Circumpolar Musings: Oil and gas, mining

Shell's plans in Arctic at risk as Obama advisers call for halt to oil exploration

Amanda Graham — Sun, 20 Jan 2013 02:25:01 GMT

(Suzanne Goldenberg/The Guardian, 18 January 2013) -- The entire future of Shell's drilling plans in the Arctic was put in doubt on Friday after two of Barack Obama's most trusted advisers called for a permanent halt to oil exploration. In a piece for Bloomberg news, Carol Browner, who was Obama's climate adviser during his first two years in office, and John Podesta, who headed his 2009 transition team, said they now believed there was no safe way to drill for oil in the Arctic. Their opinions come at a critical time for Shell, which has invested six years and nearly $5bn trying to gain access to the vast undersea reserves of oil and natural gas in the Arctic ocean. The Obama administration this month launched a high-level review of Shell's plans for the Arctic, after a series of equipment failures and safety and environmental lapses. The company is also struggling to repair or replace its Kulluk oil rig, which ran aground over the New Year, in order to return to the Arctic when the drilling season re-opens in July. Now two of Obama's advisers are suggesting Shell and other companies should not be operating in the Arctic at all. "Developers and Barack Obama's administration assured us these operations would be safe, thanks to strict oversight and new technology. Now it seems that optimism was misplaced," Browner and Podesta write in a piece for Bloomberg View. "Following a series of mishaps and errors, as well as overwhelming weather conditions, it has become clear that there is no safe and responsible way to drill for oil and gas in the Arctic ocean."

Dimensions of oil and gas development in Greenland

Amanda Graham — Sat, 05 Jan 2013 00:24:21 GMT

(Andreas Østhagen/The Arctic Institute, 19 December 2012) -- The prospect of offshore oil and gas activity in the waters around Greenland constitutes a highly contentious issue in the larger debate on Arctic petroleum development. Given Greenland’s special status as a part of the Danish Realm, with a high degree of self-governance and a majority Inuit population, oil and gas drilling there has engaged actors with a wide range of interests. Arctic oil and gas development is often generalised into a two-sided conflict between those who emphasise the protection of the environment and those who seek potential profits, with the interests of local communities variably used in favour of one or the other depending on the area of the region under question. Some of the dimensions that seem to determine much of the actual development are often lost in this dichotomy, to the dismay of those in favour of an informed debate. Taking into account that Greenland is just one of the many parts of the Arctic that is experiencing this development, with its own unique characteristics, this article sets out to shed light on the importance of internal political and commercial factors when discussing petroleum development around the island.

Committee in UK says Arctic drilling should stop

Amanda Graham — Sat, 22 Sep 2012 17:42:47 GMT

(Marine Science Today, 22 September 2012) -- A committee of Members of Parliament (MPs) in the UK is calling for a complete stop of drilling for oil and gas in the Arctic until certain safety issues have been taken care of. The Environmental Audit Committee has previously voiced their concerns that a spill could cause catastrophic environmental damage. The MPs say that current oil spill cleanup methods are not adequate. They are calling for a pan-Arctic spill response standard, full liability for firms and an environmental sanctuary in the Arctic. Both BP and Shell are involved in Arctic drilling projects. BP’s plans are temporarily on hold and they wouldn’t provide the MPs with evidence that they have an adequate plan for spill response. Shell has stopped drilling for the winter, but they claim that their spill response is adequate. “There appears to be a lack of strategic thinking and policy coherence within Government on this issue, illustrated by its failure to demonstrate how future oil and gas extraction from the Arctic can be reconciled to commitments to limit temperature rises to 2°C,” the MPs said. ”The Government should seek to resolve this matter.” You can read more from the BBC here: MPs call to halt Arctic drilling amid safety concerns.

Oil companies: The search for unconventional sources goes into the Arctic

Amanda Graham — Wed, 09 May 2012 19:03:08 GMT

(PennEnergy, 8 May 2012) -- The black gold rush on the roof of the world accelerated on Saturday. Norway's Statoil ASA (NYSE ADR: STO) signed a massive deal with Russian behemoth Rosneft in a venture that may require more than $100 billion over the next few decades. Specifically, the company aims to help Rosneft develop untapped oil resources in the Arctic, as Moscow struggles to gain a competitive advantage given declining oil production in Siberia. It's the third recent oil partnership for Rosneft. ... In the wake of Russia's slumping reserves and production in Siberia, the Kremlin has been looking for ways to incentivize producers to help Rosneft increase production. Tax breaks have been one way, but companies also want a little bit of insurance when they work with Moscow. Just last month, Exxon and Rosneft agreed to begin finalizing their initial $3.2 billion Arctic deal that would require about $200 billion for joint projects in the next decade alone, and the development of 10 ice-proof platforms for the Kara Sea that would cost about $15 billion each.

Mackenzie Valley pipeline development halted in Canada's North

Amanda Graham — Sat, 07 Apr 2012 20:17:22 GMT

(CBC News via Eye on the Arctic, 5 April 2012) -- The Mackenzie Valley pipeline, an energy megaproject in Canada's North that has been proposed and debated for decades, has been put on hold again. The 1,196-kilometre line would have transported natural gas from the Beaufort Sea to North American markets. The partners behind the proposed $16.2 billion projected halted development because of low prices for natural gas. ConocoPhillips said Thursday that the five partners in the energy development consortium have suspended funding for the project, which would have transported up to 1.2 billion cubic feet of natural gas a day. The partners include an aboriginal group funded by Calgary-based TransCanada Corp, Exxon Mobil Corp., Royal Dutch Shell Plc and Imperial Oil Ltd., also of Calgary. ConocoPhillips said the decision was made in the first quarter of this year. "The co-venturers elected to suspend funding of the project due to a continued decline in market conditions and the lack of acceptable commercial terms," it said in a release. The announcement follows a decision less than a week ago by ExxonMobil, ConocoPhillips, BP and TransCanada, to work toward developing natural gas reserves on Alaska's North Slope, which would be assessed as an alternative to a natural gas pipeline through Alberta. The state of Alaska has offered up to $500 million in incentives to build a pipeline there. The National Energy Board approved the Mackenzie Valley project in December 2010. The price of natural gas, already at a 10-year low, fell further Thursday after the U.S. government reported a surprisingly large increase in supply. Gas for May delivery fell four cents to $2.11 per thousand cubic feet in New York at midday. The government said supplies expanded last week to a level that's 60.5 per cent higher than the five-year average.

Norway's Arctic militarisation

Amanda Graham — Sat, 07 Apr 2012 20:14:33 GMT

(Euractiv via Environmental News Network, 7 April 2012) -- Norwegian and Russian energy relations might be put at risk when it comes to the exploration and acquisition of untapped energy resources in the Arctic with both countries increasing their militarisation in the area, according to Stratfor, an Austin, Texas-based global intelligence company providing geopolitical analysis and commentary. "Norwegian Defence Minister Espen Barth Eide indicated March 28 that the Norwegian army 2nd Battalion would be renamed the "Arctic Battalion" and equipped to patrol the country's Arctic territory. ... The Arctic, which is estimated to hold vast untapped oil and natural gas reserves, has become more relevant to geopolitics over the past decade. ...Norway and Russia have been highlighting their territorial claims in preparation for potential mineral extraction. Competition in the Arctic will strain the countries' relationship, though a hard break in relations is unlikely as long as both benefit from bilateral cooperation, such as between their state energy companies, Statoil and Gazprom. However, Norway will work to contain Russia's influence in the Arctic by strengthening its military partnerships with other countries in the region. Norway's latest plans are part of a decade-long programme to modernise its military, with a stronger focus on the Arctic and Russia.... Russia ... has been operating along routinely for decades, [and] already has strong military capabilities there. Despite this militarisation, Russia and Norway continue their cooperation in the energy sphere. Lacking significant offshore arctic drilling technology, Gazprom relies on Statoil's technological capacity to develop Russia's Shtokman project in the Barents Sea.... The countries also continue a cooperative military relationship, exemplified by the POMOR annual naval exercises held in May. The true test of this working relationship in the Arctic will be the exploration and acquisition of untapped energy resources. At that point, the extent of the cooperation between Statoil and Gazprom will be an important indicator of the countries' wider bilateral relationship."

New Svalbard coal mine in the pipeline

Amanda Graham — Mon, 02 Apr 2012 22:07:25 GMT

(Trude Pettersen/BarentsObserver, 27 March 2012) -- Norway has started preparations for a new coal mine on the Arctic Arcipelago of Svalbard. This week the Norwegian contractor Veidekke started construction of a three kilometer long road to Mount Lunckefjell across the Martha glacier. “The biggest challenge is to get all the machinery and equipment transported from Svea across the glaciers”, says Jostein Nordstrøm in Veidekke Contractors to Svalbardposten. His company has to clear tons of snow and ice away before they can start building a new road through the frozen glacial soil. The road is expected to be ready in August, and then the actual work on digging the new mine can start. Lunckefjell contains some 8.2 million tons of sales coal according to the mining company Store Norske. The company regards exploitation of the deposit as a natural continuation of the current mining operations in Svea Nord. Costs connected to opening of the new mine are estimated to be some NOK 1 billion. Norway’s current coal mine in Svea Nord will run out of resources within the next few years. The state-owned company Store Norske in September 2010 adopted a business plan for opening a new coal mine in Lunckefjell, just north of the current mine. The Norwegian Government gave green light for the plans in December 2011, after the Ministry of Environment came to the conclusion that the new coal mine can be opened without coming into contradiction with the environmental laws and regulations on Svalbard. A dilemma for the new mine in Lunckefjell is that the mine, although underground, will slightly be in the vicinity of the Nordenskiöld Land national park.

Still waiting for Nunavut's mining boom

Amanda Graham — Mon, 02 Apr 2012 19:53:22 GMT

(Julie Gordon/Reuters via MineWeb.com, 2 April 2012) -- TORONTO - The prospects of a mining boom in Canada's Arctic territory of Nunavut - once as bright as the Northern Lights - are fading fast as costs in the inhospitable region spiral higher, forcing writedowns on two major gold projects there. The sparsely populated territory has gained a reputation as one of the most promising regions in Canada for exploration, with prospectors promoting discoveries ranging from gold to uranium. But getting the ore out of the ground is a different story entirely. While climate change has made it easier to find mineral deposits in Nunavut, the task of mining is complicated by a lack of roads and other infrastructure, the still-crippling cold and the challenge of attracting and retaining an adventurous workforce. Agnico-Eagle Mines, which owns the only working mine in Nunavut, recently booked a partial writedown on changes to the mine plan at Meadowbank, while cash costs at the gold mine have risen to more than $1,000 per ounce. That happened just months after a fire destroyed the mine's kitchen, crippling staffing levels and slashing into 2011 gold output, illustrating how susceptible remote projects are to the even the smallest operational hiccups. "It is a high-cost part of the world to operate in," said Agnico's chief executive, Sean Boyd. "There are risks in that part of the world, no doubt about it."

Finland's environment minister backs more mining in Lapland

Amanda Graham — Tue, 27 Mar 2012 05:15:08 GMT

(YLE News, 26 March 2012) -- Finland's environment minister Ville Niinistö says there's room for more mines in Lapland, in the country's Arctic, if mining companies are willing to carry social responsibility. Ville Niinistö notes that there are no major differences in views concerning mining operations within the coalition government. Those that do exist have narrowed over the past year. "During the past year, the Ministry of Employment and the Economy, and Economy Minister Häkämies, have had their eyes opened to the fact that mining cannot be promoted if environmental issues are not taken seriously from the start. There is room for more mines in Lapland, if mining companies are willing to carry their social responsibilities," Niinistö told Yle. Economy Minister Jyri Häkämies calculates the mining could create thousands of new jobs in Lapland over the next three years. It's estimated that over four billion euros will be invested in mining there. "There is no such thing as a green mine, but mines can be made to have a lesser impact on the environment. Environmental technology projects are important. They can provide Finnish companies with new export opportunities," Ville Niinistö pointed out. However, the Environment Minister also wants to ensure that the economic benefits of mining actually remain in the country. "Mining laws are still liberal. If the degree of processing remains low, the benefits flow abroad."

Obama Administration announces major steps toward science-based Arctic energy exploration

Amanda Graham — Mon, 20 Feb 2012 23:23:01 GMT

(U.S. Department of the Interior press release via PennEnergy, 17 February 2012) -- Building on the Obama Administration’s record of taking steps to expand safe and responsible development of our nation’s oil and gas resources, Secretary of the Interior Ken Salazar today announced the next steps toward energy exploration activities in shallow waters in the Arctic during a limited period this summer. Today’s announcement is informed by the latest science, and continues to be guided by important new safety standards as well as lessons learned from the Deepwater Horizon oil spill. Those steps include: today’s approval by DOI’s Bureau of Safety and Environmental Enforcement (BSEE) of Shell Gulf of Mexico, Inc.’s (Shell) Oil Spill Response Plan (OSRP) for the Chukchi Sea; coordinated exercises and emergency response planning by U.S. agencies in the Arctic; expanded scientific work, information collection and data sharing among agencies, industry, and research institutions to inform Arctic planning; and undertaking long-term, landscape-scale planning for the Arctic. These steps are the latest in a series of initiatives in line with President Obama’s commitment to an all-of-the-above energy approach, which includes a focus on the safe and responsible production of homegrown oil and natural gas resources by American workers.

Sami mining protest in Arctic Sweden

Amanda Graham — Thu, 02 Feb 2012 06:57:23 GMT

(Radio Sweden via Eye on the Arctic, 1 February 2012) -- This week is festival time in the Arctic Circle town of Jokkmokk in Sweden's Far North. But not all the Sami, the indigenous people of Sweden's Arctic, will be celebrating. Mining, forestry and hydroelectricity provide lucrative business opportunities across northern Sweden. But exploiting natural resources often leads to conflict with Sami herders when reindeer grazing areas are blocked or damaged. High mineral and iron ore prices have led to an explosion in prospecting in recent years and increased the number of conflicts, with a regular stream of objections being brought to court. One of them centres on a mine planned just 40 kilometres west of Jokkmokk. The mining company Beowulf has been accused of illegal test drills that damage Sami grazing lands. Mattias Pirak from the Jåhkågaska Sami reindeer herding community told Sami Radio that opportunities to make big profits from iron ore should not be an excuse to destroy the environment. ... Pirak and other Sami herders are organising a demonstration to coincide with one the most visible demonstrations of Sami culture. Every year the Jokkmokk parade provides a blaze of colour in the dark of winter as herders lead their reindeer through the snow in traditional dress. The market is expecting about 40,000 visitors many of them foreign tourists, and the Sami protestors will also target them with flyers printed in English. However Mattias Pirak says that after the market protest his community will continue with their campaign — and that they will never give up.

Greenland offering first east coast oil drilling licences

Amanda Graham — Tue, 24 Jan 2012 05:20:46 GMT

(IceNews, 23 January 2012) -- Greenlandic authorities have opened bidding on oil prospecting licences to the east of the country for the first time. Interest is said to be strong, with over 70 oil companies attending the Greenlanders’ open meeting on the subject last month in Copenhagen. The areas for which search licences are being offered lie in the high Arctic; far north of Iceland and not too far from Svalbard. They are north of Scoresbysund between 75 and 79 degrees north. The areas are being offered in two stages; the first in 2012 and the second in 2013. Applications from oil companies to be permitted to take part must be received by the 1st March and for specific location licences, by the 15th December. The exploration licences will last for 16 years, with the option for extension up to 30 years. It is now ten years since oil exploration licences were first offered off western Greenland and the country has since offered a new area for exploration on average once every two years, Vísir.is reports. There are some 20 licences currently active, which are held by companies including Statoil, ExxonMobil, BP, ChevronTexaco, Shell and Japan Oil. Canada’s Husky Energy has announced it will drill two test wells in Greenlandic waters in summer 2013. The first company to find oil and gas in Greenland was the UK’s Cairn Energy in the autumn of 2010 off Disko Island, 200 km north of Nuuk. The company put its programme on hold this winter, however, after drilling eight holes at great cost, without finding enough evidence of fossil fuels to make it worthwhile.

Russia pulling ahead in the Arctic

Amanda Graham — Sat, 31 Dec 2011 20:43:41 GMT

(Michael Byers/Toronto Star, 28 December 2011) -- NOVOSIBIRSK, RUSSIA - Arctic. There is no likelihood of Arctic states going to war.” The Russian foreign ministry’s representative in Siberia smiles as he quotes the Canadian Prime Minister, as reported in a U.S. diplomatic cable released by WikiLeaks. Although Stephen Harper never expected that his conversation with NATO Secretary-General Anders Fogh Rasmussen would be made public, the analysis was entirely correct. Here in Novosibirsk (pop. 1.5 million), people are more interested in trade and investment opportunities than geopolitical conspiracies. ... Siberia is larger than Canada and its resource industry more developed, in part a legacy of the Stalinist era drive for self-sufficiency. Fully 20 per cent of Russia’s GDP comes from this vast, sparsely populated territory. ... Russia also has massive deposits of oil and gas, both onshore and offshore. Earlier this year, Russia and Norway settled the Arctic’s largest sovereignty dispute — by dividing a contested portion of the Barents Sea exactly in half. ... Unlocking Russia’s Arctic treasure chest will require new transportation routes. Some Siberian officials envisage a railway to the Bering Strait and beyond through a tunnel to North America. It’s easy to dismiss the plan as unrealistic, until you remember that the Trans-Siberian Railway connecting Europe to China and the Pacific was once also only a dream. ... Russia is intent on turning the Northern Sea Route into a commercially viable alternative to the Strait of Malacca and the Suez Canal. There is just one fly in the ointment: the United States, which opposes Russia’s claim that key parts of the Northern Sea Route constitute Russian internal waters. Significantly, the Russian legal position is identical to that taken by Canada with respect to the Northwest Passage, where the only country that opposes Canada’s internal waters claim is, once again, the United States. During a conference in Novosibirsk, I explain that the Soviet Union had expressed support for Canada’s legal position when the U.S. sent an icebreaker through the Northwest Passage in 1985. A Russian professor asks the logical question: “Did Canada ever support the Soviet Union’s Northern Sea Route claim?” I reply that, although mutual recognition would have strengthened both countries’ legal positions, Canada could never have supported the Soviets in a Cold War dispute with the United States. The professor looks at me quizzically: “But the Cold War is over, nyet? Russia, after all, is about to join the WTO.”

Minerals bring economic boom to the north of Sweden

Amanda Graham — Sat, 31 Dec 2011 01:14:45 GMT

(Radio Sweden/Eye on the Arctic, 30 December 2011) -- The job market is bright in Norrbotten County, fuelled by growing global demand for iron-ore and other industrial and precious metals. And while the ground under the city of Kiruna is sinking because of the iron ore mine, it is precisely because of that iron ore, that the job market is soaring. “In Kiruna we have 2.8 percent unemployment,” says Terje Raattamaa, the head of the Employment Office in Kiruna. “That is one of the lowest unemployment rates in Sweden.” Just outside the small mining town of Pajala, Northland Resources, an international mining company, is currently building two new iron ore mines. “We’ve done exploration during the past seven years, but before we started the construction last year, there was just a swamp area and trees here,” says Niclas Dahlström from Northland Resources. “Now we’re investing over US $720 million in the site.” Northland Resources already has three large customers that will buy every single ounce of iron ore the company produces during its first decade. Two traders, Standard Bank and Stemcor, will buy the product and sell it. The third customer, the large steel conglomerate Tata Steel, will use the raw material itself. Northland Resources says it will employ hundreds of people. “During the next two years we’ll employ 400 new people and about 200 people working with logistics, driving large trucks to put the product on rail,” says Dahlström.

Number of dead rising after oil rig tragedy

Amanda Graham — Mon, 19 Dec 2011 17:36:35 GMT

(Trude Pettersen/BarentsObserver, 19 December 2011) -- Russian media is now asking why the whole crew stayed onboard during the towing of the oil jack-up rig ”Kolskaya” that overturned and sank in the Sea of Okhotsk yesterday. With the break of day, search for survivors and dead after the accident outside the island of Sakhalin continued. 14 dead have so far been found, the Federal Agency for Sea and River Transport's web site reads. The rig sank in course of only 20 minutes, Murmansk Oblast Governor Dmitry Dmitriyenko told RIA Novosti. 32 of the 67 people aboard came from the Murmansk region. 14 persons were found alive after the accident and picked up by boats taking part in the rescue operation. All the 14 survivors were on duty on deck during the towing and were wearing survival suits and life-jackets. ... Russian media is now asking why the whole crew stayed onboard during the towing, and why towing was conducted at all in such bad weather. A source in the Federal Agency for Sea and River Transport says to Kommersant that half of the people onboard had nothing to do with the towing operation – they were drilling operators, crane operators and others. – The number of casualties did not have to be that high, the source says. According to Russian instructions for safety at sea, only a required minimum of personnel should be onboard a vessel that is being towed. The Russian Agency for Transport Supervision has started investigation of the accident. The weather in the area is bad, with wind of 10 m/s, waves of 2 meters and temperature of -2°C. The water temperature is 1°C.

Shell to unveil icebreaker for Arctic Alaska offshore drilling

Amanda Graham — Sun, 18 Dec 2011 02:05:11 GMT

(Lisa Demer/Anchorage Daily News, 6 December 2011) -- A longtime Shell contractor has nearly completed a massive, customized icebreaking ship for the company's drilling projects in the Chukchi Sea off Alaska. The icebreaker is part of a specialized fleet Shell hopes to deploy for exploration drilling next summer, if it can clear all the legal and regulatory hurdles. Named the Aiviq, the Eskimo word for walrus, the $200 million, 360-foot steel vessel's main job will be to move anchor lines that will attach drilling rigs to the sea floor in the shallow Arctic. But it's also on standby in case of an oil spill -- it could recover about 10,000 barrels of spilled crude. The ship was designed to cut through ice a meter thick and likely will be able to move through thicker ice, its builder says. It can operate at minus 58 degrees. Shell points to the ship as evidence that it's serious about drilling in -- and protecting -- the fragile Arctic. Edison Chouest Offshore is building the ship at its Larose shipyard, North American Shipbuilding.

Canadian Inuit to get millions from Arctic resource royalties

Amanda Graham — Wed, 30 Nov 2011 18:28:37 GMT

(Canadian Press via Eye on the Arctic, 28 November 2011) -- Inuit in Canada's eastern Arctic territory of Nunavut expect to receive hundreds of millions of dollars over the next decade after passing a resolution to charge a new royalty on Arctic resources. The group that administers the Nunavut land claim, Nunavut Tunngavik, says it will start collecting the 12 per cent royalty on April 1, 2013. Nunavut Tunngavik estimates it will collect nearly half a billion dollars from the royalty in its first six years. The money will be placed in a trust fund and spent by Inuit organizations. Mining groups say the royalty was expected and isn't likely to affect operations in the territory. Nunavut's mining industry is increasingly active, with $2.4 billion spent on exploration since 1999 and 82 active properties.

Seas off Arctic island may hold oil bonanza - Norway

Amanda Graham — Thu, 24 Nov 2011 06:36:33 GMT

(Gwladys Fouche/Reuters, 23 November 2011) -- OSLO - The waters off a tiny Norwegian Arctic island may hold vast amounts of oil and gas, the Nordic country's authorities said, as they prepare to open the zone for exploration by oil firms. Recent geologic studies conducted in the seas off the volcanic Jan Mayen island, a speck of land some 1,000 kilometres (621 miles) west of Norway situated to the east of Greenland and the north-east of Iceland, have been promising, according to the Norwegian Petroleum Directorate (NPD). "The samples from the seabed around Jan Mayen are outstanding," the agency's head of exploration, Sissel Eriksen, said in a statement late on Tuesday. "We don't yet have enough information for the NPD to give a resource estimate for the area, but we are very optimistic after seeing the data," she added. The study is part of a larger move by Norway, the world's eighth-largest oil exporter and the second largest for gas, to encourage oil exploration in its vast offshore Arctic areas. The oil and energy ministry said last month it would go ahead with an impact assessment study of the Jan Mayen area, which marks the first formal step towards opening the zone to oil companies. It is as yet unclear when the area will be open in practice to oil firms, but the process usually takes several years. The NPD, which manages Norway's oil and gas resources, said the studies had revealed good-quality sandstone that could act as a reservoir to oil and gas deposits. A type of rock similar to that off Greenland, where oil companies are already exploring for oil and gas, was also found, Eriksen said.

Qatar in talks for stake in Arctic LNG project

Amanda Graham — Mon, 14 Nov 2011 23:16:52 GMT

(Reuters via Arabian Business, 13 November 2011) -- Qatar is in negotiations to take a stake in an Arctic liquefied natural gas (LNG) project under development by number-two Russian gas producer Novatek, Qatar's energy minister said on Sunday. The Yamal project will develop the South Tambey field located in the Arctic area of the Yamal peninsula. "Qatar is very much interested in investment generally in oil, gas and petrochemicals. Yamal is an important project and we are really interested in participating in its development," the minister, Mohammed al-Sada, told reporters on the sidelines of an event on Sunday. "We are in active discussions and negotiations with our partners," Sada said. Resources from the condensate and gas field are expected to produce 5 million tonnes of LNG per year when production starts in 2016 and reach 15 million tonnes per year in 2018.

Gazprom extends Arctic railway

Amanda Graham — Sat, 12 Nov 2011 06:20:53 GMT

(Barents Observer, 4 November 2011) -- The world's northernmost railway line will be taken further. The line, which was built by Gazprom as supply line to the huge Bovanenkovo gas field, will be taken further north to Kharasevey, regional Governor Dmitry Kobylkin confirms to journalists. Regional authorities and Gazprom have already agreed about formalities with the project, Oilru.com reports. As previously reported, the Bovanenkovo railway was officially opened early 2011. The 572-km-long connection ends up in the station of Obskaya, where it joins ends with the national Russian railway grid. The gas-rich Yamal Peninsula is top priority for Gazprom, which is now investing big sums in regional field development. The 4.9 trillion cubic meter Bovanenkovo field is due to come into production in 2012, after which several more regional fields are in line. Among them is the Kharasaveyskoye, another huge field, located not far north of the Bovanenkovo. Unlike other Russian railway lines, the Obskaya-Bovanenkovo line is owned by Gazprom. As previously reported, the Russian Railways have been invited to take over the line, but has shown little interest. In addition to railway and field development in Yamal, Gazprom is also investing in the laying of the Bovanenkovo-Ukhta gas pipeline.

Japan to bid for oil field development in Arctic Circle

Amanda Graham — Fri, 21 Oct 2011 20:05:34 GMT

(Asahi Shimbun, 20 October 2011) -- Japan is set to join an international scramble to develop an oil field in the Arctic Circle as parts of its strategy to diversify sources of supply. A quasi-public investment firm, funded by an independent administrative agency and several leading Japanese companies, will tender a bid for the right to develop an oil field off the coast of Greenland next year. The oil field, located northeast of the Danish territory, lies on a continental-shelf floor between 100 and 500 meters below surface. It covers an area of about 50,000 square kilo meters and is the closest known oil field to the north pole. The government of Greenland will announce next year the areas where it will allow exploratory drilling. The site to be opened for exploration covers 30,000 square kilo meters. Bidding will be carried out following the announcement. Among the organizations funding the investment firm, called Greenland Petroleum Exploration Co., are Japan Oil, Gas and Metals National Corp. (JOGMEC), an administrative agency handling natural resources-related matters; INPEX Corp. a leading natural resources producer; Idemitsu Kosan Co., a major oil supplier; and trading house Sumitomo Corp. The winner of the bidding will be announced in mid-December 2012 after screening.

Shell inching closer to Alaskan drilling OK

Amanda Graham — Mon, 08 Aug 2011 23:22:16 GMT

(RedOrbit - Science, 6 August 2011) -- Shell, the largest oil company in Europe, has been given conditional approval by American government officials to begin drilling exploration wells in the Arctic Ocean in 2012, Alex Ogle of the AFP reported on Friday. In a statement released Thursday, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) confirmed that the Department of the Interior has, in Ogle's words, "opened the doors to Shell's proposal for four shallow water exploration wells in Alaska's Beaufort Sea to start in July 2012, said in a statement Thursday." "We base our decisions regarding energy exploration and development in the Arctic on the best scientific information available," BOEMRE Director Michael Bromwich told AFP, adding that they agency would review Shell's activities to ensure that they acted in a "safe and environmentally responsible manner." Shell, who still needs to obtain permits from the Environmental Protection Agency (EPA), the US Fish and Wildlife Service, and National Marine Fisheries Service, among others, welcomed the news, saying that they had "cautious optimism" that they would be able to drill there in a year's time. Environmental groups were less pleased. "This is a disaster waiting to happen, but still BOEMRE is moving forward with Arctic Ocean drilling," Earthjustice attorney Holly Harris said in a statement Thursday, according to Ogle.

Shell to sell stake in Mackenzie pipeline project

Amanda Graham — Mon, 18 Jul 2011 06:02:39 GMT

(Edward Welsch/Market Watch, 16 July 2011) -- CALGARY - Royal Dutch Shell PLC said Friday it plans to sell its stake in a C$16.2-billion Northwest Territories natural-gas pipeline project, as well as its other assets in a vast natural-gas basin in the territory. The fate of the MacKenzie Gas Project, which would bring natural gas from fields bordering the Arctic Ocean to markets in North America, has long been in doubt. Regulators approved the project last year, but other partners including ConocoPhillips and Imperial Oil Ltd., controlled by Exxon Mobil Corp., haven't committed to build it. A Shell spokesman wouldn't provide details on the company's decision to sell its assets in MacKenzie, other than that it was part of Shell's normal review of its holdings. "Shell still believes the project is important for Canada," the spokesman said. Work on the MacKenzie gas pipeline was suspended in 2007 after a regulatory process dragged on. It was finally approved by regulators late last year, after a six-year review process. But during that review, the economic rationale for bringing natural gas from the far north eroded, as a surge in new shale gas supplies were being unlocked in the U.S. and other parts of Canada by new drilling technology. In addition to its stake in the pipeline project, which would include a gathering system and processing facility, Shell's Niglintgak natural-gas field in the area will also be put up for sale. The Shell spokesman said the company has prepared a package of data on its assets in the MacKenzie Delta and has made it available to potential buyers.

Ecologists say too early to estimate impact of Barents Sea oil slick

Amanda Graham — Thu, 19 May 2011 21:46:27 GMT

(RIA Novosti, 12 May 2011) -- Ecologists have warned that it is too soon to judge what environmental impact an oil slick in the Barents Sea has had. The oil spilled into the sea in the Kandalaksha Bay, off the northern Russian port city of Murmansk, after melt water carried oil from beneath the soil offshore on May 7. Officials say the oil is up to 5 millimeters thick in places. An area of the sea covering 210,000 square meters is polluted, the latest satellite data indicates. Scientists say it is too soon to gauge the full extent of the incident. "It is still hard to assess the consequences of the oil slick for animals and birds of the Kandalaksha wildlife park," Ivetta Tatarenkova, a scientist at the park, which is situated on the coast, told RIA Novosti on Wednesday. "The spill may pose a threat to eider ducks," she said. "The invertebrates - mussels, small crustaceans and others - may also suffer at the hands of the spill," she added. Efforts are underway to clean up the slick.

Shell tries to calm fears on drilling in Alaska

Amanda Graham — Mon, 02 May 2011 06:48:38 GMT

(Clifford Krauss/New York Times, 1 May 2011) -- SAVOONGA, Alaska — Shell Oil will present an ambitious proposal to the federal government this week, seeking permission to drill up to 10 exploratory oil wells beneath Alaska’s frigid Arctic waters. The forbidding ice-clogged region is believed to hold vast reserves of oil, potentially enough to fuel 25 million cars for 35 years. And with production in Alaska’s North Slope in steep decline, the oil industry is eager to tap new offshore wells. Shell has led the way, working for five years to convince regulators, environmentalists, Native Alaskans and several courts that it could manage the process safely, protect polar bears and other wildlife, safeguard air quality for residents and respond quickly to any spill in the region. But BP’s Deepwater Horizon disaster a year ago put a chill on new offshore drilling. Shell’s renewed application will pose a test for President Obama, who promised to put safety first after the BP spill. But he has also reiterated his support for offshore drilling amid voter worries about rising gasoline prices. Environmental groups say a spill in the Arctic’s inaccessible waters could be even more catastrophic than the Gulf of Mexico accident. Republicans, meanwhile, are threatening to excoriate the president for turning his back on energy security if he says no to Shell. “Americans are reeling from staggering prices at the pump,” said Representative Cory Gardner, a Colorado Republican on the House Energy and Commerce Committee. “So the president has to justify to the American people why we are not replacing Saudi Arabian oil imports with U.S.-produced oil.” Whatever the administration decides, it will anger somebody. “If the Obama administration approves drilling in the Arctic, it will demonstrate that they have learned nothing from the gulf spill,” said Brendan Cummings, senior counsel at the Center for Biological Diversity, which is suing to stop Shell.

Oil majors look to Barents Sea for the future

Amanda Graham — Sun, 24 Apr 2011 21:35:35 GMT

(Pierre-Henry Deshayes/AFP via Yahoo! News, 24 April 2011) -- OSLO (AFP) – The oil and gas majors are looking to the promise of the Barents Sea, attracted by Norway's political stability against a backdrop of unrest in the Middle East and falling North Sea output. Of 24 offshore oil and gas production licenses Norway awarded on April 15, half were in the Barents Sea in the Arctic, an unprecedented number. "There is unprecedented interest in our northernmost seas," Norway's Petroleum and Energy Minister Ola Borten Moe said of the licensing round, adding "the present level of activity in the Barents Sea is high and increasing." Since peaking in 2001 at round three million barrels per day, Norway's oil ouput has declined steadily to around two mbpd currently. With reserves in the North Sea shrinking and major discoveries becoming rarer, Norway has decided to open up its northernmost waters in response to industry pressure and the need to ensure a steady source of income for its generous welfare state. Exploration and development in the Arctic is technologically complex and expensive, with companies having to come with extremely low temperatures, sea ice, long distances from existing infrastructure and total darkness in winter. But soaring oil prices and technological advances have made the region attractive despite the challenges, with the Arctic as a whole perhaps containing 13 percent of the oil and 30 percent of the gas on the planet not yet discovered, according to the US Geological survey. Among the firms awarded licenses earlier this month were Norwegian state-owned giant Statoil, France's GDF Suez, US giant ExxonMobil, Eni of Italy, German RWE Dea and Britain's BG.

"NOVATEK" and the government of Yamal agreed about construction of the port Sabetta

Amanda Graham — Sun, 17 Apr 2011 18:57:56 GMT

(Yamal News, 13 April 2011) -- The modern multifunctional port Sabetta will be built on Yamal peninsula. This information was given by the first deputy governor of Yamal Vladimir Vladimirov in the course of the working trip to the settlement Seyakha (Yamalskiy district). By the information given in the press-service of the governor of Yamal, Vladimir Vladimirov conducted the conference with the head of Yamalskiy district Andrey Nesterouk, the head of the settlement Seyakha Igor Okotetto and the deputy chairperson of the administration of "NOVATEK" Yevgeniy Kot. The sides discussed questions of assistance to building of the port Sabetta on Yamal peninsula. The necessity of this building is stipulated with a decision not to bring shipment of liquefied gas farther to the north of the peninsula but to tie it to extractive fields. For realization of this project "NOVATEK" and the government of Yamal-Nenets Autonomous Okrug are to conduct bottom dredging on the waterway of Ob Estuary. The port Sabetta can become the key link in the scheme of transportation of not only liquefied gas from Yamal, but also products of fish and venison processing. By the words of Vladimir Vladimirov, if it will be possible to come out to the world level, without doubts, cargoes from Seyakha and Sabetta will go both to Europe and Asia.

Greenland’s mine school: quality learning, in English

Amanda Graham — Mon, 04 Apr 2011 22:47:38 GMT

(Jim Bell/Nunatsiaq News, 4 April 2011) -- SISIMIUT, GREENLAND - For Hans Henrichsen, manager of the Greenland School of Minerals and Petroleum in Sisimiut, there’s only one standard worth reaching for: best of class. “We are taking the best of the best in Greenland. Our goal is to prove that Greenland miners are as good as any around the world,” Henrichsen said March 31 to a group of visitors from Nunavut. Agnico-Eagles Mines Ltd. flew the group to Greenland following a two-day tour of the company’s gold mine in Kittilä, Finland, where the Nunavut visitors met numerous highly educated Finns who have landed good jobs in mining. On the Greenland leg of the tour, the group learned how an Inuit jurisdiction has figured out a way to deliver that education. Henrichsen said the Greenland government decided in 2007 to build a new mining school in Sisimiut to meet a big national goal: training at least 1,500 Greenlanders for the mining industry. That’s because Greenland expects seven to eight new mines will emerge there within the next decade, producing lead, zinc, diamonds, iron, gold, molybdenum and rare earths. In 2008, the school began accepting students. Since then, 123 of 128 people who signed up for training programs have completed their courses, Henrichsen said.

Russia embraces offshore Arctic drilling

Amanda Graham — Fri, 18 Feb 2011 21:49:51 GMT

(Andrew E. Kramer and Clifford Krauss/New York Times, 16 February 2011) -- The Arctic Ocean is a forbidding place for oil drillers. But that is not stopping Russia from jumping in — or Western oil companies from eagerly following. Russia, where onshore oil reserves are slowly dwindling, last month signed an Arctic exploration deal with the British petroleum giant BP, whose offshore drilling prospects in the United States were dimmed by the Gulf of Mexico disaster last year. Other Western oil companies, recognizing Moscow’s openness to new ocean drilling, are now having similar discussions with Russia. New oil from Russia could prove vital to world supplies in coming decades, now that it has surpassed Saudi Arabia as the world’s biggest oil producer, and as long as global demand for oil continues to rise. But as the offshore Russian efforts proceed, the oil companies will be venturing where other big countries ringing the Arctic Ocean — most notably the United States and Canada — have been wary of letting oil field development proceed, for both safety and environmental reasons. ... The Arctic holds one-fifth of the world’s undiscovered, recoverable oil and natural gas, the United States Geological Survey estimates. According to a 2009 report by the Energy Department, 43 of the 61 significant Arctic oil and gas fields are in Russia. The Russian side of the Arctic is particularly rich in natural gas, while the North American side is richer in oil. While the United States and Canada balk, other countries are clearing Arctic space for the industry. Norway, which last year settled a territorial dispute with Russia, is preparing to open new Arctic areas for drilling. Last year Greenland, which became semi-autonomous from Denmark in 2009, allowed Cairn Energy to do some preliminary drilling. Cairn, a Scottish company, is planning four more wells this year, while Exxon Mobil, Chevron and Shell are also expected to drill in the area over the next few years. But of the five countries with Arctic Ocean coastline, Russia has the most at stake in exploring and developing the region. “Russia is one of the fundamental building blocks in world oil supply,” said Daniel Yergin, the oil historian and chairman of IHS Cambridge Energy Research Associates. “It has a critical role in the global energy balance. The Arctic will be one of the critical factors in determining how much oil Russia is producing in 15 years and exporting to the rest of the world.”

Stunning diamond mined in Canada

Amanda Graham — Tue, 15 Feb 2011 22:44:21 GMT

(Randy Boswell/Postmedia News via Vancouver Sun, 15 February 2011) -- It's being touted as the finest diamond ever found in Canada, a "breathtaking," 78-carat rock from the Ekati mine site near Yellowknife. Mine owner BHP Billiton was expecting a possible Canadian price record Monday at a Valentine's Day auction at the company's diamond centre in Belgium. The results of the sale weren't immediately available. "It has absolutely stunning gem quality," BHP Billiton representative Alexander Legaree said of the diamond, which was unearthed in October. "It's internally flawless and it's completely colourless, which is pretty rare for diamonds to begin with, but especially that size." He said the gem is about as big as the top joint of an adult thumb. It was to be offered in "rough cut" form to a select group of potential buyers at the sale in Antwerp. The gem was described by the company as "the most significant gem-quality diamond to be discovered" at the Northwest Territories mine since it opened in October 1998. "The diamond is potentially the most valuable stone in the mine's 13-year history," BHP Billiton said in a statement announcing the sale. The diamond, measured at 21 x 18 x 13 millimetres, would have had to fetch more than $1.2 million to surpass a pear-shaped, 10.22-carat gem from Ekati that stands as the single most valuable diamond from the mine. Larger stones have been dug out at Ekati, which is located 300 km northeast of Yellowknife. The biggest of them all, a 182-carat diamond discovered at the site several years ago, was of a lower quality and therefore less valuable than the gem being sold in Belgium. The 78-carat diamond was named Ekati Spirit after a contest open to BHP Billiton staff and contracted employees. "The name represents the people of the North, the communities in which we operate, and those who have helped define our distinguished history," the company said.

BP forms partnership to explore in Russia

Amanda Graham — Sun, 16 Jan 2011 06:02:40 GMT

(Julia Werdigier/New York Times, 14 January 2011) -- The British oil giant BP agreed on Friday to a partnership with Rosneft, a Russian company, forming an alliance to explore the Russian Arctic. ... The two companies would explore three license blocks on the Russian Arctic continental shelf that were awarded to Rosneft last year and span about 50,000 square miles. ... The agreement allows BP to expand its operation in Russia at a time when the demand for energy is rising and competition to explore new fields is heating up. “We are very pleased to be joining Russia’s leading oil company to jointly explore some of the most promising parts of the Russian Arctic, one of the world’s last remaining unexplored basins,” Mr. Dudley said in a statement. “This unique agreement underlines our long-term, strategic and deepening links with the world’s largest hydrocarbon-producing nation,” he added. The deal drew immediate calls for a review by a lawmaker in Washington, who noted that BP was the top petroleum supplier to the United States military in 2009.

N.W.T. First Nation wants Arctic mining ban back

Amanda Graham — Fri, 17 Dec 2010 18:38:21 GMT

(CBC News, 7 December 2010) -- A Northwest Territories aboriginal group is taking the federal government to court for quietly opening a vast area of once-protected northern wilderness to mining claims. The Dehcho First Nations has asked the Federal Court to overturn Ottawa's order removing an existing ban on subsurface mining in the Horn Plateau, a 25,000-square-kilometre area in the south-central part of the territory. In its application for a judicial review dated Nov. 29, the Dehcho said the federal government's decision to remove the subsurface mining ban breaches an agreement made through the N.W.T. Protected Areas Strategy. The news comes as Ottawa announced proposed boundaries this week for a national marine park in Lancaster Sound, located at the eastern entrance to the Northwest Passage. The Horn Plateau region is the source of the Horn, Willowlake and Rabbitskin rivers, serves as a nesting area for migratory birds, and is a habitat for caribou, wood bison and wolverine species. The Dehcho Dene consider the area — which they call Edehzhie in the Slavey language — to be a sacred place and an important hunting ground. It is also known to have potentially significant oil and gas deposits. The Horn Plateau area has been under interim protection since 2002. Shortly before that protection was set to expire in October, the federal Indian and Northern Affairs Department issued an order-in-council extending that protection until 2012.

More ore found in Kiruna

Amanda Graham — Sun, 14 Nov 2010 02:58:10 GMT

(BarentsObserver, 12 November 2010) -- The LKAB company in northern Sweden has found iron ore worth more than one billion Swedish kroner in its 50-year old waste deposit. "It is absolutely fantastic that we have found ore in our old rock deposits," LKAB representative Anna Tyni told Swedish Radio. The ore was discovered in more than 50-years old rock piles, newspaper Dagens Industri reports. The LKAB company is with its iron mines in and around Kiruna a cornerstone company in northern Sweden.

Glitching safety system at Russia’s aged Bilibino NPP causes emergency reactor shutdown

Amanda Graham — Fri, 12 Nov 2010 05:54:02 GMT

(Andrei Ozharovsky/Bellona, 9 November 2010) -- MOSCOW – A scram of Reactor 2 at Bilibino Nuclear Power Plant (NPP) in Russia’s Far Northeast late last October took the unit out of operation for 36 hours — bringing into doubt the ongoing attempts to modernise the obsolete and worn-out equipment at this first-generation NPP, which was commissioned as far back as the 1970s. According to reports by the public information service of the Russian NPP operator, concern Rosenergoatom, and the press service of Bilibino’s production and engineering department, the scram occurred on October 27, 2010 at 07:12 p.m. local time. The reactor was taken back online on October 29 at 05:32 a.m. local time. The scram was ascribed to a “false signal generated by the protection equipment.” The reactor was thus offline for 34 hours, providing no power or heat to the Chaun-Bilibino energy system. One circumstance that causes additional concerns regarding the latest shutdown at Bilibino is that it occurred only two weeks after three-day unscheduled repairs – October 11 through 14 – ended at the reactor. There have been no reports as to why the repairs were needed in the first place. It can be speculated that the repairs had to do with modernising the very protection and safety systems which generated a false alarm signal and brought the reactor down on October 27. Reactor Unit 2 at Bilibino NPP was commissioned in 1974. According to design projections, it was supposed to have run out its 30-year operational lifetime in 2004, and decommissioned after that. However – as has been common enough practice at Russian nuclear power plants, such as Kola NPP in Murmansk Region in Russia’s Far North – the reactor’s license was extended, allowing it to operate for another 15 years, or until 2019. ... Bilibino NPP was built beyond the polar circle, in an area covered by permafrost, in Chukotka Autonomous District. There are risks to its safety and integrity beyond the common equipment failures plaguing Russian nuclear power plants – namely, global warming. As permafrost melts, even partial thawing can cause thermokarst to appear – very irregular surfaces of marshy hollows and small hummocks formed as a result of thawing ice-rich permafrost. The melting permafrost phenomenon already presents a grave danger for Russian towns and cities in the far north, where buildings and infrastructure – including oil production and transport facilities – are predicted come under threat as the ground beneath becomes unstable. Should such risks loom close over Bilibino, the reactors will have to be shut down anyway: No listing is permissible for a structure as sensitive and potentially hazardous as a nuclear power plant.

Norilsk Nickel plans $20 billion program to boost Arctic output

Amanda Graham — Sun, 31 Oct 2010 21:52:17 GMT

(Ilya Khrennikov/Bloomberg, 18 October 2010) -- OAO GMK Norilsk Nickel’s polar division, the mining company’s biggest earner in the past decade, will spend $20 billion by 2030 to stop production from falling, according to its head Evgeny Muravyov. The division must invest in new projects to counter dwindling output as the ore it mines yields less metal, Muravyov said in an interview in Norilsk, a town north of Siberia where the unit is based. The division must raise ore output by about 3 percent a year to keep nickel production flat, he said. The polar business has accounted for as much as 80 percent of Norilsk Nickel’s profit since the company’s sale by the state in 1997, and fueled its expansion abroad. Its metallurgical complex north of the Arctic Circle has mined more than $200 billion of nickel, copper, palladium and platinum -- based on current prices -- since 1935, when prisoners of Josef Stalin’s labor camps began production there. At stake is the productivity a company that supplies 22 percent of the world’s nickel, a silvery metal used in stainless steel and batteries, and 40 percent of the world’s palladium, used in jewelry and pollution-control equipment for vehicles. “We still have reserves sufficient for at least 80 years and can mine another $200 billion of metals and hopefully more, as the share of more expensive platinum-group metals in our production is set to increase in 20 years,” Muravyov said.

Canada pipeline panel wants its findings followed

Amanda Graham — Fri, 15 Oct 2010 21:25:49 GMT

(Jeffrey Jones/Reuters, 15 October 2010) -- CALGARY, Alberta - A panel that studied the environmental and social impact of a C$16.2 billion ($16 billion) Canadian Arctic gas pipeline is rebuking Ottawa's efforts to reject many of its recommendations in a dispute that is delaying the line's regulatory decision. In a lengthy letter to Environment Minister Jim Prentice's office, Robert Hornal, chairman of the Mackenzie Gas Project's Joint Review Panel, said the 176 recommendations in his panel's key report must be preserved to prevent any adverse environmental and socioeconomic impact on the Northwest Territories. The letter was in response to the governments of Canada and the Northwest Territories, which contend many of recommendations in the JRP report, issued late last year, are beyond the panel's scope or are already being undertaken or considered outside the pipeline process. Others would constrain northern development, they said. "The panel has reconsidered all of the recommendations that the governments are proposing to reject on the ground that they were 'outside the scope of the JRP's mandate' and in each case disagrees with the governments' conclusions in this regard," Hornal wrote in the letter dated Oct. 4. "The panel sees no reason to withdraw or modify any of these recommendations." The dispute is part of the final stages of the project's review process, and is holding up the National Energy Board's decision. It had been expected last month and is now targeted for late November or early December.

LNG terminal and supply base for Murmansk

Amanda Graham — Thu, 14 Oct 2010 05:46:15 GMT

(BarentsObserver, 12 October 2010) -- Murmansk Governor Dmitri Dmitriyenko has signed agreements on the development of a ten billion RUB LNG terminal, as well as a new oil and gas supply base, in the Kola Bay. The two agreements were among a total of 21 investment agreements signed by regional authorities during the recent Murmansk Economic Forum. The agreements have a total value of 121 billion RUB, MBnews.ru reports. The agreements, most of them linked with the development of the Shtokman gas field and the development of local infrastructure, confirm the current major investment interest in Murmansk. Alone the agreement signed by the governor and the company BarentsGaz has a frame of ten billion RUB. According to a press release from the regional government, the BarentsGaz company is to develop an investment project on the construction of a base or reloading terminal for storage, reprocessing and shipments of LNG. The capacity of the terminal is to be three million tons, Oilru.com reports. It is to be located on the eastern shore of the Kola Bay, only about ten km from the City of Murmansk. Among the other deals signed is an agreement with the United Shipbuilding Corporation on the construction of a new supply base. The new base is to facilitate supplies to hydrocarbon projects on the Arctic shelf. It will engage in the bunkering of ships, loading of goods, storage, repair operations and provision of necessary support for drilling missions on the shelf, Portnews.ru reports.

Inuit of Greenland have weather on their side

Amanda Graham — Sun, 03 Oct 2010 22:55:35 GMT

(Doug Saunders, Globe and Mail, 2 October 2010) -- Nuuk, Greenland - On a sunny day, the capital of Greenland is a place of elegant beauty, its brightly painted clapboard houses scattered along the boreal shoreline, rising to a broad boulevard of chic Scandinavian buildings, shops and apartments – as if a prosperous maritime Inuit settlement had been redesigned by Ikea. Such sunny days have lately become increasingly common in Nuuk, whose 15,000 people represent a quarter of Greenland’s population, most of the rest scattered in tiny villages along a vast, roadless shoreline that encircles the ice sheet covering most of this semi-independent country. That sheet, three kilometres thick at its centre, is melting fast, as are the ice fields that surround Greenland’s north. To the rest of the world, that melting appears to be the greatest problem of our century, begetting rising ocean levels, weather volatility, reduced growing seasons and fears of famine in the central and southern portions of the globe. But to the mainly Inuit people of Greenland, global warming is a gift from the heavens, and not just for the obvious reason. These children of hunters and fishermen have, for much of the past century, lived a version of the humiliating life of dependence that has befallen most of the ex-nomadic peoples of the world, struggling to hold on to traditions while living in enforced and subsidized marginality. The retreating ice is salvation: It opens fields of treasure and promises to end that humiliation. Among the many troubled ex-nomads of the world, the Inuit of Greenland have the atmosphere on their side.

Esso Norge presses Kings Bay

Amanda Graham — Mon, 27 Sep 2010 00:46:53 GMT

(Svalbard Posten via IM Translation, 26 September 2010) -- The relationship between Esso Norway, which owns the tank facility in Ny-Ålesund, Kings Bay as the owner of the site has gone from bad to worse over the past year. The conflict between Esso Norway and Kings Bay is increasing. The oil company resort to falsehood to push Kings Bay further. Kings Bay State Company, which owns and operates Ny-Ålesund, has long been in dispute with Esso Norway over the tank facility in Ny-Ålesund. The starting point is an order from the Climate and Pollution Directorate (Klif) to Esso Norway to secure emissions at its tank facility in Ny-Ålesund. Esso Norway has been unwilling and has proposed to the Kings Bay that it takes over the entire tank facility, with NOK 500,000 in compensation. Kings Bay Chairman Knut Ore believes the old and worn-out plant would become a great expense, and require 3.5 million NOK for taking over the responsibility. The case has wandered back and forth between the two companies, without any solution being reached. Esso Norway has a 30 October deadline to carry out the order from Klif. So far nothing has happened, and nothing suggests that something will happen before the time limit expires in five weeks. Esso Norway has threatened to remove the entire plant if Kings Bay does not bend and take over. In this case, all activities in Ny-Ålesund will stop when there no longer will be fuel for the power station. While negotiations have been going on, Kings Bay has requested conditions for the supply of diesel fuel before winter begins. Esso Norway requires 850,000 NOK in shipping their own vessel to take the trip north with 500,000 litres of diesel. In an email to Kings Bay Svein H. Bjørnestad, head of legal department of Esso Norway, acknowledges the the urgency of the order and says that he finds it necessary to concretize this in order to avoid further misunderstandings. He writes: "Local authorities closed the waters around Svalbard 31 October due to ice conditions. Esso's vessel Bergen Faith has limited opportunities to go in these waters after 1 October, when they are completely dependent on acceptable weather conditions." Knut Ore respond to the claim that the waters close 31 October, and says that this is something Esso Norway is claiming to push Kings Bay further.

Greenland police arrest Greenpeace oil rig demonstrators

Amanda Graham — Sun, 05 Sep 2010 22:57:41 GMT

(ENS, 2 September 2010) -- BAFFIN BAY, Greenland - Four Greenpeace activists who climbed a Cairn Energy oil rig in Greenland waters were arrested this morning and are now being held in police custody in Greenland. The activists first scaled the oil rig Stena Don on Tuesday. They attached hanging platforms to the underside of the rig where they camped out in tents with self-heating meals until last night. Freezing gale-force winds forced the climbers and Greenpeace campaigners on the ship Esperanza anchored one kilometer from the rig to decide to end the occupation. It took the Greenpeacers four hours of climbing in bitter winds to scale the rig from their hanging platforms up onto the platform gantry, where police were waiting for them. They were taken into custody and flown off the oil rig by helicopter at 2 am. Before ending the occupation, climber Sim McKenna of the United States, said on his satellite phone, "We stopped this rig drilling for oil for two days, but in the end the Arctic weather beat us. Last night was freezing and now the sea below us is churning and the wind is roaring. It's time to come down, but we're proud we slowed the mad rush for Arctic oil, if only for a couple of days."

Beaufort Sea drilling studies get $22M

Amanda Graham — Sat, 28 Aug 2010 05:48:37 GMT

(CBC News, 20 August 2010) -- The federal government will spend nearly $22 million for research in the Beaufort Sea that could help in the debate over offshore oil and gas drilling there. Yukon Conservative Senator Daniel Lang announced a total of $21.8 million over five years for research under the Beaufort Regional Environmental Assessment (BREA), which will sponsor environmental and socio-economic research "that will gather new information vital to the future management of the Beaufort Sea," according to a release. Speaking Friday in Inuvik, N.W.T., Lang said the research will help regulators like the National Energy Board make decisions with regard to oil and gas exploration and development in the ocean. The debate over offshore drilling activity in the Beaufort Sea has heated up in recent months, as the large-scale oil spill in the Gulf of Mexico raised concerns about whether such work can be done safely and in an environmentally sensitive way in Canada's Arctic waters. In the wake of the Gulf spill, the National Energy Board has launched a broad review of Arctic drilling safety regulations.

UK group begins oil drilling in Arctic

Amanda Graham — Fri, 09 Jul 2010 03:48:12 GMT

(Ed Crooks/Financial Times, 7 July 2010) -- A British independent oil company has started drilling an exploration well in the Arctic waters between Greenland and Canada, having won approvals from the Greenland authorities in spite of the concerns raised by BP’s huge oil spill in the Gulf of Mexico. Industry experts and environmentalists say the consequences of a spill in the Arctic could be much more serious than the impact of the Deepwater Horizon disaster in the gulf. Yet the lure of the potentially vast resources of the region is so strong that companies and governments are pushing ahead with exploration programmes, albeit with heightened levels of attention to safety and scrutiny from regulators. Cairn Energy, a London-listed, Edinburgh based oil company that had spectacular success finding oil onshore in north-west India, is placing its next big bet off the coast of Greenland, near the Davis Strait on the maritime border with Canada. It plans to drill four wells off Greenland in the three-month drilling season this summer, at a cost of about $100m each. Canada’s National Energy Board has imposed a moratorium on issuing permits for drilling in the Arctic seas while it reviews safety procedures, as has the US administration. Those bans will mean that Royal Dutch Shell, which had hoped to drill explorations wells off the north coast of Alaska this summer, will miss drilling season for another year. Greenland, however, decided last month to award Cairn permits to drill its first two wells, and is expected to agree permits for the second two. Last week, Cairn began drilling its first well.

Citing gulf oil spill, Obama to suspend Arctic drilling

Amanda Graham — Thu, 27 May 2010 05:02:13 GMT

(Steven Thomma/McClatchy Newspapers via Anchorage Daily News, 26 May 2010) -- WASHINGTON - The Obama administration Thursday will suspend planned exploratory oil drilling in the Arctic Ocean off Alaska until at least 2011, a casualty of the Gulf of Mexico oil spill.The suspension will be part of a report that Interior Secretary Ken Salazar will give to President Barack Obama, who's likely to address the suspension as well as other proposals growing out of Salazar's report, at a White House news conference Thursday. The move will stop Shell from drilling five wells in the Chukchi and Beaufort Seas off northern Alaska weeks before it had hoped to start work, an administration official told McClatchy. The move will stop for now a controversial expansion of oil drilling in a part of the world that could hold vast stores of oil and natural gas, but which environmentalists warn would come at great risk. Despite a late appeal from Shell that it would employ new safety measures in the wake of the gulf spill, Salazar was unconvinced that the exploratory drilling even in the much shallower waters of the Arctic would be safe. "He is suspending proposed exploratory drilling in the Arctic," an administration official said on condition of anonymity to talk before Salazar's report is officially released Thursday. "He will not consider applications for permits to drill in the Arctic until 2011 because of the need for further information-gathering, evaluation of proposed drilling technology, and evaluation of oil-spill response capabilities for Arctic waters."

Canada to get tough with Greenland over Arctic drilling: environment minister

Amanda Graham — Sun, 23 May 2010 16:53:27 GMT

(Shannon Montgomery/Canadian Press via Metro News Halifax, 20 May 2010) -- CALGARY - Environment Minister Jim Prentice says he will demand the highest environmental standards be followed as Greenland explores offshore oil drilling just outside of Canada's territorial waters. Prentice said he'll make Canada's position very clear at a meeting of Arctic countries next month. "We certainly want to be sure that the highest possible environmental standards are being followed and we intend to make our views known," he said at an event in Calgary. "Obviously drilling offshore wells in the Arctic environment, particularly deep wells, is something that we are concerned about. Greenland recently accepted bids to drill in Baffin Bay near the mouth of Lancaster Sound, which is close to where Canada hopes to establish a marine conservation area. The territory hopes to drill along thousands of kilometres of the maritime border it shares with Canada starting this summer.

Canada to review Arctic drilling after U.S. spill

Amanda Graham — Thu, 13 May 2010 23:47:27 GMT

(Alexandre Deslongchamps/Blomberg Businessweek, 12 May 2010) -- Canadian national and provincial energy regulators will review the safety requirements for offshore drilling projects in a bid to prevent an oil spill similar to the one in the Gulf of Mexico. The Calgary-based National Energy Board will review procedures for Arctic drilling, while Canada’s easternmost province of Newfoundland said today it appointed Mark Turner, former chief operating officer of North Atlantic Pipeline Partners and Newfoundland LNG Ltd., to probe its ability to prevent and respond to a spill. While Prime Minister Stephen Harper has said Canada’s rules are safe, the opposition Liberal Party said yesterday it wants to conduct a review of offshore drilling and that a moratorium could be necessary if current rules aren’t stringent enough. “We need to learn from what happened in the Gulf,” Gaetan Caron, the regulator’s chair, said in a statement released yesterday. “The information taken from this unfortunate situation will enhance our safety and environmental oversight.” The National Energy Board will announce the details of the review in the “near future,” according to the statement. It takes the place of a separate review the Board had begun into the need for Arctic operators to be able to drill relief wells during the same season. The watchdog said there is currently no offshore drilling in the Arctic and it hasn’t received any applications for such a project.

Recovery still incomplete after Valdez spill

Amanda Graham — Tue, 11 May 2010 06:48:07 GMT

(William Yardley, 5 May 2010) -- CORDOVA, Alaska - As the oil spill spreads ominously in the Gulf of Mexico, its impact uncertain, communities here beside Prince William Sound are still confronting the consequences of March 24, 1989, the day of the wreck of the Exxon Valdez. The tanker Valdez spilled 11 million gallons of crude oil, staining 1,500 miles of coastline, killing hundreds of thousands of seabirds, otters, seals and whales, and devastating local communities. The spill stopped after just a few days. Recovery may not have an end date. Fishing here is far from what it was. Suicides and bankruptcies and bitterness surged. Many people left even as a few became “spillionaires,” getting paid to clean up. A new industry took hold: environmental groups, scientific organizations, experts in the psychological trauma of oil spills. A network of fishermen is now trained and paid by the oil industry to respond if another disaster strikes. Lawyers, fishermen and environmentalists in the gulf are now calling, looking for guidance in areas like how to harness political anger over the spill and the most effective ecological triage. National news crews are chartering planes to nearby islands to see how oil still coats rocks just below the surface all these years later. Fishermen recount once again their complicated journeys from the spill to the payments they received just last year from a punitive damages judgment of about $500 million against Exxon in 1994. People here say they want to move on.

Greenland proceeds with plans for offshore drilling in Arctic waters

Amanda Graham — Sun, 09 May 2010 17:44:28 GMT

(Darrell Delamaide for OilPrice.com via OilGuy/OpEdNews.com, 9 May 2010) -- While the oil spill from a sunken drilling rig in the Gulf of Mexico threatens to become an environmental disaster, plans are proceeding for opening up new drilling territories in the iceberg-infested waters off Greenland. The island, an autonomous territory under Danish sovereignty, this week conducted an auction for 14 blocks in Baffin Bay, off the northwest coast of Greenland near Canadian territorial waters. Results will be announced in August. In the meantime, Cairn Energy will this summer begin drilling off DiskoIsland in Baffin Bay on the basis of leases awarded in earlier auctions. Exxon Mobil and Chevron also hold existing leases, while Royal Dutch Shell and Norway's Statoil were among the bidders in this week's auctions. The U.S. Geological Survey has estimated that some 50 billion barrels of oil may be found offshore Greenland, where ice covers four-fifths of the surface territory for a good part of the year. Some in Greenland, which has a population of only 57,000, hope that oil will be the ticket to independence from Denmark, which has controlled the island since the 18th century. The portion of the Labrador Current flowing through Davis Strait off western Greenland is known as "iceberg alley" because huge chunks of ice that calve from the northern glaciers make their way into the northern Atlantic along this route. Ironically, global warming, which has melted some of the Arctic glaciers, has made offshore drilling in these waters more feasible. However, the Gulf oil spill is raising concerns in Canada about the risks posed in drilling so near the Canadian coastline. Cairn Energy's only offshore drilling experience has been in the much warmer Indian Ocean, and no one has had to cope with an oil spill in Arctic waters. Officials from eight Arctic countries, including Canada, are to meet in Greenland next month to discuss possible environmental risks of oil exploration and production in the region. Last fall, seven companies with drilling licenses, including Cairn, formed the Greenland Oil Industry Association to exchange expertise and liaise with the government on environmental and other issues. Analysts estimate that an oil price of at least $50 a barrel is necessary to make Arctic offshore drilling worthwhile. Prices have hovered around $80 a barrel in recent months.

Eight countries to discuss offshore oil drilling in Eastern Arctic

Amanda Graham — Sun, 09 May 2010 17:26:22 GMT

(Bob Weber/The Canadian Press via Brandon Sun, 5 May 2010) -- Environmentalists warn that Ottawa must be vigilant as Greenland welcomes offshore oil drilling in the Eastern Arctic immediately adjacent to Canada's territorial waters. Earlier this week, Greenland accepted bids to drill in Baffin Bay near the mouth of Lancaster Sound, where Canada hopes to establish a marine conservation area. The vast, thinly populated territory — which controls its own resources as part of a deal with Denmark — hopes to drill along thousands of kilometres of the maritime border it shares with Canada. That work is expected to begin this summer. Canada has accepted an invitation to meet with Denmark and the other six members of the Arctic Council this June in Ilullissat, Greenland. The meeting, which is to focus on protecting the Arctic environment, will include discussions on offshore oil drilling. "It will be part of it," said Danish embassy spokesman Jakob Henningsen. "They will be discussing offshore oil and gas." A spokeswoman from Canada's Foreign Affairs Department confirmed Canada's participation. "Canada will participate at a meeting on the Arctic environment," said Ambra Dickie in an email. She would reveal no other details. In addition to the eight Arctic Council members, representatives from northern aboriginal groups will also be present, Henningsen said The icy waters between Greenland and Canada are considered to hold one of the great prizes of Arctic resource development. The U.S. Geological Survey ranks the West Greenland-East Canada Basin seventh out of 25 Arctic regions with energy potential. It is estimated to hold the equivalent of more than 17 billion barrels of oil, with the chance of finding oil or gas in the area anywhere from one in three to virtually 100 per cent.

Gulf spill could have Alaska repercussions

Amanda Graham — Mon, 03 May 2010 22:59:42 GMT

(Elizabeth Bluemink/Anchorage Daily News, 2 May 2010) — The oil gushing from a Gulf of Mexico oil well has the potential to touch Alaska in many ways. Alaska is next in line, nationally, for offshore oil development in federal waters — Shell Oil hopes to drill exploration wells in the Beaufort and Chukchi seas this summer, opening a controversial new frontier for the state's oil industry. Investors' jitters over future offshore oil production could boost Alaska oil prices — it happened Thursday, when the price for Alaska crude jumped by $2.70 to $83.97. National outrage could dim the prospects of an offshore oil boom in Alaska's Arctic waters, which federal scientists say could hold some of the biggest oil and gas deposits in the country. Or, the Gulf disaster could have the less-dramatic effect of prompting new state or federal rules for preventing disasters at oil rigs and offshore wells, including the ones in Alaska. State oil and gas regulators have no say over oil and gas projects in federal waters, but they said Friday they are closely watching the aftermath of the Deepwater Horizon rig explosion and sinking to find out what went wrong. That's because they regulate offshore development in Cook Inlet and in state waters off the North Slope, home to a growing number of oil fields. And also because they are worried that federal officials may overreact, said Kevin Banks, state Oil and Gas Division director. "We are concerned because of the potential for a real backlash and people seeking to shut (offshore drilling) down," he said. Offshore oil development isn't the only part of Alaska's oil industry that could be affected by the Gulf spill. Major industry catastrophes, such as the 1989 Exxon Valdez spill, can lead to costly, far-reaching changes that have nothing to do with pumping oil from federal waters. Already some environmental groups said they plan to use the Gulf spill in their campaign to permanently close off oil-company access to the promising coastal plain of the Arctic National Wildlife Refuge.

Russia invites China to explore Arctic

Amanda Graham — Mon, 03 May 2010 19:19:26 GMT

(UPI, 3 May 2010) -- SHANGHAI - Russia is interested in joining Chinese developers to exploit oil and gas reserves locked in the Russian section of the Arctic, regional officials said. Dmitry Kobylkin, the governor of the Yamalo-Nenets Autonomous region in the Russian Arctic, expressed interest in a Chinese partnership in oil and gas development during the World Expo 2010 Exhibition in Shanghai. He said he was ready to offer partners in China a "mutually advantageous and constructive cooperation" in the regional natural resources sector, Russia's state-run RIA Novosti news agency reports. The Yamalo-Nenets Autonomous region accounts for more than 90 percent of the natural gas production and around 12 percent of the oil production in Russia. "We are ready to act as intermediaries between an investor country and the oil and gas sector and create a good investment climate," said Kobylkin. The World Wide Fund for Nature, an environmental advocacy group, said the oil spill in the U.S. Gulf of Mexico raises alarm about the possibility of exploring the Arctic for oil and gas. The WWF said it was renewing its call for a moratorium on oil and gas development in the Arctic until environmental risks are better understood.