1. Unit 4: Primary Resources Energy from the Oceans

2.  The decision to recover offshore oil depends on many factors.  These factors can be broken down into two general categories  Physical Factors  Human Factors  Differences in both of these factors influence the inputs into the oil and gas system

3.  Physical factors are those that involve the natural aspect of the offshore oil reserve.  They may include  Location: How viable is it to recover oil in a particular location? How far would they have to ship it to refine it? Is there any dangers of setting up a oil rig in the area? Icebergs? Storms? Is the water shallow enough for us to build a platform, or to pump it out?  Size of Reserve: How much oil is down there? Is it economically feasible to build a rig to pump out the oil? How long will the oil last?  Quality of the oil: Quality is judged by viscosity, or stickiness. Light oil is easier and cheaper to refine than thick sticky oil. The best and most sought after oil is described as “light, sweet crude”.  Environmental concerns: If something goes wrong will it cause irreparable damage to the environment? Is it worth the risk?

4.  Human factors are those that have a human dimension, and are influenced by people.  Price of oil: Will putting this rig there pay us enough to cover the cost? What are the long term forecasts for oil prices?  Technology: Do we have the necessary technology to drill for the oil?  There have been improvements that have widened our ability to recover oil. They come from three areas:  3-D Technology  Design of the storage and offloading areas of rigs  Directional Drilling

5.  There are four types of offshore drilling rigs.  Submersible  Jack-up  Semi-submersible Anchored  Semi-submersible Dynamically Positioned

6.  Submersible:  Built of concrete or steel.  Anchored to the seabed.  Economically feasible in water up to 20m deep.

7.  Submersible:  Advantages:  Stability  Safety  Not far from shore (usually)  Water is not as deep therefore it is easier to fix and contain any problems such as spills.  Disadvantages:  Expensive  Not reusable  Very limited in where it can be used.

8.  Jack Up: Designed to move from place to place  Deploys legs to anchor itself  Used in water levels up to 100m deep.

9.  Jack Up:  Advantages:  Moveable  Economically Feasible  Reusable  Disadvantages:  Cannot operate in deep water

10.  Semi-Submersible Anchored:  These rigs float on the ocean.  They are anchored to the sea floor therefore they are only feasible up to 200m water depth.  The large columns that support the platform are hollow and are alternately filled with sea water or oil as ballast for the rig.  It is extremely important to ensure that this ballast system is balanced or the rig could tip over.

11.  Semi-Submersible Anchored :  Advantages:  Operate in deep sea  Cost effective  Disadvantages:  Not as easily moved

12.  Semi-Submersible Dynamically Positioned:  These rigs are able to drill outside the continental shelf.  They are still limited to a depth of 2000m.  They still have pontoons and ballast tanks, to store oil and maintain stability but unlike other semi- submersible rigs they are not anchored to the sea floor.  “Dynamic” means changing or moving; this refers to the rig’s ability to be moved to a new location when needed. Thrusters position the rig over the drill site

13.  Semi-Submersible Dynamically Positioned:  Advantages:  Moveable  Can be used in deep water  Disadvantages:  Bad weather often causes problems  Ocean Ranger Disaster

14.  A story close to home  134.5 million barrels in 2007  Terra-Nova, White Rose, Hibernia  Total value of production $10.3 billion  Creates Jobs in many fields  Not only those directly involved with pumping oil.

15. Coatings, insulation Hydraulic, pumps and compressors Lifting/crane operations Rigging Fluids and chemicals Lighting Marine safety equipment Flowlines, valves and fittings Oilfield industrial supplies Equipment rentals Cargo and Freight Handling Catering and accommodations Offshore/marine fabrication Engineering and design consultants Environmental consultants Medical services Seismic and survey Tubular goods Leak detection Electrical/instrumentation personnel & services Testing and inspection Remote Operated Vehicle support Health and safety Drilling Well services Subsea Opt., maint. & const. personnel Warehousing and logistics Marine logistics & transportation Oil shipment & storage Oil Companies Sub-Contractors Contractors

17.  As technologies advance, offshore oil extraction becomes easier and cheaper. When oil prices are high, cheap production costs generally mean high revenues for the local economy.  Oil is currently the largest significant contributor to NL’s economy. At 33% of our GDP (Gross Domestic Product) it accounts for one third of all revenue in our economy in 2012. This has more than doubled in 6 years when it was 16% in 2006.  In 2012, oil production value was over $8 billion and royalty revenues were $2 billion.