Statoil is courting controversy after spudding the latest well of its current Barents Sea drilling campaign at the Isfjell prospect amid allegations by Greenpeace the company is defying a regulatory complaints procedure.
The state-owned explorer this week started drilling of the 7220/2-1 wildcat at the prospect in its operated production licence 714 to the north of its Johan Castberg discovery using semi-submersible Transocean Spitsbergen that has just drilled the nearby Pingvin probe.
However, Greenpeace claimed Statoil has spudded the Isfjell well several weeks before a 15 September deadline set by the country’s Environment Agency (EA) for submission of objections to the drilling work.
The environmental group also alleged the company is deliberately submitting late well permit applications to pressure the agency into acceptance, given that permitting delays can lead to additional dayrate costs due to a rig lying idle.
“Submitting a late application, and putting the rig in position before the application has been processed, is a ploy by oil companies to exert pressure on the EA,” said the leader of Greenpeace’s campaign to halt drilling in the Arctic, Erlend Tellnes.
He described it as “foul play” by Statoil that could lead to important environmental considerations being overlooked before drilling permission is given by the agency.
Greenpeace is now demanding that drilling of the Isfjell well is halted and has its protest vessel Esperanze located in the area to monitor the activity.
Tellnes said a similar situation had arisen with drilling of the Apollo probe in the frontier Hoop area of the Barents earlier this year when Statoil had the rig in position but was forced to wait while the agency processed a complaint from Greenpeace.
The group has lodged a series of objections with the EA over subsequent wells drilled both in the Hoop play and other parts of the Barents due to the potential risk of an oil spill to the Bear Island nature reserve to the north and the possible impact on the Arctic ice edge.
Greepeace claimed Statoil had also started drilling at the previous Pingvin probe before the complaints deadline had expired.
In the case of Apollo, Statoil was barred from drilling in oil-bearing zones until the Greenpeace complaint had been processed and this is also the case with the Isfjell probe.
A Statoil spokesman, cited by Norwegian media, explained the company had submitted late applications for Barents wells due to the fact the Transocean Spitsbergen had finished work earlier than expected in the Hoop area and the company wanted to maximise utilisation of the unit.
"We will assess our routines to ensure that we submit well applications as soon as possible," he said.
He underlined the explorer was not permitted to drill in oil-bearing layers at Isfjell until 18 September.
Statoil has drilled only the tophole sections of the previous Ensis and Pingvin probes and will return to complete drilling of the latter wells after drilling at Isfjell, he pointed out.
Meanwhile, Norwegian environmental group Bellona has carried out a study that reveals the EA has approved 156 out of 162 drilling applications over the past four years before the complaints deadline has expired – out of which 13 wells have been actually spudded before the deadline.
Bellona leader Frederic Hauge is demanding a halt to the alleged practice, which he said shows the country’s Climate & Environment Ministry is “in the pocket of the oil industry” and undermines the democratic right to lodge objections.
Responding to the findings, EA director Ellen Hambro was quoted as saying by Norwegian newspaper VG: “Unfortunately, we see that oil companies often submit well applications at the last minute, which puts pressure on our processing procedure.”
She pointed out that in most cases complaints are not submitted and oil companies therefore “take a chance” by starting drilling before the deadline for objections has expired.
This may be the case where an oil company has drilled a dry well and wants to quickly move on to drill a nearby prospect, which would require rapid processing of a well application, she explained.
“It can cost an oil company millions of kroner if a rig is lying idle and therefore we experience pressure to speed up the process,” Hambro added.