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Statoil spells out Chukchi strategy Wilems says cooperation among stakeholders, effective technologies and management commitment will be keys to success on the OCS Alan Bailey Petroleum News
Cooperative ventures between companies, engagement with local communities and effective coordination with government agencies will be key factors in addressing the challenges of oil and gas development and exploration in the Chukchi Sea, Michael Wilems, Statoil USA E&P facilities manager, Alaska and Gulf of Mexico, told the Resource Development Council annual conference on Nov. 17.
“Cooperation is the main message that we’d like to put forward,” Wilems said.
And a company’s success in the Arctic also hinges on management commitment to moving forward with the appropriate work programs, he said.
16 leases Statoil is the operator of 16 Chukchi Sea leases which it jointly owns with Eni Petroleum; the company also owns a 25 percent stake in ConocoPhillips’ Chukchi Sea Devil’s Paw prospect.
The company has just completed a 3-D seismic survey in its leases and plans to drill in those leases at some point in the future.
And, with existing involvement in oil developments offshore eastern Canada and in the Barents Sea, as well as involvement in seismic surveying offshore northeast Greenland, Statoil has extensive Arctic and sub-Arctic experience to draw on, Wilems said. The company completed its recent Chukchi Sea seismic survey under budget and in less time that had been planned, he said.
But, although drilling in the shallow waters of the Chukchi Sea will not be as technically difficult as drilling in the deep water of the Gulf of Mexico, effective technologies will be vitally important in addressing the Arctic challenges of sea ice, remote locations, lack of deepwater ports and difficult supply logistics, Wilems said. Arctic offshore exploration needs to involve all disciplines within a company. And, given the high cost and complexity of the Arctic challenges, companies need to work together, sharing scientific research and technical innovation, he said.
“No company can do it alone in the Arctic and in Alaska,” Wilems said.
Statoil would like to see an “Arctic Star” program, akin to the Deep Star program that the company leads in the Gulf of Mexico. Deep Star involves about 10 oil companies and 50 service companies in initiatives to improve operational capabilities in water depths of more than 6,000 feet, and to improve the viability of standalone oil fields in that environment, Wilems said. In a similar manner, companies operating in the Arctic offshore could share technologies in areas such as oil spill response and facility maintenance, he said.
“A significant amount of research has been done by many of the companies here and we’d like to tie that together and find where gaps exist,” Wilems said.
And, when it comes to the transportation infrastructure needed to support remote offshore activities, oil companies can help with funding while local, state and federal governments need to be responsible for the infrastructure development.
Short work window Statoil is concerned about the 10-year term of its Chukchi Sea leases, given the short length of the annual Arctic open-water season. In effect, that brief three-month annual work window reduces a company’s effective working time in its leases to somewhere between two-and-a-half and three years, Wilems said.
That issue is compounded by regulatory uncertainty, with different government agencies sometimes appearing to pull in different directions, Wilems said. The Alaska Department of Natural Resources, for example, promotes Alaska as a place to do business, while permitting authorities take a long time to issue permits, he said. It took Statoil nearly a year to acquire the permit it needed for this year’s seismic survey, with the federal Bureau of Ocean Energy Management, Regulation and Enforcement finally issuing the permit in August, by which time permitting delays had twice caused Statoil to turn back its seismic vessel in transit from Australia.
“Regulatory predictability is a serious challenge in the Arctic in North America,” Wilems said. “Oil and gas companies are willing to comply with regulations. We just need to know what they are.”
And Wilems expressed particular concern about confusion around new deepwater drilling regulations, following the Gulf of Mexico Deepwater Horizon disaster. The current Arctic regulations are already very stringent, yet the government is very likely to issue new regulations for exploration, development and operation, he said.
In addition, with few precedents for Arctic offshore oil and gas development, the possibility of litigation is a constant challenge.
Stakeholder engagement Statoil sees engagement with Arctic stakeholders as vital. It is particularly important to engage with local communities, to find mutually acceptable solutions to issues that the communities identify, Wilems said.
“For the most part local communities are not opposed to oil and gas development,” he said.
On the other hand, environmental organizations tend to adamantly oppose offshore drilling and other associated operations.
“They’re well funded and they’re well prepared in their opposition,” Wilems said.
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