New Technology Magazine


Arctic Spring

The Arctic may soon be home to a new species—an un-manned metal monster that burrows deep into the sediment, searching out vast deposits of oil and gas. Seabed Rig AS, based in Stavanger, Norway, has spent over ­$50 million in conjunction with partners Statoil ASA, Shell International B.V. and ConocoPhillips Company to develop a rig that would sit on the ocean floor. The rig would be remotely controlled through an interactive 3-D interface located on a surface vessel above. The rig is sealed to prevent contamination of the surrounding water, and has zero-liquids discharge during operations.

Arctic Spring

“The rig is designed to operate in water depths of up to 3,000 metres,” says Kenneth Sandervik, vice-president of Seabed Rig. “We have a land-based prototype that we are running now to see how it performs and what its limits are.”

The Arctic is already home to more than 400 oil and gas fields containing 40 billion barrels of oil, 1,136 trillion cubic feet of natural gas and eight billion barrels of natural gas liquids (most are located in the West Siberian Basin of Russia and on the North Slope of Alaska). And the potential is huge; in a 2008 study, the United States Geological Survey (USGS) assessed all potential sedimentary basins north of the Arctic Circle and estimated that about 30 per cent of the world’s undiscovered gas (1,670 trillion cubic feet) and 13 per cent of the world’s undiscovered oil (90 billion barrels) could be found there.


Exploring in the Arctic is not, of course, without challenges. It is one of the most ­des­o­­­late places on Earth. Starting at latitude 66° 33N, it covers some 21 million square kilometres, or six per cent of the planet’s surface. One-third is land and two-thirds sea; for much of the year, it is shrouded in darkness, ice and raging blizzards. And it is largely uncharted.

“There are very large swaths of Siberia and the Arctic that we know very little about,” says Benoit Beauchamp, a professor in the department of Geosciences at the University of Calgary and former executive director of the Arctic Institute of North America. “We know more about the surface of Mars than we do about the Arctic continental shelf.”

That knowledge is set to grow rapidly. Due to steadily rising temperatures, the area of the polar region subjected to permanent sea ice has begun to shrink, from an annual summer minimum of nine million square kilometres in the 1990s to as little as six million square kilometres in the last several years. Some scientists predict a total clearance of summer ice by 2040 or earlier. The retreat has opened up two major shipping lanes, the Northwest Passage over Canada and the Northern Sea Route over Siberia. It has also extended the period of seismic offshore research and drilling by several months.

The retreat has also aided international exploration efforts. Five nations lay claim to sovereignty over parts of the Arctic (known as the Arctic 5): Canada, the United States, Denmark (Greenland), Russia and Norway. International law allows countries to lay claim to 200 miles of offshore continental shelf, as well as natural extensions. Russia and Norway have conducted extensive surveys; Canada and the United States also launched a joint underwater mapping expedition. The information has already helped; Russia and Norway resolved a 40-year-old Arctic boundary dispute encompassing 170,000 square kilometres to their mutual satisfaction. It is also expected that Canada and the United States will resolve a boundary dispute between Alaska and the Northwest Territories, a pie slice of territory that covers some 21,000 square kilometres and may hold as much as 1.7 trillion cubic metres of gas and six billion barrels of oil.


During the 1970s and early 1980s, the Arctic was ambitiously explored with drilling both onshore and in the shallow Beaufort Sea. After a three-decade hiatus, companies have recently returned to the Arctic, with Royal Dutch Shell plc launching a program in the Chukchi Sea and Cairn Energy Plc of the United Kingdom drilling off Greenland (see box). While portions of the Barents Sea are technically within the Arctic Circle, Statoil’s recent field developments north of Norway are not classified as Arctic offshore, as there are no icebergs or seasonal pack ice present in the region.

Most of the Arctic-class vessels and related equipment built during the 1970s have been scrapped; only a few Arctic-class drilling vessels remain, including the Frontier Discoverer and the Kulluk. The existing vessels are mostly suited to shallow-water depths and have station-keeping limitations.

The latest round of offshore licences is in deeper water, ranging to 1,000 metres. New Arctic-class rigs capable of handling that depth would have to be built, as none currently exist. There is much debate among Frontier industry veterans over what form new rigs would take; they would likely be highly manoeuvrable ships capable of withstanding pack sea ice and holding position under adverse conditions.

There are several challenges to creating new rigs; first, an Arctic-class drilling vessel would likely cost at least $1 billion, making it difficult to finance. The second major challenge concerns the fallout from the BP Transocean tragedy that killed 11 crew members and spilled millions of barrels of oil into the Gulf of Mexico; a similar disaster in the Arctic would be compounded by the short response time before winter set in, as well as the remoteness of the region.

“Emergency response in the Beaufort would be very difficult,” says Beauchamp. “You don’t have towns to accommodate emergency workers or ways to deliver materials. When the spill occurred in the Gulf of Mexico, there were boats and ports and other infrastructure available, and look what happened. In the Arctic, such a spill would be completely devastating.”

The BP disaster spurred regulators and the industry to revisit all aspects of offshore drilling. As a result, equipment and processes have been upgraded and supervision augmented. Several valuable lessons were also learned about offshore prevention and containment. First, blowout preventers could be significantly improved by developing devices that could simultaneously shear a drill pipe and seal the well. Secondly, capping systems were effective in deep water; there was great potential for engineered, pre-fabricated units that could be deployed much faster than a relief well (days versus months).

Since the 1970s, Canada’s National Energy Board has required that offshore operators can demonstrate that they have the capability to kill a blowout well with a same-season relief well. They are now open to equivalency in relation to the ability to kill a blowout well (by using a capping device, for example), but since they have not established criteria for the equivalency, the design factors for the Arctic-class drill rig are unclear, raising the potential that a new-build rig might not meet regulatory requirements.


When finances and regulatory clarity are established, industry experts say it could take five or more years for a drilling vessel to be designed and built. If commercial deposits are discovered, it would likely take the better part of another decade to design production and off-take facilities. Hibernia, located in an iceberg-prone region of the Atlantic, relies on a concrete, gravity-based production platform and shuttle tankers to deliver crude to shore. Other fields near Hibernia use stationary ship systems. Arctic-class tankers are already in use in Russia’s Northern Sea Route; operators of any new discovery would likely commission a new fleet.

If enough aggregate discoveries were made to justify building a pipeline to get crude to shore, the offshore portion of the line would have to be trenched sufficiently deep to avoid ice scour. Onshore, pipelines must be carefully constructed to deal with permafrost. Crude has to be well above freezing in order to flow; heat radiating into the surrounding ground would melt the permafrost, causing the ground (and, eventually, the pipeline) to buckle. When the Trans Alaska Pipeline System was built, half of its 800-mile length was over permafrost. Operators built sections above ground on vertical support members, an H-type structure of two pilings and a crossbeam.

During planning for the Mackenzie Gas Pipeline, Enbridge Inc. decided to trench and bury its proposed 1.2-billion-cubic-foot-per-day line three metres below ground in order to protect it from extreme weather conditions. Gas temperatures would be kept below freezing to prevent permafrost melting; paradoxically, because gas heats up when it is compressed, re­frigeration units would need to be installed at compressor stations to keep the gas at a constant temperature. Because much of the pipeline right-of-way is through muskeg, special coating must be used to protect the pipe from the actions of sulphur-reducing bacteria, which produce corrosive acidic water and hydrogen (which promotes cracking). Special electronic pigs (internal inspection tools) will also be deployed to measure any vertical changes.

Efforts to prevent infrastructure from inadvertently melting permafrost will be pointless, however, if the Arctic warms up enough to set the process off naturally. With permafrost in place, the Arctic ground is as hard as concrete; once it melts, it can literally liquefy. Asphalt roads collapse into thermo-karsted caverns. Building structures in permafrost regions rely on pilings that are driven into the ground and frozen in place. As permafrost thaws, these pilings shift and buckle. The 78,000 vertical support members along the Alaska pipeline are essentially anchored to the permafrost in the same manner; already, about 25,000 are having problems with changes in permafrost, including heaving, tilting and movement.

There are further considerations to a warming climate. Already, the lack of year-round sea ice is increasing shoreline erosion, undercutting the foundation of docks and piers. Rising sea levels will also threaten onshore assets. “The Parsons Lake and Taglu fields in the Mackenzie Delta are at low elevation,” says Beauchamp. “If the sea levels were to rise due to melting onshore glaciers, they would be underwater in a few decades.”

Environmental concerns also abound. The warming climate and retreating ice mean polar bears cannot traverse ice floes in search of food. Whales are moving away from trad­itional aboriginal hunting grounds as they follow the altered life cycle of microscopic marine organisms. Caribou migration patterns are changing as their ground forage is disrupted by warmer weather patterns and advancing boreal vegetation.

Authorities and industry are seeking solutions. The Arctic Council, an international body that has traditionally been used to communicate concerns between five main aboriginal groups and the eight nations that rim the Arctic (Norway, Sweden, Finland, Russia, Denmark’s Greenland, Canada, the United States and Iceland) has created an international treaty that will divide search-and-rescue responsibilities among the nations and coordinate emergency response efforts. Other steps include:

  • Neftanaya Companiya Rosneft and Exxon Mobil Corporation announced the creation of the Arctic Research and Design Center for Offshore Developments, part of their joint venture to develop Arctic reserves. The centre will research and develop services for offshore fields, including safety, emergency prevention and support.
  • Shell, which would like to drill prospects this year in the Chukchi Sea, was recently granted approval of their oil spill response plan by the Bureau of Safety and Environmental Enforcement.
  • The U.S. Department of the Interior will coordinate exercises and emergency response planning by U.S. agencies in the Arctic, as well as new scientific work, information collection and data sharing among agencies.
  • The province of Newfoundland and Labrador and the Atlantic offshore industry are investing $16.5 million in the Centre for Arctic Resource Development (CARD). CARD will focus on medium- and long-term needs for petroleum development in Arctic and sub-Arctic regions. Already, research and development priorities gathered from a broad industry consultation program have been distilled into an Arctic Development Roadmap.

Researchers at Penn State University and Rice University have created a new type of sponge that could be used under extreme weather conditions to absorb vast amounts of hydrocarbons. The material, dubbed nanosponge, is made of carbon nanotubes that have been mixed with boron to make a highly porous, flexible material capable of absorbing 100 times its weight in oil. The material, which is hydrophobic (hates water) and oleophilic (loves oil), can be fabricated in large sheets; in the case of a spill, they can easily be deployed on the ocean surface to mop up floating oil, squeezed clean, then reused.


Technical innovation will help ameliorate extreme environment operational issues. The seabed rig, for instance, will be helpful in many sections of the Arctic. “You cannot operate the device under thick ice like you see at the North Pole, as you need a surface vessel to handle the mud and other systems,” says Sandervik. “It will be valuable in areas where the ice is seasonal. The rig is riser-less, so you can disconnect and move off if ice approaches. It can also be used for multi-seasonal drilling; simply dig a trench and place the device in it, and it will be safe from winter ice that scrapes the ocean bottom.”

Seabed Rig also recently introduced a new subsidiary called Robotic Drilling System, or RDS, that will market robots for the drilling industry. “All the equipment will be used topside on a land rig first, then adapted for underwater use later,” says Sandervik. “Our first device will be a derrick robot, available later this year.” RDS will be valuable in the onshore Arctic, as operators will not have personnel exposed to dangerous weather and other adverse conditions. “And, because it is all electronic, there are far fewer problems than with pneumatic and hydraulic systems.”

Rather than using pipelines to deliver gas to market, operators may resort to liquefied natural gas (LNG). In 2011, Shell commissioned a $10-billion floating LNG facility for a gas field located 120 miles off Australia’s northwestern coast. The floating plant, to be built by Samsung Heavy Industries co., ltd. and France’s Technip, will be almost 500 metres long and produce 3.6 million tonnes per year when it comes onstream in 2017.

Numerous ship builders around the world, including Teekay Corporation in Vancouver and FLEX LNG Management Ltd. in the United Kingdom, have devised plans for smaller floating LNG plants capable of handling 75 million to 100 million to cubic feet per day of gas. Designed to circumvent the long, expensive process of building a liquefaction plant on land, the self-propelled vessels can pre-treat, liquefy, store and offload LNG. Such vessels are ideally suited to produce remote gas fields in the Arctic during ice-free months, then move out during inclement winter weather.

A new type of fuel source may also emerge in the Arctic. Gas hydrates are a mix of ice and methane held within a frozen matrix. The material forms under temperatures and pressures commonly found in Polar regions and offshore marine sediments. Estimates place the amount of gas hydrates at several thousand trillion cubic feet around the world.

For the last several years, the U.S. National Research Council and the Geological Survey of Canada have carried out production tests at the Mallik gas hydrate field in the Mackenzie Delta. In early 2012, the U.S. Department of Energy, ConocoPhillips and Japan’s Oil, Gas and Minerals National Corporation ran production tests at a well on Alaska’s North Slope. The tests were designed to determine if various production techniques—including injection of CO2 and depressurizing the reservoir—could produce commercially viable amounts of methane.

In conclusion, the Arctic holds significant wealth and opportunity, but it will require ingenuity, innovation and patience over several decades to achieve success. “Even a dry hole holds tremendous value when you are drilling in such an unexplored region,” says Beauchamp. “It’s a risky game; they call it ‘wildcatting’ for a reason.”


According to the USGS, the Arctic may hold 90 billion barrels of undiscovered, recoverable oil and almost 1,670 trillion cubic feet of undiscovered gas—nearly a quarter of the world’s unmapped reserves. “I don’t think the USGS survey is over-hyped,” says Benoit Beauchamp, a professor of geoscience at the University of Calgary and Arctic specialist. “I think it is fairly conservative.” The following is a brief line-up of projects and results.

In April, Rosneft and Exxon Mobil finalized agreements to form joint ventures to explore in the Black Sea and the Arctic Kara Sea with a preliminary exploration budget of US$3.2 billion. The companies will undertake seismic and environmental studies in the shallow waters of the Kara Sea, with the expectation of an initial wildcat well in 2014. Rosneft also signed an agreement with Eni in April, modelled on the Exxon-Rosneft deal, to jointly develop fields in Russia’s Barents and Black Sea regions. The deals come after Russia introduced tax breaks to attract foreign investors to develop its offshore fields. The majority of Rosneft’s resources are in the icebound Arctic offshore.

Shell has invested US$3 billion in leases in the Chukchi Sea, the body of water that lies between Alaska and Siberia. Recently, the U.S. Bureau of Safety and Environmental Enforcement approved Shell’s oil spill response plan for the Arctic, as well as its bowhead whale monitoring program. Pending final drilling permit approvals, the company hopes to target the Burger Prospect (located about 70 miles offshore in 140 feet of water), with up to six exploratory wells in the next two summer open-water seasons.

A joint venture between TNK, Russia’s third-largest oil company, and BP will develop five giant oilfields in the Russian Arctic. TNK-BP will spend up to US$12 billion to drill wells in the Yamal-Nenets Autonomous Region, said to hold up to five billion barrels. Production is expected to begin in 2017 and be shipped to the Pacific Ocean along the proposed Zapolyarye-Purpe-Samotlor pipeline.

Cairn Energy, which drilled five commercially unsuccessful wells off the west coast of Greenland, was still sufficiently encouraged by the discovery of viable reservoir formations to continue its quest. It is currently evaluating 3-D seismic for further targets in the region.

Since 2007, Imperial Oil Limited, BP p.l.c. and Chevron Corporation have spent more than $1.8 billion on exploration permits located in the Beaufort Seas’ Mackenzie Delta region. The leases are up to 100 kilometres offshore and in waters exceeding 600 metres deep.

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