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June 22nd, 2005, 05:52 AM
Oil industry pins exploration hopes on Newfoundland's offshore frontier
Last Updated Tue, 21 Jun 2005 15:08:15 EDT
CBC News
Oil companies are revealing details about future drilling plans off the coast of Newfoundland – with interest rising in new basins that could extend the life of the offshore oil industry.
At the Newfoundland Ocean Industries Association conference in St. John's this week, delegates were buzzing about exploration activity beyond the Jeanne d'Arc basin, home to the four main wells in the province's burgeoning industry.
With the province's third field expected to be in production by Christmas, the oil industry is looking more intently at frontier exploration.
The conference's title – New Basins, Strong Markets, Global Opportunities – points to one of the key issues in the provincial oilpatch: what's next.
Hibernia and Terra Nova are both in full production. First oil is expected to be drawn from White Rose later this year.
The partners developing the Hebron field signed an operating agreement this spring, although a formal decision on production is months away.
Delegates attending the NOIA conference are wondering where the next frontier will be, and when it might be developed.
David Taylor, vice-president of exploration with Calgary-based Husky Energy, told the conference about the company's plan to drill an exploratory well in South Whale Basin, south of the Avalon Peninsula.
The rig Rowan Gorilla VI "has been contracted and we should have it in the field on July 2," Taylor said.
Chevron Canada is preparing a very expensive exploration well next year in the deep water of the Orphan Basin, off Newfoundland's east coast.
How expensive? "The cost will be $10 a second, while we're operating," says executive Drew Taylor, operations manager of east coast exploration with Chevron Canada.
The Laurentian Basin, which lies south of the Burin Peninsula, is also on oil companies' radar, although the area has been largely unexplored.
Kent Lissak, a director of business affairs with ConocoPhillips Canada, says the company is far from sure about what they will find.
"At best, we're facing a one-in-10 to one-in-15 chance of finding hydrocarbons there," he said.
By the end of this decade, several potential oil fields will have been explored. However, there are no guarantees about whether any of them will be as lucrative as the fields in the Jeanne d'Arc basin.
Exploration process can be lengthy and difficult
Experience has also shown that the road from exploration to production can be a lengthy one.
After years of exploration, the Hibernia field was announced in 1979.
Years of haggling – including court battles between the federal and provincial governments – ensued, as well as a delay prompted by the 1992 pullout of the Hibernia consortium's partners. Hibernia eventually pumped its first oil in 1997.
Terra Nova, which was discovered in 1987, began production in 2002.
As for White Rose, the production vessel Sea Rose – which cost about $1 billion to build – will be ready to sail away from Marystown, on the south coast of Newfoundland, later this summer.
Ruud Zoon, the general manager of east coast development for Husky Energy, told NOIA delegates that work in Marystown went well.
"This is one of the very few megaprojects in Canada that is still very much on budget and on schedule," Zoon said.
Husky and its partners are aiming to pump oil from the Terra Nova field in November or December.
Last Updated Tue, 21 Jun 2005 15:08:15 EDT
CBC News
Oil companies are revealing details about future drilling plans off the coast of Newfoundland – with interest rising in new basins that could extend the life of the offshore oil industry.
At the Newfoundland Ocean Industries Association conference in St. John's this week, delegates were buzzing about exploration activity beyond the Jeanne d'Arc basin, home to the four main wells in the province's burgeoning industry.
With the province's third field expected to be in production by Christmas, the oil industry is looking more intently at frontier exploration.
The conference's title – New Basins, Strong Markets, Global Opportunities – points to one of the key issues in the provincial oilpatch: what's next.
Hibernia and Terra Nova are both in full production. First oil is expected to be drawn from White Rose later this year.
The partners developing the Hebron field signed an operating agreement this spring, although a formal decision on production is months away.
Delegates attending the NOIA conference are wondering where the next frontier will be, and when it might be developed.
David Taylor, vice-president of exploration with Calgary-based Husky Energy, told the conference about the company's plan to drill an exploratory well in South Whale Basin, south of the Avalon Peninsula.
The rig Rowan Gorilla VI "has been contracted and we should have it in the field on July 2," Taylor said.
Chevron Canada is preparing a very expensive exploration well next year in the deep water of the Orphan Basin, off Newfoundland's east coast.
How expensive? "The cost will be $10 a second, while we're operating," says executive Drew Taylor, operations manager of east coast exploration with Chevron Canada.
The Laurentian Basin, which lies south of the Burin Peninsula, is also on oil companies' radar, although the area has been largely unexplored.
Kent Lissak, a director of business affairs with ConocoPhillips Canada, says the company is far from sure about what they will find.
"At best, we're facing a one-in-10 to one-in-15 chance of finding hydrocarbons there," he said.
By the end of this decade, several potential oil fields will have been explored. However, there are no guarantees about whether any of them will be as lucrative as the fields in the Jeanne d'Arc basin.
Exploration process can be lengthy and difficult
Experience has also shown that the road from exploration to production can be a lengthy one.
After years of exploration, the Hibernia field was announced in 1979.
Years of haggling – including court battles between the federal and provincial governments – ensued, as well as a delay prompted by the 1992 pullout of the Hibernia consortium's partners. Hibernia eventually pumped its first oil in 1997.
Terra Nova, which was discovered in 1987, began production in 2002.
As for White Rose, the production vessel Sea Rose – which cost about $1 billion to build – will be ready to sail away from Marystown, on the south coast of Newfoundland, later this summer.
Ruud Zoon, the general manager of east coast development for Husky Energy, told NOIA delegates that work in Marystown went well.
"This is one of the very few megaprojects in Canada that is still very much on budget and on schedule," Zoon said.
Husky and its partners are aiming to pump oil from the Terra Nova field in November or December.