Disappointments don't dull optimism
Production is up from Newfoundland and Labrador's Terra Nova field, and the White Rose project is on target for production in the second half of 2005. Nova Scotia is seeing an active drilling season, and the groundwork is being laid for even more.
Despite positive news from the region, Atlantic Canada still runs the risk of losing international interest if a new large discovery is not found soon. With the clock ticking, Eastern Canada is looking for the next big thing.
Gordon Carrick, East Coast vice president for Petro-Canada, said 1Q 2003 production from the Terra Nova field in the Jeanne d'Arc basin off Newfoundland is up. Carrick told attendees at the Newfoundland Ocean Industries Association annual meeting in mid June that production now stands at 180,000 b/d.
Terra Nova received sanction to increase production to 150,000 b/d in December of last year. The increase to 180,000 b/d came the following month.
Unfortunately, all of Petro-Canada's news is not positive. The company participated in two deepwater dry holes in the Flemish Pass off Newfoundland. Both Mizzen and Tuckamore were plugged and abandoned. Despite disappointments, Carrick said the company continues to be optimistic about Atlantic Canada. "The East Coast continues to be a significant part of Petro-Canada's focus," he said.
The next significant project will be drilling in the Far East segment of the Terra Nova field. This region represents one of the most important growth opportunities in Atlantic Canada, according to Carrick. Two wells have been drilled, and a third is planned, Carrick said.
Threshold reserves are being established, and Petro-Canada is hoping to sanction development next year. According to Carrick, the field could be the first offshore Eastern Canada to be tied back to an existing platform.
White Rose on target
Meanwhile, participants in the ongoing White Rose project hope that it will pave the way for future development. Management from Technip CSO, Samsung Heavy Industries, SBM-Canada, Aker Maritime Kiewit Contractors, and Mærsk Contractors presented an update on the White Rose project to participants at the NOIA meeting in June.
According to Pierre Jerome, project director for White Rose at AMKC, as the first engineering, procurement, and construction fixed-price offshore module contract in the province and the first project to be completely engineered in Newfoundland, "White Rose has set a benchmark in Atlantic Canada."
The hope is that another first will be for the project to be completed on time and on budget, something the contractors are all striving for. According to Dr. Will Roach, Husky's East Coast general manager, "Husky Energy and partner Petro-Canada are living up to their commitments on White Rose."
Partners in the project are optimistic that the industry will find a way to build on the successes demonstrated by White Rose. White Rose will show that Grand Banks fields can be developed effectively and efficiently, according to Walter DeBoni, vice president of Canada frontier and international business at Husky. DeBoni believes the successful completion of the White Rose project will stimulate more exploration and development off Newfoundland. Already, Husky has plans for more exploration activity on the Grand Banks this year, DeBoni said.
The company's East Coast expenditures for 2003 are 30% of the total budget, with $385 million going to White Rose alone, he said.
The challenge is to keep the ball rolling, but DeBoni is optimistic that White Rose will provide the momentum needed for that to happen. "If a puffin can fly with a belly full of capelin, surely we can make the offshore of Newfound-land and Labrador successful," he said.
New acreage on offer
In mid May, the Canada-Newfound-land Offshore Petroleum Board (Cnopb) announced a new bidding round comprising 14 parcels: two in the Northeast Newfoundland shelf, 10 in the Orphan Basin, and two in the Flemish Pass. Bids will close Dec. 17, 2003.
According to the Cnopb, the sole criterion for selecting winning bids will be the total amount of money the bidder commits to spend on exploration during the first five years. Successful bidders will be issued an exploration license for a term of nine years. To validate the license for the second period, a well must be spudded during the first period.
The Canada-Nova Scotia Offshore Petroleum Board (Cnsopb) announced its call for bids in late June for four parcels covering an area of 250,524 hectares. Bids will close Nov. 6, 2003.
Successful bidders will be issued an exploration license for a term of nine years consisting of two consecutive periods. These licenses also require a well to be drilled in the first five years.
Drilling heats up off Nova Scotia
While the provinces offer new prospects for bid, a number of companies are beginning exploration drilling.
Canadian Superior Energy Inc. has teamed up with El Paso Corp. subsidiary El Paso Oil and Gas Canada, Inc. to drill the first well on its shallow-water Mariner block 275 km southeast of Halifax. The well will be one of the deepest wells drilled in Canada this year. Three large prospects have been identified on high-resolution seismic covering a 101,800-acre area. The Mariner prospect directly offsets five significant discoveries near Sable Island, including the 1.6-tcf Venture natural gas field.
The company is also bidding for a seismic contractor to conduct a targeted high-resolution 3D seismic survey on the Marquis block 20 km northwest of Sable Island.
According to Mike Coolen, director of East Coast operations, work is also progressing on Canadian Superior's deepwater Mayflower block.
"We have received approval from the Cnsopb for our Mayflower Canada-Nova Scotia Benefits Plan," Coolen said. "We are currently in the process of securing a partner for our Mayflower project, and we plan to proceed with high priority seismic data over Mayflower later this year to define Mayflower for drilling during 2004."
The Mayflower block is 457 km east of Boston, Massachusetts.
Imperial Oil Resources Ventures Ltd. is drilling the fourth deepwater exploration well off Nova Scotia in two years. Imperial will drill the Balvenie prospect on EL 2378 about 300 km southeast of Halifax.
While Imperial gets back in the game, EnCana, which recently put its Deep Panuke gas project offshore Nova Scotia on hold, is looking for opportunities in the Nova Scotia offshore. According to Rob MacQueen, manager of commercial services for EnCana's East Coast business unit, the company has not abandoned Atlantic Canada in deciding to halt the Deep Panuke project. "We at EnCana are trying to figure out how to stay in Eastern Canada, not how to go," he said.
The company planned to drill three to six wells off Eastern Canada this year and is already drilling well number four, Margaree offshore Nova Scotia. A 3D seismic program is being acquired over the Stonehouse acreage off Nova Scotia in preparation for additional drilling.