John Goll, Alaska regional director for the U.S. Minerals Management Service, told Petroleum News July 12 that MMS is thinking of holding regular Chukchi Sea lease sales in response to increasing industry interest in the area.
“We hope to be ready when the industry is, so we’re going to try to continue with regular sales,” Goll said. The U.S. Secretary of the Interior has to make a decision on whether to start a sale program and at the moment there’s no specific timetable, he said.
And Shell’s purchase of swathes of leases well north of the coastline in the March 2005 Beaufort Sea lease sale may be another indicator of a resurgence of industry interest in the offshore Arctic areas of Alaska.
MMS estimates suggest that about 7 billion barrels of oil and 32 trillion cubic feet of gas can be recovered from under the Beaufort Sea. The corresponding estimates for the Chukchi Sea are 15 billion barrels of oil and 60 trillion cubic feet of gas.
Similar to but different from the Barents
Arctic environmental issues coupled with the potential for substantial quantities of petroleum resources provide some striking resemblances between the northern Alaska outer continental shelf and the Barents Sea, offshore northern Norway and Russia, where development of gas fields some distance offshore is already under way.
However, much of the Barents Sea has icebergs and drifting ice rather than the ice sheets that present so many challenges in offshore Alaska.
“It’s pretty much open water for the most part — that’s the big difference,” Goll said.
But, on the other hand, the Beaufort Sea lies next to a well-developed oil infrastructure.
“Right now they don’t have the infrastructure, whereas we do in the central Beaufort,” Goll said.
But although companies have been picking up known discoveries and good prospects in the Beaufort Sea, Goll sees the lack of well information in the area as a significant issue.
“What we need is for someone to go out and really poke more holes — we only have about 30 up there in the Beaufort,” he said.
Parallels with the Chukchi
Goll does see some particular parallels between the Chukchi and the Barents. For example, the major fields in the Barents look to lie at similar distances offshore to some of the structures drilled in the Chukchi. Early this year MMS issued a reappraisal of the massive Burger structure in the Chukchi and upped the estimate of conventionally recoverable natural gas in this structure from 5 tcf to 14 tcf.
Burger bears comparison with the Snohvit gas field, currently under development 100 kilometers offshore in the Barents. Snohvit will deliver natural gas from subsea completions to an onshore LNG facility.
This Norwegian strategy of exporting gas as LNG rather than through pipelines raises some interesting questions about whether the same approach could work for the Chukchi.
“We’ll be very interested to watch how they develop this,” Goll said.
Technical developments
In fact there’s international interest in technologies for developing offshore oil and gas in the Arctic. The ISO, for example, is developing an international standard for Arctic offshore structures; 13 countries are involved in the ISO project.
“They’re working on pulling all of the Arctic offshore standards together in one document,” MMS petroleum engineer Dennis Hinnah said.
They’re hoping to have a draft standard out by the end of this year, Hinnah said.
The ISO project illustrates the way in which countries that compete in oil and gas markets also cooperate when it comes to operational safety and environmental issues — no-one wants to see an environmental disaster and everyone wants to ensure environmentally responsible development.
“We’re all interested in things happening safely,” Goll said.
And as part of its international involvement, MMS headquarters participates in the International Regulators Forum, in which regulators from many countries meet to discuss and compare regulatory methods.
So, with the Norwegians forging ahead with their Snohvit development and with other fields in the offing in the Barents, it will be interesting to see how new technologies and approaches used in the Barents might help safely develop some of the resources in the Alaska Arctic.
