Shell-arctic-2014

I still don’t see the AIVIQ as ever being a useful subsea construction vessel. NO DECK SPACE! So what the HELL does Shell do with the huge Blue Elephant other than use it to hold up the dock? Poltroons

Air Gap. Won’t clear the bridges on the Canal.

supposedly, the GLOBETROTTER’s MPT is designed to take the top off so that they can pass beneath the bridges spanning the Panama Canal but I believe there is a problem in that there are no cranes on the West Coast which can put that top portion back on. Just evidence of still MORE GENIUS AT NOBLE DRILLING!

I hope you don’t mind me asking but are you the new “Marine Contracts Manager” for the support vessels? Just curious…

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Regardless of what some folks might writ on here, it is too bad the 2014 season is cancelled, but understood as well with the relatively low cost and large quantities of crude and gas available now. Wish you all the luck with the hurdles that remain for a return in 2015.

That’s correct-

surely don’t mean to make it all worse, but looking at this article and seeing that legal matters could easily take 18 months … you can forget about drilling by 2015 in the Chuckchi Sea as well.

[QUOTE=Drill Bill;130148]surely don’t mean to make it all worse, but looking at this article and seeing that legal matters could easily take 18 months … you can forget about drilling by 2015 in the Chuckchi Sea as well.

http://www.alaskajournal.com/Alaska-Journal-of-Commerce/Breaking-News-2013/Shell-looks-for-silver-linings-in-decision-to-cancel-2014-drill-season/[/QUOTE]

This is really unfortunate. Hopefully, by 2016 Shell will have all the biggest and best new equipment on hand to successfully find billions of barrels of oil.

Don’t believe all the hype- there is thousands of jobs riding on this project - right now a concise response to the 9th Circuit opinion against DOI seems in order - but crickets seems to be the only sound heard. In a state that relies so heavily on oil revenues I don’t see this standing without challenge for very long. Of course if Obama wants to return the billions invested in leases and lost revenues on contracts and capital expenditures I’d guess the parties involved would weigh those as business options moving forward (Just my Personal Opinion)

An appeal to the Supreme Court, or a request for rehearing, are the only possible responses to the ninth circuit court order. I would not hold out much hope for either of those options.

The remand to the trial court is on a very narrow legal issue, but it opens up the entire factual premise underlying the EIS. The amount of oil likely to be found. That is a factual issue that many experts can disagree about. Furthermore, a significant change in the estimate of the quantity of oil to be found, say from one billion barrels to ten billion barrels, could result in a requirement for an entirely new EIS. At the very least it will require major modifications.

There is nothing for it, but to use the legal process to limit the delays caused by the ruling and do whatever the trial court ultimately orders — and drill promptly. Because the environmental groups will undoubtedly appeal all over again any trial court order that allows drilling to proceed.

Frankly, and unfortunately, I think the ninth Circuit is probably right that the one billion barrel estimate is far too low and that this requires a holding that the EIS is inadequate.

Shell’s first step should be to find out who was responsible for that ridiculously low estimate. Obviously, those people should not be given another opportunity to screw up.

[QUOTE=mainecheng;130241] Of course if Obama wants to return the billions invested in leases and lost revenues on contracts and capital expenditures I’d guess the parties involved would weigh those as business options moving forward (Just my Personal Opinion)[/QUOTE]

I assume you don’t mean Obama personally? Do you mean the U.S. taxpayer?

In what context does this make any sense?

No not personally,ken however if you bought let’s say a 10 ac lot on Brunswick Naval Air station, spent lets say a million dollars, then invested another million on a building upgrades and hired 300 people from all over the USA and abroad to work for you in Brunswick. Then a month before you went into production . The ( just an example ) BRAC says whoops we’re sorry we end the base back for the dept of home land security. And put a hold on the property and your investment is stalled until they. Clear it up - months and years later - how would you feel? Uncomfortable? Frustrated? You still have to pay the mortgage and either pay the employees or …lay them off. That’s negative stability not good for investment - you see it’s not ream even that complicated. A million is a big stack of cash -
A
Billion is much much bigger who’s paying the interest?

^Was Shell unaware that drilling in the Arctic had regulatory risks? Shell took a bet that the lawsuit was going to go their way. It didn’t. I don’t think the taxpayers should have to cover risks taken by private companies.

I pay once at the pump. I don’t want Shell to take a portion of my paycheck as well…

EDIT: In your example it would be as if I purchased the land and made the investments without clear title. The title is subject to an on-going lawsuit. I make the investment and expect that if I don’t get clear title the taxpayer will reimburse me.

The oil lease from the Dept of Interior has nothing to do with a companies legal obligation to meet the requirements of NEPA with an adequate EIS, which is administered by the EPA, but subject to judicial review.

The Dept of Interior has meet all it’s obligations to Shell and the lease payment is fully earned.

Apparently, Shell’s experts grossly underestimated the quantity of oil likely to be found, and negligently or intentionally hoodwinked the EPA into approving the EIS based upon this flawed estimate over the objections of the NRDC. The NRDC appealed. The court quite properly found that the EPA erred in approving the EIS because it was based upon an unrealistic ally low estimate of the amount of oil likely to be found.

Shell has no one to blame but it’s own “experts.” Shell is not entitled to one penny of government reimbursement to cover its losses caused by its own conduct.

I do think that Congress has given these treehugger groups far too many legal rights to throw a monkey wrench into the works and stop the wheels of progress. However, we all know that is the system we are stuck with.

Nope it was part of the package- the push in ANWR showed there were lots of opposition at least to onshore expansion. The 9th’s decision was against the Department of Interior not specifically against Shell, CP, Chevron or the other Interested block holding entities- however the impact does focus on those that Paid for the leases in that round. BTW do you know who owns the fair share of acreage in North Slope blocks? US NAVY check it out. The leases were for drilling options on offshore blocks in both Chukchi and Beaufort. Shell was one of several companies that paid for lease blocks in that particular sale. It’s a bid process. Thats money that went to DOI Not taxes. There was and is no injunction at this time, however that’s the next step…right? ah I see more comments below.

[QUOTE=tugsailor;130568]The oil lease from the Dept of Interior has nothing to do with a companies legal obligation to meet the requirements of NEPA with an adequate EIS, which is administered by the EPA, but subject to judicial review.

The Dept of Interior has meet all it’s obligations to Shell and the lease payment is fully earned.

Apparently, Shell’s experts grossly underestimated the quantity of oil likely to be found, and negligently or intentionally hoodwinked the EPA into approving the EIS based upon this flawed estimate over the objections of the NRDC. The NRDC appealed. The court quite properly found that the EPA erred in approving the EIS because it was based upon an unrealistic ally low estimate of the amount of oil likely to be found.

Shell has no one to blame but it’s own “experts.” Shell is not entitled to one penny of government reimbursement to cover its losses caused by its own conduct.

I do think that Congress has given these treehugger groups far too many legal rights to throw a monkey wrench into the works and stop the wheels of progress. However, we all know that is the system we are stuck with.[/QUOTE]

The “company” made due effort to comply with all standards set down by AEPA and FEPA requirements. - Which were (in my opinion) fantastically ludicrous. 2014 was set to be under BOEM oversight- but still requires the use of Urea and Scrubbers, + ECA application of USLD - not outwardly odd since all of the GOM and East/West Coasts + Great Lakes are under the ECA as of Middle of 2013 . The EIS was reviewed and approved. (so was the Contingency Response Plan) The rub was not - to my understanding - related to amount of oil in the reservoir- These calculations can only be accomplished post well logs. And you need to drill to hydrocarbon layer to get Logs. I’m sure you understand this but the way you wrote you post implicates that the Company did not meet some point of the process or violated some portion of it. The estimates were based projections. Which even if they are low they are still pretty big. They used Macondo as a basis and due to well bore and pressures anticipated 25Kbbls/day was above the theoretical max for the Well plan. (as I understand it- and I’m pretty sure I understand it better than most) Your Last sentence is pretty much how I personally feel. The canceling of the 2014 season has direct affects to operators. Revenue that will not be earned by them. And it’s never good for the bottom line when revenue is not there on plan. But I anticipate that we’ll move ahead and plan a better outline for 2015. Address the legal issues and move on Do not forget it’s a business after all. We are not drilling in the Arctic for popularity we’re drilling for Oil and gas, The jobs created by this activity and follow on development are targeted to create as many as 35,000 NEW jobs in Alaska. Filling the TAP with oil that has been dwindling for the last 15 years, That, as my favorite Politician termed, is “Trickle Down Economics” if you’ll excuse the pun.

I am in favor of drilling where the oil is. Reasonably safety precautions and response capability are needed.

One of my concerns for the 2015 drilling season is the ice management fleet. In 2012-2014, Shell has chartered [I]Fennica[/I] and [I]Nordica[/I] from Finland, and [I]Tor Viking II[/I] from Sweden. However, the charter of the Finnish vessels ends in 2014 and I’m quite sure the same applies for the Swedish boat. I know that there’s opposition against using foreign-flagged vessels in US continental shelf, but as of now [I]Aiviq[/I] is the only icebreaking AHTS available and there have been no news of similar vessels being under construction (for the record, it took over two years to build the[I] Aiviq[/I], from laying down to delivery). However, if I recall correctly, the waiver for Jones Act (if it applies to these operations at all) is valid until 2017, so despite possible opposition these vessels could be legally employed in Alaska in 2015 as well.

Anyway, the problem is that the politicians in Finland are against employing the state-owned fleet for drilling operations in the Arctic even though that’s about the only time those vessels have actually earned money from offshore operations. One of the reasons is that if something really bad happens, the company could in theory have to cover the environmental damages by selling its fleet of icebreakers. Last time something like that happened after the World War 2 when the best icebreakers were handed to the Soviet Union as war reparations. Also, even though the Finnish icebreakers are there to protect the platform, the environmental people and the Green party see it as as an act to support drilling in the Arctic. Also, both the Minister of Transportation (incompetent) and the minister responsible for steering the state-owned companies* (Green party) are against it. The bottom line is that even if Shell wants these vessels again, it might be that the company cannot charter them to ice management duties in the Arctic due to orders from the owner (state). This might be problem because there are no suitable vessels available in the market (yet). Of course, drilling only one well instead of two could mean that they need only one IM vessel, but personally I don’t think either [I]Tor Viking II[/I] (and her sisters) or [I]Aiviq[/I] are up for the task. The only other multipurpose icebreaker I can think of, the Estonian [I]Botnica[/I], already has a charter if I recall correctly.

(* There was a funny incident involving the icebreakers last year. The previous minister ordered the CEO of Arctia to recall charges against Greenpeace from an earlier incident. When they found out that the minister had connections to Greenpeace, there was a rather amusing shitstorm in the media and she resigned…)

[QUOTE=Tups;130746]One of my concerns for the 2015 drilling season is the ice management fleet. In 2012-2014, Shell has chartered [I]Fennica[/I] and [I]Nordica[/I] from Finland, and [I]Tor Viking II[/I] from Sweden. However, the charter of the Finnish vessels ends in 2014 and I’m quite sure the same applies for the Swedish boat. I know that there’s opposition against using foreign-flagged vessels in US continental shelf, but as of now [I]Aiviq[/I] is the only icebreaking AHTS available and there have been no news of similar vessels being under construction (for the record, it took over two years to build the[I] Aiviq[/I], from laying down to delivery). However, if I recall correctly, the waiver for Jones Act (if it applies to these operations at all) is valid until 2017, so despite possible opposition these vessels could be legally employed in Alaska in 2015 as well.

Anyway, the problem is that the politicians in Finland are against employing the state-owned fleet for drilling operations in the Arctic even though that’s about the only time those vessels have actually earned money from offshore operations. One of the reasons is that if something really bad happens, the company could in theory have to cover the environmental damages by selling its fleet of icebreakers. Last time something like that happened after the World War 2 when the best icebreakers were handed to the Soviet Union as war reparations. Also, even though the Finnish icebreakers are there to protect the platform, the environmental people and the Green party see it as as an act to support drilling in the Arctic. Also, both the Minister of Transportation (incompetent) and the minister responsible for steering the state-owned companies* (Green party) are against it. The bottom line is that even if Shell wants these vessels again, it might be that the company cannot charter them to ice management duties in the Arctic due to orders from the owner (state). This might be problem because there are no suitable vessels available in the market (yet). Of course, drilling only one well instead of two could mean that they need only one IM vessel, but personally I don’t think either [I]Tor Viking II[/I] (and her sisters) or [I]Aiviq[/I] are up for the task. The only other multipurpose icebreaker I can think of, the Estonian [I]Botnica[/I], already has a charter if I recall correctly.

(* There was a funny incident involving the icebreakers last year. The previous minister ordered the CEO of Arctia to recall charges against Greenpeace from an earlier incident. When they found out that the minister had connections to Greenpeace, there was a rather amusing shitstorm in the media and she resigned…)[/QUOTE]
First of all. Tups You are incorrect. Arctica and VSS contracts do not end 2014. But You are correct there are No US Flagged vessels that meet the need- other than Aiviq- Currently. It only seems reasonable that if the course forward becomes clearer than some new Capable vessels will be built. And most likely will include pure Ice Management/Ice Breakers, Ice AHTS, Ice Tugs, and Ice Tankers, Heck even Ice Rigs Although i’ve heard talk of Jackups and I personally don’t hold much stock in that idea but again that’s a Personal Opinion- Even though the water depths anywhere else in the world (except Arctic/Antarctic regions) it would be a solid fit.
As for the 2nd paragraph. I’m not sure I fully buy your point(s) I’m sure the Finnish gov’t is in favor of Oil exploration- . And considering there are revenues for Working IceBreakers (which they have several including Bontica) Same goes for VSS Tor is not their only asset. And they work them that’s how their business works. These vessels will work this year, Although pretty likely they won’t work for Shell specifically- I’d look to see all 3 Ice Mgt vessels employed in 2015 and beyond Even if other vessels are built . And as plans for 2015 other than we are planning for it- it would not be appropriate for me to comment on. Remember that boarding one’s ship at sea without permission is by definition Piracy- I think the Russians made that point very clear when the Greens tried that tactic on their vessels. If you board a working vessel engaged in providing protection (ice Management) and distract the crew from their duties. Then you are putting the program at risk - not just protesting. If you want to protest. Fine. If you are a US Citizen in US waters, But If you are a US Citizen and board a Finnish Vessel you have boarded Finnish territory un invited . And that, it seems to me, is an International crime. Really that is for a Admiralty lawyer to comment on. As a Mariner I think it’s pretty clear, If you want to come visit my vessel make a request. Legally- Don’t force your way on. Of course with the Greens it’s about the statement, and the means is part of that statement. I like the discussion though. Any more comments?

[QUOTE=mainecheng;130763]First of all. Tups You are incorrect. Arctica and VSS contracts do not end 2014.[/QUOTE]

According to Arctia Shipping, Fennica and Nordica are listed as “available” starting from 5/2015 i.e. at the end of the 2014-2015 Baltic icebreaking season. Also, this article confirms that the charter is only until the end of the 2014 summer season. If it had been extended recently, it would have been in the news already due to the reasons I mentioned in the previous post.

[QUOTE=mainecheng;130763]It only seems reasonable that if the course forward becomes clearer than some new Capable vessels will be built. And most likely will include pure Ice Management/Ice Breakers, Ice AHTS, Ice Tugs, and Ice Tankers, Heck even Ice Rigs Although i’ve heard talk of Jackups and I personally don’t hold much stock in that idea but again that’s a Personal Opinion- Even though the water depths anywhere else in the world (except Arctic/Antarctic regions) it would be a solid fit.[/QUOTE]

It’s obvious that if offshore oil production starts in Alaska, the operation will be supported by US-built vessels. However, at the moment no-one is building ice-capable tonnage and even rumors about such vessels being on the drawing boards are few and far between. I guess the offshore industry is waiting for Shell to make its next move because no-one wants to build such expensive ships without knowing when and if they will be needed. After all, an icebreaker cannot really compete with open-water vessels in e.g. the Gulf of Mexico.

[QUOTE=mainecheng;130763]As for the 2nd paragraph. I’m not sure I fully buy your point(s) I’m sure the Finnish gov’t is in favor of Oil exploration.[/QUOTE]

While the whole government is not against oil drilling, the minister responsible for steering the state-owned companies (such as Arctia Offshore) may prevent them from signing new contracts if they are against Finland’s Arctic agenda. After all, the CEO was threatened with firing if he didn’t withdraw the charges against Greenpeace in 2012. That means that if the operational management of the company does not do as the owner wishes, it can always be changed.

In a recent article, the CEO of Arctia stated that they would like to double the size of their fleet and, as the escort icebreakers are retired, replace them with multipurpose vessels capable of supporting Arctic drilling. The ministers were against this and were primarily looking for ways to employ the Finnish icebreakers along the Northern Sea Route to escort cargo ships. As a sign of opposition against secondary uses in offshore work, the new icebreaker that was ordered from the shipyard on Friday will be a “traditional” one that will be employed year-round in the home waters.

Personally, I’d like to see as many icebreaking vessels built as possible. I just hope that the US shipyards would finally learn to produce double-curvature steel plates. It’s a pain to design a vessel with hull geometry restrictions.

[QUOTE=Tups;130746] I know that there’s opposition against using foreign-flagged vessels in US continental shelf, but as of now [I]Aiviq[/I] is the only icebreaking AHTS available and there have been no news of similar vessels being under construction (for the record, it took over two years to build the[I] Aiviq[/I], from laying down to delivery). However, if I recall correctly, the waiver for Jones Act (if it applies to these operations at all) is valid until 2017, so despite possible opposition these vessels could be legally employed in Alaska in 2015 as well.

[/QUOTE]

Actually you are incorrect, if you look at the Shipbuilding Index Chouest has (2) more vessels under construction identical to the Aiviq. And Dino Chouest announced some time back that “several” of the new build OSV’s would be “arctic ready.” Don’t know if it means anything but I saw the Sisuaq in Fourchon last week and a helipad was being installed. The Sisuaq was built and used for the Arctic on Shell’s first campaign and is owned by Harvey Gulf. Not sure if thats for the Arctic season next year or if they plan on using it in the Gulf for 2014.

I have to admit that these news have passed my eye. Thanks for correcting me.

http://www.nola.com/business/index.ssf/2013/07/edison_chouest_to_build_40_new.html

Chouest’s plans also include two new ice class vessels designed for service work in the Arctic … The company’s fleet of icebreaking vessels, which will total six when the new builds are delivered, has supported Royal Dutch Shell’s drilling activity in Alaska.

It’s surprising how ECO has been quiet about having such vessels under construction - building more US-flagged icebreaking vessels should be news worth publishing. However, it would have been nice if they had gone for a new design instead of just making sister ships to Aiviq. Ducted and mechanically coupled CP propellers for operations in ice…

I saw Sisuaq in Alaska in 2012. While the vessel is advertised to have “…added steel plating to the hull for operation in ice conditions…”, according to ABS it has no official ice class. Furthermore, the comments I heard about its performance and conditions onboard were not very favorable. The caption on the last page of our travel report says, roughly translated, “Ship from the warm waters. The supply vessel Sisuaq had been brought to Alaska from the Gulf of Mexico. The ship ended up in the wrong environment. The crew from Texas was freezing inside and on the deck in the frigid climate.” Sure, there might be a slight factual error if the vessel was actually built for the Shell operation in Alaska, but I was still there when we heard the comments about the conditions onboard. Technically, it’s probably a design flaw with insulation, heating or winterisation, and might have been fixed since then.

Anyway, while Sisuaq and the “Arctic ready” supply boats Chouest mentioned may be designed for operations in the Arctic waters, I was talking mainly about the actual icebreaking vessels used for ice management and escorting ships like Sisuaq to and from the platform.

Is this really true? If it is then where are they being built? Why would Shell commit to more of the same as the AIVIQ when the rig is was built to support is going to be scrapped? Of course, all here know that I am a huge critic of the design of the AIVIQ and I hope to hell that Shell will not repeat that mistake times two more but then again it is Shell we’re talking about here so it would not be huge shock if they did!

Chouest’s plans also include two new ice class vessels designed for service work in the Arctic and four new subsea construction vessels slated for service in the Gulf of Mexico. The company’s fleet of icebreaking vessels, which will total six when the new builds are delivered, has supported Royal Dutch Shell’s drilling activity in Alaska.

this statement makes no sense and I am very skeptical on its veracity. Just because it is printed doesn’t necessarily mean it is accurate.

Mainecheng will know and hopefully can confirm if there is any truth to the article?