Prirazlomnaya Rig: Myths and Reality

Oil&Gas Eurasia
Gennady Lyubin

Interview with Gazprom Neft Shelf LLC Executive Director Gennady Lyubin

Oil&Gas Eurasia

In September, Greenpeace activists attempted to board the Prirazlomnaya oil rig in the Pechora Sea as part of a protest against hydrocarbon production in the Arctic. Greenpeace proposes to turn the region with a fragile ecosystem into a protected zone. Activists insist the project is an environmental failure and voice numerous complaints.

OGE met with Gazprom Neft Shelf executive director Gennady Lyubin to discuss the issue and obtain the project operator’s firsthand comments on the NGOs’ most frequent allegations in the media, stating that the project fails to comply with environmental safety rules. Besides this, Lyubin also briefed OGE on the project’s current status and its progress.

Oil&Gas Eurasia : Gennady, please tell us about pre-commissioning work on the platform. Will the first wells be completed on time?

Gennady Lyubin : We’re implementing the project in standard mode, on schedule. We plan to start oil production in December. Currently we are performing start-up tests with actual loads and by the end of the year we plan to finish drilling, complete the well and bring on stream our first production well. We also plan to start drilling a second well, which we will complete next year.

OGE: What are the 2014 production plans? When do you expect the peak of output?

Lyubin: Next year we plan to produce some 600,000 tons of oil. Output is expected to peak in 2021 when it should hit the planned production ceiling of 6 million tons per year.

OGE: Did the Greenpeace activists’ attempt to board the platform affect the operations?

Lyubin: The Greenpeace initiative had no serious consequences for the rig. However, at the time of the incident we were performing scheduled underwater monitoring of abandoned exploration wells and rockfill ledges that protect the structure from scouring effect. We had to stop this work because of the threat to divers’ lives.

OGE: I know that it’s quite difficult to access oil and gas facilities and fields. How come that the Greenpeace members were able to approach and nearly board the rig, almost creating (despite the presence of border guards and rig staff) an emergency situation?

Lyubin: I’d rather call it a non-standard situation. You should understand that an offshore rig is a facility with restricted access for a reason. There are certain requirements, and if you ignore them, you might endanger the lives of many people. In our case — the divers’ lives. The events could have taken an unpredictable turn leading to tragic consequences. Therefore, compliance with the rules is the main guarantee that the situation will stay under control and nothing will threaten the safety of our employees.

OGE: Let’s turn to technology issues. Some environmental organizations say that in today’s world there are no technologies available to provide an adequate response to an oil spill under the ice. What solutions are used in your project to address this issue?

Lyubin: Today, the market offers a multitude of tools and equipment for oil spill response, including equipment designed for ice conditions. We may argue about the efficiency of certain units in certain situations, we may discuss approaches to modeling and spills, but to say that there are no technologies and methods would be deceitful.

The equipment that we have is the most modern and most efficient for our conditions. In compliance with the list of vendors in the spill response plan we acquired it from Lamor, one of the world’s leading manufacturers of this type of systems.

But we all know that the market is constantly evolving, instantly responding to the emerging demand. New, more advanced systems and technologies appear, those that can solve the tasks more efficiently. We constantly monitor what is happening in this area.

OGE: How do you clean the spill?

Lyubin: I just want to note that our chief goal is to make sure that this equipment is never used. Taking into account design features of the platform and its systems, the possibility of accidents is extremely low. For example, in the event of any failure the emergency protection system blocks the oil transshipment in seven seconds! Under such conditions large spills are virtually impossible. As you know, at various ports around the world huge volumes of oil are transshipped to vessels on a daily basis and no one considers it a lethal threat to the environment.

However, the platform is constantly monitored by two ships with the latest generation of oil recovery equipment fit for use in winter conditions. Also, we continue to study all technological novelties offered in the market to address the issue of spill response. And if an opportunity to improve the quality of our equipment comes along, we will use it.

OGE: Environmentalists assert that the maximum spill could reach tens of thousands of tons of oil, spreading over 140,000 square kilometers and 3,500 kilometers of the coast. Do your estimates provide the same figures?

Lyubin: Such calculations are based on absolutely surreal data. For example, they consider the scenario of the platform base being damaged — the caisson, where the oil is going to be stored. But the caisson wall is a three-meter thick concrete wall covered with more than four centimeters of clad steel! This is a special high-hardness steel, resistant to corrosion and wear. In fact, such structure can even withstand overload. In other words, we are talking about events that simply cannot happen in everyday life and have nothing to do with the commercial development of the field. Of course, in theory it is possible to contemplate any script based on the assumption that if you don’t do that, environmental safety might be in danger. But that kind of thinking is absurd.

The boundaries of the projected oil spill are also artificially enlarged in the southern and western directions despite hydrometeorological conditions. The calculations that occasionally appear in the press feature a hypothetical oil stain that keeps expanding for 10 days. This is not possible in principle, since the existing spill response plan provides for spill containment over the first four hours using our manpower and means, resources located near the Varandey terminal and professional rescue team on 24/7 duty around the platform.

Unfortunately, people who are not specialists aren’t always able to tell the difference between provocative statements from the real data.

OGE: Environmentalists also say the rescuers’ base is a thousand miles away from the rig and that they wouldn’t be able to reach the rig in time in case of emergency. Have you taken this into account in your oil spill response plan?

Lyubin: This is fiction, too, as is the constantly repeated assertion that we have no necessary equipment for emergency response.

As I said earlier, two icebreakers moored right next to the rig are on 24/7 duty, while some equipment is located on the rig itself. Additional equipment for coastline protection is located in Varandey, which is only 55 kilometers away from the platform. Finally, the Emergency Situations Ministry opened this year a rescue emergency center in Naryan-Mar, less than 250 kilometers away.

OGE: Your critics also claimed that a large amount of equipment delivered to the rig is faulty. How did you address these risks?

Lyubin: All equipment was acquired from the world’s leading manufacturers of oilfield equipment and systems taking into account the rig’s production requirements. The list of suppliers includes both Russian and foreign companies such as Aker Solutions, Siemens, Baker Hughes and others. In any case, during the commissioning stage, all systems undergo a very thorough performance check. I doubt that anyone could seriously believe that we would use faulty equipment to execute such a large and complex project.

OGE: As known, the topside was taken from the decommissioned Hutton rig that had been built in 1984 and operated in the North Sea. How can you guarantee the reliability of this 30-year-old structure?

Lyubin: Information about the purchase of Hutton has fuelled endless speculations about this allegedly old rig that we operate. I want to reiterate that the Prirazlomnaya rig is a new facility, the one that was built to operate in the specific weather conditions of the Pechora Sea. The lower toe part has a unique design. During construction of the topside, the manufacturer used brand new equipment and several supporting structures from Hutton with impeccable reliability and durability, as repeatedly tested and confirmed. In fact, this is a new facility. So those who talk about some old rig are either sincerely mistaken or deliberately use Hutton’s purchase to create this myth about a looming global disaster.

OGE: We can also hear that project costs keep rising. Can you comment on this?

Lyubin: Up until now we have spent about 100 billion rubles ($3.13 billion) on this project, and the cost of the rig alone accounts for 60 billion ($1.9 billion). The rest has been spent on the coastal infrastructure, vessels, tools to ensure work safety. Approximately the same amount of investment will be required for the entire duration of the project, taking into account operating costs. The price of the rig will remain the same.

OGE: What will happen to the rig after production comes to an end?

Lyubin: The field’s depletion period is 25 years and the operating life of the reinforced-concrete rig framework is 50 years minimum. We are talking about the structure as a whole. Of course, during this period, we will be repairing and replacing certain parts of the operating equipment. After completing the project we will kill the drilled wells and transport the rig to the shore for disposal.

OGE: What kind of dialogue would you like to establish with environmental organizations?

Lyubin: A constructive one. All calculations that we make — including those that relate to environment — fully comply with Russian law and the regulations of international maritime transportation. If the existing laws don’t suit someone, they can always launch initiatives to change them, presenting their arguments and calculations. I’m convinced this would be a more civilized way to handle this issue instead of spreading the myths about our alleged use of 30-year-old technology and equipment.

OGE: Are any unique technologies or solutions applied in this project?

Lyubin: I can say that the caisson is a unique piece of equipment. It bears the main load and the reliability of the rig depends on its own reliability. The specially designed caisson part has allowed us to create a facility that successfully resists the Arctic climate, waves and ice, to protect all equipment and to ensure safe operation. At the same time, each offshore platform is unique as they are usually custom-built for specific projects. The Prirazlomnaya rig’s topside is a more conventional structure, but, naturally, it has also been adapted to Arctic conditions.