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Shell Starts Exploratory Drilling in Beaufort Sea, Alaska

Shell has kicked off exploratory drilling at its prospect in the Beaufort Sea, offshore Alaska, the company yesterday announced on its website.

On October 3, 2012, at approximately 2:45PM AKDT, the Kulluk began drilling at Shell’s Sivulliq prospect. Shell has noted that the occasion is historic in that it’s the first time two rigs have been drilling simultaneously offshore Alaska in over two decades. The Noble Discoverer has been drilling at Shell’s Burger prospect in the Chukchi Sea since September.

“In the weeks ahead we look forward to operating safely and responsibly, putting Americans to work and adding to Shell’s long, successful history of drilling offshore Alaska,” said Pete Slaiby, VP Alaska.

Bought by Shell in 2005, the Kulluk was specifically designed and constructed for extended season drilling operations in Arctic waters.

Shell Starts Exploratory Drilling in Beaufort Sea, Alaska| Offshore Energy Today.

Norway: Little Knowledge on Northeastern Barents, NPD Says

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The Norwegian Government has decided that the Norwegian Petroleum Directorate will map the geology in the northeastern part of Norway’s new sea area in the Barents Sea. According to the plan, the seismic surveys will start this summer and continue into 2013. This will provide important knowledge regarding possible oil and gas resources in this area.

“We have very little knowledge concerning the geology in the northeastern Barents Sea. In order to know more about the resource potential, we need more data,” says Sissel Eriksen, exploration director in the Norwegian Petroleum Directorate.

On 15 September 2010, Norway and Russia signed the agreement relating to maritime demarcation and cooperation in the Barents Sea and Arctic Ocean. The agreement entered into force on 7 July 2011.

On the Norwegian side, the Government has started an opening process with the aim of awarding production licenses in the southeastern sector of the Barents Sea. The geological mapping started last summer and will continue until this summer.

Earlier this year, the NPD entered into contracts regarding two vessels that will acquire seismic data both in the southeastern sector of the Barents Sea, in the sea area around Jan Mayen and in Nordland IV and V this summer.

“The plans to also map the northeastern sector of the Barents Sea mean that we need more capacity to acquire seismic. This assignment has been submitted for tender,” says Eriksen.

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Report: Obama Administration Is Giving Away 7 Strategic Islands to Russia

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Posted by Jim Hoft on Saturday, February 18, 2012, 12:32 PM

May 1881 US explorers approached Jeannette Island and Henrietta Island and claimed them for the United States. According to some US individuals, including the group State Department Watch, eight Arctic islands currently controlled by Russia, including Wrangel Island, are claimed by the United States. However, according to the United States Department of State no such claim exists. The USSR/USA Maritime Boundary Treaty, which has yet to be approved by the Russian Duma, does not address the status of these islands nor the maritime boundaries associated with them.

The Obama Administration is reportedly giving away Wrangell, Bennett, Jeannette and Henrietta islands in Alaska to Russia. The federal government drew the line to put these seven Alaskan islands on the Russian side

Former senatorial candidate Joe Miller broke this story at World Net Daily:

The Obama administration, despite the nation’s economic woes, effectively killed the job-producing Keystone Pipeline last month. The Arab Spring is turning the oil production of Libya and other Arab nations over to the Muslim Brotherhood. Iraq is distancing itself from the U.S. And everyone recognizes that Iran, whose crude supplies are critical to the European economy, will do anything it can to frustrate America’s strategic interests. In the face of all of this, Obama insists on cutting back U.S. oil potential with outrageous restrictions.

Part of Obama’s apparent war against U.S. energy independence includes a foreign-aid program that directly threatens my state’s sovereign territory. Obama’s State Department is giving away seven strategic, resource-laden Alaskan islands to the Russians. Yes, to the Putin regime in the Kremlin.

The seven endangered islands in the Arctic Ocean and Bering Sea include one the size of Rhode Island and Delaware combined. The Russians are also to get the tens of thousands of square miles of oil-rich seabeds surrounding the islands. The Department of Interior estimates billions of barrels of oil are at stake.

The State Department has undertaken the giveaway in the guise of a maritime boundary agreement between Alaska and Siberia. Astoundingly, our federal government itself drew the line to put these seven Alaskan islands on the Russian side. But as an executive agreement, it could be reversed with the stroke of a pen by President Obama or Secretary Clinton.

The agreement was negotiated in total secrecy. The state of Alaska was not allowed to participate in the negotiations, nor was the public given any opportunity for comment. This is despite the fact the Alaska Legislature has passed resolutions of opposition – but the State Department doesn’t seem to care.

The imperiled Arctic Ocean islands include Wrangell, Bennett, Jeannette and Henrietta. Wrangell became American in 1881 with the landing of the U.S. Revenue Marine ship Thomas Corwin. The landing party included the famed naturalist John Muir. It is 3,000 square miles in size.

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The Lone Icebreaker: U.S. Sovereignty in the Arctic

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Tyler Davis

The United States Coast Guard is being left behind in the Arctic. While countries such as Russia are building up their icebreaker fleet and actively increasing their presence in the Arctic, the United States is losing its only form of sovereignty in the region.

On December 1, Rear Admiral Jeffrey M. Garrett, U.S. Coast Guard, testified before Congress on protecting U.S. sovereignty in the Arctic. He stated in Second Line of Defense that “the Icebreaker fleet represents the main surface presence that the U.S. can exert in what is essentially a maritime domain in the Arctic Ocean.” Yet today, the Coast Guard has an icebreaker fleet of only three ships. Worse yet, two of these ships are out of commission due to maintenance work and will not be available for at least seven more years.

The lone icebreaker in commission is the USCGC Healy, which conducts all types of missions from search and rescue to navigational aid to scientific research. Though the ship has been effective at its job in the Arctic, it is designed to break through ice of only medium thickness; for ice of heavy thickness, the Healy is absolutely useless. And like the other two icebreakers, it is quickly aging.

Without efforts to modernize the fleet, the future of the U.S. national maritime interest and security in the Arctic is looking pretty bleak. Icebreakers are a necessity in the region, and without them the U.S. might as well throw in the towel. These ships are key to year-round access to the Arctic and are the only U.S. insurance policy for future hazardous events. If something happens to the Healy, then the United States would not only lose access to the region but would not be able to react to potential oil spills and would become less effective in search-and-rescue missions.

Complicating matters even further, ice in the Arctic is melting, producing more ocean area for the transportation of goods and services in the region. Essentially, whoever best utilizes this route will control trade and transportation of goods and materials in the upper hemisphere. With all other nations around the Arctic building their icebreaker fleets and exploiting the key transportation route that connects the Atlantic and Pacific Oceans, the United States is falling behind.

In order to create an icebreaking fleet to maintain U.S. presence in the region, the Administration should look toward privatizing the fleet. Allowing private companies to own and operate the U.S. icebreaking fleet and perform national security functions would not only allow for crucial modernization but also save federal dollars and expand U.S. capabilities in the Arctic. This is particularly important at a time when the government is looking to cut corners in federal spending.

Ultimately, something must be done. If the U.S. does not act fast, it will come in last in the race for the Arctic.

Tyler Davis is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm

Posted in American Leadership

Aker Solutions Plans to Strengthen its Footprint in Northern Norway

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As the chase for oil and gas moves further north, the oil services industry follows. Today Aker Solutions, a Norwegian multinational provider of services related to engineering, construction, maintenance, modification and operation announces plans to establish a large engineering office in Tromsø as part of the company’s northern Norway strategy.

Aker Solutions announces plans to establish a large engineering office in Tromsø.

The new office will gather knowledge and expertise related to the northern region. It will become involved in engineering and maintenance and modification projects on the entire Norwegian continental shelf and abroad, and be an integral part of Aker Solutions’ international competence network.

“We believe in the reserves potential on the Norwegian continental shelf and in the Arctic. If the marked continues to develop positively and we are successful in our efforts to win work with customers in the region, we believe that we will have a substantial engineering hub in the North with 2-300 employees in three to five years,” says executive chairman of Aker Solutions, Øyvind Eriksen.

The establishment of the Tromsø office is part of Aker Solutions’ overall strategy to increase the company’s footprint in the northern regions of Norway, driven by an increasing number of interesting field development opportunities offshore northern Norway and in the Barents Sea.

Aker Solutions have worked closely with suppliers in northern Norway for many years. The Tromsø office will now develop a sourcing strategy for Aker Solutions in northern Norway and further strengthen our relationships with suppliers in the north.

Tromsø  becoming increasingly involved in oil & gas

Tromsø is the largest city in this part of Norway and a regional centre with good connections to other key locations in the north and to other Aker Solutions offices in Norway. The university in Tromsø is becoming increasingly involved in oil and gas related research and education programmes, which is expected to fit well with Aker Solutions’ future competence requirements.

Elsewhere in northern Norway, Aker Solutions is in the process of building up a subsea service base – housing engineers, technical staff and field operators – in Hammerfest to support the Goliat subsea field development. Aker Solutions has also recently acquired the Narvik-based well technology business X3M Invent. Aker Solutions is also considering establishing an engineering office in Sandnessjøen to support the company’s modifications and operations services business.

“In June the Norwegian government announced a petroleum policy that clearly spelt out an expectation to the oil industry that activity at sea should have ripple effects on land through job and value creation. We support this drive because it makes business sense to both us and our customers,” adds Øyvind Eriksen.

Aker Solutions is currently looking for suitable permanent office premises in the city. Recruitment for engineers for the Tromsø office will also start this winter.

Aker Solutions today has offices and operations in the following Norwegian locations: Arendal, Asker, Bergen, Egersund, Fornebu, Hammerfest, Horten, Kristiansand, Kristiansund, Lier, Midsund, Moss, Narvik, Oslo, Porsgrunn, Stavanger, Trondheim and Ågotnes.

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Rosneft ‘door closed’ in Barents

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Russia’s military has reportedly barred the way for state oil company Rosneft to gain exploration access to three prospective areas in the Barents Sea.

Steve Marshall & News reports 28 November 2011 09:19 GMT

Rosneft has had its applications for three licences covering the Severny, Papaninsky and Mezhdusharsky Vostochny structures rejected by Russia’s mineral extraction agency Rosnedra after objections were raised by the Ministry of Defence, a Rosnedra source, quoted in Russian media, was reported as saying by the Barents Observer.

The three tracts, located south-west of the Novaya Zemlya archipelago, are prospective for oil and gas, with Severny reported to hold 26.6 billion barrels of oil equivalent, while Mezhdusharsky and Papaninsky are believed to contain 2 billion boe and 559 million boe respectively.

Rosneft also had its bid to explore the Severo-Barentsevoye field turned down due to ongoing state mapping of the area.

Conflicting interests among Russian state bodies have historically stalled decisions on exploration and development of Barents acreage, with fields discovered in the 1970s still undeveloped.

The Russian military sees the Barents as a strategically important area because it provides ice-free access to the North Atlantic and Arctic Ocean. The might Northern Fleet, based on the Kola Peninsula, has its bases on the Barents coast.

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Is the Industry Ready to Drill in the Arctic? Stena Drillmax Ice Nears Delivery

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By Alexander Wardwell, Det Norske Veritas

Scheduled for delivery in March 2012, the most recent addition to Stena Drilling’s fleet will be the industry’s first ice class +1A1 dual-mast ultra deepwater drillship for arctic conditions. But is the industry ready for offshore arctic drilling?

Based in part on Stena’s proven DrillMAX design, the new drillship, now under construction at Samsung Heavy Industries in South Korea, represents the company’s most ambitious project to date. According to Tom Welo, Managing Director of Stena Drilling, the project was conceived to meet the evolving demands of the industry. “Increased global demand for oil has encouraged energy companies to focus more on exploration,” he says. “And since many of the most promising fields are increasingly found in deepwater and harsh environments, including the arctic, we saw an opportunity to build a drillship to reflect the market.”

Tom Welo Stena Drilling

Tom Welo, Managing Director, Stena Drilling. Photo: Alexander Wardwell

Welo acknowledges that DrillMAX ICE represents a significant investment for the company and so far, the drillship has not secured a contract. “Any newbuilding project built on spec is a risk, but in our view, the greater risk would be to sit still,” he says. “We anticipate continued growth in this segment, and want to strengthen our position as a leading provider of drilling units equipped to operate in harsh environments.”

Flexible operational profile
At present, Stena Drilling operates four semisubmersible drilling platforms and three drillships. While these units have been active all over the world, including the North Sea, US Gulf of Mexico, South East Asia, Mediterranean, Caribbean, South America, North America & Greenland: Atlantic Front, Australia, North Africa and West Africa, the company has earned a strong position as a leading provider of drilling services in harsh environments. While similar to the company’s existing fleet of drillships, the design of DrillMAX ICE has been optimised for ultra deepwater arctic operations.

However, Welo is quick to note that once completed, the unit will be suitable for any job. “While we expect the vessel will be active in the polar region, the design doesn’t limit the drillship to waters above the Arctic Circle,” he says. “Rather, it expands the vessel’s operating parameters to almost any depth or environment.” Welo adds that the new drillship is capable of operating in water depths up to 10,000 feet.

Managing risks in the Arctic
The unit has been optimised for Arctic conditions. Six ice-classed 5.5MW azimuth thrusters, providing maximum manoeuvrability, propel the ice-strengthened hull. Below deck escapeways port and starboard side connect the aft engine rooms with FWD accommodation. Designated moon pools port and starboard allow for installation of two separate ROV systems. Anti-icing equipment protects the unit’s anchors, deck piping, lifeboat escape exits, scuppers and drains while enhanced de-icing machines keeps decks, gangways, and handrails clear. Steam heating coils warm the ballast tanks and drill water tanks and windwalls and cladding offer enhanced protection to the drill floor and dual mast derrick. “Most accidents and near-misses are related to human error, so we have worked hard to ensure the safety and comfort of our crew.”

In total, costs related to adapting the DrillMAX unit for Arctic conditions are calculated somewhere between USD 220 to 240 million. “We did consider adding icebreaking capabilities, but were concerned that the moon pool would collect ice and the cost would be prohibitive,” says Welo. “Instead, when operating in the Arctic, the drillship will have an escort of OSVs to help manage the ice.”

A relative threat
Operating in icy seas and low temperatures, which can drop to –20°C degrees in the Arctic in summer, is challenging, but Welo notes that different environments have different threats. “Operating in the North Sea is complicated by frequent storms and heavy seas and as we saw with Hurricane Katrina, the Gulf of Mexico is hardly a benign environment,” he says. “Icebergs and extreme cold certainly represent a risk in the Arctic, but there is less of a threat from heavy seas and large waves.” Still, Welo adds, DrillMAX ICE can survive waves as high as 30 metres.

While the drillships hull form is based on Stena’s proven DrillMAX design, some topside modifications were included. The drillship is likely to operate in the environmentally sensitive Arctic region, so space was created on deck for an extra six-RAM BOP, providing critical redundancy. “The additional BOP will also help us avoid delays between drilling projects related to the BOP workovers and maintenance.”

Proven concept
While there have been drilling operators active above the Arctic Circle for decades, most notably in the North Sea and the Barents Sea, energy companies have approached exploration in the region with some caution. To help generate more confidence in the Stena DrillMAX ICE concept, the company has worked with a broad range of key suppliers, with extensive experience in harsh environments.

DNV

For example, the drillship is equipped with DP3 station-keeping and related automation systems provided by Kongsberg for operating in ice conditions, knuckleboom deck cranes rated for -30°C conditions, and six-RAM BOPs provided by Cameron. The company conducted extensive Ice Model Testing, and worked closely with DNV to achieve ICE 10 Certification, among other notations. “Stena and DNV have worked together for decades,” says Welo. “Like Stena, DNV has extensive experience in the North Sea managing risk in harsh environments. DNV were thus natural choice to class the unit.”

With the build going well at Samsung Heavy Industries, Welo is looking forward to welcoming DrillMAX ICE into the Stena fleet. In the meantime, he says the company is in dialogue with a number of energy companies that have expressed interest in the concept. “I am confident we will secure a charter soon,” he says. “After all, DrillMAX ICE is coming out of the yard during a time when energy companies are expanding their deep and ultra deepwater exploration programmes. With this unit, we can offer the flexibility to go anywhere.”

Republished with permission, (c) 2011 Det Norske Veritas

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"arctic oil" Norway mobilises for oil push into Arctic

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By Walter Gibbs and Balazs Koranyi

OSLO, Nov 18 (Reuters) – Norway unveiled a 20-year plan to unlock offshore Arctic oil and gas resources and channel them to worldwide markets, a project the foreign minister said may cost billions of dollars and bring rivalries over Arctic resources to a head.

“It is the project of a generation,” Foreign Minister Jonas Gahr Stoere said in an interview. “As the ice melts, new transport routes are opening up, resources are becoming accessible and human activity is drawn to this region.”

The 134-page white paper said massive infrastructure building, research investment, a new fighter-jet fleet and careful diplomacy will help bring “a new industrial era in the high north”, including an island group where jurisdiction is contested.

Neighbours like Russia and the United Kingdom have already begun to challenge Norway’s claim of full tax and regulatory power in the potentially oil-rich waters off the Svalbard island group, halfway between Norway and the North Pole.

Last month Russia formally protested against Norway’s temporary seizure of Russian trawlers for fishing violations in what Moscow considers international waters, and populist Duma member Vladimir Zhirinovsky likened the actions to piracy.

Diana Wallis, a European Parliament vice president and Arctic affairs specialist, said she too questioned unfettered Norwegian control in the northern Barents Sea zone and that future oil exploration would magnify the dispute.

“At the moment there are gaps in the (jurisdictional) framework, especially in the scenario of an oil and gas boom,” she told Reuters.

A 1920 treaty gives Norway sovereignty over Svalbard and a tight ring of surrounding water on condition it impose minimal taxes and give all 40-some signatory nations equal access to the area’s bounty.

But Norway has since declared a 200-mile economic zone around Svalbard and says its autonomy over oil, gas and fish beyond 12 miles is unconditional — as in the Norwegian North Sea, where oil firms pay 78-percent income tax.

“It is Norway’s sovereignty and therefore it’s Norway’s responsibility to decide the rules,” said Stoere.

“Those that argue that our interpretation is wrong are free to take this to the Hague,” he added, referring to the International Court of Justice.

Stoere played down the potential for conflict, saying exploration off Svalbard is years away. “The oil industry is busy elsewhere,” he said.

F-35 FIGHTERS

A grand slam of oil and gas discoveries in 2011, including Statoil’s big Skrugard find in the western Barents, has energised Norway’s offshore oil industry.

And Russia’s anger over Svalbard did not stop it from signing a new sea boundary with Norway in the central Barents, freeing a promising zone for oil exploration on both sides.

Norway and Russia are both among the world’s largest gas exporters and oil exporters.

The northward movement of capital, infrastructure and manpower that Stoere envisions will meet little political resistance south of Svalbard, where Norway’s economic zones are unchallenged and Statoil already produces natural gas.

Today’s earth-observation satellite stations, F-16 fighter jet bases and oil-and-gas outposts in Norway’s sparsely populated high north are “only the beginning” of decades of growth and research to come, Stoere said.

By leveraging its oil wealth in public-private partnerships, he said, Norway will consider building a 1,400-kilometre extension of its North Sea pipelines to the Russian frontier to transport Barents gas to western Europe with spurs ashore to power mining and other new industry in northern Norway.

The white paper sees heightened military activity in the far north, including more NATO exercises and the planned purchase of 48 F-35 Joint Strike Fighters from the United States to replace Norwegian F-16s now stationed above the Arctic Circle.

“The government will enforce sovereignty and exercise authority in the north in a credible, consistent and predictable way,” Norway’s white paper says.

Political analysts said they have noted a pick-up in Russian naval and air force patrols across the Barents in the past five years, though far short of what was normal in the Soviet era. (Editing by William Hardy)

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