Petroleum Research Atlantic Canada (PRAC) has a new lease on life, thanks in part to research and development spending rules introduced seven years ago by the board that regulates the province’s offshore oil industry.
In the past year, PRAC has remodelled itself to deliver a portion of the R&D dollars that oil companies are required to spend annually.
A non-profit organization founded by oil companies, it funds petroleum-related R&D in Newfoundland and Labrador.
Thursday, PRAC signed a contract for its first major joint industry project — one that aims to find better ways to dig trenches in the seabed.
“It’s a multimillion-dollar contract,” said Dave Finn, chief operating officer of PRAC.
“It is the principal means of protecting subsea infrastructure in ice-prone environments.”
Trenches are currently used on the Grand Banks to protect oil well equipment on the seabed from icebergs that scour the ocean floor.
The Terra Nova and White oilfields use huge excavated craters, known as glory holes, dug about nine metres deep.
Among the goals of the trenching project is to figure out the best digging tools, how to prevent the sidewalls from collapsing and to find a use for the excavated material.
“The objective is to develop it incrementally in new systems — full-scale commercially ready trenching systems,” said Finn.
Costly to dig
Digging trenches can be expensive, especially in the hard rock seabed on the Grand Banks and with only a few months of good weather to get the work done in the North Atlantic.
Glacial till — boulders, gravel and soil left behind when glaciers melted — also make it difficult to dig trenches.
“You’ve got these big boulders that are buried and a lot of times you won’t detect them until you’re upon them,” said Finn.
They’re the same kind of boulders found on the barrens near Butterpot park.
“A major part of this project is how to detect obstacles and plan the trenching route,” said Finn.
Developing small fields
Doug Cook, chief executive officer of PRAC, said better trenching technology will also help develop smaller oilfields near existing ones.
“The subsea tieback projects are going to be where it’s at — smaller fields tied back to the bigger platforms,” he said.
“Subsea trenching, subsea flowlines and tie-backs … are the way to get at the rest of the value of the hydrocarbons offshore.”
Scale of projects ‘pretty significant’
Subsea tie-backs are used to develop small pools of oil and gas up to 30 kilometres away from an existing production platform.
North Amethyst, which expanded the White Rose oilfield, was the first tie-back in the province’s offshore industry.
Five oil and gas companies are involved in the trenching project — ExxonMobil, Suncor Energy, Husky Energy, Chevron and Statoil.
PRAC awarded the contract to Intecsea Canada, but did not disclose its dollar value.
Intecsea is a division of the Worley Parsons Canada, the company designing and building the topsides modules for the Hebron production platform.
CNLOPB spending rules
Since 2004, the oil companies have been required to spend a percentage of their annual offshore oilfield revenue on research, development, education and training activities in the province.
The rules were brought in by the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB).
The offshore regulator said approximately $13 million was spent on research, development, education and training in 2009 by the operators of the province’s three producing oilfields.
It’s the most recent year for which spending levels are available from the board.
That brings the total spending to about $100 million between April 1, 2004, and the end of 2009.
CNLOPB spokesman Sean Kelly said the spending was split 50-50 between R&D and education and training.
In case of spending shortfalls, oilfield operators must provide a financial guarantee to the board that they will meet their R&D spending obligations. (See “Offshore R&D spending” graphic for more details.)
“They have to give that to us before we give them approval to operate,” said Kelly.
Spending requirements are tied to each oilfield’s production permit, which is a typically a three-year licence.
Cook said a majority of the collaborative R&D spending by the oil companies will likely be done through PRAC.
“That’s probably on the order of two-thirds to three-quarters,” he said.
“It’s hard to predict, but the scale of the projects we’re looking at is pretty significant. They’re in the tens of millions of dollars.”
The organization has a five-year plan and the clock started ticking this year. PRAC is focusing its efforts in three main areas:
• ice management and trenching;
• oil spill response technology designed for harsh environments; and
• advanced well technology and design.
Ice management includes everything from better forecasting and ice detection to improving trenching technology.
Today’s oil spill response technology, such as booms and skimmers designed to recover oil, doesn’t always work well in the harsh, ice-prone North Atlantic.
“We’ve started workshopping that with the members,” said Finn.
“There are technologies that are emerging in the wake of the Macondo spill. Right now, the principal response is mechanical containment and recovery, dispersants … in situ burning.”
Finn said PRAC is still talking to its members to pinpoint the oil spill technology gaps they want to fill locally.
Advanced well design is aimed at increasing the amount of oil that companies get out of seabed reservoirs.
“If you can get a one per cent increase in the recovery, that’s a huge payoff for the province, for the companies,” said Finn.