Petroleum Development and Production Nunavut Petroleum Workshop

Oct-2012

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
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Arctic Resources

Statoil 2009

Forecasted offshore activity 2012 to 2017

Wells per region & type NAM Exploration NAM Development Norway Exploration Norway Development Russia Exploration Russia Development Wells per year
80 70 60 50 40 30 20 10 0 4 2012 2013 2014 2015 2016 2017

2012 4 0 8 3 0 5 20

2013 6 0 8 12 4 8 38

2014 12 0 10 17 6 11 56

2015 10 0 10 17 6 10 53

2016 12 0 10 25 12 11 70

2017 14 0 10 28 14 7 73

Total # of wells 58 0 56 102 42 52 310

Russia Development Russia Exploration Norway Development Norway Exploration NAM Development NAM Exploration

Where will the activity be?

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

Norway, Barents Sea gas

Snohvit

Subsea to beach (140km), CCS, LNG Est. Cost > $12 B Snohvit LNG expansion put on hold 3.5 Tcf needed for a

Russia, Shtokman

Gazprom 51%, Total 25%, Statoil 24% Super Giant Gas Field - 135 Tcf (USGS) 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

Russia, Yamal peninsula

Bovanekovskoye
Gazprom 175 TCF of gas 240 wells drilled 1,240 km pipeline Railroad to main Russian system 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

Russia, Pechora Sea

Prirazlomnoye (Offshore)
1st development project in Russian Arctic offshore 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

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What does this mean in our part of the world?

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What does this mean in our part of the world?

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Some Discovery to Production timelines

Country Field
Canada Canada Norway Norway Norway Russia Russia Russia Norman Wells Amauligak Snohvit Goliat Skrugard/Havis Shtokman Bovanenkovskoye Tambeyskoye

Discovery Start Development Start Production Discovery to Production

1921 1984 1984 2000 2011 1988 1971 1974 1980 2023 2001 2012 2016 2016 2008 2011 1985 2027 2006 2014 2018 2022 2012 2018 64 43 22 14 7 34 41 44

Red numbers are guesses

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New technologies
Seabed Rig
Under water drilling rig

Badger Explorer
Rig less drilling

North Energy
Tunnel to Oilfield

Boeing & SkyHook

Airships

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Minimum sea ice extent and its implications

The changes
The North East Passage has been open since 2008 (a.k.a. Northern Sea Route) 34 ships went through the NE passage in 2011, over 70 expected in 2012 The North West Passages northern route has been open since 2010. 22 vessels passed through in 2011 compared to 69 in the first 100 years from 1906 to 2005. We can expect to see more commercial shipping in the NW passage in the next few years. All Arctic nations are now looking at improving emergency preparedness and search and rescue capacity.

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Summary
The Arctic activity is increasing
Existing Gravity Based Structure (GBS) platform solutions can be used in up to 100 meters of water depth New re-floatable GBS platforms are being developed for exploration in heavy ice Floating options exist for mild ice conditions Subsea technology improvement allows 3 phase flow over 145 km to avoid floating production New technology is being developed to explore and produce in harsh ice conditions

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gutskot@slb.com

Backup slides

The challenges in the Arctic, continued

The operating conditions vary from area to area

GOM

Shallow hazards will be a challenge in many areas for both onshore and offshore exploration and production
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permafrost Free gas Gas Hydrates

600 m

1000 m

Oil-Gas

Financial climate in the Arctic

1. 2. 3. 4. Canada Greenland Norway Alaska

Russia not mapped out in original study by IHS Energy because of uncertainties on financial regime. Recent agreements with Total and others would indicate improved financial regime.

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