MEDIA BRIEFING NOTES

The Greenpeace Atlantic Frontier campaign is to prevent dangerous climate change by halting further oil expansion and beginning a phase out of fossil fuels.

To preserve the climate the world must begin phasing out the use of fossil fuels to reduce emissions of CO2, the gas most responsible for changing the climate. Carbon Logic, the calculation of CO2 impacts on the climate, shows that the world cannot afford to burn even a quarter of the existing reserves of fossil fuels without causing grave damage to ecosystems. (Existing reserves are those currently being exploited or already identified).

In the battle to save the climate, the Greenpeace Atlantic Frontier campaign draws the line in the sand at this point and says no to new oil.

The Atlantic Frontier, an area to the West of the Shetlands and out to the Rockall Trough and Plateau, is a large stretch of very deep, as yet largely pristine ocean. It is also the location selected for new oil development, oil not already part of the reserves.

The Atlantic Frontier represents a risky but potentially profitable site for oil exploration and drilling. Currently, exploration drilling platforms are operative in the four fields so far discovered (Foinaven, Schiehallion, Clair, and Suilven), and Foinaven production of oil is imminent. Over a wider area, extensive seismic testing is being carried out, despite the Atlantic Frontier being the home of whales (including the very rare blue whale) dolphins and an intricate, little known marine ecosystem.

As one of the few remaining pristine areas left, the Atlantic Frontier deserves to be preserved for its own sake. The line in the sand therefore, has a dual function – to preserve the climate and the life of the area.

The area

The Atlantic Frontier covers an area of Atlantic Ocean from the waters west of the Shetlands to beyond the Rockall Trough and the Faeroe Islands and from Ireland to Norway. It follows the path of the continental shelf where the shallower seas of Britain plunge into the deep waters of the Atlantic.

In the UK sector, oil development is as follows:

· Two oil fields, Foinaven and Schiehallion located just under 200 km west of the Shetland Isles which are due to come on line in spring 1997 and 1998 respectively

· The Clair field, closer to the Shetland which is expected to come on-line towards the end of the century

· The blocks included in the 17th seaward marine licensing (for which applications closed on 25th March 1997 and Greenpeace applied unsuccessfully), including blocks west of the Outer Hebrides, and north-west of Shetland, and west of the Scilly isles.

· A new field north of Foinaven was also discovered in March this year, known as Suilven

In the Irish Sector:

· Vast unlicensed areas to the West of Ireland known as the Rockall Plateau

· Some licensed and unlicensed blocks west and south-west of Ireland known as the Porcupine basin, and the Slyne Trough

Additional Sectors:

· There are areas in Norwegian waters, Faeroese waters, and areas between the Faeroes and Shetland disputed by the UK and Denmark

FPSOs

Unlike the North Sea, the Atlantic Frontier has much deeper water, with prolonged bad weather and strong under water-currents. So far the number of fields discovered and developed is small. This means that instead of building platforms to extract and partially process the oil, it is more economical for the oil industry to rely on Floating Production Storage and Offloading Facilities (FPSOs).

FPSOs carry out the same function as oil rigs but instead of being fixed to the seabed, they are floating ships with all the primary processing equipment amassed on deck. They also have the capability to store vast quantities of oil in a similar way to an oil tanker.

Oil is drawn up from the reservoir deep beneath the seabed to a sub-sea wellhead. A number of these wellheads then feed into a sub-sea manifold. The manifold is connected to the ship via a flexible riser, which feeds oil into the FPSO. The FPSO maintains position above the manifold by using a series of anchors and engine power.

There is no pipeline to shore for the FPSOs, which will operate in the Atlantic Frontier. The FPSO remains in position and every few days or, when the FPSO is full of oil, it transfers its load to an oil tanker for transport to shore. Any gas that comes up with the oil cannot be piped or shipped ashore and is burnt off through a huge gas flare or re-injected into the oil reservoir. The Foinaven FPSO is equipped with a large flare but BP now says the gas will be re-injected.

The concept of the FPSO is not new, they have been used in the North Sea for many years. However, the Atlantic Frontier is considerably deeper than the North Sea, the weather and wave patterns are different and in some areas strong underwater currents exist. In order to deal with this different environment, new FPSO technology has been developed and, with BP’s Foinaven field, is being tested for the first time.

The 250 metre long, 34 metre wide Foinaven FPSO known as Petrojarl Foinaven has the capacity to store 350,000 barrels of oil (approximately 45,000 tonnes). It also has the largest floating groundflare in the world, with the capacity to burn 3.2 million cubic meters of excess gas per day.

Construction of other vessels is already under way. BP has already ordered a new FPSO for the Schiehallion field, which will have the capacity to hold up to 1,000,000 barrels of oil (approx. 133,000 tonnes). FPSO technology is also expected to be used for the Clair field and the newly discovered Suilven field.

In addition to BP, 16 other oil companies are exploring and bidding for blocks of sea in the Atlantic Frontier to exploit oil and gas. FPSO technology is considered the way forward by many of these companies.

Concerns over FPSO technology

The technology needed for deep water FPSOs (such as those to be used in the Atlantic Frontier) is not only new but untried and untested.

Rather than go for a new build ship, BP opted for a "mix and match" approach, in order to save an estimated nine months in the development schedule. (This has since been lost due to other complications). The bow and stern of the Petrojarl Foinaven come from an old Russian submarine tender ship and the midsection was purpose built.

BP’s Foinaven development is the first deep water FPSO for the Atlantic Frontier and the whole operation has been plagued by technical problems. Sub-sea manifolds have cracked, and the Petrojarl Foinaven is believed to have had stability problems. First production was initially expected for April 1996, and is now almost a year late.

The use of FPSOs without pipelines presents an additional risk through the transfer of oil from the FPSO to the tanker from more oil transportation.

Fast tracking

The capital costs associated with exploration in the Atlantic Frontier are high and the oil companies need to see their investment generating income as quickly as possible. To facilitate this, the Government has `fast tracked' the whole development process. Viewed with some amazement by other governments and non-UK oil companies, this can shorten the period from first discovery to production from eight years to as low as four in some cases.

Amendments were made to the Petroleum Production (Seaward Areas) Regulations of 1988 in time for the 17th licensing round. The Amendments were necessary to make the Regulations appropriate for the procedures, which the industry is now developing, for deep-water oil recovery. Junior Energy Minister, Richard Page, said, "these regulations vary the terms and conditions of petroleum licenses to reflect the nature of the acreage to be awarded in the 17th Round". (DTI Press Release P/96/943 17th December 1996).

An oilfield development can be split into three key phases - appraisal, pre-project work (including engineering design) and construction. In the past these were essentially carried out in sequence. For Foinaven the time taken for each element has been shortened and then carried out in parallel to reduce conventional costs.

Foinaven's appraisal drilling phase began in March 1994 and by drilling the wells back to back and using multiple drilling rigs, the full appraisal programme was completed in 6 months compared to the normal 2 years.

Atlantic Frontier the appraisal programme, a conventional development would enter a pre-project or design phase. With Foinaven the design stage began before any appraisal wells had been drilled - and, rather than providing tendering companies with a detailed design specification - BP provided them with the desired oil production rates and margin per barrel and asked them to devise the best solution. This cut the pre-project phase to eight months instead of the normal two years. During the summer of 1994, for about three months, appraisal, pre-project and project phases were all running in parallel.

Overall the time period from field discovery to operation was reduced to just over four years, rather than the more usual period of up to eight years for North Sea developments.

Concerns over fast tracking

Fast tracking means that environmental impact assessments (EIAs) are carried out (if at all) at the same time as oil development. This rather suggests that the conclusions of any EIA are academic since the development is under away. It also fails to take into account the environmental impact the exploration itself can have (see notes on bio diversity).

We know very little about the currently pristine deep-sea environment in the North East Atlantic. Carrying out a Strategic Environmental Assessment of the whole Atlantic Frontier area before allowing the oil industry to move in would have been the precautionary approach to protecting this vulnerable environment.

Fast tracking represents the headlong rush for oil at any cost. This is hardly compatible with John Gummer's statement that "there is no point in seeking to mitigate the effects of CO2 whilst providing an inducement for people to use more".

The Government's official ‘sustainable development policy’ is to ensure supplies of fossil fuels at ‘competitive prices’ (Indicators of Sustainable Development for the UK. DOE 1996). There is no recognition in this of the need to restrict the use of fossil fuels in the short term or phase them out in the long.