ocean observations
North to Alaska?
By Steve Withrow, Trinity International Consultants, Inc.
Steve Withrow, founder and owner of Trinity International Consultants, Inc., has accumulated more than 25 years of experience working with a wide variety of marine science & technology companies to strengthen their competitive position in commercial, academic and government sectors. Contact Steve at Tel: (508) 548-3246 E-mail: trinity138@ comcast.net
As announced on the Minerals Management Service (MMS) WebSite on February 6, 2008: "MMS has completed the first Chukchi Sea sale since 1991. Today's offshore lease sale is the most successful in Alaska's history based on the number of bids received and the number of tracts receiving bids." After 30 years and $300m in environmental studies conducted offshore Alaska, seven O&G majors had just submitted 667 bids on the 5,354 "blocks" being auctioned by MMS. Shell Oil bid on 275 blocks and took the lion's share of the 480 blocks on offer. Conoco Phillips was second with 90 blocks leased. All told, a total of $3.4b in leases was bid by the seven majors in this sale. This was a surprisingly large sum, indicating significant long-term energy potential in the area. It also indicates that the major oil companies are now confident that the long-running environmental controversies in the region may finally be manageable. Shell Oil has been absent from offshore Alaska for many years, but now their website states: "Shell believes that Alaska has significant untapped potential and will play an increasingly important role in meeting the energy challenge in the future. We plan on making additional investments in Alaska. To be successful in Alaska, we will work openly and with the involvement of key local and international stakeholders." By comparison, the previous 1991 lease sale resulted in only 28 leases issued, with only five exploratory wells being drilled. Assuming that the recent bids are deemed by MMS to provide the public with "fair market value", significant subsea exploratory and production activity will soon increase off of the Alaskan coast. This begs the question...
What technological infrastructure currently exists in or near Alaska to support this exploration? And what if there is a substantial "find" in the region? How quickly will offshore support contractors and equipment suppliers be able to mobilize to meet the emerging requirements? According to Dr. Bruce Magnell, Senior Oceanographer with the Woods Hole Group and a recognized industry expert on subsea environmental monitoring technology: "I think there will be a sustained oil boom in offshore waters of Alaska, probably lasting for the next decade or two. The major oil companies obviously have concluded that there is a lot of oil off Alaska, and there are advantages to undertaking development there as opposed to other less stable parts of the world. Shell, for example, has apparently decided that offshore Alaska will be one of their major development thrusts in the coming years. And the new developments will probably be farther offshore, in more challenging environments, and harder to develop than anything we have yet seen on the North Slope, so new ocean technologies will be required." Now, we're not saying that companies in our industry should drop everything and rush north to Alaska like it's going to be the next big "gold rush" -- only that perhaps you might want to keep and eye on what's happening in the Great Northwest and begin taking a look at how your measurement sensors and vehicles will perform in cold water climates. There are a lot of technological issues related to the presence of ice during part of the year, to the extreme cold in winter, and to the lack of normal transportation and communication infrastructure. And, of course you might want to start mentioning something about it in your 3 & 5 year strategic plans to corporate headquarters.
April 2008
20 MTR
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