- PN: There are many challenges but the biggest is probably “permitting”. Of course the reason that permitting is a big hurdle is that the oil industry has not fully satisfied public and regulatory concerns with respect to environment impact, etc.
- GOM incident has sent awaking signals to the operators that safety and reliability are of paramount importance during the E&P activities. Do you think this incident deterred the push for Arctic Oil & Gas activities?
PN: The recent GOM incident certain caused some pause in Arctic E&P, but I think we now see continued interest and activity in US, Canada and in particularly in Russia. Arctic E&P is not a “short game” but does hold promise for large oil discoveries so exploration will continue.
- Shell has invested significantly in this area but has been beset by delays since original plans to drill in 2007. Do you see the community (industry and regulatory authorities) taking more of an observer status now rather than a leading role for Arctic related activities?
PN: No I think that things are ramping up again. In Alaska, Shell has applied for drilling permits for 2014 for the Chukchi (I think there is very good chance that they will drill in 2015). ConocoPhillips and Statoil are playing a waiting game but are ready to move on their Chukchi leases as soon as Shell has some discoveries. In Canada, ConocoPhillips and Chevron continue to do Pre-Feed on the big Amauligak filed development and in Russia the ExxonMobil/Rosneft partnership are aggressively pursuing options to drill their leases in the Kara, Laptev and Chukchi Seas.
- Will the development of gas and associated technologies (shale gas, GTL) render Arctic Oil & Gas less attractive in your opinion?
PN: Definitely not. All of the Arctic plays are looking for oil rather than gas. We have plenty of gas discoveries throughout the Arctic but even before shale gas keeping the price low there was no way to easily monetize Arctic gas.
- With Singapore being geographically distant from the Arctic Circle, do you foresee any opportunities for the local yards and potentially the equipment manufacturers?
PN: Distance is not a factor. Singapore is not close to the N. Sea or Brazil and yet it builds lots of equipment for both of these regions. The oil and gas market is truly global and Singapore has a great reputation so I do not see any geographically driven hurdles.
- Are there any possible R&D areas for the research community in Singapore that in your opinion, will support the activities of the local yards?
PN: I think there is a strong need for the “D” in the R&D term. Maybe “small r & BIG D” would be a better way to put it.
If we examine the history of the offshore, most innovation preceded the research that later came to support it. For example, we developed TLPs before we found that tendon ringing could be a problem and so we carried out research to solve that issue. Similarly, VIV was identified as an issue after we had designed and built a number of deep water moored production facilities and we then conducted research to identify and address the issue. In the Arctic, we have identified issues around ice-loading after we successfully build and operated the Molikpaq arctic drilling caisson. There is a huge scope for innovation in the area of Technology Development in support of local industry and I would advise on trying to focus on supporting that, rather than undertaking basic or even applied research. Innovation should be driven by market opportunity and supported by technology development and some applied research.
- There is no Arctic testing facility in the region. Do you think that this would constrain the type of R&D activities that could be meaningfully performed in Singapore? How shall we overcome this constraint (perhaps through working with some of the overseas locations with ice basin and associated testing facilities or is it worthwhile to consider an Arctic basin in Singapore)?
PN: The biggest hurdle is not the lack of an ice basin facility, but rather the lack of staff who are experienced in the field of Arctic engineering. I suggest that the path forward would be to form a joint venture of some sort with, for example, the National Research Council of Canada, who have both facilities and expertise. Since Canada in no way competes with Singapore in the offshore and marine construction market this might be a win-win approach. Other ice basins exist in places like Hamburg and Helsinki, but it may be more difficult to get good cooperation as the Germans and Finns still support their marine construction industries and thus may not be the best partners for Singapore.