Deepwater holds critical hydrocarbon potential

Extreme volatility in gas prices is pushing exploration into deepwater. According to David Brown of the Canada Nova Scotia Offshore Petroleum Board, increasing demand and decreasing production create a situation that is "simply unsustainable." The petroleum industry is looking toward deepwater to meet demand, Brown told attendees of the Canadian Offshore Resources Exhibition and Conference in Halifax, Nova Scotia.

Extreme volatility in gas prices is pushing exploration into deepwater. According to David Brown of the Canada Nova Scotia Offshore Petroleum Board, increasing demand and decreasing production create a situation that is "simply unsustainable." The petroleum industry is looking toward deepwater to meet demand, Brown told attendees of the Canadian Offshore Resources Exhibition and Conference in Halifax, Nova Scotia.

Increasing demand is the catalyst that is opening up the world's deepwater frontiers, and the proximity of Nova Scotia makes it an obvious target for the growing needs of North America, particularly the United States, where the vast majority of the continental shelf is off limits for E&P. According to numbers Brown presented, there is a 90% chance of finding 5 tcf of gas in Nova Scotia's deepwater, and there is a good chance that much larger reserves will be discovered. Brown believes better seismic interpretation and more deepwater drilling will turn up the elephants lurking in Atlantic Canada's deepwater plays.

Phonse Fagan of Newfoundland and Labrador's department of mines and energy agrees that the Maritime provinces hold tremendous potential. He illustrated with seismic data that some very large features have been identified in the Orphan and Flemish Pass basins. These petroliferous regions lie in the deepwater areas off Newfoundland and Labrador.

"There are 700,000 sq km of potential offshore Newfoundland and Labrador," Fagan said. And the likelihood of significant finds is bolstered by the similarities in source rock between the Orphan and Flemish Pass basins and the producing Jeanne d'Arc basin (where Hibernia and Terra Nova are onstream and White Rose is moving toward production).

Despite a number of recent deepwater wells that have come up empty, Fagan encouraged investment, pointing out that only 133 exploration wells have been drilled off Newfoundland to date, and most of those have been in shallow water, leaving an enormous amount of acreage untouched by the drill bit.

The province is offering 12 parcels in the Orphan basin covering 3,000,000 hectares and two parcels in the Flemish Pass basin covering 78,000 hectares in a bidding round that is scheduled to close in December.

10/08/03

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