Challenges in Developing the Russian Arctic

M.A. Kuznetsov, K.K. Sevastyanova, S.A. Nekhaev, P.V. Belyaev,
P. A. Tarasov, Ph.D. Ph&M  LLC RN-SakhalinNIPImorneft

Introduction
Rosneft owns a number of licenses for developing Russian continental shelf deposits, including those located in the arctic and subarctic regions. Among the principal difficulties related to the execution of projects in the Arctic is the underdeveloped infrastructure, severe climatic conditions, including presence of ice and ice formations offshore, difficult soil conditions, complexities of oil and gas transportation and environmental risks, among others.

For most projects located in the Russian Arctic there are no real direct comparisons anywhere in the world, and therefore resource development in this region requires the development of new technologies and bringing together the accumulated arctic experience. Present report reviews the basic aspects of international experience related to development of offshore fields in similar conditions and factors that contributed to their successful implementation.

Experience of Offshore Projects in Developed Regions
Currently, the main centers of offshore activity are the Gulf of Mexico, North Sea and coastal areas of Africa, Brazil and South-East Asian states (Indonesia, Malaysia primarily).
Offshore production in well-developed oil and gas regions fosters significant acceleration in the process of design, construction and installation of facilities; the most outstanding example of this being the Gulf of Mexico. The structures and existing infrastructure used here are very similar. Nonetheless, even in these areas delays in project execution are often noted (30-50% of offshore oil and gas projects depending on the region) as well as exceeding the budget figures (fig. 1).

A good example of this is the Hibernia project. In order to comply with the company’s (quite logical) policy of using local labour resources, for the design and management of construction for a new type of gravity-based structure, a local contractor was engaged. This not only resulted in a significant delay, but almost jeopardized the entire project. Finally it was decided to bring in Norwegian experts to the project after which point the construction ran smoothly, on time, and on budget [1].

Below we review several key issues that need to be resolved in order develop projects such as these (mentioned above) both profitably and riskless.

Selecting the Concept
The first objective of the design and construction phase is to determine the best type of production facilities to use for the conditions at hand. This objective is ambiguous, especially for the new frontier regions such as Arctic. For example, over the last two decades the Shtokman gas field has had several suggested production units: an ice-resistant FPSO, including round-shaped one (similar to those produced by Sevan Marine), ice-resistant versions of TLP and SPAR- type platforms as well as steel truss and reinforced concrete shell structures. For offshore Newfoundland and Sakhalin islands, in similar conditions, it is possible to observe that adjacent production fields in similar conditions successfully operate different types of production facilities. Therefore, selecting the type of offshore production facility and evaluation of its applicability is the key issue in designing an offshore oil and gas field.

Regulatory Framework
The function of the regulatory framework, as a rule, involves the facilitation and reliability enhancement of the design work, coordination, construction and operation of the project. During the development process the regulatory framework can be based on the similar pilot projects which have a proven track record. A good example is the development of Norwegian standards [2], which, as a rule, regulate safety levels for structures and risk factors that a given event will happen; however the methods of operation and substantiation required are not strictly regulated and allow for some flexibility when selecting the development methods. Apparently, the operator is interested in the safest and most efficient way to develop the field. Moreover, compliance with the standards is supported by strict and constantly tightening of the requirements for environmental protection. As a result of these standards, Statoil has proven itself to be a high-tech company implementing unique production solutions in conditions similar to the Arctic, conducting environmentally clean drilling and production with record-breaking oil recovery factors in the industry.

Safety of Operations: Causes for Typical Accidents Offshore
The principle causes of accidents are from well kicks or uncontrolled gas releases and the subsequent explosions. Often the causes for loss of offshore facilities are natural disasters. As a rule, the consequences for floating structures tend to be more catastrophic. For example most jack-up losses occur during transit (wet tow) during poor weather conditions [3]. Somewhat less commonly, offshore structure design defects can be the reasons for accidents. Sometimes these involve underestimating fatigue loads on floating structures (semi-submersible platform Alexander L. Kielard), as well as the fatigue loads caused by the recurrent influence of breaking ice (Bohai Gulf [4]). In Arctic conditions, external loads on the structures become of greater importance, and therefore the reliability of the structure’s design becomes a determining factor for operational safety.

Platform Design Flaws
The construction method for a Condeep platform  (ferroconcrete gravity-based structures offshore Norway in depths ranging from about 100m to 300m) includes the dry-dock construction of the hull section including the oil storage tanks, subsequent towage of this structure into a deep-water zone (fjord) and the construction of the remaining cells’ shafts which will support the deck and provide conduits for the drilling and the oil pipes whilst afloat. The foundation is then submerged, the top deck is mated and the entire construction is towed to the installation point. The gravity based structure has cylindrical crude oil storage tanks which is used to store oil and to provide bouyancy of the structure before its final installation.

The ferroconcrete foundation of the Sleipner-A platform sunk during its planned submersion in the dock for topside installation. By that time, Norwegian companies had 20 years of experience in the design of such structures and this platform was the 12th among similar Norwegian projects; it was also relatively small (water depth at 83m as opposed to 217m with Gullfaks-C project which had been successfully executed by that time).

The reason for the degradation of the oil storage cell caused by an excessive pressure drop due to elevation difference (over 60 m of water) of the liquid column between hollow cells and tricell joints formed by the intersections of the individual cells. Due to an error in the construction design, shear loads in the junction areas were underestimated. The damages comprised of about 200 million US dollars for loss of the structure and 500 million US dollars for interrupted production plans. Based on the investigation results, various authors indicate the following causes for the error in this project [5, 6].

1. When the project was started, Norwegian companies had made the transition from using semi-analytic instruments (in the first projects) to making the entire calculation using computers models. However, the computation process had utilized some outdated algorithms and provisions, which in combination with insufficient meshing near the critical elements, had led to the critical loads being underestimated by a factor of 2.

2. Degrees of safety during the design and construction phase appeared to be minimal. In some part, this was due to the necessity of maintaining the floatability features, and in other parts – with flaws in the calculation (it would have sufficed having the reinforcement bars only 0.5 m longer).

As a result, the following conclusions were made:
» when designing for shear, it is prudent to be generous with the use of stirrups;
» regardless of the structure complexity, calculations must be verified using semi-analytic methods both to check the computer results and to improve the engineers’ awareness of the critical design issues;
» the expensive and formalized quality management system that was used turned out to be unable to detect errors which were made during the design process.

Accidents During Drilling, Production and During the Use of Platform Equipment
It has repeatedly been noted that a successful platform operation, even in regions where typical offshore rigs and treatment facilities are used, requires highly qualified personnel. On one hand, there are instances when insufficient understanding of integrated oil and gas treatment facilities led to alterations which later resulted in explosions, particularly those caused by exceeding pressure limits at the last stage of separation. One of the largest accidents in the industry took place on the Piper Alpha platform and was caused by defects in the equipments launch system along with bad guidelines, e.g. those that did not cut off the supply of production gasses [7]. On the other hand, after a gas release on the Snorre-A platform offshore Norway, a similar disaster was averted thanks to the proficient actions of the crew – although these actions were contrary to the actual guidelines. Violating several safety regulations, they restored main power and made several attempts to mix and pump drilling mud before finally killing the well. [8]

Accidents are often caused by oil and gas blowouts during well construction, geodynamic factors such as the subsidence of the ocean floor during reservoir production, sliding layers of the sea floor and earthquakes [9]. For instance, at the Ekofisk field, due to the absence of proper reservoir pressure maintenance, the sea floor subsided 6 meters, which lead to some major technical and economic consequences.

Assessing Technical Feasibility by Using Proven Solutions
Often the main argument for selecting the correct type of offshore structure type is its proven track record. As noted in reports from the Deepstar consortium [10], the majority of new solutions, although they look technically substantiated, are not used by the operators because in fact (statistically) their operation had not been proven. With that in mind, the Deepstar consortium considers it as one of the most important objectives to run experimental pilot projects to test the effectiveness of new technology in this area.

With the exception of a few individual international projects, Russian Arctic offshore deposits have no direct analogues, and therefore no proven solutions. In the nearest future, one could reasonably expect new developments in offshore arctic technologies.

Analyzing Regional Infrastructure
When it comes to the development of oil and gas fields in deep-water offshore arctic, most large companies use the following strategy: stage-to-stage study, gradual penetration into the region, creating of integrated production gathering systems. During information accumulation regional production complexes are formed. Some companies prefer a dominating presence in a limited number of oil producing regions so they can manage their development closely. With that in mind, typical staging of regional development is as follows:
onshore  -> shallow water/transition zone  -> deep sea -> deep reservoir deposition etc.

For example, deposits in the shallow waters of the Beaufort Sea share part of surface facilities with onshore production (oil gathering system, compressors at Prudhoe Bay). In Russia, development of reservoirs in the Pechora Sea, the Ob and Taz Bay fields and offshore Yamal could be considered as an extension of onshore activity.

Therefore, project analysis should include assessment of infrastructure and opportunities for production in the region and in the country. For instance, using the concrete structures offshore in Norway was more of a political decision, aimed at keeping contract work within the country. This finally contributed to economical and technological development of the country, and the country was able to train its own experts to a world-class level. At the same time, the construction of floating production and storage facilities allows the operator to be less attached to the production region. When reviewing the scenario of having the facilities manufactured abroad, it is necessary to analyze the international shipbuilding market. Presently about half of the world’s tanker fleet is manufactured in South Korea. At the same time, the situation is not static: development of new technical solutions is possible as well as a drastic change in structure and geography of the production centers. For instance, China’s share of the shipbuilding market is growing (see fig. 2).

Global Experience of Arctic Conditions
One of the basic distinctive features related to most Russian arctic shelf areas is the presence of ice – ice loads which in most cases determine the entire development concept along with requirements for increased investment (imposed by ice-resistant type of structure) and operational expenditures (need for ice management).

There are very few oil and gas producing facilities in the Arctic or in similar conditions that are either completed or nearing completion (“Prirazlomnaya” platform, Hibernia, Terra Nova, Sakhalin-1, 2, projects in the Beaufort Sea).
The peculiarities of these offshore projects are:
»     the threat of ice features damaging deepwater pipelines, cables or subsea production systems, either located on  the sea floor or buried into the seabed;
»     remoteness from infrastructure and market outlets, and difficulties in transportation;
»     having to operate at low temperatures, icing problems;
»     presence of sub-aquatic permafrost, gas hydrates;
»     issues related to environmental and industrial safety, including oil spill response and escape, evacuation and rescue operations in Arctic ice laden waters.

The zones in the Russian shelf, which are unique by their hydrometeorological conditions, research and pre-design studies must be done in advance.

Ice Load Assessment Problems
A lack of understanding of the interaction mechanism of ice and ice features with offshore facilities was the main reason why development of the Beaufort Sea was seen uneconomical in the 1970’s and postponed for 30 years. [12]. Further studies indicated that estimated ice loads were overestimated by a factor of 15, while using the more realistic values could have made the development of the region economically viable at that time.

With the aim of correct risk evaluation related to iceberg collisions with offshore production platforms, Mobil has been running scientific research and experimental design works since the 1980s, which  includes aerial photography and satellite monitoring to determine the size of the icebergs encountered in the region. The first ever iceberg impact experiments were carried out. As a result, an improved understanding of ice mechanics and failure processes have led to an improved basis for global design loads, while conservative estimates of iceberg pressure on large contact areas at 6 MPa, which were used  in the Hibernia design basis, were reduced to a lower figure (1.5 MPa) for the Hebron project [13].

Regardless of these findings, until now there is no common view on calculation methods. Currently, calculation results based on various internationally accepted methods still vary by as much as 10 times.

In recent years, there has been a lot of activity on the elaboration of a document, which would harmonize and update existing regional and national codes in the ice-strengthened facilities. An ISO 19906 standard was recently adopted, where a number of issues are still considered to be only estimates, for example the methods of calculating global loads from ice ridges, interaction with cone-shaped structures.

In any case, the existing and proposed structure concepts require rectification, adaptation and new calculation methods. As a result of this project-specific design codes are developed for use during the design of unique objects. These include theoretical basis with analytical estimations, numerical and physical modeling.

Different stages of each project require different levels of precision. For conditions in the Arctic offshore at the preliminary stages it is appropriate to pose the question of the technical feasibility of the project and the possibility of constructing the selected type of platform under existing conditions. The accuracy of project’s economic assessment in this case greatly depends on how carefully the technical feasibility is conducted.

Existing software for technical and economical estimates (Que$tor, Oil and Gas Manager) use very simplified models and economic evaluations based on statistical data, primarily obtained from projects executed in the southern seas. Obviously, accuracy of such an estimate doesn’t exceed the validity of the technical solution, which is implied when one uses the given correlation.

In conclusion, it should be noted that a partial alternative to ice-resistant offshore structures would be to develop the deposit without a surface production platform. A prototype of such a solution in the Northern Sea is the Snohvit gas project as well as some prospective projects in Ob and Taz Bay where subsea production systems are planned.

Ice Management
The following works could be applied to ice management:
»     regulation of ice conditions and reduction of ice load to offshore facilities and tankers during drilling & production operations and offloading of hydrocarbons into tankers;
»     ensuring navigation of vessels and tankers in difficult ice conditions;
»     sustaining required ice conditions in harborage area;
»     maintenance of navigation channels.

For quite a while it was mistakenly believed that ice-class supply vessels could be used for ice management purposes. However, these ships alter their routes and their speed in difficult zones, while vessels used for offshore projects must be able to handle any ice that comes near a drilling rig or platform (including breaking ice formations and altering iceberg courses).
An additional difficulty for ice management in Arctic conditions is underdeveloped monitoring systems and having to operate in polar night conditions. Therefore it is important to develop such aspects as complex monitoring of the ice conditions near the production areas and transport routes; satellite monitoring; regularly providing quality satellite data for the production zones (once per day); towage and deviation of icebergs during the combined presence of icebergs and ice floes (difficult ice conditions);  and technologies to identify multi-year ice.

Currently, there are probability calculations based on methods with and without the consideration of ice conditions [15], and works are underway on the implementation of control and ice management factors into the critical load estimation algorithms and the structure’s behavior for predicted events (fig. 3).

Drilling in Ice Conditions
Well construction in ice conditions where there is little ice movement does not present a big problem and can be done from the ice or from ice islands, as is the case with the Canadian Arctic Archipelago, as well as from vessels frozen into the coastal ice belt. In cases where there is significant ice movement and low sea depths, caisson-based rigs have proved successful. Commercial implementation of such gravity-based platforms began in the Beaufort Sea and then continued in Sea of Okhotsk offshore Sakhalin island. Design projects for ice-resistant drilling rigs for year-round operations offshore Sakhalin and in Arctic seas are currently underway.

Since late 1970’s, drilling operations have been carried out from moored drilling rigs in the Beaufort Sea, with the support of ice-breakers. The mooring system that are used allow for fast disconnection of the facilities. Canmar drilling vessels (a total of 4 configurations were released) were initially meant for drilling in open waters in the summer and early fall, but upon introduction of ice management systems, the operational period was extended. Dynamic positioning was attempted by one of these drill-ships but was found operationally impractical, due to the shallow water depths (20m to 50m).  These vessels are designed for small ice loads (about 1 MN). As a comparison, caisson structures in the Beaufort Sea were designed to withstand up to 1000 MN loads. The Floating drilling rig Kulluk, constructed in 1982, had a higher ice class and represented a principally new type of structure, being symmetric, backsloped structure. This shape of the structure breaks drifting ice by guiding it down and bending. The unit can operate in depths up to 100m. It was successfully used until the early 1990s and recently, after a 13 yeas out of service, was reintroduced.

Ice conditions during core sampling from the Lomonosov Ridge near the North Pole in 2004 were the most difficult; vessel positioning on fixed point was used. Drilling was done from the refitted ice breaker, Vidar Viking, which was escorted by the Soviet Union and Oden ice-breakers.

Extended-reach drilling has become the most widely used method in offshore deposit development. This technology has the highest potential for development of the Russian Arctic shelf because it allows drilling over a large area from a stationary platform onshore and from artificial islands without the use of expensive ice-resistant offshore platforms. Figure 4 demonstrates the dynamics of maximum reach from the drilling rig installation point. The industry records offshore were achieved while drilling from stationary platforms, although those pertained to a wide range of depths (30-330 m).

Conclusions
Having reviewed the key challenges faced when developing arctic oil and gas fields in this article, it is clear that a comprehensive approach is required. It is necessary to draft the regulatory framework, which would govern the design, coordination, construction and operation processes of the offshore facilities in this region. Industry standards based on experience worldwide are guided more by the principal offshore regions of the world and are not necessarily applicable for Arctic conditions. As was demonstrated by the results of one of the most advanced offshore Arctic projects – construction of “Prirazlomnaya” platform – a lack of experience, regulatory norms, industry standards, necessary equipment and capacities may lead to significant delays. Currently, is important to work on key issues that would improve technical solutions such as:
»     adaptation of existing technologies to Arctic conditions for development of offshore deposits;
»     development and creation of new technologies;
»     complex analysis of hydrometeorological conditions;
»     implementation of ice-technology programs.

The issues reviewed are being worked on at Rosneft and some of this work is done as part of targeted innovation projects.

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The article was published in the NR ROSNEFT Scientific and Technical Newsletter (Nauchno-technicheskiy Vestnik OAO “NK “Rosneft”) No.3, 2011, pp.18-24; ISSN 2074-2339. Printed with permission from the Editorial Board.