|Theme||Visible||Selectable||Appearance||Zoom Range (now: 0)|
What's Ahead - Anthony Onukwu previews articles on emerging oil and gas regions.
Welcome to the first issue of 2011. As always, we are looking ahead and, in this issue, TWA brings you another interesting theme, with some exciting articles on emerging oil and gas regions.When German scientist Alfred Wegener put forward the idea that the geographic fit of the western coast of Africa and the eastern coast of South America had once been joined together in the geological past. Most people would have thought it was a myth, but advances in marine geology over the next 40 years led to the recognition that the two continents had separated at the end of the Jurassic and the very beginning of the Cretaceous periods by a process of rifting and oceanic suturing. Today, deepwater Brazil is the rising star in the Western Hemisphere for the oil and gas industry after the offshore finds in pre-salt, and deepwater west Africa—also with salt body structures—has achieved huge success in recent years. The number of fields is expected to increase fivefold by 2013. It is the immense promise of the giant deepwater “elephant” fields that is fueling the current boom in exploration and development and raising the levels of investment in these regions.
Abstract As climate change renders the Arctic increasingly accessible, there has been a substantial uptick in industry interest in the region; it is believed an estimated $100 billion could be invested in the Arctic over the next decade. The Arctic contains vast oil and natural gas reserves—the U.S. Geological Survey estimates the Arctic could contain 1,670 trillion cubic feet (tcf) of natural gas and 90 billion barrels of oil, or 30 percent of the world's undiscovered gas and 13 percent of oil. Energy companies are certain to be at the forefront of Arctic development and investment. Climate change has played an important role in expanding access to the Arctic region, although there have been fewer opportunities to access lower cost oil and gas plays. As conventional production has declined, industry has had to focus more on difficult-to-access and unconventional oil and gas plays throughout the world, including those in the Arctic. Exploration and development in the Arctic requires expensive, tailored technologies as well as safeguards adapted to the extreme climatic conditions. In the wake of the 2010 Deepwater Horizon incident, there have been additional costs associated with emergency response and containment requirements.
This study discusses the non-Arctic nations’ strategy for the development of arctic oil and gas resources. According to the Circum-Arctic Resource Appraisal (CARA) by the U.S. Geological Survey (USGS, 2008), it was estimated that undiscovered oil and gas in the Arctic Circle accounted for, respectively, 13% (90 billion barrel; Bb) and 30% (1,670 trillion cubic feet; Tcf) of the world’s total resources. If we solve major challenges and problems in the Arctic, it will trigger exploration and production (E&P) development. It is expected that the Arctic oil and gas resources will become an alternative to supplying national future energy demand.
The oil and gas industry has demonstrated the ability to drill and develop offshore oil and gas resources in first-year sub-Arctic ice and in shallow-water high-Arctic environments. However, development in deep water (water depths exceeding 100 m) remains a formidable challenge due to small, unpredictable open-water windows and large environmental loads from multi-year ice features. This paper provides an overview of recent projections of undiscovered Arctic hydrocarbon resource potential and the geographical distribution of the resource potential thought to lie in deep water. The unique environmental conditions are summarized along with their impact on the cost of supply outlook for Arctic resources relative to other hydrocarbon supplies. The key technical challenges facing deep-water high-Arctic development are reviewed along with the current industry efforts aimed at meeting the challenges.
According to a 2008 Circum-Arctic Resource Assessment by the U.S. Geological Survey (USGS) (Bird et al., 2008), the Arctic could hold about 22% of the world’s remaining undiscovered hydrocarbons. Resource projections such as these, coupled with diminishing supplies of conventional oil resources and higher oil prices, have resulted in intensified acreage acquisition and exploration activities in the Arctic. Arctic exploration is expanding well beyond the shallow-water depths of current industry production experience, which is limited to bottom-founded structures and gravel islands in depths less than 40 m. In fact, much of the undrilled prospective acreage lies in socalled deep water, that is, beyond the 100-m water-depth contour). The expanding search into the deep-water Arctic is to some extent underpinned by industry confidence that the necessary enabling technology will emerge if the prize is large enough. Such confidence is supported by industry’s long-standing record of overcoming major technological hurdles to safely and economically produce large hydrocarbon accumulations in harsh environmental conditions around the globe.