Development of the Caspian Shelf Requires Package Approach
Prof. Anatoly Zolotukhin, Doctor of Engineering
Anatoly Zolotukhin holds a position of project manager at Statoil and is a petroleum engineering professor (part time) at Stavanger University and the Russian State University of Oil and Gas named after Gubkin (Moscow, Russia). He holds a MS degree in petroleum engineering (1969), MS degree in mathematics (1976), Ph.D in fluid mechanics (1973) and a Doctor of Science's degree in reservoir engineering (1990). Since 2001 he has been a corresponding member of the Russian Academy of Natural Sciences. He has more than 30 years of academic and working experience. Anatoly Zolotukhin is the author and co-author of 12 books and more than 100 articles.
Thousands of stories, novels, works of fiction and scientific treatises have been devoted to the Caspian Sea. The peoples inhabiting its shores have many tales and legends about it. Only the Mediterranean and the Black Sea exceed the Caspian Sea in the number of littoral states. The seabed contains ample resources of oil and gas. With appropriate management, the oil reserves will be enough to provide the littoral states and importing countries with energy resources for the next fifty years.
However, everything is not that simple. There are certain problems, which influence the question of 'appropriate management'. In particular, the issues of the sea's legal status, agreements on shelf delimitation between the littoral states, legislation and harmonized standards ensure the legal basis for safe shelf exploration.
Equipment and technology should be mentioned here as well. There is no safe and efficient shelf exploration without up-to-date technical solutions. In this regard, issues of safety for people and the environment command priority and must be solved by the world community, because the violation of standards at one exploration site can harm the ecosystem of the entire region!
In our opinion, the most appropriate approach to the Caspian's shelf development is to attract the interest of the world's most prominent oil and gas companies. That is how the Norwegian shelf was explored. Legislation had been quickly enacted and high standards established, so that the conditions were right for joint exploration of oil fields by a group of companies, one of them being an operator. Thus, Norway ensured the use of advanced technologies, which guaranteed safe and effective resource development.
Hydrocarbon Resources of the Caspian Sea
It is well known that the oil and gas resource estimates made by different companies are usually different and subject to changes. Such a change has indeed happened with the Caspian estimates. However, in spite of different figures, all the experts agree that the oil and gas resources of the Caspian Sea are huge. Here are some optimistic estimates; though not very precise, they offer evidence of the sea's reserves. According to them, there are about 50 billion tonnes of oil and 20 trillion cubic meters of gas, that is, in total, 70 billion tonnes of oil equivalent. With oil and gas extraction at 40% and 70% respectively, the output will be 34 billion tonnes of oil equivalent. It is ten times as much as the remaining extracted resources of the Norwegian continental shelf, estimated as 3.4 billion tonnes of oil equivalent.
As for the allocation of resources among the littoral states, according to the explored and estimated reserves (about 15 billion tonnes of oil equivalent), Kazakhstan is far ahead of Azerbaijan, Russia, Turkmenistan, and Iran. However, if forecast reserves are included in the resource estimation, Turkmenistan can advance to second place with its anticipated 13-16 billion tonnes of oil equivalent (mostly gas). The recent discovery of a low-density oil deposit by Lukoil changed opinions about the Caspian's capacity and raised its resource estimation again...
By 2010 the total oil and gas extraction in the Caspian Sea shelf is forecasted to be about 200 million tonnes of oil equivalent, which is almost as much as the highest extraction rate in the Norwegian shelf in 2004.1
1. It is noteworthy, that most of its output is exported, which makes Norway the world's third biggest oil exporter.
Some experts believe the Caspian Sea to be comparable to the Persian Gulf. Others argue that by 2010 the estimated Caspian reserves will be twice as much as oil and gas reserves in the Gulf of Mexico. This explains why many states consider the Caspian region as their strategic zone, and united Europe believes it to be one of the key centres for its energy security.
Caspian Ecosystem
The Caspian Sea is the world's largest landlocked water body. The seabed relief is rugged and the depth varies sharply – from several metres in the north to hundred of metres in the centre and south. The deepest point is 1025 m. The sea freezes only in the northern part; the ice thickness varies from 25-30 cm to 60 cm, while the temperature can be as low as -27 degrees centigrade. Central and southern deepwater areas are ice-free all year round; the lowest temperature at the water surface is 11 degrees centigrade.
These environmental conditions set limits for oil extraction and transportation techniques. There are also tight requirements for environmental protection. Degradation of the ecological situation, a decrease in fish resources and illegal fishing activity in the Caspian may result in even tougher measures.
In November 2003 Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan signed a framework convention for Caspian marine environment protection. It was an important step toward safe development of Caspian resources. However, this step was concerned rather with politics. There are still many things to be done to ensure safe exploration of the Caspian shelf. Engineering and process solutions in the oil and gas sector will play a leading part as well.
Engineering and Process Solutions for Safe Development of the Caspian Shelf
Development of the Caspian shelf is a long and multi-stage process. Due to the extra vulnerability of the Caspian ecosystem, particular attention must be paid to the safety and reliability of the solutions on offer. Norway can be taken as an example again: it took it about fifteen years (!) to develop effective and safe operating procedures for the Snovit gas-condensate field in the Barents Sea shelf. Only after that representatives of other industries and social organizations approved the experts' suggestions, and development began. It is a salutary example.
On the other hand, the oil industry is presently in the grip of a technology boom. We are entering a new stage, when acquired scientific experience is being incorporated into new technologies. Moreover, the basic concepts are being realised so rapidly that applied sciences have no time to rationalise the new techniques. The only way to prove them is through experiment or test production. This combination of strict requirements for safe development techniques and rapid growth in new solutions makes it difficult to forecast major development, extraction, and transportation methods.
Let us set economic evaluation aside and think about approaches to the Caspian field development used nowadays or in the future.
From the point of view of field infrastructure development, the best solutions are seabed rigs and floating structures for extraction, preparation and storage with accommodation blocks (in the central and southern Caspian areas). In the northern part (Russia and Kazakhstan) there should be buried submarine rigs not damaged by ice, and production islands that allow surface well completion2, extraction, storage and packaging.
2. Surface well completion means that the wellhead is above the water, unlike wet subsea completion, when wellheads are under the water.
At present, we can consider several prospective and applicable transportation solutions. Below are some of them.
Tanker transportation of liquid hydrocarbons to onshore facilities. Taking into consideration the shallow waters in the northern Caspian, shuttle tanker size and tonnage will be limited by its draft. Such a tanker must be either ice-strengthened for year-round operation, or accompanied by an ice-breaker in winter.
Multiphase pipeline transportation from a seabed wellhead to onshore facilities. In the northern Caspian area, the seabed wellheads and pipelines should be buried to avoid contact with ice.
Tanker transportation of compressed natural gas from the field to the marketing area. This solution avoids the need to construct long pipelines from a well to onshore gas processing facilities. This mode of transportation can be competitive when gas terminals are far away from the field.
A recent technique for using liquefied compressed natural gas. It is a promising solution because it reduces the cost of low-temperature liquefaction (when pressure increases, liquefaction temperature grows) and gas "servicing" in the course of transportation. These benefits will have a positive influence on the economic performance of the new method.
Tanker transportation of liquefied natural gas from the place of liquefaction; it can be a floating liquefied natural gas barge or a shore-based LNG plant.
And last but not least is 'traditional' gas transportation with a big-inch pipeline. Oil transportation should be mentioned as well. The existing solutions are more conventional compared with gas transportation, and one should not expect anything new, just regular pipelines and tankers. However, making forecasts on the growth of technology is a thankless task, and I will be glad to be proved wrong.
Future technical and process solutions will be most probably concerned with complex submarine development of the Caspian hydrocarbon resources. I am referring to underwater plants for oil and gas separation and reinjection of carbon dioxide and produced water to deep submarine beds. Such plant will help to solve the problem of air pollution and reduce the discharge of carbon dioxide, which promotes the greenhouse effect. The ??2 surface separation technique developed by Statoil and its partners has been successfully introduced in the Sleipner oilfield. Next year this technique combined with multiphase transportation to onshore facilities will be implemented in the Snovit gas-condensate field. In 2007 the company is planning industrial testing of the first underwater separation plant in the Tordis field.
One of the most important and difficult tasks is promotion of safety during all types of oil, gas and condensate transportation. Unpredictable environmental consequences complicate the task. Though there are some achievements in this sphere, further steps must be taken. Firstly, the existing standards have to be agreed for the entire Caspian territory or new standards developed. Secondly, there is a need for further hazard assessment of pollution by accidental gas release or oil spill and elimination of its effects. Thirdly, a so-called 'environmental rapid response force' should be established. This is in line with our proposal for the safe exploration of Arctic resources which we put forward at the conference in Spitsbergen (6-8 June 2005). I believe this approach can be applied to the Caspian shelf as well.
Decontamination methods in the case of oil spillage on land and at sea have already been developed. Decontamination of under-ice spillage is falling behind. Russian and Kazakh professionals and representatives of the world community must combine their efforts to solve this problem.
Another failure of decontamination methods is that a technique in itself is not enough for effective performance. Techniques, facilities and proper coordination of the 'environmental rapid response force's' activity are keystones of success. I would like to repeat, that it is a task not for one company or one state. It can be fulfilled only with the combined efforts of all parties interested in the safe development of the Caspian shelf.
Training of Specialists for Offshore Field Development
In our opinion, there are several necessary conditions for successful (that is cost-effective and safe) development of hydrocarbon resources:
· effective and safe techniques of exploration, extraction, processing and transportation
· equipment and facilities that ensure safe implementation of the above techniques both for people and the environment
· safe methods of process monitoring and agreed emergency operating procedures
· high quality and educated personnel able to use equipment and techniques safely.
The 'last but not least' item does not receive sufficient attention. Although Russia has proper training of professionals in the oil and gas sphere, there is a lack of certain offshore professions. Certain subjects essential for efficient and safe offshore field development are missing in the curricula. These are lectures devoted to advanced well planning, environmental control methods, oil spill liquidation, underwater oil and gas extraction plants, and multiphase pipeline transportation. I guess it is the same for professional training in other Caspian littoral states.
Rapid development and introduction of new technology by Western companies made Russia and Kazakhstan fall behind in terms of education. Universities are unable to catch up with advancing science and manufacture. There are no professors in certain subjects. We need to train professors first! But it takes time. I would like to refer to Norway again. The first graduation of specialists in submarine well completion and seabed extraction plants from Stavanger University will only take place in 2007 – even though Norway has been developing and improving these techniques for the last 15-20 years, and it is a world-renowned leader in submarine exploration!
Oil and gas education in the Caspian littoral states should be harmonised. It is impossible to have safe shelf development in one country and faulty exploration in another one, which frustrates the efforts of its neighbours. In this regard it is essential to maintain international cooperation, to give an opportunity to professors to go on probation abroad, to arrange joint teaching by lecturers and professionals from other countries, to conduct joint research etc.
Conclusion
Development of the Caspian shelf is a task for a group of countries. The package approach means the combined efforts of different organizations interested in implementation of this task. There should be engineers and researchers from different industrial and scientific spheres; ecologists, experts in offshore construction, exploration engineers, representatives of governmental authorities and non-governmental organizations. Moreover, because international interests are involved (fishing and environmental management in inner and multinational waters and security issues), there must be an interstate body to solve disputes. I would like to repeat that it is a complex task that requires combined efforts.
Table of contents
Development of Human Potential in Kazakhstan:Will We Manage to Join the World's Top 50 Most Competitive Countries? Yury Shokamanov
Lifelong Construction Vladimir Kananyhin
What Investors Should Know about Construction in Almaty Stanislaw Glazkov
Distinguishing Features of the LogyCom Production Process Pavel Raspopin
Oil and Gas Producers Sum up the Results Elvira Djantureyeva
Oil of Mangistau: What Does the Current Year Have in Store? Natalya Butyrina
Development of the Caspian Shelf Requires Package Approach Anatoly Zolotukhin
Associated Gas: One Problem, Different Approaches Gulzhan Nurakhmet
