HOPEDALE BASIN-2: Atlantic off Labrador poised for modern exploration round

Basinwide seismic interpretation can be done using the following markers: a) prerift basement (Labrador unconformity)-excellent on the shelf and poor under deeper half-grabens and on the slope; b) Mid-Cretaceous (Avalon unconformity)-fair to excellent, and in places highly interpretive reflector due to faulting; and c) Base Tertiary (Baylot unconformity)-most continuous and correlatable horizon. A few intra-Tertiary markers are well expressed and in places show significant amplitude anomalies (Fig. 6).

Based on the interpretation of the prerift, synrift, and syndrift seismic sequences, the area covered by the new seismic survey can be subdivided from south to north into several physiographic and structural sectors (Fig. 3):

1. Hawke basin. This is a deepwater Mesozoic rift basin located east of the Cartwright arch and in communication with deepwater Hopedale basin. The Cartwright Transfer Fault Zone (CTFZ) that separates the two basins is evident in the potential field data but is more elusive on the seismic lines crossing this tectonic zone. An abrupt change in the direction of main structural lineaments (ridges, elongated fault blocks, and half grabens) marks this transfer zone.
2. Cartwright arch. This is a prerift basement high area that is comprised of a) a shelfal sector with thin Tertiary sequences overlying strongly reflective top prerift basement and b) an upper slope sector marked by a down-to-sea bounding fault, where numerous rotated basement blocks containing a stratified Paleozoic section can be interpreted. Another down-to-sea fault zone marks the contact between Cartwright arch and Hawke basin.
3. Hopedale basin shelfal sector. This includes three in-communication depocenters named here: a) Hamilton subbasin, b) Harrison subbasin, and c) Nain subbasin. They contain several almost parallel lineaments of ridges, elongated fault blocks, and half grabens separated on strike by transfer faults and accommodation zones. The offset on these transfer zones is 10-15 km. Only about a dozen of the identified highs have been drilled; just a few of them are situated on the most prospective side of the shelf where deeper source rock depocenters are located.
4. Hopedale outer shelf sector. The basement plunges deep under the shelf; a large basinal trend exists followed by several high trending ridges. In certain parts of the basin a large anticlinal lineament is placed before the shelf break. The shelf break is generally marked by down-to-sea large faults affecting the basement and its sedimentary cover.
5. Hopedale upper slope. The upper slope of the Hamilton subbasin dips gentler and is occupied by a large Mesozoic depocenter. Specific for this area is a detached Tertiary sedimentary cover forming numerous fault-bounded rotated blocks and named here the Tertiary listric fault sector.
6. Hopedale lower slope. The lower slope of this subbasin is occupied by a large Mesozoic depocenter that contains numerous structural features. In places, due to reduced resolution these features are hard to correlate. Structurally intriguing is a cluster of Tertiary gravity detachment folds that exists between the Hamilton and Harrison subbasins in this region. Transtension or shale diapirism may also play a role in the formation of these large folds.
7. Igneous extrusive province. The easternmost part of the Nain and Harrison subbasins is occupied by an igneous province formed by lava flows covering thinned continental crust. The flows have been faulted and intruded by igneous bodies. The succession is probably of Late Cretaceous age and contains interbedded sedimentary successions. Flows and emerging mantle derived serpentinite ridges are overlain by parallel layers of Tertiary sediments (Fig. 5).

No salt was observed on the seismic data from the Canadian Labrador Sea. Amplitude anomalies and other various direct hydrocarbon indicators are observed throughout the Cretaceous-Tertiary sequence.5 7

Structural-tectonic evolution

New regional seismic grids are essential for geological description and investigation of petroleum potential of such a large offshore area.

The Labrador Sea is an Atlantic-type rifted margin and consists of Precambrian metamorphic basement, Paleozoic platform deposits, and faulted and slightly folded mostly Early Cretaceous synrift sedimentary rocks, all covered by Late Cretaceous and Tertiary postrift and recent glacial deposits (Fig. 5).

The geologic evolution of southern Labrador included a Lower Paleozoic period of basin formation and limestone platform deposition, followed by a long period of peneplanization.12 25 27 Several episodes of Precambrian shield/Paleozoic platform crustal stretching took place first as part a Mesozoic intracontinental network of basins and then during slow emplacement of transitional and oceanic crust in the southern Labrador Sea.

It is possible that during the North Atlantic rifting stage (Late Jurassic-Early Cretaceous), when basins in the south underwent extension and when excellent source and reservoir rocks were deposited, parts of the Labrador/Greenland area had already started to be subjected to sag or intracontinental rifting with alluvial and lacustrine stage deposition and even sea incursions from the south.

Several arguments for the existence of an incipient Jurassic marine seaway in the area have been presented by Danish geoscientists for the Greenland side;38 however no Jurassic rocks have been recovered up to now from the Labrador Sea wells. The older synrift age identified in the Hopedale basin Herjolf M-92 well is Berriassian.14 29

Significant faulting and tectonic subsidence took place during most of the Cretaceous and lasted in some areas, up to Paleocene time, interrupted by several episodes of thermal subsidence. The initial Early Cretaceous rifts formed in several parallel strips, now located close to the basin western margin, on the middle of the shelf and in the downthrown side of a major fault that approximately marks the shelf break.

The amplitude of tectonic subsidence varies across the basin, with the deepest troughs existing east of the earlier well locations. Some fault activity continues during the continent break-up, mantle exhumation, and drifting.

Petroleum system

A proven petroleum system exists in the Hopedale basin, and expectations are high for further gas discoveries.

During the initial intracontinental extension, elongated rift valleys and the intervening ridges have received a major pulse of coarse clastics that formed the Bjarni formation. The most widespread reservoir, Bjarni sandstone (12% porosity and 100 md permeability) is thick in the grabens and thins on the ridges, showing syntectonic deposition.

Until recently, Cenomanian to Maastrichtian Markland shales were considered the main source rock.3 6 14 31 32 Recent Rock-Eval analysis of cuttings, geochemical analysis of organic-rich interval, and organic petrology show that the best source rocks occur in the Early Cretaceous Bjarni formation and contain mostly type III terrestrial organic content.39 The source interval is quite thick-more than 500 m at the Herjolf well with TOC of 5%-and thickens in the numerous half grabens.

After the Labrador/Greenland break-up, basin subsidence followed with deposition of a thick, fine-grained Markland formation that according to several authors includes high TOC shales. The thick Markland shale also forms an excellent regional seal. Other regional seals are in Eocene (Kenamu shales) and Oligocene (Mokami shales).

The Labrador rift system spreads from northern Orphan basin to the Baffin Island area. Continuous extension and minor transtension during the North Atlantic and Labrador rift phases resulted in a landscape of alternating ridges and deep half grabens, mostly oriented NW-SE. Fault activity may have lasted up to Early Tertiary in some areas.

To give an indication of the scale of these structural elements, the ridges and troughs have lengths of more than 100 km while individual subbasins extend for more than 400 km (Figs. 3 and 4).

There are several structural and stratigraphic trapping mechanisms for the Bjarni sandstone, which was derived from both rift shoulders and from intrabasinal ridges (Figs. 5 and 7-10).

Three coarse clastic pulsations originating mostly from the western rift shoulder formed the younger Freydis, Cartwright, and Leif sandstones (Figs. 5 and 7-10) that have increasingly better reservoir properties (up to 25% porosity). It is accepted that the Hopedale basin had a high thermal gradient (2.7° C.) and that source rocks started expelling wet gas after reaching depths of approximately 2,500 m probably in Late Oligocene-Early Miocene time.14 31 According to Fowler et al.,39 the oil window is deeper at 3,000-3,500 m.

Numerous horst and fault blocks are seen on the seismic data, some forming impressive exploration leads. Paleozoic limestones and dolomites found on the tops or sides of higher basement blocks often have reservoir properties. Drape over these high blocks and lateral pinchouts of Bjarni and younger sandstones are other possible hydrocarbon plays. On the outer shelf and slope, listric faults and their associated rollover are exploration targets (Fig. 10).

Exploration potential

With a long intracontinental rift evolution, terrestrial and probably marine interludes of source rock deposition and numerous synrift and postrift structural and stratigraphic trapping possibilities, the Hopedale basin has significant undrilled petroleum potential.

Only 16 wells have reached planned targets at significant depths resulting in five gas discoveries, with one, North Bjarni F-06 (Fig. 5), proving a giant gas discovery. An excellent success ratio for a frontier basin of over 30% was recorded.

Improved seismic imaging and recording of data into deepwater areas is key to understanding the tectonic evolution and the exploration potential of the Labrador basins. As proven by this study the continental crust extends more than 300 km from the Mesozoic onlap on basement and this entire area is prospective for hydrocarbon exploration (Figs. 5 and 7).

The most important reservoir in the basin is the Bjarni sandstone, and this has been the most successful play in the basin. The unbiodegraded oil encountered at North Leif I-05 shows immaturity,39 but more mature source rock and reservoired oil may exist in deeper parts of the basin.

The Top Bjarni formation (Avalon unconformity) is a good quality marker that can be mapped now with relative confidence east of the Bjarni field and North Leif lineament into deep water. Younger sandstone with reservoir properties has been deposited in the basin during the Neogene uplift of the basin flank (Labrador Peninsula), and probably turbidites have been accumulated on the slope and in deepwater, a play that is yet undrilled in the Hopedale basin or anywhere on the Grand Banks and Labrador slope.

The Paleozoic “basement” sediments cannot be written off as exploration targets, as two large gas discoveries have been made in the carbonates. The Gudrid discovery (924 bcf recoverable) tested 20 MMcfd, and the Hopedale discovery (105 bcf recoverable) tested 20 MMcfd from a Paleozoic dolomite. This play should be particularly found in the southern part of the basin.

The Bjarni and Markland shales deep hydrocarbon kitchen existing on the outer shelf seems to be the source of the gas filling the five discovered accumulations. Another, probably Markland shale filled depocenter, exists in front of the slope. The Markland is also a terrestrial dominated source rock with some marine influence.

Several large anticlinal features are located under the shelf break area. These can be hydrocarbon sourced from both the western and eastern depocenters. Whether oil prone Jurassic source rocks exist in these deeper undrilled depocenters remains to be proven. Increased exploration activity has taken place across the sea on Greenland’s continental margin where indications of older sequences, including Late Jurassic source rocks, have been observed in outcrop and on seismic data.

While exploration for offshore oil in Newfoundland and Labrador has been ongoing for over 40 years, no systematic effort has yet been undertaken to find natural gas. As it stands the almost 10 tcf of recoverable gas that has been discovered is a byproduct of oil exploration.

With the recent increases in North American natural gas prices and the obvious need to develop new supply areas, serious discussions have begun on ways and means to bring the Newfoundland and Labrador natural gas to market. Possible modes of transportation under consideration include pipeline, compressed natural gas, LNG, and gas to liquid tankers. Oil is currently being transported from the Grand Banks fields by shuttle tankers.

It is encouraging that gas prospects are now in the drilling inventory of some of the operators, and research into ways to monetize the stranded gas resource of the Jeanne d’Arc and Hopedale basins is ongoing. Advancements in seismic acquisition and techniques coupled with regional geological studies are key to successful drilling of high-risk, high-reward frontier areas such as the Hopedale basin.

Important improvements in the offshore regulation regime of the Newfoundland and Labrador E&P were recently taken by the federal and provincial governments. One excellent initiative that will considerably reduce the overall cost of drilling is to introduce discretionary requirements related to flow testing of the first well drilled on a new hydrocarbon prospect.40

The earlier Hopedale basin gas finds and eventual new large discoveries may be utilized in the future for:

• Smelting and providing electricity to Labrador’s emerging nickel industry.
• Supplementing Labrador hydroelectricity exported to North America.
• Supplying gas to the Canadian Atlantic provinces and US using any of the CNG, GTL, or LNG technology.

In spite of harsh environment the Labrador fields are significantly closer to the East US or central Canadian markets than many of the alternatives. Operations on the Grand Banks have shown that iceberg management using towing by standby vessels is effective and economic, particularly as such vessels must be onsite in support of drilling operations in any case. And it can be also said that much greater transport distances (such as Siberia to Western Europe) and comparable logistical challenges are being met in other areas of the world.

The big picture

The Hopedale basin had a complex geological evolution, starting with intracontinental rifting in the Early Cretaceous (possible Jurassic?) and followed by significant subsidence and accumulation of passive margin sediments.

Large gas discoveries were made during the 1970s exploration cycle in the shallow Labrador Sea, proving the presence of a rich petroleum system. No follow-up drilling has taken place, and only during the past few years has exploration returned with the acquisition of modern, high quality 2D seismic data.

While numerous drillable structures have been identified in the past, all located in the inner shelf area, new seismic data allow the extension of the geophysical study into outer-shelf and deepwater, and show several previously unknown large depocenters and anticlinal features, some of which are accompanied by amplitude anomalies.

The Bjarni sandstone is recognized as the main reservoir target, but quality reservoirs have been encountered in prerift, synrift, and syndrift sequences. The Bjarni formation also contains interbedded shales with terrestrial organic content that constitute an excellent type III source rock. Source rocks are also present in Late Cretaceous and Early Tertiary, while the occurrence of a Late Jurassic marine source is still unproven on the Canadian side of the rift but has been documented on the conjugate margin off west Greenland.

The discovered gas has remained stranded due to its more remote location and some logistical challenges (such as iceberg management) that made it less attractive when cheap gas was widely available elsewhere. Higher prices, new technologies, and political considerations of the alternatives (LNG for example) are changing the equation. The area’s proven resource is substantial and the potential resource is enormous.

No doubt challenges to exploration and production of the hydrocarbons from Labrador Sea remain great and many, but the demand for cleaner energy, increased commodity prices, improved government regulations, large size of the prize, technological advancements, and relative proximity to the largest world markets will place the Hopedale basin and the rest of the Labrador shelf clearly on the industry radar screen in the coming years.

Acknowledgments

Davey and Paul Einarsson at GSI for seismic data donation to Memorial University and permission to show the Hopedale basin lines. John Hogg at ConocoPhillips, Phonse Fagan at A.J. Fagan Consulting/MUN; Sam Nader, consultant, and Steve Kearsey at MUN/Husky Energy for collaboration on the Labrador Sea project. J. Wright, H. Miller, I. Atkinson, M. Martin, V. Hardy, S. Schwartz, and A. Dearin at Memorial University; D. Hawkins, T. Bennett at C-NLOPB; M. Fowler, S. Dehler at GSC Atlantic; W. Foote, L. Hicks, and L. Stead at the Government of Newfoundland, and D. Chafe at ABM.

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