Viking II(2011)

Balder Viking(2011)

Vidar Viking(2001)

Frej(1975)

BBYmer

(1977)Atle

(1974)

BOden(1989)SWEDEN

(6)

SCF Sakhalin(2005)

Vasiliy Golovnin(1988)

Akademik Fedorov(1987)

Ikaluk(1983)

Smit Sakhalin(1983)

Magadan(1982)

Dudinka(1970)

Dikson(1983)

Mudyug(1982)

Tor(1964)

Kigoriak(1977)

Baltika(2013)

R-70202(2014)

R-70202(2015)

R-70202(2016)

LK-16 #1(2015)

BLK-16 #2

(2015)

B

Vitus Bering(2013)

Alexey Chirikov(2013)

LK-25(2015)

Varanda(2008)

(2006) (2006) (2006)Kapitan Dranitsyn Vladimir Ignatyuk Kapitan Khlebnikov

(1981)

Krasin(1976)

Admiral Makarov(1975)

Akademik Tryoshnikov(2011)

Kapitan Nikolayev(1978)

Kapitan Sorokin

Yermak(1974)

St. Petersburg(2008)

BMoskva

(2007)

BVladislav Strizhov

(2006)Yuri Topchev

(2006)

LK-16 #3(2015)

B

LK-110(Estimated 2017)

N

LK-60 Arktika( 2015)

N NLK-60

(Estimated 2016)

NLK-60

(Estimated 2017)

Taymyr(1989)

NVaygach

(1990)

NYamal(1993)

NRossiya

NSovetskiy Soyuz

N50 Let Pobedy

(2007)

N

RUSSIA(40)+ 6 under construction+ 5 planned

MAJOR ICEBREAKERS OF THE WORLD MA

RIN

E TRANSPORATION STYSTE

MS

UNITED STATES COAST GUARD

E

N

NE

SE

* Courtesy of Robert K. Headland – Scott Polar Research Institute

USCG Polar Icebreaker(TBD)

+ 1 planned

Polar Pevek(2006)

(1983)

(TBD)

UNITED KINGDOM+ 1 planned

icebreaker information and recommendations from a variety of sources and experts, including icebreaker subject-matter experts, internet posts, news updates, Arctic experts and Coast Guard o�ces with icebreaker equities. We validate our information within the public forum and update the chart at least semi-annually based on new information and

Scope.

10,000 horsepower.” Minimally ice-strengthened ships (enough to survive in ice, rather than operate in it) and icebreakers of less than 10,000 horsepower are not included. With the exception of the Baltic icebreakers, this chart does not indicate where their owners may actually operate them. In addition, the chart does not specify whether a vessel’s crew is civilian or military.

oldest. The chart colors icebreakers by their relative capability estimated using brake horsepower as the most common basis. The most capable icebreakers are black, the next level sea-green and the lightest icebreakers are blue. Icebreakers in construction are colored yellow, and planned icebreakers are white. Planned icebreakers are

Nuclear-powered icebreakers are marked with an Nhorsepower criteria are marked on the chart with a B. Most Baltic icebreakers may not have operated in the Arctic due to concerns with open-ocean sea-keeping ability for open water transits. Fleet numbers and Icebreaker Size in Context. For example, the economies of Finland, Russia and Sweden have greater dependence on major icebreakers to pursue economic goals in the Arctic and Baltic winters than the economies of other nations. Also, ice in these countries’ shipping lanes, rivers and ports forms earlier, lasts longer, and requires more power to break, requiring more extensive

icebreakers already listed, the U.S has a number of icebreakers operating in the Great Lakes, New England and the mid-Atlantic to facilitate commerce and for exigent circumstances, but these are not listed in this chart because the icebreakers are not required to meet the threshold of at least 10,000 BHP.

This chart is not intended for icebreaker �eet comparisons and no inference should be drawnregarding a country’s icebreaker “ranking” against another.

Polar Research Vessel(TBD)

feedback. This chart represents the Coast Guard’s current understanding of the major icebreaker �eet.

B

Smit Sibu (1983)

Cha

rt D

evel

oped

and

mai

ntai

nted

by

US

CG

Offi

ce o

f Wat

erw

ays

and

Oce

an P

olic

y (C

G-W

WM

)

ICEBREAKERS


enough displacement to allow for easier weight discipline, but miscalculations result in smaller deadweight and lower earning capability of the vessel.

Increasingly designers are also having to consider the vessel's open water performance. Modern ice breaking vessels spend substantial time in open water: cargo ships, for example, may travel from ice-free ports to ports that are only ice-covered at certain times of year so they only need act as ice-breakers intermittently. This makes the design process an optimization between open water performance and ice performance.

In the early days of ice-breaking the main driver was the need to be able to

operate ships in ice covered waters so development was focused on hull strength and propulsion power. As time went by, there were innovations in hull form and propulsion systems but in some cases the hulls were optimized so much to level ice conditions that the vessels no longer performed well in normal sea ice (which is always deformed due to winds and currents, creating ridges and rubble fields) or open water conditions.

Hull strength is the single most important parameter for vessel survival. Hull strengthening methods were developed simultaneously with the hull form development. Measurements have been made to determine the ice loads in different parts of the hull during different ice-breaking operations and it is clear that the way the captain operates the ship has great effect to the hull and propulsion loads.

After the energy crisis of the 1970s, there was increased focus on developing more efficient vessels. Design efforts concentrated on developing efficient hull form and propulsion systems. In the

Ice-breaking vessels require more project-related design than open water and ice-strengthened vessels.

This is because breaking through ice is a highly demanding and specialised activity, with icebreakers usually operating in extreme conditions, with the vessels often closer to their performance and strength limits.

The ice conditions in the intended area of operation set the design criteria for the ship and even a relatively small increase (or decrease) in ice thickness may have a big impact on the power and ice strengthening requirements of the ship. As ice-breaking vessels are considerably more expensive than similar open water vessels, it is unreasonable to over-dimension the vessel "just to be sure" as this reduces cargo carrying capacity and leads to losses for the shipowner. Under-dimensioning, on the other hand, means the vessel is limited in its operational capabilities.

Icebreaker design has always been very weight critical. Icebreakers have high power and a strong hull, but a small displacement. Weight evaluation in design phase and weight follow-up during building phase is essential for a successful project. Ice-breaking cargo vessels normally have

1980s, the focus was on the efficiency of the whole transportation system. With the introduction of azimuthing propulsion systems for ice-breaking vessels in the late 1980s and early 1990s, there was a focus on developing multipurpose icebreakers, which could undertake offshore work in open water in summertime and in winter work as icebreakers.

Azimuth propulsion also enabled the development of totally new types of ice-breaking ships, such as the Double Acting (DA) icebreaker, a vessel which can operate efficiently, running astern in ice. After that came the oblique icebreaker, which can also break ice sideways. Oblique movement enables the icebreaker to make a broader channel so it can assist vessels with a larger beam than the icebreaker.

The double acting principle was adapted to cargo vessel designs. The reduction in power requirement compared to shaft-line propulsion was up to 50%, which meant that cargo vessels could operate efficiently in ice covered waters without icebreaker assistance and still be efficient in open water. This also meant that the size of cargo vessels could be increased making the transportation more economical.

It is not just hull strength and form that is adapted for ice conditions. IIce also imposes special requirements on the machinery and propulsion systems as machinery malfunction or damage to the propulsion system in ice has a bigger effect on vessel performance than in open water. In open water, the vessel is able to come to safe harbour even with partial power, but in ice covered waters reduced power may mean that the vessel will get stuck in ice. And in Arctic or Antarctic areas, help is often far away. This means there are additional requirements for equipment reliability and redundancy.

It takes a long time to develop new vessel concepts. It took almost 18 years from the first idea of the oblique icebreaker until the first vessel set sail. That is an extreme example, because the idea was so revolutionary that no shipowner was ready to order a vessel with such a novel design. With the double acting concept the timeline was

Breaking through ice pushes vessels to the edge of their performance and strength limits. Arto Uuskallio of Helsinki-based Aker Arctic Technology discusses some of the design issues for icebreakers, past, present and future

A design FOR ICE

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We have to discuss how we can do this right first time because we will not get a

second chance

Icebreakers operate in the most testing conditions

Aker Arctic testing new designs

SPE RUSSIAN OIL & GAS EXPLORATION AND PRODUCTION TECHNICAL CONFERENCE AND EXHIBITION

Sustaining and optimising production: challenge the limits with technology

14 - 16 October, 2014All-Russian Exhibition Center, Moscow, Russia

ORGANISED BY:

PLATINUM SPONSORS

GOLD SPONSORS

SPONSORS

ORGANISED BY:

Register online today at www.russianoilgas.com

Total Attendance of3,000+

100+Technical Presentations

100+Leading Exhibitors

Visitors from30+ COUNTRIES


ICEBREAKERS

shorter but still almost ten years. It will be interesting to see how long it will take until a trimaran icebreaker is built.

Today the main drivers in ice-breaking vessel design come from the increased environmental and safety requirements. The upcoming Polar Code will definitely have an effect on the vessel design although it is too early to define the impact until the Code is finalised and the

first vessels are designed. Increased shipping and industrial

activity in the Arctic is also driving new designs as vessel types not traditionally used in ice-covered waters are needed to support this activity. As existing open water vessels cannot be used in the ice-covered waters, new types of ice-breaking ships are needed, from firefighting and different types of safety and rescue

Arctech Helsinki Shipyard has secured an order worth US$380 million from Russian shipping giant Sovcomflot for three ice-breaking stand-by vessels. The ships will be built to serve Sakhalin Energy, the operator of the Sakhalin II project off the Russian East Coast, with delivery between September 2016 and March 2017. This contract builds on a previous order from Sovcomflot in April 2014 for a larger PSV. The ice-breaking stand-by vessels are designed for stand-by and rescue duties and for oil spill recovery as well as for the transfer of low flashpoint fuels. Measuring 95m in length and 22m in breadth, with propulsion power of 13,000 kW, the vessels will operate in thick drifting ice in temperatures as cold as -35 C° and will be able to proceed independently in 1.5m thick ice. These orders from Sovcomflot take the number of icebreakers under construction at the yard to six: it is also building a 16 MW icebreaker for the Russian Ministry of Transport and an LNG icebreaker for the Finnish Transport Agency. In Spring 2014 it delivered the world's first oblique icebreaker, the multipurpose emergency and rescue vessel NB 508 Baltika, to the Russian Federal Agency of Sea.

Arctech lands US$380m Sovcomflot contract

functions to heavy lift operations, dredging and oil spill recovery vessels.

It is difficult to say what kind of vessels will be built in the future as even small changes in the rules can make a big difference to the solutions used. One thing is certain: understanding the environmental conditions and operational needs are crucial for good ice-breaking vessel designs.

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tech

The three new icebreakers will work on the Sakhalin II project

SPE RUSSIAN OIL & GAS EXPLORATION AND PRODUCTION TECHNICAL CONFERENCE AND EXHIBITION

Sustaining and optimising production: challenge the limits with technology

14 - 16 October, 2014All-Russian Exhibition Center, Moscow, Russia

ORGANISED BY:

PLATINUM SPONSORS

GOLD SPONSORS

SPONSORS

ORGANISED BY:

Register online today at www.russianoilgas.com

Total Attendance of3,000+

100+Technical Presentations

100+Leading Exhibitors

Visitors from30+ COUNTRIES

ICEBREAKERS

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ARCTIC KNOW-HOW, 125 YEARS IN THE MAKING

It's 125 years since Thea Foss, a young Norwegian immigrant living in Tacoma, Washington, bought

a used rowing boat, hoping to rent it out to help with the family’s finances. After painting it pristine white with green trim, she sold the rowing boat at a profit and used the money to buy several more boats. Her husband, Andrew, was a carpenter and began to build boats. A sign on the roof of their home advertised the enterprise as “Always Ready”. Foss, now a global maritime company with a fleet of over 130 vessels and 1,500 people on the payroll, still reflects that promise in its motto: “Always Safe. Always Ready.”

And part of that readiness involves a growing capability in the Arctic, where Foss has honed specialist expertise and

For over a century Foss Maritime Inc has followed its customers north, gaining decades of experience of working in the Arctic. Now, as activity levels increase in these challenging waters,

Amy McLellan finds the Seattle company is expanding its Arctic-ready fleet

Gary Faber: Experience counts in the Arctic

Foss has proved an innovator in tug solutions

experience. For 25 years, from 1960 to 1985, the Christine Foss and her captain Bob Burns were a lifeline for remote communities in Alaska, delivering fuel that kept Bristol Bay and Kuskokwim River towns alive during long Arctic winters. The company has also been instrumental in developing remote fields, hauling critical infrastructure more than 2,300 miles up the west coast to the Point

Thomson oilfield on the eastern North Slope: even in the height of summer the tugs had to wait for the ice to break-up before the cargo

could be unloaded. The company has developed its own unique equipment to serve this niche: its Emmett Foss tug, for example, has a shallow draft to help move modules, supplies and other cargo onto Arctic beaches and rivers that are out of reach of larger ocean-going tugs.

The company's motto is “always safe, always ready”


FOSS MARITIME

The company also has experience in the Russian Arctic, completing one of the world’s largest sealift deliveries over three years as it supported Exxon's construction of an oil production facility at the northeast tip of Sakhalin Island, a project completed ahead of schedule.

Operating safely and successfully in these extreme conditions comes down to experience. “You need good people who have been there and done that with a solid basis of situational awareness and decision making,” says senior vice president Gary Faber, who has 40 years in the business having gone to sea aged 17. “There's no-one to call, you are the guy.”

There are no short cuts to this kind of know-how. “You need to have the years under your belt to get used to the different parts of the Arctic and the situations that can, and do, occur,” says Faber. “And you need to have good teachers, experienced mariners passing down the right things. There's no substitute for that.”

With decades of experience supporting multiple industries operating north of the Arctic Circle, Foss has that depth of experience inhouse. “Because we do a variety of work, we are in the Arctic every year,” says Faber. “We've been going to the Red Dog Mine every year for 20 years with tugs and barges.”

This means even the years when there's no drilling activity in these icy waters – and there have been many – Foss still “keeps its hand in”. “For companies that just do rig support, there aren't enough opportunities to be working up there and you can lose that experience quickly,” notes Faber.

It's not just Arctic experience and the local knowhow – as Faber points out, there are not many navigational charts for these waters and the ice changes the contours every year – that are important: maritime support companies also need the logistical and commercial skill to make the most of a short operating window.

“You have maybe 60 days in August and September and you really have to plan to optimise that window,” says Faber.

Experience is also required about when to call it a day, even if northerly conditions appear fine as it's the exposure to the Pacific on the journey south during the autumn months that presents the most extreme weather. “It's so unpredictable.

The weather can be on you so fast and there are no ports of refuge. Once you are on your way you are committed. It's having that experience to make sure you give yourself time to react.”

Sustained high oil prices, advances in technology and an industry that outside unconventional resource plays is struggling to replenish reserves, means there's growing impetus to resume exploration in these challenging waters. As work rates increase in Arctic waters, Foss is investing to meet demand as operators eye untapped riches on the

North Slope and in the Chukchi and Beaufort Seas. A new office in Anchorage was opened in 2014 and the company has formed a partnership with the energy services

arm of the Arctic Slope Regional Corp, whose shareholders are the Inupiat. The alliance will see Foss train Inupiat youth for maritime industry jobs on the north coast.

The company is also adding to its Arctic-ready fleet. Three newbuild Arctic-class tugs with strengthened hulls are under construction at its Rainier Shipyard in Oregon. This new boat is something of a mariner's wish-list for Faber.

“We've put all of our years and years of experience into the design. In the US and Russian Arctic there's not a lot of water up there so it's shallow draft but plenty of power.”

The three new tugs will be equipped with low-emission Caterpillar engines and achieve in excess of 100 metric tons of bollard pull despite their shallow draft. The first will launch in December, with two more in the coming years.

“This is one of those career defining things, to design and build the boat I've been looking for for the best part of my career,” says Faber.

The company has also ordered a new barge from Gunderson Marine in Portland for work in the shallow draft regions of the Arctic. The barge’s first Foss job is expected in early 2015, when the company will perform a second sealift of oil and infrastructure to Point Thomson on Alaska’s North Slope. The barge will likely be towed from South Korea by the first of three Arctic-class tugs.

1889 Thea Foss buys a used rowing boat

1912 The company buys its first tug

1914 World War I creates new opportunities: Foss buys interests in Seattle-based towboat company

1920 The company changes its name to Foss Launch & Tug Company

1932 Starts delivering refined oil products to remote communities in south east Alaska

1939 World War II: Foss sends five tugs to support naval construction projects in the South Pacific

1982 Foss pioneers the use of the Voith Schneider Cycloidal system, the first of its kind in North America, giving tugs exceptional maneuverability for ship assists and tanker escorts

1986 The company changes its name to Foss Maritime Company

1987 Foss Maritime is bought by Saltchuk Resources, Inc, a privately owned family investment company

1990 Foss begins lightering ore from the Red Dog Mine in the Alaskan Arctic to bulk carriers anchored in deep water

2006 Foss completes one of the world’s largest sealift deliveries to Sakhalin Island off the coast of Eastern Russia

2009 Christening of the Carolyn Dorothy, the world’s first hybrid powered tug

2013 Foss’ Rainier shipyard starts work on the first of three Arctic-Class tugs/begins work for WorleyParsons delivering oilfield modules to Point Thomson in the Alaskan Arctic

2014 Opens new office in Anchorage as it pursues future opportunities in Alaska’s expanding oil, gas and mining sectors.

Time Line

We've put all of our years and years of experience

into the design of our new Arctic-class tugs

At work in the shipyard

FOSS MARITIME


Washington understand Arctic issues and formulate appropriate policies. “We bring that knowledge and presence of the Arctic,” says Harland, who is concerned the US may miss out on the opportunity that chairing the Arctic Council could bring in the two years from Spring 2015. “Our agenda should be pretty well thrashed out before we take over. You need to hit the ground running, it's only a two year window of opportunity.”

Crowley has long worked these waters, not just supporting North Slope developments with turnkey project management solutions, ocean towing and heavy lift transportation services but also supporting the Chukchi and Beaufort Sea exploration campaigns of almost 30 years ago. The company also provides fuel transportation and distribution to northerly locations - it has several tank farms in the Arctic – while its marine division at the southern terminus of the

Trans-Alaska oil pipeline is known as the “Guardians of Prince William Sound”, providing tanker escort and docking services.

The company also provides emergency response services to the offshore industry: Crowley was instrumental in the recovery of the Kulluk drilling unit, which had been working for Shell in late 2012 when it ran aground off Sitkalidak Island while under tow to Seattle. It was an event, much criticised by the US Coast Guard, that played into the hands of critics of Shell's exploration plans in the Arctic and earlier this year the Anglo-Dutch oil giant shelved plans to drill in the Chukchi this summer.

Alaskan experience AT THE TOP TABLE

In the challenging and unpredictable environment north of the Arctic circle, experience counts. It's one

reason Crowley Maritime Corporation is a name to know for those planning offshore ventures in Arctic waters: the company has been working in Alaska since 1953. That's more than six decades of Arctic experience.

That experience and insight is now being recognised at the highest levels: in July the company's vice president in Alaska, Bruce Harland, was named as one of three US representatives to the new Arctic Economic Council, which will have its first meeting on 2-3 September in Nunavut.

“We're going to talk about increasing access and interest in the Arctic and suggest operational and business practices that emphasise sustainable development,” says Harland. “The AEC is important because it's a forum where we can discuss how the Arctic develops and whether that development is with a lot of thought or whether it's just willy nilly.”

Harland, who has lived in Alaska for 17 years, says this thought leadership is important. “Otherwise there's a significant risk of it being a free for all: we have to discuss how we can do this right first time because we will not get a second chance.”

He's concerned, given that next year the US assumes chairmanship of the Arctic Council, that Arctic issues are still low in the national consciousness. “The US is not very Arctic aware. In Russia, Canada, Finland, Norway, the Arctic is part of who they are. But it is not part of the American consciousness.”

Yet through Alaska, the US has a big stake in the Arctic. This is why Alaskans have an important role to play in helping

As Harland points out, however, “the Kulluk incident was a towing based issue and not an Arctic drilling issue and the towing incident didn't even happen in the Arctic. Nor were there any environmental issues or spills associated with that event”. Even so, he admits, Shell's future activities in the region will be under intense scrutiny. “This is something the industry will have to work through and demonstrate their capability,” he says.

Again, the event underscored the importance of using seasoned Arctic mariners. Yet that experience can be hard to find given this is still very much a new frontier and those with experience of previous offshore Arctic campaigns are now of retirement age. And there are many different types of Arctic experience.

“Resupply operations that occur offshore Canada and Alaska in the summer months have the goal of avoiding the ice. That's a very different type of operation from breaking ice and intentionally forcing your way through the ice: it's different equipment and mindset,” points out Harland.

This Arctic skill gap is worrying for the industry as it steps up investment in the State, which is “on the cusp of some really big projects”.

“It's a very hopeful future,” says Harland, although he worries about the scope for young Alaskans to capitalise on the well paid jobs now available in the latest DP vessels given the limited training facilities in the state: many, like Harland who studied at the United States Merchant Marine Academy in New York, attend maritime colleges out of state.

Crowley is keen to help build experience and competence in the workforce. “We put extra positions on our vessels so they can shadow experienced mariners before they are in position of responsibility. It's well worth the expense for the confidence they gain.”

Again, Crowley is leading the way in the Arctic.

Crowley Maritime has been working offshore Alaska for more than 60 years. Amy McLellan speaks to its Anchorage-based VP Bruce Harland

We have to discuss how we can do this right first time because we will not get a

second chance

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Crowley at work: Eni sealift in 2010


OFFSHORE SUPPORT

Ice trials show capabilities of CAT-POWERED AHTSNew engine technology means even a non icebreaker AHTS can undertake some ice-breaking duties in a range of ice conditions

Copenhagen-based Viking Supply Ships has successfully carried out full-scale ice trials in the Gulf of

Bothnia on the Brage Viking, an 85 metre long AHTS type offshore support vessel that was delivered in 2012 from the Spanish Zamakona yard. The vessel, built to Finnish-Swedish ice class 1A standards, features two MaK 8M32C 4000kW and two MaK 6M32C 3000kW main engines, with a combined power output of 19,050 hp. These engines drive two nozzled CPP propellers, supplied by Caterpillar Propulsion.

The results of the extensive testing, in three areas with different ice thicknesses ranging from 20 cm to 50cm, showed that although not specifically designed for ice-breaking duties, Brage Viking’s performance in light to moderate ice conditions was at the same level as that of purpose-built Arctic supply ice breakers.

“We saw an opportunity to test Brage Viking to evaluate its performance in ice conditions and to demonstrate to customers, classification societies and flag state authorities its ability to operate safely in various types of ice,” says Viking’s project director, Andreas Kjol. “ These tests were unique, and of special importance, because opportunities like this are quite limited.”

Before the tests were carried out, Viking Ship Services prepared ‘pre-reports’, to set out the theoretical, anticipated performance of the vessel in ice. “We were very pleased with the actual results,” says Kjol. “Generally it can be said the vessel’s performance in the ice conditions encountered was somewhat better than predicted.”

The tests performed included going ahead and astern in level ice and channels, turning circle tests and ice ridge penetration. During the test the Brage Viking achieved a maximum speed ahead in level ice, with a 30-50 cm thickness, of 13.5 knots. Astern ice-breaking also tested with good results.

The vessel has an open water bulbous bow which can break ice by bending ice upwards when a suitable bow draught is selected. The tests showed that the vessel could penetrate typical ridges easily, while the bulbous bow could break ice running at operational speeds when the draught was correct.

“One of the things we learned from these tests was the correct operational draughts to optimise ice-breaking,” says Kjol. “We also learned that if required, small modifications to the upper part of the bulbous bow would increase the draught range and the performance of the bulbous bow, especially in heavier ice conditions, without sacrificing performance in open water.”

The bow of sister ship Loke Viking was in fact modified after these tests.

The vessel’s four main engines are connected via reduction gears to twin shaft CP-propellers. The twin rudders have a maximum turning angle of 70 degrees and can be operated separately. The lower side of the propeller nozzle and the rudders are installed about 0.9 m below the hull bottom line and are attached to the hull by a fin support, reducing ice loads and propeller/nozzle ice interaction.

The tests showed that the vessel could make a clean channel and that, by turning the rudders in the opposite direction, the channel could be widened further. At a maximum speed of 13-14 knots the ship broke the ice field to a width of 5-6 times that of the vessel

through its own wave pattern.Manoeuvring performance was rated

as ‘good’, and the vessel was able to also break out of its own channel backwards with rudders centered, just by changing the pitch of the inner curve propeller in an opposition direction. As the nozzled propellers were located relatively deep down, with a good hull clearance, almost no propeller-ice interaction was noted.

Kjol adds: “We needed to have more information about how the Brage Viking performed in ice, and to show to customers what she is capable of doing safely. So this was a very valuable exercise as we learned more about the scope for using this vessel for ice-breaking duties while the crew also learned a lot of about its behaviour in ice.”

Viking Ship Supply has developed a niche for itself, in providing offshore support services in harsh environments, especially in Arctic regions. The company is also extremely experienced operating in the Baltic, where for 14 years it has performed ice breaking services for the Swedish government.

“Brage Viking handled the conditions found in the northern Baltic in February very well,” says Kjol. “Operating as we do in remote regions, where a vessel can be three days from the nearest harbour, we need to have reliable equipment onboard. The propulsion system in particular has to be extremely reliable as downtime in these circumstances is not an option.”

Viking Ship Supply now has two years of experience operating the Brage Viking, and in that time the MaK engines and Caterpillar Propulsion propellers have performed very well, with a high degree of reliability. “These tests reinforced our confidence in the propulsion plant onboard. The propulsion system overall showed its ability to cope with, and operate well under testing ice conditions,” concludes Kjol.

Operating in remote regions, where a vessel can be three

days from the nearest harbour, we need to have reliable

equipment onboard

The Viking Brage on ice trials

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Arctic Oil & GasConference

IBC Energy’s 10th annual

Delivering technology innovations and operational excellence

Tuesday 4th – Wednesday 5th November 2014Thon Arena Hotel, Lillestrøm, Norway

Monday 20th and Tuesday 21st October 2014, Delta Hotel, St John’s, Newfoundland Wednesday 22nd October 2014: Seminar

7th Annual Arctic Shipping North America Forum

North America 2014

www.arcticshippingforum.com/northamerica

www.ibcenergy.com/arctic

www.ibcenergy.com/arcticoilspill

Protecting the Arctic through technology innovation and knowledge sharing

Thursday 6th – Friday 7th November 2014 Thon Arena Hotel, Lillestrøm, Norway

Arctic Oil Spill Conference

IBC Energy’s 4th

10% DISCOUNT, QUOTE VIP CODE:

FKT2647FEAD

and the American Petroleum Institute (API) Emergency Preparedness and Response Program Group (EP&RPG) formed a joint committee in 2009.

The committee established a Joint Industry Programme (JIP) charged with advancing Arctic oil spill response strategies and to increase understanding

of potential impacts of oil spills on the Arctic marine environment.

The JIP officially launched in January 2012 and it is now supported by ten international oil & gas companies – BP, Chevron, ConocoPhillips, ENI, ExxonMobil, North Caspian Operating Company (NCOC), Shell, Statoil, Total and

According to the US Geological Survey, the Arctic holds 13% of the world’s undiscovered

petroleum and 30% of its undiscovered natural gas. Of these resources, an estimated 84% lie offshore. The Arctic is therefore a huge potential source of energy for decades to come. However in order to develop the resource safely, the industry has a relentless industry focus on accident prevention – with an absolute resolve to be prepared to respond to any incident, however unlikely.

The industry has made significant Arctic oil spill response advances through more than 90 years of Arctic operations and decades of continuous research and development. To build on this and further improve existing technologies and methodologies for Arctic oil spill response, members of the International Petroleum Industry Environmental Conservation Association (IPIECA) Oil Spill Working Group (OSWG), Industry Technical Advisory Committee (ITAC),

OIL SPILL JIPmoves into second phase

Gazprom Neft. For all member companies, oil spill prevention is the first priority.

The JIP’s specific goal is to advance Arctic oil spill response strategies and equipment as well as to increase understanding of potential impacts of oil on the Arctic marine environment. The JIP has developed comprehensive international research programmes to further enhance industry knowledge and capabilities in the area of Arctic oil spill response. Having all response technologies available for use means that a spill can be assessed and the best response then initiated by employing the most appropriate tool or tools. The flexibility to use a broad range of response options, as conditions change, is essential to mounting the most effective response possible. There is no single solution for dealing with a spill in the Arctic offshore. Effective response requires all tools in the toolbox.

Over the course of the programme, the JIP will develop and advance new

Jennifer Wyatt, Chair of the Executive Committee of the Arctic Oil Spill Response Technology Joint Industry Partnership, provides an update on the work of this important JIP

The JIP is supported by ten international

oil and gas companies

Scientists taking measurements

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OIL SPILL RESPONSE

capabilities in six areas. The projects involve a combination of experimental study, synthesis of existing data leading to improved practice, and development of improved operational methods for response. Expert technical working groups for each project area involve top researchers from the member companies. The JIP is committed to ensuring each research project is conducted responsibly – its top priority is the safety of people and the environment.

Dispersants

The overall objective of the Dispersant technical working group is to build on current knowledge of the effectiveness of dispersants as an oil spill response tool and define the operational limits of chemical dispersants and mineral fines in Arctic marine waters. The report, “Dispersant Testing Under Realistic Conditions” reveals that dispersants can work in the Arctic and will, under certain conditions, be more effective in the presence of ice than in open water. The presence of ice can increase the time window within which dispersants can be used effectively and that there is need for a discussion around potential obstacles to achieving permission to conduct dispersant operation in ice-prone regions.

In Situ Burning (ISB)

The In Situ Burning technical working group aims to understand the degree to which ISB is effective as a response technique in Arctic conditions, and raise awareness of its benefits and drawbacks. The headline findings so far are that technology exists to conduct controlled ISB of oil spilled in a wide variety of ice conditions. In fact, ISB is one of the response techniques with the highest potential for oil spill removal in Arctic conditions and the industry should consider regulation that will support its use. Most of the perceived risks associated with burning oil are able to be mitigated.

The report, “In Situ Burning in Ice-Affected Waters: State of Knowledge” includes a treatise on the science of how in situ oil burning works, consisting of a detailed literature review of all relevant scientific and field studies and experiments on the subject. A second report, “In Situ Burning In Ice-Affected Waters: A Technology Summary And Lessons From Key Experiments” confirms

that there is sufficient information gained from laboratory and field testing to understand the basic principles of in situ burning oil in a wide variety of snow and ice conditions. The report summarizes

that the technology exists to conduct controlled in situ burning of oil spilled in a wide variety of ice conditions. A third report, “In Situ Burning In Ice-Affected Waters: Status of Regulations in Arctic and Sub-Arctic Countries” captures a status of regulations related to the deployment of ISB as an oil spill response countermeasure.

Remote Sensing

At the same time, the Oil Spill Detection and Mapping in Low Visibility and Ice Research technical working group is completing work with C-CORE and Polar Ocean Services/Woods Hole Oceanographic Institute. Accurate oil-slick detection and mapping is particularly important for arctic spills, as oil may be hidden from view under snow and ice during periods of almost total darkness. The overall goal of the Oil Spill Detection and Mapping in Low Visibility and Ice Research technical working group is to expand the industry’s remote-sensing and monitoring capabilities in darkness and low visibility in broken ice and under ice, and to detect and track subsea plumes that can develop if dispersants are used to control continuous subsea. The industry has a range of airborne and surface imaging systems utilised from helicopters, fixed-wing aircraft, vessels and drilling platforms that can be used for ice conditions.

Environmental Effects

The Environmental Effects Working Group is soon to launch its comprehensive literature review together with a searchable database which will guide the planning of future laboratory, field, and modelling studies. This knowledge will facilitate the creation of accurate environmental impact assessments and aid in deciding which response technologies to deploy in the event of a spill in Arctic areas.

Moving into the second phase of research

The next phase of research will see the JIP commence lab and basin testing of specific technologies. Basin calibration of three test tanks have already been completed and, over the coming months, laboratory and further basin testing of dispersant effectiveness will be conducted at different test facilities (SL Ross, SINTEF, and Cedre). Experiments will be conducted at the CRREL facility to test and evaluate the performance of various surface and subsea remote sensing technologies. Research has also been initiated to develop a new sea ice model that will be tested, evaluated and validated. Results will be integrated into established oil spill trajectory models. Finally, research is being initiated to improve our knowledge of herder fate, effects, and performance in ice prone waters.

Our findings to date highlight that the industry is prepared and has a wide range of viable technologies for oil spill response in the presence of ice in open water. The industry also has a role to play in helping countries in Arctic jurisdictions understand the benefits of having a regulatory process in place to approve the use of all of these.

ISB is one of the response techniques with the highest

potential in Arctic conditions

Researching in the Arctic

For more information: www.arcticresponsetechnology.org

OIL SPILL RESPONSE


This is where investment in developing new materials can help, providing a high Clo value while also delivering the functionality and ease-of-use demanded by the industry. VIKING also supplies heated cabinets for storing the immersion suits.

“At minus 40 a lot of materials get very rigid and almost impossible to work with so it's important to keep them in heated cabinets,” says Carlsen.

Last summer the company launched a new SOLAS-approved thermal lifejacket, the first to comply with new stringent lifejacket performance standards as well as existing thermal requirements. The new PV9720 lifejacket protects against loss of body temperature with a built-in neoprene torso covering the core body, head and crotch area and also provides manoeuvrability and field of vision, important when entering a liferaft, as well as a slim profile design for easy donning and storage. Carlsen says there's already demand for use on offshore supply vessels, accommodation platforms, pipe laying barges, passenger ferries and companies exploring in the Barents Sea.

The company also supplies polar liferafts that can withstand the harsh conditions typical of Arctic regions, functioning at temperatures as low as -50, with a heater system that ensures the raft always inflates. Its Arctic Evacuation System for offshore installations allows emergency evacuation from heights up to 40 metres. It comes with integrated liferafts, fire retardant

As activity levels increase north of the Arctic Circle, with more transits of the Northern Sea

Route and exploration drilling pushing ever northwards, so too do the risks. This is why it is important that those working in these northern waters have specially designed safety equipment. And this is where the likes of Denmark's VIKING Life-saving Equipment A/S come in. The Esbjerg-headquartered company offers a suite of safety, fire-fighting and rescue products that are winterised for polar conditions, drawing on years of Arctic experience: in 2005 the company supplied liferafts for ice-breaking supply boats serving the giant Sakhalin development in the harsh Okhotsk Sea off Russia's East Coast.

Its product range includes immersion suits designed to protect against life-threatening hypothermia, which causes reduced muscle coordination and movement, poor decision-making, amnesia, loss of consciousness and death. Having the right kit to stave off hypothermia really is a matter of life or death, enabling people to think clearly, operate life-saving equipment and stay afloat while waiting for assistance.

The insulation in an immersion suit works by locking air and radiant body heat in the suit to help prevent hypothermia and extend survival time in the water. The regulatory requirements for these suits are stringent: under SOLAS

regulations persons wearing the suits have to be able to be in the water for six hours at zero degrees and have their body temperature drop only two degrees.

Insulation within clothing is measured with the unit “Clo”: one “Clo” represents the thermal comfort of an average person in business clothing in a normal indoor environment. Fractions of this thermal comfort are what are

perceived when worn in the water, because water transfers heat out of the body 25 times faster than air. VIKING's SOLAS immersion suits have a minimum Clo value of 0.75, which means they are compliant with the regulations.

As Benny Carlsen, VIKING’s VP Offshore, points out, however, an effective immersion suit isn't just about multiples of insulation. “It's one thing to develop a suit and add a lot of insulation but it also has to be functional: it has to be comfortable, it has to be easy to put on in the correct way and it has to allow you to work.”

STAY WARM, STAY SAFEFreezing temperatures, shifting sea ice, unpredictable weather, limited navigational charts

and in darkness for six months of the year: the Arctic is a dangerous place. Amy McLellan reports on how one company has developed safety and rescue products to help mitigate those risks

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The right kit really is a matter of life or death, enabling people to think clearly, operate life-saving equipment and stay afloat while

waiting for assistance

Testing conditions

OFFSHORE SAFETY


chute and blast proof container and, with its special counter weight system, can be deployed either to the sea or to a stand-by ice-breaking vessel.

“This system can be deployed on the sea when it's ice free but when it's floating ice you can lower it down onto the back of the ship,” says Carlsen. “It means you don't need two different types of system depending on the ice conditions at different times of year.”

The company has used its knowhow and global reach to find solutions to its customer problems. Its Viking Shipowner Agreement is now a standard feature of the maritime industry, saving time and therefore money for shipowners. “We take all the responsibility for planning and servicing of the safety equipment. It's streamlined and on a fixed price for five years so owners have certainty on costs.”

They are very popular agreements, particularly its Liferaft Exchange service. “Under this agreement, shipowners become members of a global pool of liferafts, all approved and standardised, so when they get into port they can quickly swap over - there's no waiting for us to take them and service them. It's very convenient, ensures a quick turnaround and it's a fixed price contract.”

The company has now taken this one-stop-shop model offshore: the VIKING Offshore Safety Agreement. In this sector, operators often have a portfolio of marine safety equipment involving many different brands, models and vintages spread across many rigs. Maintaining this demands significant time and resources, both for the operator and its different suppliers, which must maintain spare parts inventories, accurate delivery times and consistent quality levels. The delivery logistics are complicated, too. Unlike safety servicing for passenger or cargo ships, which can be carried out when the vessel is in port, offshore platform owners

are often forced to choose between buying or renting a temporary set of liferafts to replace equipment being serviced, or to consider reducing onboard personnel for days while vital safety equipment is being maintained on shore. And it's expensive to have servicing engineers travelling via helicopter to far flung platforms.

“Typically it's not the service itself that's expensive, it's the logistics, sending people offshore and sending them back,” says Carlsen. “That's quite an expense.”

Statoil this year inked a multi-year servicing contract with VIKING for the maintenance of marine safety equipment on board 36 platforms in the North Sea. Statoil's senior engineer in charge of maintenance management Frode Lindseth, speaking earlier this year, said that previously the company's North Sea installations had been servicing their safety equipment under a variety of different schemes with little or no synchronization or coordination with other installations in the area.

“Now, VIKING has taken on the management effort, creating a single point of contact for us and finding new efficiencies with a minimum of disruption to Statoil’s production and production support processes. And the new predictability of costs is also very important to us, too,” said Lindseth.

“This is our contribution to the offshore industry, making the industry more efficient,” says Carlsen.

And, he adds, “from an overall safety perspective, this is a real game-changer.”

He explains: “Basically, we take care of all aspects of a rig owner’s safety equipment and servicing tasks for predictable, transparent prices. This not only answers efficiency requirements but it can also lift the customer’s safety equipment and servicing arrangements to the higher levels required as exploration moves further from shore.”

All the safety equipment in the world is of little use if workers don't know how to use it effectively or safely. In October 2013 VIKING acquired SAATSEA, now renamed VIKING Saatsea, which delivers an online training system to onboard crew so they can complete and register module-based theoretical and practical assignments, with immediate, up-to-date competency assessments for marine and offshore inspections. A cloud-based mobile solution ensures that the system always works, even when the vessel is not on the internet. The information is synchronized automatically whenever the vessel has the opportunity to come online. This means shipowners can be sure their crews are compliant with the mandatory requirement for annual onboard training of all Emergency Rescue and Recovery Vessel crew on vessels operating out of Denmark, Norway and the UK as well as the coming regulatory requirements for documentation of STCW refresher courses for all IMO vessels.

Online training: an essential part of the safety kit

Where the right equipment really matters

An Arctic evacuation system

OFFSHORE SAFETY


The ocean has shaped all aspects of life in Newfoundland and Labrador. It has impacted our people and created a culture of innovation - a culture

which has led to unique strengths, innovative technologies and world-class infrastructure in ocean technology.

With a strong industry selling to international markets, an experienced research community with unique R&D facilities and significant support from all levels of government, Newfoundland and Labrador is developing technological solutions in key economic sectors such as oil and gas, fisheries and aquaculture, transportation, environment, marine recreation and tourism, and defence and security.

Newfoundland and Labrador is the Path to the Arctic. While not geographically located in the Arctic, the water surrounding Newfoundland and Labrador is colder than anywhere else south of 60 degrees. It is even colder than the waters near Norway and parts of Alaska, Greenland and Iceland.

As a result, oil and gas experts and operators in Newfoundland and Labrador are changing how to explore and endure cold, harsh and ice-prone environments based on proven experience in safe and sustainable development of offshore oil and gas in one of the world’s most demanding ocean environments.

The world is recognizing Newfoundland and Labrador as its natural cold-ocean laboratory. Consequently, the province is attracting many international, world-class events; each with participation from more than 1000 delegates.

This year Newfoundland and Labrador will host the prestigious OCEANS'14 Conference from September 14-19, 2014. OCEANS’14 is jointly sponsored by the Institute of Electrical and Electronics Engineers and the Ocean Engineering Society, as well as the Marine Technology Society.

Aptly themed, “Oceans: Where Challenge Becomes Opportunity”, OCEANS’14 will attract leaders from industry, academia and government and will play a key role in promoting collaboration, strengthening relationships and facilitating partnerships among key stakeholders on a global scale.

The American Society of Mechanical Engineers (ASME) 34th International Conference on Ocean, Offshore and Arctic Engineering (OMAE2015) will be held in St. John's from May 31 - June 5, 2015. OMAE2015 is the ideal forum for researchers, engineers, managers, technicians and students from

the scientific and industrial communities from around the world to present and exchange ideas and advances in technology as well as promote international cooperation in ocean, offshore

and arctic engineering.Newfoundland and Labrador has also

been chosen to host the prestigious Arctic Technology Conference in October 2016 (ATC2016). ATC is an Arctic-focused expansion of the Offshore Technology Conference (OTC), the world’s foremost event for the development of offshore resources. The Arctic Technology Conference has a proven track record of providing a worldwide platform for industry colleagues, vendors and

academia to network, share ideas, research and develop cutting edge technology to overcome the challenges that can be found in one of the world’s most challenging environments.

Events special: Newfoundland & Labrador, the world's cold-water laboratory

We invite you to discover and explore Newfoundland and Labrador – the World’s Cold-Ocean Laboratory. To learn more about Ocean and Arctic Technology, please visit us online at www.gov.nl.ca/IBRD or e-mail [email protected].

While not geographically located in the Arctic, the water

surrounding Newfoundland and Labrador is colder than anywhere

else south of 60 degrees

Hibernia: still a landmark in offshore harsh environment developmentMemorial University: a hub of Arctic know-how

Terra Nova FPSO: the first development in North America to use FPSO technology in a harsh weather environment

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• OTC’s 45 year history and legendary success.

• The combined reach and credibility of 14 of the world’s top engineering and scientific organizations.

• Three years of demonstrated success attracting some 1500 E&P professionals from 25 countries and 80 exhibiting companies each year.

• The world’s most focused yet comprehensive Arctic conference built with expertise representing every technical discipline.

• Copenhagen’s geo-strategic location provides easy access for all European Arctic professionals while also drawing experts from North America and around the globe.

Why chooseATC over other Arctic events?

Sponsorship and exhibit opportunities available now.ArcticTechnologyConference.org

COPENHAGENDENMARK23-25 MARCH 2015

BELLA CENTER

ArcticTechnologyConference.org

OTC’s Arctic Technology Conference (ATC) is part of the successful series of events which includes the flagship Offshore Technology Conference in Houston, OTC Brazil in Rio de Janeiro and OTC Asia in Kuala Lumpur. Anchored by 14 of the energy industry’s leading engineering and scientific organizations, OTC’s cutting-edge conferences, products and services exhibitions have fostered development of the world’s oil and gas resources since 1969.

If your job is to discover and effectively and safely produce the vast energy resources in the Arctic, you need to participate in the event that has the industry and society credibility to bring it all under one roof: ATC.

Participate in ATC with confidence:

atc15-297mmx210mm-FE.indd 1 8/18/14 11:42 AM

Offshore Northern Seas 2014 (ONS 2014) August 25 – 28, 2014Stavanger, NorwayOffshore Northern Seas 2014 (ONS 2014) is a biennial event, providing a platform for the presentation of the political, economic and technological issues involving the international oil and gas industry, as well as showcasing the latest innovations within the industry. ONS 2014 will incorporate the ONS Innovation Park, with a special focus on the oil and gas industry’s increasing reliance on cutting-edge technology. The Innovation Park also serves as a background for the prestigious Innovation Awards. With over 1,000 exhibitors and around 60,000 visitors, ONS 2014 will be one of the Offshore industry’s leading events.www.ons.no

7th Annual Arctic Shipping North America Forum 2014October 20 – 21, 2014St John's, NewfoundlandNorth America's leading shipping event dedicated to Arctic shipping operations. The event provides the opportunity to hear from ship operators on what works and what is missing for operations in the High North, assess the potential impact of Canada's chairmanship of the Arctic Council, discover the details of US policy towards the Arctic and understand the viewpoint of the Northern Communities

in establishing effective marine policies in the Arctic. www.informamaritimeevents.com/event/arcticshippingnorthamerica

4th Offshore Support Vessel ConferenceOctober 20 – 21, 2014Hotel Continental, OsloWith input from Statoil, Viking, Ulstein, Fearnley, DNV GL and many more, this event covers market forecasts, new opportunities, expert analysis, technology and fuel efficiency.http://www.informamaritimeevents.com/event/offshore-support-vessels-conference.

Arctic Circle October 31 – November 2, 2014Reykjavík, Iceland A forum is discuss the latest views and news from the Arctic. The 2013 assembly had more than 1,200 participants from 40 countries.www.arcticcircle.org

10th Annual Arctic Oil & Gas ConferenceNovember 4 – 5, 2014Thon Hotel Arena, near Oslo, NorwayArctic Oil & Gas Conference: Delivering technology innovations and operational excellence for safe, sustainable and economical development of Arctic resources. Roundtable sessions on sustainable development of the Arctic’s natural resources, offshore pipeline design

& engineering challenge, non-technical challenges in operating in Arctic regions and the latest advances in ice-breakers for the oil & gas sector.www.ibcenergy.com/event/Arctic

4th Arctic Oil Spill ConferenceNovember 6 – 7, 2014Thon Hotel Arena, near Oslo, NorwayBringing together senior level executives from oil companies, R&D organisations, spill contractors, regulators and NGOs, this event covers the pioneering technologies and methods, and emerging legislative and regulatory requirements, to mitigate environmental effects of E&P operations in the Arctic.

Arctic FrontiersJanuary 18 – 23, 2015Tromsø, NorwayNow in its 9th year, this thought-provoking conference, which brings together representatives from science, politics, and civil society, has the title Climate and Energy. It will address how upcoming challenges in the Arctic may be addressed to ensure sustainable development. www.arcticfrontiers.com

Arctic Shipping ForumFebruary 24 – 26, 2015Helsinki Congress PaasitorniNow in its 11th year, the forum covers maritime issues in Arctic waters, from the Polar Code to ship design and technology for ice-going vessels.www.informamaritimeevents.com

Green Ship Technology Conference 2015March 2015Copenhagen, DenmarkFrom policy to technology, this major event brings together decision-makers and thought leaders to help equip the shipping industry make informed decisions on crucial environmental issueswww.informamaritimeevents.com

A showcase for the latest developments in upstream technologies and services, the main theme of this dual technical conference and exhibition is "Sustaining and optimising production: challenging the limits with technology". The event provides a showcase for leading Russian and international suppliersand provides organisations with an opportunity to engage face to face with Russia's exploration and production community.www.russianoilgas.ru

SPE Russian Oil and Gas Exploration and Production Technical Conference and ExhibitionOctober 14 – 16, 2014All-Russia Exhibition Centre, Moscow

TO ADVERTISE your event in the magazine, website or eNewsletter, please contact [email protected]

Pipetech AmericasMarch 10 – 11, 2015San Antonio, TexasNow in its sixth year, this high level summit brings together decision-makers and influencers in oil and gas mid-stream operations. www.pipetechamericas.com

ATC 2015March 23 – 25, 2015Bella Center, CopenhagenIn 2015 the Arctic Technology Conference will cross the Atlantic to Copenhagen to provide easier access for European and Asian Arctic practitioners. ATC is an Arctic-focused expansion of the Offshore Technology Conference (OTC), the world’s foremost event for the development of offshore resources in the fields of drilling, exploration, production and environmental protection. www.arctictechnologyconference.org

OMAE2015 Ocean, Offshore and Arctic Engineering ConferenceMay 31 – June 5, 2015St John's, NewfoundlandThe American Society of Mechanical Engineers (ASME) 34th International Conference on Ocean, Offshore and Arctic Engineering (OMAE2015) is the ideal forum for researchers, engineers, managers, technicians and students from the scientific and industrial communities to present and exchange ideas and advances in technology as well as promote international cooperation in ocean, offshore and Arctic engineering.www.asmeconferences.org/OMAE2015

3P Arctic, The Polar Petroleum Potential ConferenceOctober 6 – 9, 2015Park Inn by Radisson Pribaltiyskaya, Saint Petersburg Organised by the American Association of Petroleum Geologists, 3P Arctic has been running since 2009 and is the leading geoscience event for the Circum-Arctic basins.www.3parctic.com

• OTC’s 45 year history and legendary success.

• The combined reach and credibility of 14 of the world’s top engineering and scientific organizations.

• Three years of demonstrated success attracting some 1500 E&P professionals from 25 countries and 80 exhibiting companies each year.

• The world’s most focused yet comprehensive Arctic conference built with expertise representing every technical discipline.

• Copenhagen’s geo-strategic location provides easy access for all European Arctic professionals while also drawing experts from North America and around the globe.

Why chooseATC over other Arctic events?

Sponsorship and exhibit opportunities available now.ArcticTechnologyConference.org

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OTC’s Arctic Technology Conference (ATC) is part of the successful series of events which includes the flagship Offshore Technology Conference in Houston, OTC Brazil in Rio de Janeiro and OTC Asia in Kuala Lumpur. Anchored by 14 of the energy industry’s leading engineering and scientific organizations, OTC’s cutting-edge conferences, products and services exhibitions have fostered development of the world’s oil and gas resources since 1969.

If your job is to discover and effectively and safely produce the vast energy resources in the Arctic, you need to participate in the event that has the industry and society credibility to bring it all under one roof: ATC.

Participate in ATC with confidence:

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EVENTS


Reaching what the industry calls a "final investment decision" - the golden milestone signalling

that steel can be ordered, workers hired and construction can begin - takes time, money and tight coordination between multiple parties working on different parts of a project. Sponsors and financial backers want to make sure they've done their due diligence before unleashing a flood of capital. More than 90% of project costs - the money for production modules, compressors, pipe, motors, installation and construction - are incurred after the final investment decision.

The FID naturally attracts attention. Aside from signalling the start of real spending, it's a big breakthrough in a multi-year process that's typically fraught with uncertainty and risk.

The Alaska LNG project's proponents — ExxonMobil, ConocoPhillips, BP and TransCanada - estimate it will take several years before they reach FID. Black & Veatch, an international oil and gas consulting firm advising the state of Alaska on the LNG project, says FID could come as early as 2019.

A work plan by proponents of the proposed US$45 billion to US$65 billion Alaska LNG project shows that a positive investment decision hinges on whether they can secure gas buyers, shipping

agreements, land-use approvals, financing, permits, engineering, procurement and construction contracts, and as much certainty as possible that the profits will be worth the enormous investment.

Still, an affirmative FID doesn't guarantee a finished or operational project. The decision is rarely legally binding in terms of an absolute construction schedule, giving project owners an escape hatch.

"Things change. The LNG demand market could go poof. The supply commodity costs could ratchet up to an unsustainable level. Or project costs could just get out of control. Or exchange rates could turn on you," says Houston-based energy attorney Bill Garner. "Since this is a private decision within a company or among the partner group, it just is wiser to maintain one's flexibility by not having things legally binding."

The rise of LNG megaprojects is recent enough that few examples exist of projects that have been postponed and there are no examples of privately sponsored projects that have been abandoned after an investment decision has been made, but it's not unheard of within the greater oil and gas industry.

Pulling out of a project post-FID may still trigger penalties, including loss of all project equity paid to date, liquidated damages or expulsion from

The decision to break ground on a liquefied natural gas export project is a momentous move for project sponsors, a multi-billion-dollar stake on their futures. Jeannette Lee, researcher and writer for the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects, analyses the milestone that is the final investment decision

Final Investment Decision: THE BIG BREAKTHROUGH

Jeannette Lee

The Trans-Alaska pipeline: the state is no stranger to big strategic projects

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ALASKA LNG


the partnership. Depending upon how the agreements are drafted, there may be provisions for termination damages built into financing commitments, off-take agreements or engineering, procurement and construction contracts, Garner says.

Pre-FID costs low

Pre-construction spending for a typical large LNG project might involve just 6% of the overall capital expenditures, with the other 94 percent of spending coming after FID.

Before FID, spending on a project is typically less than 10% of total costs, said Nikos Tsafos of Enalytica, a consultant to the Alaska Legislature on the LNG project.

"The call of capital really comes only after you've had an enormous amount of time to spend to study all the permutations of the options in coming up with a schedule and a project structure that is comfortable to all the project partners," Tsafos told the Legislative Budget and Audit Committee in January 2014.

The state of Alaska estimates US$2.4 billion in pre-FEED and FEED expenditures for the entire production and transportation chain, including the gas treatment plant on the North Slope, 800 miles of pipeline and the liquefaction plant and shipping terminal at Nikiski. That's about 5% of the estimated US$45 billion to US$65 billion cost.

"Before you get to final investment decision, you haven't spent any real money," Tsafos said. Though substantial, "it's not 'real money' in the context of $65 billion," he added.

LNG pricing is extremely important for project sponsors. They're looking at tremendously expensive projects with long lead times and need some certainty that by the time the first cargo is ready to ship, they'll be able to sell the LNG at a price that ensures good returns.

Price certainty is major reason project

sponsors nail down sales contracts before making the final investment decision.

"This is a very common, almost necessary step. It is typical for large LNG projects to have the majority of the LNG committed to customers from the start," Deepa Poduval, lead consultant for Black & Veatch, the state's top consulting firm on the proposed Alaska gas project, told the Alaska Journal of Commerce in February 2014.

Shtokman stalled

Lack of buyers, in part, prevented the Shtokman LNG project in Russia's Arctic from going forward. It had been expected to come onstream between 2013-2015, but development was postponed in 2010 because of decreased gas demand in Europe and huge gains in US shale gas production.

No investment decision has been made for the Shtokman project, which some analysts estimated would cost US$50 billion. Discovered in the late 1980s, Shtokman is one of the world's largest gas fields, with estimated reserves of 140 trillion cubic feet of gas, but its rather remote location, 340 miles offshore in the Barents Sea, means development will be challenging and costly. Other obstacles include how to transport the gas and the lack of supportive fiscal terms from Moscow.

Solid sales and purchase agreements alone can't guarantee a smooth road to the final investment decision. Possible challenges include permitting and regulatory delays, legal challenges, changes in commodity market outlook, time to secure long-term LNG contracts, labor shortages, material and equipment availability or weather. With all their experience in petroleum megaprojects, the companies considering an LNG venture in Alaska know full well that these setbacks are far from rare.

Rigorous, obsessive financial analysis of such projects is the norm in the lead-

up to FID. "Getting to FID is a very disciplined process. Everyone knows exactly what they're focused on and there's a majordomo (chief steward) pulling all this together and after that, you lose the discipline in the project implementation," Garner says. "That's when things always go awry."

During a committee hearing Feb. 26, 2014, BP Exploration Alaska's David Van Tuyl assured members of the Alaska Legislature that the four companies backing an Alaska project would do their utmost to avoid cost overruns.

"The one galvanizing fact, I think, for all the companies here is that we want this project to be a success, to compete in the world market and to be delivered at the lowest cost possible," Van Tuyl said in testimony before the Senate Finance Committee. "That's going to make us

relentless about identifying opportunities to reduce costs and minimize the risks."

There are many examples of projects that, even after a positive investment decision, have been derailed or re-thought. The LNG import terminals rimming the US Gulf Coast are the best example within the industry of projects whose status today is very different from what was planned. When the shale gas boom hit the United States, most of the new LNG import terminals were rendered obsolete and many of the owners are now pushing to transform them into export facilities. It's too early to know how many of the LNG export projects proposed for the US Gulf Coast, East and West coasts will proceed to FID.

At the February 2014 Alaska Senate Finance Committee hearings, company executives were optimistic about the possibility of exporting North Slope LNG. "We think we've got a really good shot at this market. We do think (the project) can be competitive," ConocoPhillips' Pat Flood said.

"ExxonMobil is extremely excited about this project," executive Bill McMahon told the senators. "We believe this project has good fundamentals."

For more information on the proposed Alaska LNG project, see www.arcticgas.gov/alaska-lng-project

ExxonMobil is extremely excited about this project

Sponsors: ExxonMobil/ConocoPhillips/BP/TransCanada/State of Alaska

Cost: US$45-US$65 billion

Project involves: Construction of gas treatment plant at Prudhoe Bay, a 58-mile pipeline from Point Thomson gas field to Prudhoe Bay, an 800-mile pipeline from Prudhoe Bay to Nikiski, an LNG plant, storage and tanker terminal at Nikiski

Capacity: The LNG plant will produce 17-18 million tons per year of LNG, processing up to 2.4 BCF of gas per day

Status: In April 2014 the Alaska Legislature approved legislation to allow state equity participation in the project, which is now in pre-FEED phase. In July 2014 the project sponsors filed for federal permission to export LNG.

The project at a glance

ALASKA LNG


Icebergs, such as these in Bonavista Bay, Newfoundland, are a serious concern for offshore oil and gas operations

Stein Haugen

New environment, NEW THINKING

Interest in the potential oil and gas reserves that lie offshore in the Arctic has been the impetus for renewed activity. In Norway, in particular, Arctic operations are very high on

the agenda, and there have been extensive discussions about the technical and operational challenges this represents in terms of production, safety and the environment. These discussions tend to focus on specific topics, such as navigation and positioning issues, communication challenges, contending with multiphase flow over long distances, and managing polar lows and Arctic storms. All of these present serious technical and operational challenges that need to be overcome.

The oil and gas industry has a track record of taking on these kinds of challenges and developing solutions, but sometimes, it is useful when presented by a host of challenges to take a step back from the specific problems, and look at the overall issue of safety, both for people and the environment.

Unarguably, there is uncertainty associated with Arctic operations, and there is a point of view within industry that this uncertainty is greater than that which has been dealt with in other challenging areas like the North Sea or Norwegian Sea. This is a reasonable position considering, among other things, the unresolved issues enumerated here. And there is no denying the fact that industry has very limited experience with Arctic operations and is likely to encounter surprises and unexpected issues in this frontier region.

In engineering, the traditional way of handling uncertainty is to increase safety margins – by adding steel, adding new safety systems or introducing stricter procedures for operation. Not surprisingly, this also is the approach taken in safety management – the solution often is to add another barrier system or another “layer of protection” to prevent accidents from occurring. In other words, the result may be that Arctic operations require more extensive and reliable safety measures than are required elsewhere.

Another important consideration is the expectations placed on the oil and gas industry with regard to safety. Operations in the North Sea are widely considered to have a high safety level governed by strict requirements. The formal requirements with regard to acceptable risk levels probably will not be different in the Arctic, but it is quite possible that expectations from the public will be higher. That expectation is most probably one that anticipates accident-free operations, particularly with regard to oil spills. Without question, this increases the demands on the

safety management system – meaning more technical systems and procedures will be added. The problem with this solution is that it doesn’t step outside the box. Instead, it adds more of the same approach that always has been applied.

As frontiers have opened and operating conditions have changed, the offshore industry has had to develop technology for new operating theatres. And more often than not, fundamental changes have had to be made to the approach taken to finding the solutions that have enabled safe and reliable operations.

If the “adding on” approach is the one that is taken, the potential exists for excessively increasing demands on the safety management system. Adding more technical systems adds more complexity, more systems that can fail, more maintenance requirements and more difficulties in understanding and predicting system functionality. Following this route, it is possible to reach a point at which safety begins to decrease. Adding more procedures might well have the same effect – writing adequate procedures that are possible to follow and applying these procedures correctly becomes more difficult and more time consuming and requires more people and resources. Here too the outcome potentially could be the diminishing of safety.

Another critical aspect is cost. Stricter safety requirements tend to generate more planning procedures and require more checking, which takes a significant amount of time and resources. At a time when cost cutting is required in the Norwegian offshore industry, increased cost is not something companies can accept lightly. It is quite possible, in fact, that if this route is followed, resource commerciality could be compromised. And this clearly would not be beneficial for Norway.

It might be worthwhilea to consider the viewpoint that continuing risk management in the same way may not be the best choice when the stakes become higher. It is time for industry to think in new ways, to look for more dynamic, online approaches to monitoring and controlling risk, to increase system robustness to make them more “forgiving.” Or it might be that the successful solution will be something completely different.

Regardless of the path industry eventually takes toward risk management in the Arctic, it is evident that a new mindset is needed. The most expedient and direct way forward will emerge when industry begins a new discussion that steps away from the status quo and invites the best minds to look at this challenge in a new way. P

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The Arctic is a uniquely challenging environment and traditional rick management approaches, adding extra steel and procedures, may actually prove detrimental to safe operations. Stein Haugen, CTO, Safetec, an ABS Group company, argues that a new mindset is required

Adding more technical systems

adds more complexity

INSIGHT


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Frontier Energy is the world’s first magazine dedicated to the oil & gas and shipping operations in the Arctic and other challenging ice-affected regions.

Each issue will offer an exclusive insight into the technologies being used to overcome the challenges of this unique environment. Supported by a weekly e-newsletter, the magazine brings readers informative special reports and up-dates on all the latest developments.

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