Arctic Petroleum Development and Production Q1-2013 Geir Utskot - PowerPoint PPT Presentation

Arctic Petroleum Development and Production Q1-2013 Geir Utskot Arctic Manager

Overview Arctic resources Forecasted activity 2012 to 2017 Existing Arctic Developments What does this mean in our part of the world? Some Discovery to Production timelines Some new technologies The northern sea routes Summary 2

Arctic Resources Statoil 2009 3

Forecasted offshore activity 2012 to 2017 Wells per region & type 2012 2013 2014 2015 2016 2017 Total # of wells NAM Exploration 4 6 12 10 12 14 58 NAM Development 0 0 0 0 0 0 0 Norway Exploration 8 8 10 10 10 10 56 Norway Development 3 12 17 17 25 28 102 Russia Exploration 0 4 6 6 12 14 42 Russia Development 5 8 11 10 11 7 52 Wells per year 20 38 56 53 70 73 310 Wells per region 2012 2013 2014 2015 2016 2017 Total # of wells NAM Exploration 1 0 6 10 12 14 43 NAM Development 0 0 0 0 0 0 0 Norway Exploration 8 14 10 10 10 10 62 Norway Development 3 5 5 5 11 18 47 Russia Exploration 0 4 6 6 12 14 42 Russia Development 5 8 11 10 11 7 52 17 31 38 41 56 63 246 4

Where will the activity be? 5

Newly issued Rosneft licenses (cont.) http://www.rosneft.com/attach/0/16/40/fact_sheet_arctic_blocks_eng.pdf 7

Russia, Bazhenov shale Bazhenov Shale  Estimated to be 5 times the size of US Bakken  In areas with existing oil and gas infrastructure Yet the full scale of its riches remains a mystery. Estimates range from a conservative three billion metric tons, or over 20 billion barrels, to as much as 143 billion metric tons, according to a survey of Russian research by oil consultants IHS Cera. The upper estimate would mean an extraordinary one trillion barrels, nearly four times the size of Saudi Arabia's oil reserves or 30 years of world supply at current rates of consumption. 8

Norway, Barents Sea gas Snohvit  Subsea to beach (140km), CCS, LNG  Est. Cost > $12 B  Snohvit LNG expansion put on hold – another 3.5 Tcf needed 9

Norway, Barents Sea oil First oil development is the Goliat by ENI/Statoil  Subsea production, Sevan Production Storage Unit, tankers to market, Gas reinjection, Electrical power from land to run the platform to reduce CO2 emissions from platform  Est. Cost $6.4 B 10

Norway, Barents Sea oil (cont.) Skrugard/Havis is the second Norwegian Barents Sea oil development  In 2011-2012 Statoil and its partners discovered Skrugard and Havis, which are two independent structures within the same licence and represent the Skrugard field development. 400-600 million barrels of recoverable oil have been proven in this area.  To be producing in 2018, subsea development, floating processing unit, 280 km pipeline to shore, Statoil operator 11

Russia, Shtokman  Originally Gazprom 51%, Total 25%, Statoil 24%  Super Giant Gas Field - 135 Tcf  Est. cost >$20 Billion  Phase 1 of 3: 16 - 20 subsea wells  Floating LNG Production Unit  550km subsea pipeline  Delayed due to low gas prices  Statoil pulled out of JV, re-entering?  Tender issued for FEED of LNG plant at Teriberka outside Murmansk  Shell and Gazprom announced JV  GTL would be very easy to ship 12

Russia, Yamal peninsula Bovanekovskoye Gazprom • • 175 TCF of gas • 240 wells drilled 1,240 km pipeline • • Start at 1.4 Bcf/d and increase to 10- 13 Bcf/d • Railroad built Yamal LNG • Total and Novatek Tambeyskoye field • 55 TCF of gas • • Est. cost $20 B Start in 2018 at 650 • mmcf/d and triple to 2 bcf/d by 2020 13

Russia, Pechora Sea Prirazlomnoye (Offshore) 1 st development project in  Russian Arctic offshore Gazprom Neft  340 MM bbl (P90), 20 m water  depth, Production starts in 2013? 36 wells by 2019, Development  CapEx of $4B To be followed by development  of the larger Dolginskoye oilfield nearby (NW) Romanian jack-up will start  drilling delineation wells this summer 14

What does this mean in our part of the world? 15

What does this mean in our part of the world? (Cont.) 16

What does this mean in our part of the world? (Cont.) Many existing fields (Hopedale and Saglek) are within the pipeline distance from the Snohvit subsea field to Melkoya LNG plant. The newly discovered basins would currently most likely require floating processing units 17

How does it all compare? 18

Some Discovery to Production timelines Country Field Discovery Start Development Start Production Discovery to Production Canada Norman Wells 1921 1980 1985 64 Canada Bent Horn 1974 1980 1985 11 Canada Amauligak 1984 2023 2027 43 Norway Snohvit 1984 2001 2006 22 Norway Goliat 2000 2012 2014 14 Norway Skrugard/Havis 2011 2016 2018 7 Russia Shtokman 1988 2016 2022 34 Russia Bovanenkovskoye 1971 2008 2012 41 Russia Tambeyskoye 1974 2011 2018 44 Red numbers are guesses 19

New technologies Seabed Rig Under water drilling rig Badger Explorer Rig less drilling North Energy Tunnel to Oilfield Boeing & SkyHook Airships 20

Subsea Flowlines and Umbilicals Flexibles - Monitoring Rigid - Heated Pipe-in-Pipe Flexibles - 3,000 meters Extend flexible risers water depth Measurement-enabled flexible Extension of current technology and pressure capability to 3,000 to include possibility for active pipe meters and beyond through heating of flowline system innovative solutions ► Joint development of advanced ► Initial results from ultra-deep ► HPIP qualified for reeling, flexible pipe integrity and offshore test of 7", 9" and 11" offering very high thermal surveillance with Schlumberger flexible pipe for sweet and sour efficiency in combination with service were successful lower power requirements Towards 3,000 meters A new generation of Excellent flow and beyond intelligent flexible pipe assurance performance Drive growth: enabled by technological innovation Source: Technip Technip High North Experience 21

ETH-PIP Technology – A New Pipe-in-Pipe Generation  Standard Pipe-in-Pipe (PiP)  Electrically Trace Heated PIP (ETH-PiP) 22

ETH-PiP Technology: Field Architecture Advantages  Single Line Based Field Lay-Out vs. Conventional Loops  Less total flowlines length  Less risers  Longer step-out from FPSO Umbilical Single Line ETH- PiP ETH FPSO In-Line Tee Subsea FPSO Manifold Subsea Manifold Umbilical 23

ETH-PiP Technology: Enhanced Oil Recovery?  Impact of Reduction of Pressure Drop Downstream Wellhead Pressure  Due to production profile low WHP gradient = Wellhead Flowing at end of field life, any improvement in hydraulic Pressure (WHFP) performance of flowline i.e. reduction of pressure drop, could substantially increase wellhead production period. 100 bar Range D P/ D T ≈ 1.0 – 2.0 bar/year range Production Time Extension Δ P Reduction Production Planned Production Time Period [Years] 0 N N+n 24

TOTAL Islay Project – First Application  Flowline Data  6.625” x 12.750” ETH-PiP line – 5.8 km length  4 heat tracing cables (Heat Trace Ltd.)  Fibre optics system in annular space for temperature monitoring  Several Key Lessons Learned to incorporate into future R&D. 25

Future Arctic Developments in Canada Existing reach from FPSO to subsea trees is typically 10 km radius, 20 km diameter 26 Technip Slide Library

Future Arctic Developments in Canada Future reach from FPSO to subsea trees (with heat traced Pipe-in-Pipe is typically 35 km radius, 70 km diameter 27 Technip Slide Library

Gas To Liquids, Shell, Pearl GTL facility, Qatar In 2003, the project cost was estimated to Key facts be US$5 billion. Location: Qatar, Ras Laffan Industrial City Because Shell's contract provided them Integrated gas and gas-to-liquids project with the input gas for free, the project was Development and Production Sharing Agreement calculated to be viable once the price of with Government of the State Qatar, 100% Shell oil exceeded $40. funding Development cost: $18 billion-$19 billion Production: 1,6 bcf/d of gas (291,598 boe/d) resulting in: 140 kbo/d of GTL products (2 trains); gasoil, kerosene, naphtha, normal paraffin and base oils for lubricants 120 kbo/d of NGL and ethane Total production: 3 billion boe of natural gas over the life of the project Key contractors: JGC/KBR joint venture 28

Minimum sea ice extent and its implications The changes; 2012 lowest ever The North East Passage has been open since 2008 • (a.k.a. Northern Sea Route, NSR) • 34 ships went through the NE passage in 2011, over 70 expected in 2012 but only 46 sailed (1.3 million tons of goods) • The North West Passage’s northern route has been open since 2010. 26 vessels passed through in 2011 compared to 69 in the first 100 years from 1906. • First LNG shipment through the NSR from Snohvit to Japan in Nov-2012. 2012 • We sailed our seismic vessel out the NWP this summer from Canadian Beaufort Sea • All Arctic nations are now looking at improving emergency preparedness and search and rescue capacity. 29