Managing risks of operations in the high north

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Managing risks of operations in the high north

  1. 1. Managing Risks of Operations in the High NorthKorea-Norway Business Cooperation Seminar in SeoulJon RysstMay 15th 2012
  2. 2. The Arctic is very diverseManaging Risks in the ArcticMay 15th 2012© Det Norske Veritas AS. All rights reserved. 2
  3. 3. A region of opportunity and interest leading to opening of new areas to industrial activity «Cold Climate» operations  Seismic and drilling activity, some shipping activity  Cold climate conditions, mainly in summer season  First year ice conditions, or ice free  Darkness, low temperatures, remote 2012 2013 2014 2015-2020 «High Arctic» operations  Extended season drilling  Oil/Gas offshore production  Shipping and mining  Multi-year ice conditionsManaging Risks in the ArcticMay 15th 2012© Det Norske Veritas AS. All rights reserved.
  4. 4. We should, as a minimum, require The same risk level in the Arctic as in the North Sea Risk  Probability x Consequence North Sea risk Severity of consequences and probability drive risks Additional risk Risk Acceptable risk level Rescue Material failure Oil spill Risk mitigated through technology and regulatory measuresManaging Risks in the ArcticMay 15th 2012© Det Norske Veritas AS. All rights reserved. 4
  5. 5. The five Arctic coastal states have fundamentally different regulatory approach to offshore petroleum activities Performance-based Prescriptive Mainly Hybrid approach Prescriptive and prescriptive that uses Performance- Performance- detailed regulations, often prescriptive and based approach based, requires regulations. requiring industry performance- with non-binding the operator to However, not yet standards based guidelines and adopt fully adopted for through requirements recommended international best offshore regulatory depending upon standards practices activities. incorporation. the circumstance A performance based system is more suited for the Arctic due to better management of new challenges, technologies and risksManaging Risks in the ArcticMay 15th 2012© Det Norske Veritas AS. All rights reserved. 5
  6. 6. We believe that safe and sustainable oil and gas activity can be ensured in the Arctic Way forward: Key preventive measures:  A risk based a approached to be adapted  Adequate and harmonized regulations, rules, and technical standards, ref. Barents 2020  Sharing of “best-practices” on Arctic operations Key consequence reducing measures:  Search and rescue capacity  Oil spill response capabilityManaging Risks in the ArcticMay 15th 2012© Det Norske Veritas AS. All rights reserved. 6
  7. 7. The North East Passage or Northern Sea Route Politically related challenges:  Totally dependent on Russian jurisdiction and predictability incl. disposition of the Atomflot fleet of icebreakers Climate, physical and financial challenges:  Temperature incl. ice and darkness  Limited draft and width  Short season (3-4 months)  Claimed fees for icebreaker assistance  Price tag of ice class requirementsManaging Risks in the ArcticMay 15th 2012© Det Norske Veritas AS. All rights reserved. 7
  8. 8. Safeguarding life, property and the environment www.dnv.comManaging Risks in the ArcticMay 15th 2012© Det Norske Veritas AS. All rights reserved. 8

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