A Responsible Approach to Arctic Operations

Northernmost LNG plant, situated in Hammerfest, Norway (Photo: Statoil)Northernmost LNG plant, situated in Hammerfest, Norway (Photo: Statoil)The Arctic presents attractive resource potential for the oil and gas industry. Estimates by the United States Geological Survey indicate that as much as 22% of the remaining yet-to-find oil and gas can be found north of the 66th parallel.

The last few years seen increased interest in the region, not only by our industry, but in the areas of mining, shipping and tourism to name just a few. However, activity in this region is nothing new.

Explorers and adventurers have for more than a hundred years crossed the region, whilst gathering data and helping increase the understanding of the sometimes very hostile environment.

The oil and gas industry made its first steps into the Arctic region in the 1920s.

For Statoil the Arctic journey started over 30 years ago, with the opening of the Norwegian Barents Sea for exploration. In fact, the second office Statoil set up was in Harstad, Norway in 1976, north of the Arctic Circle, and Statoil's current operations in the Northern Norway are run from this office.

Safe operations

Since 1980 Statoil has safely drilled more than 100 wells in Arctic and sub-Arctic regions. Statoil has moved step by step further north increasing competence, experience and technology. In recent years a dedicated research and development department has been set up to focus on Arctic-specific technology development. This is in addition to collaboration with industry, academia and governments on technology development to face the needs of the future.

Statoil's current Arctic and sub-Arctic producing assets include the operated Snøhvit LNG facility in Hammerfest and partner roles in the Terra Nova and Hibernia fields offshore Newfoundland, Canada. Development projects include the Statoil-operated Johan Castberg-project (former Skrugard) and the partner-operated Goliat field in the Norwegian Barents Sea and Hebron offshore Newfoundland. In 2013 a significant oil discovery was made in the Bay du Nord well offshore Newfound and efforts are ongoing to appraise this discovery.  In addition there are comprehensive exploration portfolios in both these basins.

Exploration acreage in the rest of the Arctic includes licences offshore Alaska and and three partner-operated in addition to one Statoil-operated licence in Greenland.

In May 2012 Statoil and Rosneft signed a cooperation agreement to jointly explore offshore frontier areas of Russia and Norway. The partners will jointly explore the Perseevsky licence in in the Russian part of the Central Barents Sea and three licences - the Kashevarovsky, Lisyansky and Magadan-1 - north of Sakhalin Island in the Sea of Okhotsk.Extreme conditions in the Arctic (Photo:Yvind Hagen, Statoil) Extreme conditions in the Arctic (Photo:Yvind Hagen, Statoil)

Not just one Arctic

Overall Statoil is present in most of the key Arctic basins. These basins offer very different challenges and opportunities. It is imperative to note that there is more than one Arctic environment, and it is useful for our discussion to distinguish between what we identify as the three different operational categories.

First we have the workable Arctic. Here solutions can be based on known technologies, and any remaining technology needs are within reach in the short to medium term. Workable arctic is typically areas with little or no sea ice and/or limited icebergs, or alternatively very shallow areas where ice resistant platforms are feasible.  Examples are the opened parts of the Norwegian Barents Sea and offshore Newfoundland, Canada.

Secondly we have the stretch Arctic. Solutions in this category require major innovation, but could be achievable with focused investment in the medium to long term. This means that we can visualise how exploration and development is likely to take place, but are some way from finalising key technologies or capabilities needed for commercial feasibility. Stretch Arctic is typically areas with significant ice that inhibits operations from floating structures, or very cold and remote areas that are ice bound for much of the year. The Barents Sea north east is a good example of this category.

Our last category is the extreme Arctic, where solutions are hard to visualize and need long term focus and investment in technology. This means that the environment is so challenging that it is difficult to envisage solutions within the foreseeable technology future. Extreme Arctic is typically areas with near continuous heavy ice coverage from the Arctic Ocean, likely containing old or glacial ice. An example of this is East Greenland, where Statoil recently was awarded a licence.

Statoil has over 30 years of experience working in Arctic conditions (Photo:Statoil)Statoil has over 30 years of experience working in Arctic conditions (Photo:Statoil)Future energy supply

When Statoil and our industry are taking positions in the Arctic region this is done with both a short and long term perspective in mind. In the workable Arctic we have production today, whilst in the extreme Arctic it is difficult to see production occurring within the next decade or two.

As mentioned, the areas north of the Arctic Circle are estimated to contain one fifth of the undiscovered, technically recoverable oil and gas resources in the world, and therefore have the potential to be major contributors to the energy supply for decades to come. Access to new exploration acreage, including areas in the Arctic, is fundamental to the company's ambition beyond 2020.

This is important also for the secure and long-term energy supply to Europe. As mature fields are experiencing declining production, new resources will have to be found, and we have a firm belief that the Arctic will be an important contributor in this picture.

A stepwise approach

The strategy of a stepwise approach to exploration and development in the Arctic relates to all aspects of Statoil's activity. Active dialogue with communities and governments remains a cornerstone for Statoil in the Arctic and the company has an ambition to create value for host communities and the company.

Activity in the Arctic, in the same way as in other parts of the world, needs to be of mutual benefit to all partners. We strive to engage with our stakeholders.

The full potential of the Arctic can only be unlocked through innovation—more collaborative business models and more joint technology programs.  We believe that Statoil’s approach will make us a strong partner for communities, governments, and our peers.

There is no margin for error. A spill in the Arctic could harm the environment, close the region for development for decades and deny the world an important source of energy.

For centuries, the history of the Arctic has been characterized by a cycle of boom and bust—fishing, fur trading, mineral extraction, oil, gas—but this time, it’s different. This time, the emergence of the Arctic has the potential to be one of the defining economic and political issues of the 21st century. Our industry is at the very centre of this issue.

The Arctic is a natural arena for collaboration, between nations, industries and peoples. Arctic nations are actively collaborating - on boundaries, on environmental research, and on regulations. We are encouraging this and doing our part.


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Online features on the project website are an online series of commentary articles discussing a variety of issues facing the Arctic today with the aim at engaging policy makers, stakeholders and the general public on Arctic issues in different countries. It is a venue for public interaction and communication between the public, scientific researchers, policy makers and stakeholders through online comments in order to enhance the transfer of knowledge into action.

The features are written by a broad selection of authors, including leaders, experts and locals in the Arctic community.

Each feature focuses on one of the different trends chosen for impact assessment in the methodology report from Work Package 2 of the project: Climate and environmental changes in the Arctic; Increase in maritime transport; Increase in mining and exploitation of hydrocarbons; Changing nature of Arctic fisheries; Turbulent modernization of Arctic societies and cultures; Increasing research in the Arctic


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