Challenger Minerals _North Sea_ Ltd Environmental Management

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					Challenger Minerals (North Sea) Ltd

Environmental Management System


      Public Statement 2009




       Langlands House, Huntly Street,
            Aberdeen, AB10 1SH
                                                                          Public Statement 2009


1          Introduction
In order to fulfil the objectives of OSPAR Recommendation 2003/5 to Promote the Use and
Implementation of Environmental Management Systems by the Offshore Industry, the Department of
Energy and Climate Change (DECC) requires all operators of seaward licences to have an accredited
Environmental Management System (EMS). In its guidance on the Recommendation, DECC requires
all operators of offshore installations (including exploration and appraisal drilling) to produce an annual
public statement covering all activities during the previous calendar year. This document represents
Challenger Minerals (North Sea) Ltd’s (CMNSL) annual public statement for 2009.




2          Challenger Minerals (North Sea) Ltd
CMNSL is an affiliate of Challenger Minerals Inc (CMI). CMI is an offshore exploration and production
company with a global portfolio of operations, delivering energy solutions for the benefit of its
co-venturers and asset owners. Both CMNSL and CMI are wholly owned subsidiaries of Transocean,
the world's largest offshore contract driller. Applied Drilling Technology International (ADTI), the
world’s leading turnkey drilling company is also a subsidiary of Transocean. ADTI provides drilling
management services to CMNSL. CMI began screening and developing projects in the North Sea in
2001 and became a qualified North Sea operator in 2005. CMNSL is currently the operator of acreage
in Liverpool Bay and the central North Sea, as well as being a partner in several other North Sea
licenses (Figure 2.1).

                   Figure 2.1      CMNSL license areas on the UKCS




May 2010                                                                                                 1
                                                                      Public Statement 2009


3          Environmental Management System
CMNSL has an externally verified Environment Management System that meets the requirements of
ISO 14001. The system was originally verified by Lloyd's Register Quality Assurance (LRQA) on 15
August 2006 to meet these requirements, and has been approved by DECC. It was last re-verified by
LRQA on 2 April 2009.

The Management System describes the management controls in place to ensure that all CMNSL
operations (ie those relating to exploration, development, production and decommissioning activities)
are conducted in a responsible manner with respect to environmental issues and in accordance with
the Transocean environmental policy (Figure 3.1). The scope of the management system covers all
activities both offshore and onshore.

            Figure 3.1    Transocean environmental policy statement




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                                                                      Public Statement 2009


4          Environmental goals, objectives and targets
As required by the international standard for environmental management systems (ISO 14001),
CMNSL has identified the potentially significant environmental aspects and impacts of its operations,
and has developed objectives and targets designed to improve the environmental performance of
these activities. In addition to the potentially significant environmental impacts identified for UK
operations, environmental objectives are also influenced by global corporate commitments and
environmental legislation.

During 2009, the only offshore activities undertaken by CMNSL were drilling operations at the Crosby
exploration well (Section 5). From the potentially significant environmental impacts which relate to
exploration drilling operations, one main environmental objectives was set for 2009. This was to
ensure no oil or chemcial spills of any kind to the environment which was completed successfully for
the Crosby operations.

The CMNSL environmental policy also requires that operations comply with all relevant environmental
legislation and other agreements (Figure 3.1). Compliance was successfully achieved for all 2009
operations.
In addition, the environmental impact assessment (EIA) carried out prior to drilling the Crosby well
identified mitigation measures which could be employed to reduce the potential environmental impact
of these operations. These measures were successfully implemented through the environmental
management plan (EMP), designed specifically for the Crosby well, which outlined the mitigation
measures and associated roles and responsibilities.




5          Offshore activities and environmental performance 2009

5.1        Well 110/14d-8 (Crosby)
During 2009, CMNSL’s offshore activities consisted of drilling one exploration well – Well 110/14d-8
(Crosby). This exploration well was located in Block 110/14d in the Liverpool Bay area, approximately
16 km west of Formby on the Lancashire Coast (Figure 5.1).
                  Figure 5.1     Location of Crosby exploration well




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                                                                         Public Statement 2009


CMNSL acts as operator of Block 110/14d on behalf of its joint venture partners:

       Atlantic Petroleum UK Ltd;
       Dyas UK Ltd;
       First Oil Expro Ltd;
       Providence Resources UK Ltd;
       Palace Exploration Company.

Drilling operations were conducted on behalf of CMNSL by ADTI using the Ensco 92 jack-up drilling rig.
Drilling began on 8 June 2009 and operations ended on 28 June 2009. A hydrocarbon bearing
formation was encountered, but it proved to have an excessive water content and the well was
plugged and abandoned as a dry hole.



5.2        Environmental performance
This section summarises the environmental performance for the Crosby well using information
submitted to the Environmental Emissions Monitoring System (EEMS) and other data sources.

5.2.1      PON1 submissions

Under the Offshore Petroleum Activities (Oil Pollution Prevention and Control) Regulations 2005, in the
event of any oil or chemical spill within 500 m of a drilling rig or fixed platform, a PON1 form must be
submitted to DECC and other relevant authorities informing them of the incident. There were no PON1
submissions during CMNSL’s offshore activities in 2009.

5.2.2      Produced water discharges

Under the OPPC Regulations, oil in water levels in produced water discharged to sea must not exceed
30 parts per million (ppm). Exploration drilling operations at the Crosby well did not generate any
produced water.

5.2.3      Cuttings discharge to sea

The Crosby well was drilled entirely using water base drilling muds (WBM) and the drill cuttings
generated were either deposited directly onto the seabed or discharged to sea once returned to the
drilling rig, as is standard practice in the UK. A total of 506.2 tonnes of cuttings were discharged
during drilling operations.

5.2.4      Chemical use and discharge

Chemcial use and discharge during offshore operations is controlled by the Offshore Chemicals
Regulations 2002 (OCR regulations). These regulations introduced the OSPAR Harmonised Mandatory
Control Scheme for the use of chemicals offshore. Chemicals are ranked according to a hazard
quotient (HQ) calculated using the Chemical Hazard and Risk Management model (CHARM). The HQ
ranking is divided into colour bands from least to most hazardous (Gold to Purple).

There are some chemicals to which the CHARM model cannot be applied eg inorganic substances. In
such cases, chemicals are assigned a grouping under the Offshore Chemical Notification Scheme
(OCNS) based on their toxicity characteristics (A to E). Chemicals which are environmentally benign in
seawater are termed as ‘Poses Little or NO Risk’ (PLONOR). All PLONOR products are given an ‘E’
rating (least hazardous).

A summary of chemicals regulated under The Offshore Chemicals Regulations 2002 used and
discharged during operations at Crosby is presented in Table 5.1. Chemicals are divided according to
either their HQ colour band or ranking category. The majority of chemicals used and discharged were
classified as PLONOR and/or were in the least environmentally hazardous categories.

Certain chemical components are marked with a ‘substitution warning’ as they are listed on the OSPAR
list of chemicals for priority action or due to characteristics such as high toxicity/poor biodegradation
potential. These chemicals must be replaced with a more environmentally friendly product within a
given timescale. Nine chemical products with substitution warnings were included in the PON 15B
chemical permit application for the Crosby well.




May 2010                                                                                               4
                                                                               Public Statement 2009


The majority of these chemicals were included as contingency in case downhole conditions required
their use, but were not required during operations at the Crosby well. Only two chemicals with
substitution warnings, a surfactant and hydraulic fluid for which no alternatives are currently available,
were used.

                        Table 5.1            Chemical use and discharge quantities
                                             for 2009

                                                Amount used       Amount discharged
                              Category
                                                  (tonnes)            (tonnes)
                        Gold*                         7.01                   5.71
                        Silver                        0.00                   0.00
                        White                          0.00                  0.00
                        Blue                           0.00                  0.00
                        Orange                         0.00                  0.00
                        Purple                         0.00                  0.00
                        OCNS A                         0.00                  0.00
                        OCNS B                         0.20                  0.00
                        OCNS C                         0.00                  0.00
                        OCNS D                         0.55                 0.55
                        OCNS E*                    1,556.67             1,356.53
                        Total                    1,564.43               1,362.79
                        *
                             Least hazardous categories.

5.2.5      Waste

As an oil and gas operator, CMNSL records the amount and disposal route of any waste generated and
disposed of in the UK via EEMS. Under the relevant environmental legislation, waste generated during
exploration activities must be segregated and stored appropriately for disposal onshore. Waste is
typically segregated and recorded according to the following categories:

       Group 1 is special waste such as oils, paints, surplus chemicals etc, and these are mainly
        recycled.
       Group 2 is general waste including domestic waste and much of this has to go to landfill.
        Segregated materials such as scrap metal, plastics, paper/cardboard and clean wood are
        recycled.
       Group 3 is hazardous waste including asbestos, clinical and explosive materials.
       Group 4 is waste from drilling (eg contained low toxicity oil base mud (LTOBM) contaminated
        cuttings). Referred to as ‘backloaded’ cuttings.
       Group 5 waste is Naturally Occurring Radioactive Material (NORM) from mineral scales which
        build up in processing equipment and pipe work (generally from production installations only).

The types, quantities and disposal methods for waste generated during 2009 operations are shown in
Table 5.2. Approximately 21 tonnes of waste was generated during the Crosby operations. Due to the
nature of the majority (86%) of this waste, it could not be recycled or reused as was disposed of in
landfill. As only water base drilling muds were used during operations, all drill cuttings generated were
discharged to sea. Therefore no cuttings were returned to shore as Group IV waste.

Table 5.2           Waste generation 2009

                                                     Waste to
                             Reuse     Recycling                Incinerate    Landfill    Other       Total
    Waste category                                   energy
                            (tonnes)    (tonnes)                 (tonnes)     (tonnes)   (tonnes)   (tonnes)
                                                     (tonnes)
Group I – Special              0         0              1.40        0           0           0        1.40
Group II - General             0         1.55           0           0          18.00        0       19.55
Group III - Other              0         0              0           0           0           0        0
Group IV –
                               0         0             0            0           0           0        0
Backloaded cuttings
Group V - NORM                 0         0              0           0           0           0        0
Total (tonnes)                 0         1.55          1.40         0          18.00        0       20.95




May 2010                                                                                                       5
                                                                        Public Statement 2009


5.2.6      Atmospheric emissions

No flaring activities were conducted at the Crosby well, therefore atmospheric emissions were only
recorded for diesel fuel consumption of the drilling rig. A total of 124.9 tonnes of diesel were used by
the drilling rig for the Crosby well which produced an estimated 434 tonnes of CO2 equivalents. The
atmospheric emissions generated are summarised in Table 5.3.

                            Table 5.3     Atmospheric emissions 2009

                                              Atmospheric emissions
                                                    (tonnes)
                                   CO2                  399.68
                                   NOx                    4.55
                                   N2O                    0.03
                                   SO2                     0.50
                                   CO                      1.04
                                   CH4                     0.01
                                   VOC                     0.15




May 2010                                                                                              6

				
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