Environmental Monitoring Impact Of Drilling Discharges

Question: Describe about An Environmental Monitoring Study To Assess The Impact Of Drilling Discharges In The Mid-Atlantic? Answer: International Law in regulating the Global Oil Gas Industry: There are various global processes of extraction, exploration, refining, transporting (by pipelines and oil tankers) and marketing of petroleum products. These global processes are included in Petroleum Industry. Fuel oil and Gasoline are the major products of the industry. Petroleum industry is divided into five factors: upstream (exploration, development and production of crude oil and natural gas), downstream (oil tankers, refiners, retailers and consumers). Nature of the Industry: Business is done by the offshore oil and gas industry in all over the world. The designing and engineering of the industry is done according to the extraction of hydrocarbons at sea place. According to the four interests, it is isolated from traditional shipping: A marine component sensitive to the fact that the most part of the work is done on ships. To create a production facility, an industry component is used for drilling of a hole in the seafloor. The interest of the Coastal State for assurance of the safety of the work. The international interest in uniformity. The role of International Law in regulating the global oil gas industry: Various efforts have been applied over the years to achieve the goals. Some points have been given mentioned below, which include: Commercial importance of offshore oil and gas exploration is increasing continuously. It is taking place where the water level is increasing continuously. Difficulties are being created by this level of water. Various counties which are engaged in offshore oil and gas are known as developing countries. Instructions would be given to these countries by an International Convention. The states of the developing countries would have template for use. A brief overview of the global oil and gas industry: Set of opportunities and threats are presented by the global economy. In the range of industries, these are presented for businesses. Latest industry trends and statics are provided by the Global Oil Gas Exploration Production global market research report. The products and the customers, which are driving profitability and revenue growth, are identified by this report. The companies which are leading in all over the world, are identified by the industry report. Industry Analysis Industry Trends: In the last few years, emerging economies of the BRIC nations (Brazil, Russia, India and China) have driven demand for energy. These demands are recovering and petroleum prices are increasing. Due to it, profit margins have also been increased in the last few years. According to the expectations, industry employment may increase in the next coming years. Rising production of oil and gas will be reflected by it. It will also increase the difficulty of extraction of oil. Industry Products: Crude Oil: As per the estimation, the account of crude oil should be 68.1% of industry revenue in 2015. It is representing a decline from the year 2010. Strong natural gas production is reflected by the declining importance of oil. Various grades of crude oil are produced worldwide. The range of these grades varies from the highest-quality light, sweet crude oil to poor-quality heavy, sour crude oil. Industry Activities: Exploration of oil and gas Extraction of crude oil Extraction of Natural gas Production of Liquefied natural gas (LNG) Liquefied petroleum gas (LPG) production, except in conjunction with petroleum refining Extraction of Oil shale. Graph of top Crude Oil producing countries has been shown below: Negotiating an Oil and Gas Contract Main Terms and Conditions: Various changes have been made in the oil and gas industry. Due to it, it has become the most challenging task of the world. To make this task more understandable, it has been divided into three parts. arious common types of agreements are used in the part 1. The participants are guided through various contracts. These contracts focus upon the understanding of the key issues with drafting techniques. General contact terms are discussed in the part 2. All types of agreements have some common terms. These terms are known as General contact terms. Negotiation skills with specific references are discussed in part 3. Points to be covered up in Negotiating Skills: Increasing negotiated relationships Commercial and technical skills Recognition of a negotiation Great role models Structure for control: Best result is obtained by the best negotiation. Negotiation controlling and process management are the keys for the best negotiation. Control for success: Key planning checklist to negotiate well Structure for success: Creating the space to agree Trading for success: Understanding relative values Some more points to be remembered for well negotiation: Psychology of persuasion Available range of levers Focusing on persuasion Legal/Environmental issues as a result of Oil and Gas activities: Various environmental issues occur due to oil and gas activities. Due to effluent, water contamination occurs. Seepage occurs form the storage and waste tanks. Due to discharge of effluents, thermal pollution occurs. In this case, the temperature of the effluents is higher than recipient water bodies. Water contamination occurs due to oil spills. During operations at production and refining plants, particulate emissions into the atmosphere are generated. Potentially hazardous materials are released occasionally. Solvents and acid or alkaline materials can be considered as potentially hazardous materials. Figure of sources of discharges and emissions from offshore installations has been shown above. Due to inappropriate disposal of solid wastes; soil, surface water or ground water contamination occurs. It occurs from chemical industry processes which include effluent treatment sludge and particulate matter from dust collectors. Due to truck circulation. Changes in local traffic occur. Loud noise is generated by equipment and operations. Due to it, noise pollution occurs. The next figure shows the Trends in the amount of produced water discharged and injected and the quality of the produced water (oil content). Various accidents occur which impact the environment; such as leaks, large oil spills, fires and explosions on plants. Above figure shows the Developments in the number of offshore installations and installations discharging. Petroleum Development Arrangements in the Oil Gas Sector: Influences that shape contractual framework of Petroleum Development: Petroleum development contract forms are influenced by Petroleum exploration and production activities. These activities are borne out of fact that: Crude oil and Natural gas resources are not easily accessible because they exist far below the earths surface. Human life expectancy is increased by Hydrocarbon resources. These resources are very significant in modern world; therefore, affect their development. First of all, searching of oil and gas resources is required for petroleum development activities. After the searching of these resources, they should be converted from primary state to the secondary state for consumption. Natural Gas Consumption has been shown in the figure below: Contractual Framework of Petroleum Development Activities: There are three main types of contract firms: Upstream / Exploration and Production contracts Petroleum Development Agreements International Petroleum Agreements Field / Service contracts at exploration phase of activity Contracts from production phase into midstream phase Field / Service Contracts at Exploration Phase: At exploration phase, required Field / Service Contracts are given below: Seismic Survey Rig Contractor Rig Services Contractor Supply of equipment Contracts from Production to Midstream Phase: Required contracts from production to midstream phase: Crude oil lifting Crude oil transport Crude oil sale Decommissioning of well Types of Petroleum Development Arrangements: Concessions : used in 60 countries Production Sharing Contracts : used in 41 countries Risk service contracts : used in 4 countries Participation Agreements Major oil trade movements have been given below. A case study The Nigerian Oil Gas Industry: In Africa, Nigeria is the largest oil producer. The rank of Nigeria captures its place among the top 10 oil production countries in the world. According to the estimation, Nigeria contains oil reserve of 37.2 billion barrels and natural gas reserve of 180 trillion cubic feet. Oil and Gas Journal (OGJ) has given this estimation at the end of the year 2011. In 2011, per day production of crude oil and dry gas was 2.53 million barrels and 1 trillion cubic feet respectively in Nigeria. The economy of Nigeria depends upon the oil and gas sector. In 2010, total energy consumption for Nigeria was 4.4 quadrillion Btu (111000 Kilo tons of oil equivalent). This estimation was given by the U.S. EIA. In Nigeria, oil and gas activities started in 1908. In the terms of structure, industry is divided into three parts: Upstream sector Downstream sector Services sector Downstream sector includes the midstream sector. Crude oil and gas have to pass from various processes. These processes are processing, storage, marketing and transportation. These processes are covered in midstream sector. The key segments in the downstream sector are: Transmission and Conveyance Distribution and Marketing Liquefied Natural Gas (LPG) In Africa, the largest Natural Gas Reserves are hold by Nigeria. There is limited infrastructure to develop this sector. Nigeria LNG (NLNG) is the first and most ambitious gas project of Nigeria. It has six LNG trains in operation with total annual capacity of 31 bcm. The graph of World Crude Oil Production (Millions of Barrels per day) has been given above. Legal Resolution of disputes in the Oil and Gas Industry: Dispute Resolution Options have been given below: Arbitration Domestic / International Expert Determination Other ADR Application in Oil and Gas Industry Advantages and Disadvantages There are various points in Litigation: Difficulties of Litigating Local laws Courts Good, Bad and Ugly Litigation against States Timescales Long and very long Arbitration: It can be considered as binding method for dispute resolution. It is the most efficient method of settling a dispute. The arbitrator can be chosen by the disputing parties. It depends upon the complexity. Privacy is maintained in the whole process. It is maintained confidentially, which is crucial in the oil and gas sector. It has more flexibility than litigation. It can be customizes according to the disputant needs. The time consumption and cost element is lesser than that of litigation. For arbitration, venue and platform can be chosen easily by the disputants. Expert Determination: Independent expert, which has vast knowledge of field, can be chosen by Expert Determination method. To settle financial and technical claims, expert determination method is chosen. Industry expert is involved in expert determination method. Industry expert is well aware of potential disputes in oil and gas industry. Dispute outcomes become final, if parties agree to bind with expert determination. This method is much cheaper and faster than litigation and arbitration. By this method, flexibility is given to oil and gas disputants. Recognition and Enforcement of Foreign Judgments: Final goal in the litigation process is the Recognition and Enforcement of a Judgment. When enforcement of a foreign judgment is asked by a party, the issue of recognition and enforcement becomes the initial phase of litigation. In the recognition and enforcement of the foreign judgment, U.S. law is liberal. There are two types of cases of the question of recognition of foreign judgments. First case is the most common case. According to it, the foreign money judgment is given by judgment creditor. Enforcement is not involved in the second type of judgment recognition case. In both type of cases, efficiency is promoted by recognition of the foreign judgment. Duplication of previous proceedings is avoided in both types of cases. Current affairs and issues in the Oil Gas sector: Frontier acreage and access to reserves: Exploration and development of new fields are represented by Frontier Acreage challenge. It was regarded as too difficult, expensive and politically unstable to justify operations. Unconventional resources: Due to advancement in technology, partial issues of global demand are being resolved by these resources. Shale gas, oil sands and coalbed methane (CBM) are the unconventional resources. Conventional reserves in challenging areas: Unstable political regime is represented in these areas. It leads to lack of security for investments. There are various countries with unstable political situation (Nigeria, Lybia, Iran). References: Menzie, C. A., Maurer, D. Leathem, W. A. (1980), An Environmental Monitoring Study To Assess The Impact Of Drilling Discharges In The Mid-Atlantic. The effects of drilling discharges on the benthic community In: Symposium on research on environmental fate and effects of drilling fluids and cuttings BERR (2008). Environmental monitoring for UK offshore oil gas. DECC Summary report for OSPAR Joint Assessment and Monitoring Group. Grsvik, B.E., Meier, S., Westrheim, K., Skarphinsdttir, H., Liewenborg, B., Balk, L. Klungsyr, J. (2007). Condition monitoring in the water column. Klungsyr J., Balk, L., Berntssen, MHG., Beyer, J., Melbye, AG ., Hylland, K. (2003). Contamination of fish in the North Sea by the offshore oil and gas industry. 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