Western Canada offshore leasing pushed by task force

Three major basins off British Columbia are a target for leasing. [53,031 bytes] The oil and gas exploration and development activity taking place off Newfoundland and Nova Scotia isn't lost on the rest of maritime Canada, especially now that fishing and forestry operations are facing increasing limitations. Newfoundland is revitalizing after a de cade of severe unemployment.

Three basins have significant potential

The oil and gas exploration and development activity taking place off Newfoundland and Nova Scotia isn't lost on the rest of maritime Canada, especially now that fishing and forestry operations are facing increasing limitations. Newfoundland is revitalizing after a de cade of severe unemployment.

A task force in British Columbia will shortly convene a panel aimed at lifting a moratorium on the Hecate Strait and Queen Charlotte Sound. The Hecate Strait lies due east of the Queen Charlotte Islands and is somewhat sheltered from Pacific storms. Queen Charlotte Sound is in shallow water in a more exposed region south of the Queen Charlotte Islands and north of Vancouver Island.

The North Coast Oil and Gas Task Force, headquartered in Prince Rupert, British Columbia, is attempting to lift the ban on offshore exploration on Canadian West Coast exploration, beginning with the two water bodies. Currently, Chevron, Petro-Canada, and Mobil hold leases in the area.

"We are confident that, with the technology available and the present laws in place in Canada and British Columbia, this can be done safely," states a task force's board of directors . "The resource, when proven and handled properly, could open the doors to strong economic growth for the region."

Exploration history

In addition to 14 exploration wells drilled on the surrounding islands, Shell Canada drilled six wells in the Hecate Strait and two in Queen Char lotte Sound in the 1965-69 period. By 1969, the Santa Barbara oil spill and proposals to ship Alaska's North Slope oil down the coastline of British Columbia changed the outlook for operations off the entire Pacific North America coastline.

In 1972, the Canadian government imposed a moratorium to prevent crude oil tankers from taking the Dixon Strait route, which transited Hecata Strait and Queen Charlotte Sound. Subsequently, drilling was prohibited. By 1981, the British Columbia government imposed a moratorium in Johnstone Strait and the Straits of Georgia and Juan de Fuca. The latter separates the US and Canada.

In the early 1980s, discussions began over some of the conditions in which exploration might be allowed, although neither the federal nor provincial moratorium was removed. At that time, reserves of only 150 million bbl and 6 Tcf were estimated for the entire western coastline. An environmental assessment panel presented recommendations on new exploration off Vancouver Island in 1984.

In 1993, the British Columbia Science Council stated that much more drilling would be required to adequately assess the hydrocarbon potential, but that preliminary investigation of structures indicated that North Sea size accumulations could be present. The Geological Survey of Canada boosted the petroleum potential of the Queen Charlotte Basin to 2.5 billion bbl of oil and 20 Tcf of gas in 1995, or about three times the reserves of Hibernia.

Potential

The task force estimated revenue loss to British Columbia, by the lack of royalty and tenure sales from drilling and production, was at $300-400 million per year. For Prince Rupert, a likely service and support base for regional drilling, the problem is an inability to shift to a higher technical content in employment and training. The task force is thinks industry would locate there if a source of oil and gas could be confirmed.

The task force has been making presentations to the various elected governments of communities bordering the two water bodies. The region has a population of about 70,000 people and the regional economy is beginning to suffer.

"If the government of the Province of British Columbia would be interested in discussing these matters, the government of Canada would certainly entertain that conversation and approach the whole process in a very constructive and open-minded fashion," stated Ralph Goodale, Canada's Minister of Natural Resources in an interview earlier this year.

Survey due

The Geological Survey of Canada is releasing a report on the hydrocarbon resource potential of major basins of sedimentary rock on the Pacific Margin of Canada. The report will be important in shaping the renewal of exploration off Pacific Canada. The three basins to be evaluated include:
  • Tofino Basin: This area overlies the convergent plate margin west of Vancouver Island. A Tertiary structural play appears to be important, although estimates of oil potential are not as optimistic as other areas. This area has a single identified play.
  • Queen Charlotte Basin: This area is a trans-tensional basin lying adjacent to the transform boundary between the North American and Pacific plates. Miocene and Pliocene gas plays are possible.
  • Georgia Basin: This sedimentary basin lies on the eastern side of Vancouver Island and adjacent Georgia Strait, and is partly overlain by the Fraser River delta. With the presence of large closed structures, the Cretaceous structural play appears to offer signficant potential.
According to a statement by Kirk Osadetz and Peter Hannigan of the Geological Survey, "The location of these sedimentary basins at complex plate margins results in a variety of depositional settings affecting hydrocarbon source rock potential, reservoir development, and the timing of geological events. The complex interactions of tectonic plates result in a highly variable and complicated geological history that produces large geographic variations in hydrocarbon generation, migration, and entrapment."

The indications of hydrocarbons include:

  • Gas production from Pleistocene sediments in the Fraser delta
  • Good gas show from a well on the Olympic Peninsula (US)
  • Numerous seepages and other surface hydrocarbons, in wells, and on seismic sections throughout the region.
Previous estimates of hydrocarbons for the three areas approximate 9.8 billion cu meters of oil (one-third recoverable) and 43.4 Tcf of gas (nine-tenths recoverable). The study predicted that some 97 gas fields larger than 3 Bcm are predicted to occur in west coast plays.

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