The new vessel will be “ice classed” with additional hull strengthening; Det Norske Veritas (DNV) is Stena Drilling’s chosen class society.

“DrillMAX ICE IV brings our total fleet to eight units. Our existing Stena fleet consists of four semisubmersibles, which are active offshore Norway, UK, Angola, and Australia,” said Tom Welo, CEO of Stena Drilling.

Stena Drilling has an impressive array of specialized drillships in other locations around the globe, as Welo explained further. “One is operating offshore Brazil, one is in the West of Shetlands, one was delivered August 2009 for a long-term contract with Hess starting at delivery, and we have one more under construction at Samsung Heavy Industries Shipyard in South Korea, the DrillMAX ICE IV, due for delivery end 2011.”

Market forces

Stena DrillMAX IV is under construction at Samsung Heavy Industries, Korea. (Photos courtesy of Stena Drilling)

Stena Drilling’s decision to go into the Arctic was heavily influenced by the fact that oil prices were climbing higher and that new discoveries need to be made. Although the oil prices have since dropped, Stena Drilling is still confidently pursuing its multibillion dollar Arctic strategy.

“You remember how the oil prices crept up consistently throughout the late 1970s and early 1980s, and then suddenly dropped in 1986. Several oil companies that had begun exploring deepwater fields, as well as Arctic fields in the east of Greenland and the Barents Sea, suddenly stopped and got out. So we at Stena have taken heed of those experiences and have come up with a kind of hybrid, which will satisfy both Arctic and ultra-deepwater drilling.

“The DrillMAX series you see is able to withstand both extreme harsh and cold environments, and it is also designed to operate in ultradeep waters worldwide. So our investment is able to cover the areas with greatest potential for our clients in an optimum way. If our clients decide that it doesn’t make economic sense to drill in the Arctic in the short term, then we can still put our Drillmax to work in any of the deepwater fields that are entering the production phase as we speak,” said Welo.

Technological advances

Welo has been the CEO of Stena Drilling for more than a decade. He has been at the helm during an era that has seen rapid technological changes taking place, which have enabled companies to overcome environmental challenges. “Our operations in West Africa and Brazil have advanced hugely in recent years because of technological advancements in drilling techniques. These technologies are exactly what will be needed in the Arctic, which shares similar geology,” Welo said.

“There has been drilling in the Canadian Arctic since 1976, ever since the previously Norwegian-owned Canmar Explorer III sailed from the Victoria Docks after being ice-strengthened. So the expertise has been developed ever since then, really in terms of the utilization of steel,” Welo said.

Stena has been at the forefront of developing ice-classed vessels for the past two decades. They have several bulk carriers that were built 18 years ago with the express purpose of going on expeditions to the Arctic. The company then developed ice-strengthened tankers for the Baltic, and it has the biggest ice-classed Aframax ship ever built.

Adapting to the environment

Tom Welo, CEO of Stena Drilling, describes the enormity and complexity of the Stena Drillmax ICE.

“We have not chosen to build a ship that can break ice because the moonpool will be full of ice and the cost would be prohibitive. But we have had to invest heavily in thrusters; they weigh 50% more than on the DrillMAX series, as they have to be ice-classed. So the total additional cost of having an entire DrillMAX adapted for Arctic conditions is somewhere in the region of US $220 to $240 million,” Welo said. “With good ice management in place, the vessel can remain in operation in the Arctic much longer than the vessels operating in the period 1976 to 1985, enabling better economics for the client.”

The working environment in the Arctic is also very different, so Stena has had to take safety into consideration in a different way than with more conventional vessels. DrillMAX ICE will have an ice-classed “hat” on top of the vessel in order to protect the crew from falling ice, often a problem in the Arctic. Additional features also include heated walkways, de-icing equipment, and heated hand rails all around the vessel, so that the crew is protected from the cold.

“Now Stena is using dynamic positioning on our DrillMAX series, a well-proven technology that replaces conventional mooring systems,” Welo said. “Station-keeping is maintained by using multiple reference systems, including GPS systems and taut wires as necessary, as tests have shown that GPS can encounter black spots in the Arctic.”

Political risk

The Arctic, of course, comes with a whole set of other challenges, in particular political risk, as its geographical area spans the territories of the US, Canada, Great Britain, Greenland, Denmark, Norway, and Russia.

“Yes, the Arctic is challenging for those nations that are dissatisfied with their share of the hydrocarbon resources. But unlike many other regions of the world, where political instability is commonplace, the Arctic nations are developed nations that can talk to each other. Plus, the Arctic is far closer to most of the big hydrocarbon consumers,” Welo said.

With projects such as the Barents 2020, in which DNV is helping to write rules relating to the Arctic that both Norway and Russia are assisting with, the potential for offshore exploration and production in the Barents Sea will also be realized.

“Production is potentially easier in the Barents Sea because the issue of drifting ice is much less critical than the Beaufort Sea. There are likely to be enormous resources there, some already proven,” he said. “I was involved in drilling a well for Hamilton Brothers using a jackup, 1,200 miles (1,920 km) east of Murmansk in 1994; a huge field was confirmed, but nothing has been done with it to this date, as far as I know. But there is no offshore production in the area as Russia has yet to develop its capabilities or to give out licenses. So anything that can be done to help the Russians develop their offshore rules will be welcomed by the industry,” Welo said.