Exploration off eastern Canada heats further

Exploration and development activity off Nova Scotia and Newfoundland is continuing apace.

Recent developments include the formation of an exploration joint venture for a sizeable area of the Scotian shelf and the acquisition of a farm-out in a license area already being explored there.

In the Grand Banks area, Chevron has increased its estimate of reserves in Hebron-Ben Nevis fields, and the Hibernia partners have restored Hibernia production to 60,000 b/d following recent production problems (OGJ, Mar. 16, 1998, p. 36).

Scotian shelf

Mobil Oil Canada Properties Ltd., Shell Canada Ltd., and Imperial Oil Ltd. have announced a major exploration joint venture on the Scotian shelf off Nova Scotia.

The area surrounds the Sable Offshore Development Project (SOEP), now under way to produce more than 3 tcf of natural gas from fields near Sable Island (OGJ, Dec. 15, 1997, p. 22).

Mobil and Shell each have a 40% working interest in the new joint venture exploration program, and Imperial has 20%. The partners already share interests in the SOEP development.

Last month, the companies acquired additional acreage in the area about 112 miles off Nova Scotia. They were awarded exploration licenses covering more than 59,000 acres on which they made a $9.5 million (Canadian) work bid.

The companies also hold a license in the area on which they made an $86 million work commitment in 1995. Mobil and Shell each hold a 45.5% interest in this license, and Imperial has 9%. The area includes the Adamant prospect, near Thebaud field, which is under development. Exploratory drill- ing is being considered for late 1999 or early 2000 in this area.

The partners have formed a joint technical team to manage an overall exploration program, including a $15 million 3D seismic survey this summer. Geco-Prakla has been awarded the seismic contract and will use the Geco Topaz seismic vessel for the work.

Mobil said that, over the next 5 years, the companies could spend significantly more than the $96.5 million commitments they made on the licenses. Mobil executive Ken Miller says, if developments work out as planned, the Scotian shelf could become one of the single largest natural gas sources in North America.

The Geological Survey of Canada has estimated potential reserves for the Scotian shelf at 18 tcf.

Meanwhile, Norsk Hydro Canada Oil & Gas Inc. has acquired a farmout from PanCanadian Petroleum Ltd. on the Scotian shelf. Norsk Hydro will initially hold a 30% working interest in a license in the Grand Pre and Riversdale areas. PanCanadian will be operator and own a 70% working interest.

The agreement involves two land parcels of 19,759 hectares and 104,256 hectares. An exploratory well is being drilled in the Grand Pre license area.

Grand Banks action

Crude oil reserve potential for the Hebron-Ben Nevis discoveries on the Grand Banks could be three times the original estimate, says Chevron Canada Resources Ltd., Calgary.

Chevron spokesman Charlie Stewart said the fields may have reserves of 600 million bbl, compared with a 1981 estimate of 195 million bbl.

Chevron heads a consortium planning delineation drilling in July to confirm reserve estimates.

Meanwhile, a water injection program has begun in the 750-million-bbl Hibernia field in the same area which began producing last fall. Workers began perforating an 18,373-ft injection well May 15 to boost production to 60,000 b/d.

Additional injection wells are planned later this year to increase production to about 100,000 b/d. Hibernia is expected to be producing an average 135,000 b/d by early 1999.

Seven production wells are under way or have been completed since Hibernia began production. Initially, production from the first two production wells reached about 60,000 b/d but began to decline. Production has been cut to as low as 15,000 b/d while the water injection well was prepared. The first natural gas injector is scheduled to be in operation in early August.