Managing risks of operations in the high north

Jon Rysst

May 15th 2012

Managing Risks of Operations in the High North

Korea-Norway Business Cooperation Seminar in Seoul

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Managing Risks in the Arctic

May 15th 2012

The Arctic is very diverse

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May 15th 2012

A region of opportunity and interest leading to opening of

new areas to industrial activity

2012 2013 2014 2015-2020

«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

«High Arctic» operations

Extended season drilling

Oil/Gas offshore production

Shipping and mining

Multi-year ice conditions



May 15th 2012

We should, as a minimum, require

The same risk level in the Arctic as in the North Sea

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Risk

Additional risk

Risk Probability x Consequence

Severity of consequences and probability drive risks

North Sea risk

Rescue

Oil spill

Material failure

Risk mitigated through technology and regulatory measures

Acceptable risk level



May 15th 2012

The five Arctic coastal states have fundamentally different

regulatory approach to offshore petroleum activities

A performance based system is more suited for the Arctic due to better management

of new challenges, technologies and risks

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Prescriptive and detailed

regulations. However, not yet fully adopted for

offshore activities.

Mainly prescriptive

regulations, often requiring industry

standards through

regulatory incorporation.

Hybrid approach that uses

prescriptive and performance-

based requirements

depending upon the circumstance

Performance-based approach with non-binding guidelines and recommended

standards

Performance-based, requires the operator to

adopt international best

practices

Perf

orm

an

ce-b

ased

Pre

scrip

tive



May 15th 2012

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 capability

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May 15th 2012

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 requirements

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May 15th 2012

Safeguarding life, property

and the environment

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