Application of Approval

Hibernia
Development Plan Update

August, 1990
St. John’s, Newfoundland

Participants

Mobil Oil Canada, Ltd.
Gulf Canada Resources Limited
Petro-Canada Inc.
Chevron Canada Resources Limited

ISBN: 0-921569-09-2

Table Of Contents

• 1.0 Decision 90.01 Summary
  • 1.1 Introduction
  • 1.2 Hibernia Benefits Plan
  • 1.3 Hibernia Development Plan Update

• 2.0 Background
  • 2.1 Introduction
  • 2.2 Regulatory Framework
  • 2.3 History of the Hibernia Project
    • 2.3.1 Discovery and Licensing
    • 2.3.2 Approval of the 1985 Application
    • 2.3.3 Statement of Principles
    • 2.3.4 Hibernia Management and Development Company

• 3.0 The Hibernia Benefits Plan
  • 3.1 The Hibernia Benefits Plan
  • 3.2 Procurement and Employment Monitoring

• 4.0 The Hibernia Development Plan Update
  • 4.1 Introduction
  • 4.2 The Update
  • 4.3 The Board’s Review
    • 4.3.1 Environmental Considerations for the Development
    • 4.3.2 Extension of the Ben Nevis/Avalon Reservoir
    • 4.3.3 Topside Redesign
      • 4.3.3.1 Revised Configuration
      • 4.3.3.2 Topside Design and Worker Safety
    • 4.3.4 Loading System
    • 4.3.5 Marine Support Vessels
    • 4.3.6 Onshore/Inshore Construction Site
    • 4.3.7 Other Issues from Decision 86.01
      • 4.3.7.1 Environmental Loadings
      • 4.3.7.2 Flaring of Gas
      • 4.3.7.3 Extreme Wind Speed Criteria
      • 4.3.7.4 Seismic Design Criteria
      • 4.3.7.5 Produced Water Disposal
      • 4.3.7.6 Treatment and Discharge of Fluid Effluents
      • 4.3.7.7 Site Abandonment and Restoration
      • 4.3.7.8 Structural and Foundation Integrity Monitoring

• 5.0 Conclusion
  • 5.1 Hibernia Development Plan Update Decision 90.01
  • 5.2 Hibernia Benefits Plan Decision 86.01 Status
  • 5.3 Hibernia Development Plan Decision 86.01 Status

List of Figures

• Figure 1 Hibernia Field Location
• Figure 2 Proposed Development Schedule
• Figure 3 Proposed Development Well Layout – Hibernia Reservoir
• Figure 4 Topside Facilities Layout
• Figure 5 Assembly Sequence – Topside Facilities
• Figure 6 Production System Components
• Figure 7 Bull Arm Construction Site

1.0 Decision 90.01 Summary

1.1 Introduction

This report constitutes the decision of the Canada-Newfoundland Offshore Petroleum Board (the Board) concerning the revised plans of Mobil Oil Canada, Ltd. and its joint venture partners (collectively referred to in this document as the Proponent) for the development of the Hibernia oil and gas field. The report deals with proposed changes to the development project as described in the 1985 Hibernia Benefits Plan and Hibernia Development Plan submissions, and their effect upon the Board’s approvals described in its Decision 86.01.

On March 30, 1990, the Proponent submitted a plan entitled Hibernia Development Plan Update (the Update) for the Board’s information. The Board determined that the Update constituted a revised development plan requiring its approval. The Proponent also informed the Board that its Hibernia Benefits Plan was unchanged. Therefore, the Hibernia Benefits Plan Decision 86.01 is continued except that Condition 3 to the Board’s earlier approval is rescinded as a result of a proposed change in design. The Board also approves the Update subject to the conditions contained in this Decision and those continued from the Decision 86.01 approval of the Hibernia Development Plan.

1.2 Hibernia Benefits Plan

The benefits principles incorporated in the Canada-Newfoundland Atlantic Accord Implementation Act and The Canada-Newfoundland Atlantic Accord Implementation (Newfoundland) Act (the Acts) are intended to ensure that the hydrocarbon resources off Newfoundland’s coasts are developed in such a way that maximum benefits accrue to the Province and to Canada. At the time of issuance of its Decision 86.01, the Board felt, in a general sense, that the Proponent’s benefits strategy met statutory requirements, but nevertheless established five conditions upon its Benefits Plan approval to ensure the Proponent’s compliance with the intentions of the Acts.

The Board concludes, after reviewing the Hibernia Development Plan Update, that the commitments made by the Proponent in its 1985 Benefits Plan submission to the principles of full and fair opportunity and first consideration will be maintained despite the proposed changes in the project. The Board notes that the proposed design changes, and the ongoing negotiations between the Proponent, the Government of Canada and the Government of Newfoundland and Labrador, will result in revised estimates of Canadian and Newfoundland content and employment for the project. The Proponent has undertaken to provide the Board with these estimates upon conclusion of a Binding Agreement among the parties.

The Proponent was required by Condition 3 of the Hibernia Benefits Plan Decision 86.01 to re-examine the feasibility of assembling and outfitting the main support frame (MSF) for the topside facilities, as they were then proposed, in Newfoundland. The revised topside design described in the Update eliminates the need for an MSF, and makes the Condition inapplicable. The Board therefore has rescinded Condition 3.

The Board has determined that the remaining four Conditions to its Benefits Plan Decision 86.01 are unaffected by the proposed revisions to the Project, and remain in effect.

1.3 Hibernia Development Plan Update

The Hibernia Development Plan Update describes the Proponent’s current interpretation of the geology and reservoir characteristics of the Hibernia field and the changes in both the approach it intends to take and the facilities it proposes to install to produce the petroleum.

The Board has reviewed the Update to determine whether the proposed modifications to the 1985 Hibernia Development Plan necessitate revisions to its Development Plan Decision 86.01, and whether they affect the predictions of the 1985 Hibernia Environmental Impact Statement or any of the conditions following from the extensive public review by the Hibernia Environmental Assessment Panel. For the reasons discussed in Chapter 4 of this report, the Board has decided that further public hearings are not required for its consideration of the Update.

The Board has determined that Development Plan Conditions 4 and 6 of its Decision 86.01, which deal respectively with the estimation of extreme winds caused by mesoscale events and with the re-evaluation of seismic design criteria, have been satisfied and that reiteration of these Conditions is not required. The Board will ensure that the Certifying Authority for the project verifies and accounts for each environmental design parameter during its review of the facilities.

Condition 14 of Decision 86.01 dealt with worker safety. The Board notes that the requirement for a safety plan acceptable to the Board is now part of the draft Production and Conservation Regulations as a condition precedent to obtaining a Production Operations Authorization. The safety plan is intended to combine in a single document many of the elements which had previously been required in various parts of the regulations. In light of the evolution of regulatory requirements for safety plans, the Board considers it appropriate to amend Condition 14 of Decision 86.01. The amended version appears in this report as Condition 90.01.1 (Section 4.3.3.2).

As a result of changes proposed in the loading system and in the support vessel fleet, and in view of the fact that specific systems are not yet selected, further approvals by the Board will be required as selection and designs progress. These requirements are contained in Conditions 90.01.2 and 90.01.3 (Sections 4.3.4 and 4.3.5).

Among other things, the draft Production and Conservation Regulations require that the Proponent furnish the Board with evidence of financial responsibility for the purpose of ensuring that the site(s) where work was carried out are left in the condition stipulated by the Board. This results in Condition 90.01.4 (Section 4.3.7.7).

The Board believes that the remaining Conditions to its Development Plan Decision 86.01 are substantively unaffected by changes described in the Update, and observes that the Update contains specific undertakings by the Proponent relating to many of them. Those Conditions are, therefore, continued and Chapter 5 includes a review of their status.

The Board notes that the approval described herein will be followed by additional analyses as the detailed project design evolves and by subsequent approval processes for various phases of the work. The Certifying Authority chosen for the Hibernia project will conduct detailed examinations and inspections of the design and construction of the facilities, and ultimately will issue a Certificate of Fitness attesting to the suitability of the installation for its intended purpose. Four organizations have been recognized by Governments to offer their services in this capacity, and the Board has accepted a draft Scope of Work for a Certifying Authority to be chosen by the Proponent.

2.0 Background

2.1 Introduction

The Hibernia field is located on the northeastern Grand Banks approximately 315 km southeast of St. John’s, Newfoundland, in a water depth of about 80 metres (Figure 1). The field covers an area of about 223 square kilometres, and is estimated by the Proponent to contain some 83 10⁶m³ of recoverable hydrocarbons in two separate reservoirs, the Hibernia and the Ben Nevis/Avalon.

Early in 1986, the Board considered an application by Mobil Oil Canada Ltd., (the Proponent) on behalf of the participants in the Hibernia field for approval of its Hibernia Benefits Plan and its Hibernia Development Plan. The Board reported its decision conditionally approving both Plans in Decision 86.01 issued in June, 1986. Since then, the Board has monitored the evolution of the Hibernia project through regular meetings with the Proponent and through the review of reports of engineering and other supporting studies submitted to the Board.

On March 30, 1990, the Proponent submitted a document entitled Hibernia Development Plan Update (the Update) which incorporates proposed modifications to the original conceptual design of the structure topside, and other new information concerning the overall field development. Additionally, the Proponent has chosen a specific site for the construction of the gravity base struture (GBS) and assembly of the topside structure.

The Proponent has informed the Board that it remains committed to its 1985 Hibernia Benefits Plan but that certain specific undertakings consistent with that Plan are anticipated to result from the negotiations between the Governments and the Proponent concerning the fiscal and financial conditions pertaining to the project.

After reviewing the Update, the Board determined that it is a revised Hibernia Development Plan requiring Board approval pursuant to Sections 139(5) of the Canada-Newfoundland Atlantic Accord Implementation Act and 134(5) of The Canada-Newfoundland Atlantic Accord Implementation (Newfoundland) Act. The Proponent was so informed on April 12, 1990.

This report constitutes the Board’s conditional approval of the revisions presented in the Update. It also includes a review of the status of the conditions which it attached to its approval of the original benefits and development plans in 1986.

2.2 Regulatory Framework

Pursuant to the Canada-Newfoundland Atlantic Accord Implementation Act and The Canada-Newfoundland Atlantic Accord Implementation (Newfoundland) Act (the Acts), the Canada-Newfoundland Offshore Petroleum Board is responsible for the administration of regulations governing the exploration for and production of hydrocarbons in the Newfoundland offshore area. Proponents of oil and/or gas developments in this area are required to obtain the Board’s approval of their plans for such developments. An application for approval must be accompanied by a Canada-Newfoundland Benefits Plan and a Development Plan.

The Benefits Plan describes how the proponent intends to meet the statutory requirements pertaining to industrial and employment benefits for Canadian businesses and individuals, and, in particular, for those resident within the Province of Newfoundland. The Development Plan contains a detailed description of the project. Approval of the Benefits Plan is a pre-condition to approval of the Development Plan. The Acts also require a Proponent to obtain the Board’s approval for amendments to previously approved Plans.

The Board may attach such conditions, consistent with the Acts, to its approvals as it considers appropriate. When regulations have not yet been promulgated but their development is sufficiently advanced that further substantial changes are unlikely, it is the Board’s policy to make compliance with the latest draft of those regulations a condition of its approvals.

The Acts also require that a person wishing to conduct any work or activity in relation to the exploration or drilling for, or the production, conservation, processing, or transportation of petroleum in the offshore area must obtain the Board’s prior authorization in writing. The Board envisages that the Hibernia development project will be comprised of approximately ten programs of works or activities each requiring a separate authorization as the project proceeds.

The draft Production and Conservation Regulations establish the requirement that before production operations may commence, the operator must, as part of the documentation supporting its application for authorization, provide the Board with a Certificate of Fitness issued by a Certifying Authority recognized by governments. During 1989, four organizations, the American Bureau of Shipping, Bureau Veritas, Det norske Veritas (Canada) Ltd. and Lloyd’s Register of Shipping were recognized to issue such certificates for facilities proposed to be installed offshore Newfoundland. The choice of a Certifying Authority rests with the proponent for the project.

2.3 History of the Hibernia Project

2.3.1 Discovery and Licensing

The Hibernia field was discovered in 1979 by the Chevron et al Hibernia P-15 well. Between 1979 and 1984, nine further wells were drilled by Mobil, as operator for the participants, to delineate the field. The discovery well was officially declared to be a Significant Discovery in October, 1985. The Board declared the Hibernia field to be a Commercial Discovery in January, 1990 and issued a 25 year Production Licence in respect of the field on March 21, 1990. The current participants are:

Prior to September 1988, Columbia Gas Development of Canada Ltd. held a 5.4675% interest in the field, which it subsequently sold to Chevron.

2.3.2 Approval of the 1985 Application

On September 15, 1985, the Proponent filed its Hibernia Benefits Plan and its Hibernia Development Plan with the Federal and Provincial Governments. Upon the appointment of the Board in December, 1985 these plans were referred to it for review and decision.

The Board considered both plans, taking into account the comments and evaluations provided by government departments and agencies, and the assessment of its own staff. It also considered the December, 1985 report of the Hibernia Environmental Assessment and Review Panel. In June, 1986, the Board issued its Decision 86.01 giving conditional approval to the Hibernia Benefits Plan and the Hibernia Development Plan.

The Board determined that, with the exception of a few areas requiring additional information and consideration, the Benefits Plan met the statutory requirements relating to industrial and employment benefits. Five conditions were attached to the Board’s approval of the Benefits Plan.

The Development Plan was found to be a comprehensive document which, for the most part, dealt adequately with the issues associated with the development of the Hibernia field. The Plan was approved subject to seventeen conditions, most of which related to matters to be taken into account during the detailed design of the installation.

All the conditions are presented in Chapter 4 of the Board’s Decision 86.01 and are reproduced with their current status in Chapter 5 of this report.

2.3.3 Statement of Principles

Following the Proponent’s 1985 application for approval of its Hibernia Development Plan, world oil prices declined sharply from the high levels of the early eighties. This decline led to reconsideration by the Proponent of the economics of the development, and was followed by extensive negotiations between the Proponent and both governments concerning fiscal and financial considerations.

These negotiations culminated with the signing of a Statement of Principles by the Proponent and the Federal and Provincial Governments on July 18, 1988. That document established their agreement-in-principle on the fiscal and financial terms applying to the Hibernia project and specified certain undertakings on the part of the Proponent concerning construction of the topside facilities and the execution of design work for the project. The provisions of the Statement of Principles are to be included in a Binding Agreement which is now expected to be signed during 1990.

2.3.4 Hibernia Management and Development Company

Late in 1988, the Hibernia participants formed the Hibernia Management and Development Company Ltd. which will be responsible for the construction and operation of the Hibernia facilities. The Board has been informed that this company will be staffed in large measure by personnel seconded from the participating companies. The Board expects that this will be an effective vehicle for the transfer of technology to Canadians from participants who have extensive international experience in offshore petroleum development.

3.0 The Hibernia Benefits Plan

3.1 Hibernia Benefits Plan

The Benefits Plan document is a statement of the Proponent’s objectives and its strategy concerning benefits to Canada and Newfoundland from the project. The Hibernia Benefits Plan, approved by the Board in Decision 86.01, contained extensive commitments by the Proponent to provide a full and fair opportunity for all Canadian businesses and individuals, and first consideration for those in Newfoundland, to participate in the supply of goods and services and in the employment opportunities arising from the Hibernia development project. It provided information on the Proponent’s expectations of the industrial and employment benefits to Canada and Newfoundland and noted, in particular, the Proponent’s commitments to technology transfer and supplier development in its project execution and contracting strategy. It also stated that Mobil would provide an appropriate internal organization to deal with the Board on benefits matters.

The Proponent has informed the Board that the Plan considered by the Board in 1986 is unchanged by the modifications contained in the Hibernia Development Plan Update. The Board continues to believe that adherence by the Proponent to the basic principles of full and fair opportunity and of first consideration for local residents in employment and for local business in providing goods and services is essential to meeting the statutory requirements. The Board is, therefore, pleased to note the Proponent’s assurance that its previous Hibernia Benefits Plan commitments are unchanged.

In the 1988 Statement of Principles, the signatories agreed that the target for Canada-Newfoundland content in the project would be between 45 and 50%. Responsibility for monitoring the Proponent’s performance in relation to this undertaking was assigned to the Board. It was also agreed that a specified portion of the engineering design work for the project and the construction of certain components of the project facilities would be executed within Newfoundland.

The topside redesign, the changes to the type of loading system being proposed, the composition of the support vessel fleet, and the negotiations towards the Binding Agreement between the Proponent and the Governments will result in revised estimates of Canada and Newfoundland content and employment from the project. The Proponent has undertaken to provide the Board with updated estimates when a Binding Agreement is concluded.

In Decision 86.01, the Board attached five conditions to its approval of the Hibernia Benefits Plan. In signing the 1988 Statement of Principles, the Proponent agreed to resolve each of these conditions.

Condition 1 required the Proponent to consider all reasonable alternatives to provide for maximum Canadian participation in shuttle tanker construction, and inform the Board of the results of these investigations. The Proponent has agreed to re-examine this matter as its contracting plans for shuttle tankers evolve commencing in year three of the project.

Condition 2 required the Proponent to submit, prior to the start of production, a training and staffing plan reflecting the maximum reasonable employment and training for the residents of Newfoundland. The Proponent has agreed to provide such a plan prior to the commencement of development drilling and production operations.

Condition 3 required the Proponent to re-examine the feasibility of assembling and outfitting the main support frame in Newfoundland and to provide further documentation to enable the Board to evaluate the matter. The redesign of the topside facilities, which is approved in Section 4.3.3 of this report now makes this condition inapplicable. It is, therefore, the decision of the Board that Condition 3 of its Decision 86.01 in relation to the Hibernia Benefits Plan be rescinded.

Conditions 4 and 5, which relate to the Board’s monitoring of the Proponent’s contracting practices, are discussed in the next section.

3.2 Procurement and Employment Monitoring

The Board is currently developing a monitoring and reporting system for the Project. With respect to procurement monitoring, the Board, after consultation with the Proponent, has established guidelines which provide for the Board’s review of designated contracting and procurement decisions. Compliance with these guidelines will satisfy Conditions 4 and 5 to the Decision 86.01 approval of the Benefits Plan.

The Board has also held discussions with the Proponent concerning the system to be used for the monthly reporting of project cost, Canada-Newfoundland content and employment data. The Board believes that this system, combined with the procurement monitoring system, will provide an effective framework for monitoring the Proponent’s performance in meeting its Benefits Plan commitments, the undertakings contained in the Statement of Principles and those anticipated in the Binding Agreement.

4.0 The Hibernia Development Plan Update

4.1 Introduction

The Hibernia Development Plan Update sets out the Proponent’s current interpretation of the geology and reservoir characteristics of the Hibernia field, and the revised estimates of the oil in place. It describes, based on the results of background studies performed since 1986, changes in the approach the Proponent intends to take and in the facilities it proposes to install to develop the field. Also, it includes an updated description of the parameters upon which the design of facilities is to be based, and certain undertakings arising from Conditions to the Board’s Decision 86.01.

The Board has reviewed the Update in accordance with its mandate and the regulatory framework. Among other things, the statutes and regulations require:

• that the resource be produced in accordance with good oilfield practice having proper regard for the efficient recovery of the resource and the prevention of waste;
• that the facilities which are installed be designed to take into account the environmental conditions to which they may be exposed, so as to maintain their integrity throughout the possible life of the field;
• that a responsible approach be taken to environmental protection in the design of facilities and in the planning for contingencies; and
• that the safety of personnel be a primary consideration in the design of facilities, the choice of equipment, the development of operating procedures and contingency planning.

The Board recognizes that although certain aspects of the project design have advanced beyond that discussed in the 1985 Hibernia Development Plan submission, the Update is still essentially a conceptual project description, since detailed engineering design has not begun. Consequently, the Board’s review and approvals continue to be related to the concepts, approaches and undertakings described in the Update. As the detailed design proceeds, it will be necessary for the Proponent to obtain additional approvals and authorizations pursuant to the Acts.

The draft Certificate of Fitness Regulations authorize the Certifying Authority to conduct detailed examinations during the design and construction process and, ultimately, to issue a Certificate of Fitness attesting to the suitability of the installation for its intended purpose. However, the Certificate of Fitness Regulations require that the scope of work to be performed by a Certifying Authority in issuing a certificate first be approved by the Board’s Chief Conservation Officer.

In April, 1990 the Board accepted the Proponent’s draft Scope of Work for the project. The final version of this document must be submitted for approval before being included in the contract for these services.

4.2 The Update

In the Update, the Proponent continues to propose a GBS to support the topside production facilities. The GBS will contain some 37 500 tonnes of steel and 390 000 tonnes of concrete, and will require approximately five years to design and construct. The development schedule is illustrated in Figure 2. The topside facilities are now estimated to weigh approximately 32 740 tonnes. As before, the processing equipment will be designed for a peak production rate of 24 000 m³ of oil per day, and an average rate of 17 000 m³/d. The Proponent still plans to use three double-hulled, ice strengthened 120 000 dwt tankers to transport the crude to market.

The cost of designing and constructing the GBS and the topside facilities is now estimated by the Proponent to be 1.2 billion dollars and 2.0 billion dollars respectively. The Board has been informed that the reduction in weight resulting from the redesign of the topside structure has reduced the cost of these facilities by approximately 0.5 billion dollars. The two loading systems, the three tankers and the marine support vessels are expected to cost 0.9 billion dollars. The total cost of drilling platform wells and drilling and installing subsea wells will be about 1.5 billion dollars. The total capital cost of the project, expressed in 1988 Canadian dollars, is estimated to be 5.6 billion dollars.

The Proponent expects that 83 wells will be necessary to develop the Hibernia field, 58 for the Hibernia reservoir and 25 for the most attractive portion of the Ben Nevis/Avalon. Forty-eight of the Hibernia wells are planned to be drilled from the production platform. Provision will be made in the design for drilling up to 32 wells through each of its two drilling shafts. Ten Hibernia and all the Ben Nevis/Avalon wells are expected to be subsea wells drilled by a semi-submersible drilling unit.

The Update indicates that the Hibernia field will have a producing life of 18 years and that during the production phase the project will directly employ about 1060 people. The average annual operating cost of the project is estimated to be approximately 242 million dollars.

4.3 The Board’s Review

The Hibernia Development Plan Update has been examined by the Board, with particular attention to differences between the project design as it is now proposed and the project described in the 1985 Hibernia Development Plan submission. The Board identified the following areas for consideration:

• Environmental matters
• Extension of the Avalon Reservoir
• Redesign of topside structure
• Offshore loading system
• Marine support vessels

Each of these topics is discussed in sections 4.3.1 to 4.3.5. Section 4.3.6 deals with the choice of a site for GBS construction and topside assembly. A final section deals with other changes resulting from background studies performed since 1986 or arising directly from Decision 86.01 Conditions.

4.3.1 Environmental Considerations for the Development

On May 15, 1985, Mobil, on behalf of the Hibernia participants, filed a comprehensive Environmental Impact Statement (EIS). The EIS had been prepared in accordance with guidelines issued separately by the Federal Environmental Assessment Review Office and by the Newfoundland and Labrador Petroleum Directorate and covered both the biophysical and socio-economic aspects of the project.

The Government of Canada and the Government of Newfoundland and Labrador jointly appointed a Panel to conduct a public review of the Hibernia EIS. In June, 1985, the Panel held twelve public information sessions in ten Newfoundland communities. At these sessions, the Proponent provided information and responded to questions about the project. Later in 1985, the Panel conducted eleven days of public hearings in six Newfoundland communities, during which it heard 66 oral presentations and received 90 written submissions. The Panel submitted its report to the two governments and the Board in December, 1985, at which time it was also made public. The Panel made 43 recommendations to governments and the Board as a result of the review process. The report was discussed in Section 1.5.4 of Board Decision 86.01.

The Board is aware of the continuing public concern about the environment and the need to ensure that offshore petroleum activities are conducted in an environmentally responsible manner. Accordingly, it has examined the proposed modifications to the Proponent’s plans for Hibernia development as described in the Update to determine whether they might affect the predictions contained in the 1985 EIS. In addition, as the project planning has progressed since 1986, the Board has received a number of reports of studies commissioned by the Proponent. These reports were assessed from an environmental standpoint upon receipt. The Hibernia Update was also reviewed in this light to assess the revised development concept in its entirety.

The Board concluded that the proposed modifications do not give rise to changes in the EIS impact predictions. Therefore, the conditions relating to environmental protection matters contained in its Decision 86.01 continue to apply to the revised Hibernia development plan as presented in the Update.

The Board notes that Conditions 12 and 17 of Decision 86.01, which require the Proponent to obtain the Board’s approval of its plans for compliance and effects monitoring as part of a comprehensive Environmental Protection Plan, will ensure that environmental protection remains an integral feature of the Hibernia Project during the entire life of the field.

4.3.2 Extension of the Ben Nevis/Avalon Reservoir

In December 1988, the Proponent submitted a report to the Board entitled “Interpretation of the Hibernia Structure at the Hibernia and Ben Nevis/Avalon Horizons”. This report contained the results of the interpretation of data from a 3-D seismic survey which was re-processed after the 1985 Hibernia Development Plan was submitted.

The report presented a new geological interpretation for the deposition of the reservoir sequences within the Avalon formation and recognized the division of these sequences into two distinct formations, the Ben Nevis and the Avalon, and it revised the nomenclature used to describe them. Under the new terminology, the former Avalon sandstones are referred to as Ben Nevis/Avalon sandstones. Both the new and the old nomenclatures are used interchangeably in the Update, the new being used in the text and the old in the figures, maps and tables reproduced from the 1985 Hibernia Development Plan.

More importantly, the 1988 report concluded that the Ben Nevis/Avalon reservoir extended farther to the southwest than had been previously thought (Figure 3), and that there was good reason to believe that the stratigraphic continuity of higher quality reservoir and the thickness of that part of the reservoir would lead to potentially higher oil reserves than had been previously estimated. The Board concurs with the Proponent’s interpretations in this respect. However, the revised geological interpretation is not reflected in the reservoir correlation and pay maps provided in the Update.

The Proponent has estimated that, as a result of these interpretations, the original oil-in-place estimates for the Ben Nevis/Avalon reservoir may increase by 43 million m³ to 297 million m³. This increase is not apparent from the Update. Based on further data supplied by Mobil, the amended figures are given below.

On November 9, 1989, the Proponent applied for a Declaration of Commercial Discovery in respect of the area within its Exploration Licence believed to be underlain by hydrocarbons. The application included ten grid sections not included in the Significant Discovery Licence for the field, one in the southeast corner underlain by the Hibernia reservoir and nine in the southwest corner underlain by the Ben Nevis/Avalon reservoir. The Board expects this portion of the field to be developed eventually by continuing the “stepwise” strategy proposed for development of this reservoir in the Hibernia Development Plan.

On January 12, 1990, the Board made a Declaration of Commercial Discovery in respect of the 63 grid sections comprising some 22 285 hectares covered by the Proponent’s application. A Production Licence for the area was issued on March 21, 1990.

Condition 2 of the Board’s Decision 86.01 refers to development of the Avalon (now Ben Nevis/Avalon) reservoir. It requires

• that prior to any development of the Avalon Reservoir, the Proponent submit a revised plan for the Board’s approval;
• that during development of the Hibernia Reservoir, the Proponent evaluate the Avalon Reservoir by coring, logging and testing all prospective zones penetrated by wells drilled to the Hibernia Reservoir; and
• that during the design of topside facilities, the Proponent give due consideration to sizing equipment and allocating space for production facilities and utilities, sufficient to accommodate additional production from the Avalon Reservoir concurrently with Hibernia production, should there be a requirement to produce the Avalon Reservoir prior to the time contemplated in the Development Plan, and that the Proponent report to the Board on its actions in this regard before the topside facilities design is finalized.

The Board believes that the requirements set out in Condition 2 continue to be valid. It also notes that a large area of the Ben Nevis/Avalon reservoir is perceived to have low porosity and permeability. The Board believes that rapidly evolving horizontal drilling technology, which has the potential to greatly improve individual well productivity and increase ultimate oil recovery, may have application in the future development of this reservoir.

The Board established Condition 2(iii) because it recognized that the outlook for production from the Ben Nevis/Avalon reservoir could change as new information emerged during Hibernia development. The Proponent’s own work in redefining the southwestward extension of the Ben Nevis/Avalon reservoir is evidence of the possibility of such a change in outlook. The Board expects that there will be opportunities during the detailed design to make prudent provisions for the future expansion of processing capacity. The Board believes that Condition 2(iii) cannot be met except during the detailed design of the topside facilities and it is appropriate, therefore, that it be continued.

4.3.3 Topside Redesign

4.3.3.1 Revised Configuration

The topside configuration envisaged in the 1985 Hibernia Development Plan consisted of sixteen modules each weighing between 1000 and 2000 tonnes, which formed the module deck. Four additional structures were to be mounted on the weather deck located on top of the module deck. The module deck was to be installed on a 6500 tonne MSF which formed a cellar deck in which 8000 tonnes of equipment was to be installed. This configuration was based on the designs of the Statfjord platforms offshore Norway and dated from the early 1980’s when the maximum available lifting capacity of crane barges was approximately 2000 tonnes.

Since 1985, the dramatic increase in the lifting capacity of crane barges used to assemble and install offshore facilities and the consequent feasibility of transporting very heavy components from fabrication yards to topside assembly sites, has led to a steady increase in the size of the modules used to construct offshore installations. The ability to utilize larger modules presents the opportunity to reduce the overall weight of installations and to complete a larger percentage of the hookup and pre-commissioning checks of equipment at the fabricator’s yard than was previously possible. Both factors can lead to substantial cost savings.

In 1988, this situation led the Proponent to commission a major study to investigate options for optimizing the design of the topside facilities for the Hibernia project. Based on the results of this investigation, the Proponent has now proposed that the configuration of the topside facilities be changed (Figure 4) to consist of five large modules, each weighing between 3900 and 6700 tonnes, and eight topside mounted structures each weighing between 100 and 1300 tonnes. The five large modules will be welded together to form an integrated deck which will provide the structural strength without the need for an MSF. Primary strength in the transverse direction is provided at the module interfaces and in the longitudinal direction by the four structural members formed when the modules are joined together. The total estimated weight for the topside facilities is now 32 740 tonnes, a reduction of almost 10 000 tonnes from the 42 500 tonnes previously envisaged.

In the scheme proposed in the Update, the five large modules will be skidded or rolled onto a finger pier for assembly rather than assembling an MSF on temporary support legs near the shore and lifting the modules onto it using a crane barge (Figure 5). The eight topside mounted structures will be installed after the large modules are welded together. Hook-up and mechanical installation activities will be completed to the maximum degree possible while the topside facilities are located on land at the finger pier or at the deepwater mating site.

The Board approves the proposed conceptual redesign of the topsides and notes that the arrangement of the modules provides for a segregation of activities in a way that tends to improve the inherent safety of the facilities layout.

4.3.3.2 Topside Design and Worker Safety

Recent accidents at offshore production installations worldwide and, in particular, the explosion and fire at the Piper Alpha platform in the U.K. North Sea in July 1988, have emphasized the need for continued vigilance on the part of operators and regulatory agencies to ensure that offshore oil and gas facilities are designed and operated safely.

In the past, safety has often been approached from the perspective of adding protective systems after a process or facility has been designed. It is now generally recognized that the less an installation depends on coping with failures of equipment, systems and procedures, the more inherently safe it will be.

The reliance on good engineering practice, the application of approved standards and the use of certification and inspection regimes do not, of themselves, comprehensively identify and highlight the hazards and sequences of events that can lead to major accidents. To do this, safety studies should be a feature of each stage of the project and these should focus on those aspects of the design which will become “frozen” at the next stage and become difficult or costly to change. The use of the whole spectrum of available safety analysis techniques in a structured framework increases the likelihood that all hazards will be recognized.

Since 1981, conceptual safety evaluations have been a feature of the Norwegian regulatory system. The Norwegian Petroleum Directorate has recently issued draft regulations expanding the requirement for a conceptual safety evaluation of offshore installations to include formal risk analyses at all phases of offshore petroleum development. In the United Kingdom, the Department of Energy is currently developing a regulatory framework within which offshore operators will be required to develop internal safety assessment procedures. It proposes that formal safety assessments be undertaken at defined stages in a project and that they be documented so that an independent review of them can be conducted.

For the Newfoundland Offshore Area, Section 39 of the draft Installations Regulations requires every operator to submit a conceptual safety analysis of the offshore production installation with its application for development plan approval. This analysis may be based on a proposed system design that is sufficiently detailed to ensure that the requirements of the regulations will be satisfied without major modifications at the detailed design stage, or it may be based on a less comprehensively developed design concept and revised from time to time as each stage of the design is completed.

In the Update, the Proponent has stated that a preliminary consequence analysis for the Hibernia production system has been conducted and that this analysis will be updated and used during the development of detailed design and operating philosophies for the project.

In subsequent correspondence, the Proponent said that the consequence analysis is part of an extensive program of periodic safety reviews conducted throughout the detailed design phase. The review process evaluates the overall technical design in the areas of process, control systems, loss prevention, piping, utilities, facilities, environmental protection, equipment engineering, materials engineering, quality assurance and quality control.

The Proponent also stated that after the engineering contractor is appointed, periodic safety reviews will be initiated between the contractor and the operator and that these reviews will start with a meeting, immediately following contract award, to plan for a Hazard and Operability Study. The purpose of this meeting is to familiarize the contractor with the Proponent’s safety review process and provide safety information which will have to be incorporated into the design. The Proponent intends to utilize both local personnel and specialists from its worldwide operations for this review process, depending on the skills which are required and available. When design reaches the stage where process and instrument diagrams and process flow diagrams are prepared, the formal Hazard and Operability Study will be completed covering all of the areas previously specified. A report setting out the results of this study is to be prepared and used as a reference for ongoing safety reviews throughout the remainder of the design process.

The Board notes that since Decision 86.01 was issued, the requirement for a Safety Plan acceptable to the Board has been included in the draft Production and Conservation Regulations as a condition precedent to obtaining a Production Operations Authorization. The Safety Plan is intended to apply during the entire life of the project and combine, in a single document, many of the elements which had previously been required by various parts of the regulations. The Proponent is, therefore, encouraged to start work on the Safety Plan as soon as possible because it will be necessary to have many of its elements in place before occupancy of the installation for offshore hook-up and commissioning.

Recognizing that changes, additions or deletions may be required during the life of the project, the Board expects the Safety Plan to include descriptions of the Proponent’s contingency planning, corporate safety management policy, facilities and equipment, occupational safety and health program, operational procedures, risk analyses, and the training and qualifications program for its employees.

The Board considers that it is appropriate in light of the evolution of the regulatory requirements concerning the appointment of a Certifying Authority and the submission of a Safety Plan that Condition 14 of the Board’s Decision 86.01 be amended as follows:

CONDITION 90.01.1

It is a condition of the Board’s approval of the Hibernia Development Plan Update that:

• Upon the appointment of the engineering contractor for the project, the Proponent provide, for the information of the Board and the Certifying Authority, a copy of its updated consequence analysis document;
• Upon its completion, the Proponent provide, for the information of the Board and the Certifying Authority, a copy of the report issuing from its formal Hazard and Operability Study; and,
• Six months prior to the date scheduled for the installation of the production platform at Hibernia, the Proponent submit, for the Board’s approval, the Safety Plan required by the draft Production and Conservation Regulations.

4.3.4 Loading System

In its 1985 Development Plan Submission, the Proponent had proposed two articulated loading platforms (ALPs) connected to the GBS by an export line. Since then a number of malfunctions with ALPs in the North Sea and their successful replacement by alternative, less costly systems has prompted the Proponent to re-examine the loading system proposed for the Hibernia project. As a result, the Proponent now proposes to use an offshore loading system (OLS) consisting of a seafloor riser terminal, a flexible vertical riser, a subsea swivel and gooseneck, a subsurface buoy and a flexible catenary riser (Figure 6).

The seafloor terminal will be filled with grout after installation to provide a gravity base to adequately anchor the riser.

The Update proposes a transportation system that consists of two of these offshore loading systems each located approximately 2 kilometres from the GBS and connected to it by separate crude transfer lines. As proposed in the original development plan, three dedicated tankers will move the Hibernia crude to market.

The Board notes that the proposed loading systems have their principal components submerged below the sea surface, and are less exposed to wave action and floating ice than the ALPs.

The Board, in its Condition 5(i) of Decision 86.01 required

That the Proponent design the export lines and loading platforms so that they can be flushed of hydrocarbons if there is a risk of damage to those facilities.

The Proponent states in Section 6.5.1 of the Update that the crude transfer lines between the production platform and the riser base of each OLS would be so designed as to permit their pigging and/or flushing. It is unclear, however, whether the vertical and catenary risers, whose approximate volumes are 4.9 m³ and 23.3 m³ respectively, are intended to be designed in this manner. In this regard, the Board observes that it is intended that the project tankers will be equipped with oily water separation equipment (Update, Section 6.5.3), and, that the potential therefore, may exist for development of operating procedures whereby the risers can be flushed to the vessel.

The Board notes the Proponent’s commitment to provide the capability to flush the crude transfer lines between the GBS and the riser base of the proposed loading system. The Board reiterates its intention that Condition 5(i) apply to the entire loading system. The Certifying Authority will review the loading system as part of its review of the production installation.

While the proposed loading system appears to have a number of attractive features, only a limited number of systems of this kind have been installed to date and all of these have been supplied by a single manufacturer. The Proponent has not stated that it proposes to use that manufacturer’s system.

The Board believes it would not be appropriate to give its final approval until a specific system is proposed and, therefore, gives its approval in principle subject to the following condition:

CONDITION 90.01.2

It is a condition of the Board’s approval of the Hibernia Development Plan Update that, prior to the final selection of the offshore loading system, the Proponent seek the Board’s approval for the specific system it proposes to install.

4.3.5 Marine Support Vessels

In 1985, the Proponent had proposed the use of a dedicated multi-purpose vessel to perform standby duties and two conventional supply vessels to provide marine support for the facility. The Proponent now proposes to use three vessels, larger than those previously used in the Newfoundland offshore area, to provide standby and supply functions for the Hibernia development.

These vessels are to have multi-function support capability including platform supply, ice surveillance and management, platform standby and evacuation, search and rescue, diving support, oil-spill clean-up and fire-fighting. Each vessel is to be equipped with a helicopter winching area and an on-scene communication control centre. Vessel support for mobile drilling units engaged in drilling subsea wells will be additional to these three ships and will be similar to those that have been used during exploration drilling. A separate diving support vessel may be used to support subsea development and inspection of subsea facilities.

The Board believes that the use of three multi-function vessels, in place of a single dedicated vessel, is acceptable because it provides effective standby coverage even if one of the vessels is temporarily out of service.

The Board notes that the Update does not describe the functional specifications nor the level of ice strengthening proposed for these vessels in their expanded role and the Proponent has informed the Board that this information is not yet available. The Board, therefore, approves this proposal in principle, with the following condition:

CONDITION 90.01.3

It is a condition of the Board’s approval of the Hibernia Development Plan Update that:

• the Proponent provide a functional specification of the marine support vessels for the Board’s approval before finalizing their design; and,
• an assessment of the proposed ice-strengthening for these vessels be performed by an independent third party acceptable to the Board.

4.3.6 Onshore/Inshore Construction Site

Although both the 1985 Hibernia Development Plan and the present Hibernia Development Plan Update describe the steps involved in the construction of major elements of the Hibernia facilities, neither identifies specifically the site(s) in Newfoundland at which construction will occur. However, the 1985 Hibernia EIS used the Adam’s Head site in Placentia Bay as an example and considered the implications of these activities in a generic way for the local environment and the communities in the proximate area.

The Proponent has now informed the Board that the site chosen for construction of the GBS, certain topside facilities and assembly of the completed modules comprising the topside structure is Great Mosquito Cove, in Bull Arm, Trinity Bay (Figure 7). This location is about 12 km from Adam’s Head, on the opposite side of the Isthmus of Avalon.

The Bull Arm site was selected because the water depth at the proposed drydock location and the bathymetry of the immediate area offered considerable economic advantages. These features permitted the deepwater mating and outfitting site to be located close to shore in proximity to the GBS drydock and the topside assembly area. In addition, the lower level of inshore fishing activity and other marine traffic at Bull Arm, and the much more compact construction area will result in less disturbance to the inshore fishery. The other effects of the construction activity on communities in the area are expected to be of the same kind and order of magnitude as those described in the Proponent’s 1985 EIS.

Land-based and near-shore construction site activities are subject to the provisions of The Newfoundland Environmental Assessment Act. The Act permits the Minister of the Environment and Lands to authorize such activities subject to the preparation and implementation by the Proponent of an acceptable comprehensive Environmental Protection Plan (EPP) for the construction site. The Minister has established the Hibernia Construction Site Environmental Management Committee (HCSEMC) to oversee the preparation and implementation of an EPP for the Bull Arm site. HCSEMC is chaired by an Assistant Deputy Minister of the provincial Department of Environment and Lands and is composed of representatives of federal and provincial departments with responsibilities related to the site activities. The Board is represented on the Committee by one of its Vice-Chairmen.

The EPP will contain the information required by contractors so that they may plan their activities at the site in a way that avoids or mitigates potential damage to the environment. It will also provide the mechanism for liaison with local groups and for the timely provision of the information required by provincial and municipal government authorities in their planning for the provision of public services. As part of its EPP preparation process, the Proponent is consulting community groups in the Bull Arm area. In particular, consultations have been initiated with representatives of inshore fishermen concerning the development of a plan for the provision of compensation for any loss of income that may result from displacement of or interference with fishing activity due to construction related activities.

Following its review by HCSEMC, the required scope of work to be contained within the EPP was included by the Proponent in the bid request package provided to prospective GBS contractors in December, 1989. Both bidders for the contract have included in their bid submissions an interim EPP for the first 180 days of construction site activity. The adequacy of the interim EPP’s is being assessed by the Proponent and by HCSEMC, and will provide a basis for preparation of a full “life of project” EPP by the successful bidder.

The Board believes that the implementation of the EPP for the construction phase of the project at the Bull Arm site, together with the Environmental Effects Monitoring Plan and the “life of project” Environmental Protection Plan required by Conditions 12 and 17 of its Decision 86.01, provide an effective, continuous framework for environmental protection during the execution of this project.

The Board also notes that occupational health and safety at construction sites in the Province of Newfoundland is regulated by the Newfoundland Department of Employment and Labour Relations (the Department) pursuant to The Newfoundland Occupational Health and Safety Act and the regulations pursuant to the Act. Under the legislation, the Proponent is ultimately responsible for the occupational health and safety of employees engaged in construction and commissioning of production installations in Newfoundland. In general terms, this responsibility includes the selection of contractors with satisfactory occupational health and safety programs and good safety records. It also includes monitoring their safety performance during the work.

At major construction and assembly sites the Proponent has the additional responsibility of ensuring that a satisfactory occupational health and safety plan that coordinates the activities of the general contractor(s) and subcontractors on the site is in place. Furthermore, the Proponent must establish a program to audit the operation of the site specific plan and ensure that its contractors comply with it and applicable provincial legislation. The Board has, jointly with the Department, developed guidance for the Proponent respecting Construction Phase Occupational Health and Safety and Emergency Response Plans for this phase of the project.

4.3.7 Other Issues from Decision 86.01

The previous sections of Chapter 4 have dealt with the major changes which have taken place in the Hibernia Development Plan since 1985. In this section, the Board notes actions taken by the Proponent in dealing with some of the other issues raised in Decision 86.01.

4.3.7.1 Environmental Loadings

A number of physical environmental design criteria cited in the 1985 Hibernia Development Plan have been modified in the Update as a result of background studies performed since 1986. The Board takes particular note of three of these differences:

• An analysis of results of model testing has led to an increase of 6.2 m in the height of GBS columns above the caisson increasing the clearance between the topside installations and the water surface to 31.2 m.
• Geotechnical investigations have resulted in an increase from 0.5 m to 2.0 m in the height of the skirts which extend below the caisson base slab.
• An increase from 4 MPa to 6 MPa in the estimated crushing strength value for iceberg ice, and an increase of 200 MN in the 500-year return period global iceberg load. The Proponent has informed the Board that these changes result from tests on multi-year ice performed in 1985. The crushing strength is a more conservative value than the 4 MPa resulting from earlier tests on iceberg ice and “…appeared to be the highest, or upper bound, design value that could conceivably be entertained…” (Proponent, Subsequent Correspondence).

The Board reaffirms its intention to ensure that the Certifying Authority verifies and accounts for all environmental design criteria during its review of the facilities.

4.3.7.2 Flaring Of Gas

Condition 3 of the Board’s Decision 86.01 required

1. That the Proponent file for approval by the Board, prior to commencement of development drilling, a specific drilling schedule designed to reduce gas flaring to limits acceptable to the Board;
2. that in the unlikely event that reservoir conditions prevent gas re-injection, the Proponent present to the Board for approval a plan for gas disposal; and,
3. that the Proponent obtain the Board’s approval to flare those small volumes of gas needed for normal operations.

The Proponent has indicated in its Development Well Drilling Schedule (Update, Table 3.4.1) that a gas injection well will be drilled in the first year of drilling activity. This will allow injection of produced gas earlier than had been the case in the previous submission. The Board reiterates the requirement described in Condition 3.

4.3.7.3 Extreme Wind Speed Criteria

Condition 4 of the Board’s Decision 86.01 required

That the Proponent conduct a study on the estimation of extreme winds caused by mesoscale events and submit the results of the study to the Board prior to using them for design purposes.

In a February, 1988 submission to the Board, the Proponent contended that an explicit determination of mesoscale effects upon marine winds was not possible using present techniques, and proposed instead that conservative conversion factors be used to convert hourly-averaged wind speeds to those for shorter averaging periods. The extreme wind speed estimates presented in Table 4.3-3 of the Update were developed using this methodology.

The Board reviewed the Proponent’s submission and consulted the Atmospheric Environment Service of Environment Canada concerning the proposed methodology. The Board concluded that the Proponent’s approach was reasonable for the characterization of extreme wind conditions for design purposes, and that Condition 4 had been satisfied. The Board will ensure that the Certifying Authority for the Hibernia Project verifies and accounts for these design wind speed values during its review of the facilities design.

4.3.7.4 Seismic Design Criteria

Condition 6 of the Board’s Decision 86.01 required

That the Proponent re-evaluate the seismic design criteria taking into account the recent and ongoing studies related to seismic risk on the eastern Canadian Continental Shelf, and submit the results of this re-evaluation to the Board for approval prior to using the results of the study for design purposes.

In 1989, the Proponent contracted a reputable geotechnical and environmental consulting firm to conduct a seismic hazard assessment for the Hibernia site. The study took into account the work related to seismic risk on the eastern Canadian Continental Shelf done since the 1981 Nolan-Ertec study which formed the basis of the Proponent’s 1985 Development Plan submission. The Proponent has stated that it intends to use the results of the latest study in the design of the Hibernia facilities.

The Board requested the seismology section of the Department of Energy, Mines and Resources to review the 1989 assessment. This department has informed the Board that the study took proper account of the changes in the understanding of seismicity in the Hibernia area since the 1985 submission.

The Board is satisfied that the methodology used in developing the seismic design criteria is reasonable. The Board will ensure that the Certifying Authority verifies that the use of these criteria in the design of the structure achieves a reliability level consistent with that intended in the regulations pertaining to the design, construction, and installation of offshore structures. The Board notes that Condition 6 has been satisfied.

4.3.7.5 Produced Water Disposal

Condition 7 of the Board’s Hibernia Development Plan Decision 86.01 required

1. That produced water which is to be discharged be treated to comply with the regulatory requirements existing at the time; and,
2. that before finalizing the design of facilities the Proponent submit for the Board’s approval a plan for the re-injection of produced water in the event that the effects monitoring program should disclose unacceptable environmental damage resulting from that source.

The Proponent states in Section 6.3.4 of the Update with reference to produced water that the “…average oil concentration in the discharged water will be in accordance with the regulatory requirements in effect at the time.”. The Proponent also states in this section that “…provision will be made for disposal of produced water to the water injection system…” should the damage referred to in item (ii) occur.

The Board notes the Proponent’s commitments and observes that the C-NOPB/COGLA Waste Treatment Guidelines published in 1989, provide standards for total hydrocarbon concentration in produced water discharge. The Board also notes with regard to Condition 7(ii) that the facilities proposed in the required reinjection plan will be assessed by the Certifying Authority during its review. Condition 7 is continued without change.

4.3.7.6 Treatment And Discharge Of Fluid Effluents

Condition 8 of the Board’s Decision 86.01 required

1. That the Proponent allow in its design for the facilities to treat storage displacement water should treatment become necessary; and
2. that the Proponent design its facilities so that fluid discharges will occur below the summer thermocline

In Section 6.2.3 of the Update, the Proponent commits itself to fulfilment of Condition 8(i). The Proponent also states in this section that storage displacement water will be discharged below the summer thermocline. The Board notes the Proponent’s commitments, and reiterates its requirement that all waste water be discharged in this manner. Condition 8 is continued.

4.3.7.7 Site Abandonment and Restoration

Condition 10 of Decision 86.01 required

That the Proponent design all subsea facilities such that, upon termination of production, they will be capable of being covered or removed so that the area is returned to a fishable condition, and design the GBS so that it could be removed if the Authorities at that time so require.

The Proponent states in Section 6.6 of the Update that “When the reserves of the Hibernia Field have been recovered, decommissioning and site restoration will be carried out in accordance with applicable regulations in effect at that time.”. In addition, the Proponent explicitly commits to remove all abandoned subsea well equipment above the seafloor and to design the GBS platform for eventual refloating. The Board notes the Proponent’s commitments, and will ensure that the Certifying Authority reviews the suitability of the detailed design of the GBS in that respect.

The Board notes that, among other things, the draft Production and Conservation Regulations require that before a Proponent starts any work or activity authorized by the Board, it shall furnish the Board with evidence of financial responsibility in a form and amount satisfactory to the Board for the purpose of ensuring that it leaves the site where the work or activity was carried out in the manner required by the Board. The Board is presently considering the form and amount of security which should be provided for the Hibernia development and intends to consult with the Proponent before making a determination on this matter.

It is the Board’s decision that Condition 10 of Decision 86.01 be continued and that the financial security contemplated by the draft regulations be provided in accordance with the following Condition:

CONDITION 90.01.4

It is a condition of the Board’s approval of the Hibernia Development Plan Update that 6 months prior to tow-out of the production platform to the Hibernia field, the Proponent provide the Board with the evidence of financial responsibility required by the draft Production and Conservation Regulations.

4.3.7.8 Structural and Foundation Integrity Monitoring

Condition 13 of the Board’s Decision 86.01 required

That the Proponent provide instrumentation for structural and foundation integrity monitoring and that the extent of such instrumentation be determined in consultation with the certifying authority and approved by the Board.

The Proponent commissioned a study on the Hibernia GBS Structural and Foundation Instrumentation and in 1989 provided a copy of the report to the Board. The Board notes that the report makes recommendations pertaining to temporary instrumentation needed to provide information to safely construct and install the GBS, and the long term instrumentation needed to monitor the performance of the structure after installation. The Board also notes that the potential GBS contractors have been made aware of these recommendations. However, a Certifying Authority for the project has not yet been appointed and a final determination has not been made as to the extent of the required instrumentation. Condition 13, therefore, is continued.

5.0 Conclusion

5.1 Hibernia Development Plan Update
Decision 90.01

Having reviewed the Hibernia Development Plan Update, the Board approves the project subject to the four conditions set out below and the continuation of the conditions contained in its Hibernia Decision 86.01, the status of which is summarized in Sections 5.2 and 5.3:

Condition 90.01.1

It is a condition of the Board’s approval of the Hibernia Development Plan Update that:

1. Upon the appointment of the engineering contractor for the project, the Proponent provide for the information of the Board and the Certifying Authority a copy of its updated consequence analysis document;
2. Upon its completion, the Proponent provide for the information of the Board and the Certifying Authority the report issuing from its formal Hazard and Operability Study; and
3. Six months prior to the date scheduled for the installation of the production platform at Hibernia, the Proponent submit, for the Board’s approval, the Safety Plan required by the draft Production and Conservation Regulations.

Condition 90.01.2

It is a condition of the Board’s approval of the Hibernia Development Plan Update that prior to the final selection of the offshore loading facilities, the Proponent seek the Board’s approval for the specific system it proposes to install.

Condition 90.01.3

It is a condition of the approval of the Hibernia Development Plan Update that:

1. the Proponent provide a functional specification of the marine support vessels for the Board’s approval before finalizing their design
2. an assessment of the proposed ice-strengthening criteria for these vessels be performed by an independent third party acceptable to the Board.

Condition 90.01.4

It is a condition of the Board’s approval of the Hibernia Development Plan Update that 6 months prior to the tow-out of the production platform to the Hibernia field, the Proponent provide the Board with the evidence of financial responsibility required by the draft Production and Conservation Regulations.

5.2 Hibernia Benefits Plan
Decision 86.01 Status

The Board has reviewed the status of the five conditions attached to its 1986 approval of the Hibernia Benefits Plan. The present status of those conditions is summarized below:

Condition #1

That the Proponent consider all reasonable alternatives to provide for maximum Canadian participation in shuttle tanker construction, and inform the Board of the results of these investigations.

Status: Continued.
The Proponent agreed to examine alternative as contracting plans evolve.

Condition #2

That, prior to the start of production, the Proponent submit a training and staffing plan reflecting the maximum reasonable employment and training of residents of Newfoundland.

Status: Continued.

Condition #3

That the Proponent re-examine the feasibility of assembling and outfitting the main support frame in Newfoundland and provide further documentation to enable the Board to evaluate the matter.

Status: Rescinded.
Condition no longer applicable because of elimination of main support frame from design concept.

Condition #4

That, as the project evolves, the Proponent provide to the Board comprehensive listings of all major contracts and purchase orders anticipated. The Board, in consultation with the Proponent, will determine which of these major contracts and purchase orders will be subject to Board review.

Status: Continued.
The Board has established, in consultation with Proponent, procurement monitoring guidelines for this purpose. Compliance by the Proponent with these guidelines will satisfy this Condition and Condition 5.

Condition #5

That the Proponent provide advance notice of and information on major contracts and purchase orders to enable the Board to conduct its review. The review time required will be determined by the Board, in full consultation with the Proponent.

Status: Continued.
See commentary for Condition 4.

5.3 Hibernia Development Plan
Decision 86.01 Status

The Board has reviewed the status of the seventeen conditions attached to its 1986 approval of the Hibernia Development Plan. The present status of those conditions is summarized below:

Condition #1

1. That the Proponent at a very early stage in the development program, drill a well in the area of the B-08 gas cap, to obtain samples for laboratory analyses and define a gas-condensate-oil regime; and,
2. that the Proponent undertake studies, concurrent with initial development drilling, to establish the feasibility of a miscible flood for the Hibernia Reservoir.

Status: Continued.

Condition #2

1. That prior to any development of the Avalon Reservoir, the Proponent submit a revised plan for the Board’s approval;
2. that during development of the Hibernia Reservoir, the Proponent evaluate the Avalon Reservoir by coring, logging and testing all prospective zones penetrated by wells drilled to the Hibernia Reservoir; and,
3. that during the design of topside facilities, the Proponent give due consideration to sizing equipment and allocating space for production facilities and utilities, sufficient to accommodate additional production from the Avalon Reservoir concurrently with Hibernia production, should there be a requirement to produce the Avalon Reservoir prior to the time contemplated in the Development Plan, and that the Proponent report to the Board on its actions in this regard before the topside facilities design is finalized.

Status: Continued.

Condition #3

1. That the Proponent file for approval by the Board, prior to commencement of development drilling, a specific drilling schedule designed to reduce gas flaring to limits acceptable to the Board;
2. that in the unlikely event that reservoir conditions prevent gas-reinjection, the Proponent present to the Board for approval a plan for gas disposal; and,
3. that the Proponent obtain the Board’s approval to flare those small volumes of gas needed for normal operations.

Status: Continued.
The Proponent has indicated that a gas injection well will be drilled during first year of development drilling activity.
[Update Table 3.4.1]

Condition #4

That the Proponent conduct a study on the estimation of extreme winds caused by mesoscale events and submit the results of the study to the Board prior to using them for design purposes.

Status: Satisfied.
The Proponent has indicated that quantitative estimation of mesoscale effects presently is not feasible, and proposed a conservative methodology for estimation of design wind speeds averaged over short periods. The Board has consulted the Atmospheric Environmental Service and has concluded that the proposed methodology is reasonable. The Certifying Authority will verify and account for these values during its review.
[Update, Section 4.3.2]

Condition #5

1. That the Proponent design the export lines and loading platforms so that they can be flushed of hydrocarbons if there is risk of damage to those facilities; and,
2. that the design iceberg scour depth be determined by the Proponent and approved by the Board prior to the design of subsea well installations.

Status: Continued.
The Proponent states with respect to item (i) that export lines will be capable of being flushed. The status of loading risers is unclear. The Board notes that the potential for flushing risers to tankers appears to exist, and reiterates this Condition.
[Update, Sections 6.5.1, 6.5.2, 6.5.3]

Condition #6

That the Proponent re-evaluate the seismic design criteria, taking into account the recent and ongoing studies related to seismic risk on the eastern Canadian Continental Shelf, and submit the results of this re-evaluation to the Board for approval prior to using the results of the study for design purposes.

Status: Satisfied.
The Proponent commissioned a study for this purpose, and has committed to use the results in the design. The Board has reviewed study in consultation with Department of Energy, Mines and Resources and is satisfied that the proposed methodology is reasonable. The Certifying Authority will verify and account for design values during its review.
[Update, Section 5.5.2]

Condition #7

1. That produced water which is to be discharged be treated to comply with the regulatory requirements existing at the time; and
2. that before finalizing the design of facilities the Proponent submit for the Board’s approval a plan for the re-injection of produced water in the event that the effects monitoring program should disclose unacceptable environmental damage resulting from that source.

Status: Continued.
The Proponent has committed to item (i), and to the provision in the facilities design for the re-injection of produced water.
[Update, Section 6.3.4]

Condition #8

1. That the Proponent allow in its design for the facilities to treat storage displacement water should treatment become necessary; and
2. that the Proponent design its facilities so that fluid discharges will occur below the summer thermocline.

Status: Continued.
The Proponent has committed to item (i), and has indicated that storage displacement water will be discharged below the thermocline. The Board notes that item (ii) applies to all waste water discharges.
[Update, Section 6.2.3]

Condition #9

That the Proponent obtain specific approval from the Board for its plans for subsea installations prior to proceeding with the detailed design of these facilities.

Status: Continued.

Condition #10

That the Proponent design all subsea facilities such that, upon termination of production, they will be capable of being covered or removed so that the area is returned to a fishable condition, and design the GBS so that it could be removed if the Authorities at that time so require.

Status: Continued.
The Proponent has explicitly committed to remove all subsea well equipment above seafloor, and to design the GBS for eventual refloating.
[Update, Section 6.6]

Condition #11

That oil-contaminated cuttings be discharged below the summer thermocline.

Status: Continued.

Condition #12

That prior to production, the Proponent submit, for the Board’s approval, its plans for environmental compliance and effects monitoring programs.

Status: Continued.

Condition #13

That the Proponent provide instrumentation for structural and foundation integrity monitoring and the extent of such instrumentation be determined in consultation with the Certifying Authority and approved by the Board.

Status: Continued.

Condition #14

That prior to the installation of the facilities, the Proponent obtain the Board’s approval of detailed plans for worker safety.

Status: Amended.
See Condition 90.01.1.

Condition #15

That the Proponent provide periodically to the Board, during the execution of the project, in a form to be prescribed, estimates of the expected capital cost for the project as a whole and for those major components which the Board shall request.

Status: Continued.

Condition #16

That prior to production, the Board will establish the dimensions of a fishing exclusion zone following consultation with the Department of Fisheries and Oceans, the fishing industry and the Proponent.

Status: Continued.

Condition #17

That the Proponent, prior to production, submit to the Board for approval, an Environmental Protection Plan describing its systems, procedures, plans and agreements for environmental protection.

Status: Continued.