October 25, 2008
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Home / Issue Archive / 2008 / October #10 / Experts Debate Best Technology For Barents Sea Development

№ 10 (October 2008)

Experts Debate Best Technology For Barents Sea Development

Developing offshore fields in the northern and eastern seas is a critical mission both for the country’s oil and gas industry and economy as a whole.

By Alexei Chesnokov, Oil&Gas Eurasia

Shtokman and Other Fields
At present, about a third of all produced hydrocarbons are recovered from sea beds and ocean floors. For quite some time, the USA, Norway, UK, and Brazil have successfully harvested this mineral wealth, having developed and utilized industrial technologies and machinery to implement their engineering solutions. Russia must follow quickly as development and implementation of such solutions would jump-start further development within the entire national machine building industry. It would require substantial investment and completion of daunting tasks, but there is no alternative. In doing this, the country could move toward the rank of top-ranked economy. In late September, VNIIGAZ conducted the second international conference “Development of the Russian Offshore Oil&Gas Resources: Arctic and Far East,” which was devoted to this vital issue.
During the opening session, Yuri Yevdokimov, Murmansk Region Governor, stated that the vital importance of developing the Arctic mineral wealth was underlined by the RF Security Council’s field session conducted at the archipelago of Franz Josef Land.
The Ambassador of Norway, Oiwind Nordsletten, welcomed the the conference with a reminder that Norway ranked second in Europe after Russia in hydrocarbon recovery, third in world gas export, and fifth in world oil export.
The Ambassador stated that Norway has always looked for broad and mutually beneficial international partnerships and  as well as foreign experience and investments. Therefore Norway gladly invited Russian companies for cooperation. Participation of the state Norwegian company StatoilHydro in the Shtokman Project and completion of orders by Murmansk Sevmash factory for Norwegian oil and gas companies are good examples of such successful partnerships.
Given ever increasing demand for gas, Vovk said it is important that Russia’s shelf be developed. He quoted reserve estimates for the Russian offshore at 100 trillion tons of fuel equivalent and noted that 76 percent of those offshore reserves are gas. Most of Russia’s shelf is as yet unexplored, though in the Pechora Sea, the Prirazlomnoye oilfield is in development, and plans for the Shtokman gas and gas condensate field in the Barents Sea are moving forward.
Volk noted other prospects, including the pre-Yamalski shelf in the Kara Sea (Rusanovskoye, Leningradskoye and Kharasaveiskoye fields), the Gulf of Ob and Tar Bay; the Sakhalin shelf as well as the Pallas structure in the Black Sea and the Tsentralnaya structure in the Caspian Sea. But to explore offshore deposits, drill and produce them, it is necessary to sort out infrastructure, legal and manufacturing issues such as licensing, R&D and the development of coastal infrastructure and suppy bases.
Technologies Fair
On the second day of the international conference, VNIIGAZ arranged for workshop sessions conducted simultaneously in six conference rooms.
Leading domestic and foreign companies proposed their recent developments and technologies for offshore operations. Representatives of Krylov Shipbuilding Research Institute discussed field facilities construction projects underway and concepts of equipment and technologies for prospecting and exploratory drilling in Russia's offshore areas. There is a wide range of concepts including gravity based drilling rigs, self-elevating floating drilling rigs (FDR), semi-submersible FDR, drilling vessels, and a newly-designed product – air-cushion FDR.
Schlumberger’s representative introduced a new approach to plan drilling operations while drilling horizontal wells. Applying rock mechanics simulation enables significant reduction in expenses relating to oil field operations, reduction in well caving risks, and optimization of drill mud using.
Gubkin Oil and Gas Russian State University's representitive devoted his presentation to principles and practical application of the ‘Smart Field’ technology.
Most of major foreign companies work on development of this technology that includes solutions such as ‘smart’ wells equipped with temperature, pressure and flow sensors, which along with modern information technologies enables control of well operations on a real-time basis from any place of the world. This technology also includes using 4D seismic survey, developing new work organization principles and optimizing all processes. Application of all these innovations enabled for example BP to increase recovery of reserves in the Vallhall field by 6 percent, and StatoilHydro to derive $1.5 billion in the Shorre field.
BORNEMANN introduced a multiphase technology for underwater production and transport. Multiphase boosting is possible due to a unique two-screw pump with a capacity over 2,000 cu. m per hour, which is capable to transfer to the central collection station a product stream without separation and pre-treatment, with gas content over 99 percent. A pressure category of this pump is over 350 atm.
A representative of the Arctic Center of Chevron Canada told about advantages of gravity-based platforms compared to subsea templates in shallow waters, based on their own long-term experience.
Norwegian FMC proposed their technology for underwater product treatment, separation and compression, which makes it possible to transport the product to long distances.
Shell introduced new developments enabling to carry out seismic surveys directly from ice; as well as self-contained subsea data acquisition and seabed exploration units.
Shtokman – the First Step in Development of the Arctic Shelf’s Gas Resources
When this Project is implemented it will deserve entering The Guinness Book of World Records. The Project key figures: gas reserves are estimated at 3.8 tcm, the sea depths reach 340 meters, and a distance from Teriberka to the Orlovka Bay is 552 kilometers. Estimated output is 70 million tons per day at the first phase. Commercial production is scheduled to start in 2013.
Commencement of the project’s commercial production is coordinated with commencement of the Nord Stream project implementation.
Executive Director of Shtokman Development A.G. JV, Yuri Komarov, took questions fromt he press related to the Shtokman Project.
Correspondent: When will the Shtockman field development commence with drilling?
Yuri Komarov: We schedule to start development drilling in 2011.
Correspondent: Will drilling rigs be available by that time?
Komarov: The first drilling rig is scheduled to be available for operation in early 2011. This is a phased schedule.
Correspondent: Are you sure that Vyborg factory will keep to the supply schedule?
Komarov: At the moment we have no grounds to doubt it. Our schedule is very tight. Therefore, in addition to the two drilling rigs being fabricated in Vyborg, we may well have to lease more drilling rigs for a certain period. Unfortunately, the weather window at the Shtokman field is quite restricted, and we can’t expect that the weather will be with us during the whole two years allocated for drilling.
Correspondent: To what extent is it helpful to use experience of your foreign partners?
Komarov: We have never implemented an offshore project of this magnitude before. There were numerous technological problems; and so we formed a joint team of well qualified partners. Gazprom owns 51 percent of the project, Total 25 percent and StatoilHydro 24 percent. No single country could take on this project, it must be a collaborative effort.
In addition, the Project includes a whole complex of challenges that have never been faced before. Therefore when it is implemented it should be entered in The Guinness Book of World Records.
Correspondent: How many wells are to be drilled by 2013? And how deep will they run?
Komarov: Before 2013 we must drill 16 wells. The wells are under design now; they will be horizontal, quite complicated, and about several kilometers long.
Correspondent: Where do you plan to inject waste mud?
Komarov: This problem will be solved at the design stage; it is planned to carry out special surveys, drilling and seismic survey to define a horizon for injection of waste mud. It must be a solution that would provide for complete protection of the environment.
Correspondent: Why do you plan to construct three pipelines from the point of production to the land?
Komarov: Because we have three phases and a subsea template, platforms and pipes are designated for each phase.Pipelines run to the coast where a gas pipeline and LNG plant will be constructed with four lines each designed to transfer 7.5 million tons of gas per year.
Correspondent: How many special LNG tankers will be required for LNG delivery and where will orders for their construction be placed?
Komarov: At present, we can’t provide for construction of LNG tankers in Russia. We will need total 16-20 tankers for the Project, with about six tankers required for the first phase.
Correspondent: When will bidding for the project’s orders take place?
Komarov: We plan to hold tenders in the second half of the following year. Then we will understand whether the industry is prepared for implementation of such a grand project.
Correspondent: Do you have any fears about fall in gas prices?
Komarov: Cycling of oil and gas prices exist and are difficult to predict. The present day trends are adverse and disturbing. However, I am confident that we will not see a drop to previous levels. Still, if the market price drops too much, we will face a problem when making a final decision regarding the project.
Correspondent: Have you calculated the gas production cost for the project?
Komarov: Of course we have, and by today's standards it will be quite profitable.
Those Noncompliant with Standards will be Prosecuted by Law
The above expression existed in virtually all standards of the USSR. Many changes have taken place since then, but standards often remain the same – though the requirement to comply is now optional. At present, the Russian national system of standards cannot support large projects for developing offshore fields. That is why active efforts are required to formulate new regulatory documents for this industry sector, which will enable engineering and environmental safety of operations at offshore oil and gas complexes.
Anna Kvasnyak, VNIIGAZ’s standardization specialist, answers OGE’s questions.
Oil&Gas Eurasia: Why are standards are so important for the industry operations?
Anna Kvasnyak: Any standard is per se an instrument for the state to set rules for design, construction and operation of industrial facilities and to debar unfair manufacturers. Standards contribute to manufacturing safe, reliable and high-quality products and are especially significant for the oil and gas industry with a lot of hazardous industrial facilities and a high risk for the environment and human health.
OGE: What is the state’s role in implementation of standards?
Kvasnyak: The state plays the key role with regard to standardization issues and this is a global practice. In our country, the Federal Agency for Engineering Regulation and Metrology (the GosStandard’s successor) deals with these issues. In addition to this agency, there are numerous supervisory bodies that enforce observing rules and regulations set by the state in the standards.
OGE: What standardization systems exist in the world?
Kvasnyak: There are many standardization systems existing in the world. ISO is the International Standards Organization; its standards can be applied by all member-countries as their national standards. API is the American Petroleum Institute dealing with standards in the oil and gas industry; it is quite a reputable and recognized institution. API standards are applied by major oil and gas companies. It is an industry standardization system in its essence. Corporate standardization systems do also exist. But only very large companies can take the liberty of having their own corporate standardization systems. In our country these are Gazprom, LUKOIL and Rosneft.
OGE: What procedures are associated with adoption of national standards?
Kvasnyak: Harmonization of documents is a widely discussed topic at the moment. Within the national standardization system, various countries try to take account of international experience in order to establish a uniform approach to defining requirements. Harmonization can be carried out by the so called “cover method” or "modification method." The cover method implies  translation of a standard and its adoption as a national one. This is often used by developing economies and industries. The modification method means that an international standard is taken as a  starting point and adjusted to local conditions. In my opinion, this method is the most acceptable for our country. We have our own resource development program and possess  extensive experience in standardization.

- Alexei Chesnokov is a Staff Writer for Oil&Gas Eurasia. 


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