Petro-Canada and partners have filed a plan covering the $2 billion (Canadian) development of Terra Nova oil field on the Grand Banks off Newfoundland.
Terra Nova field, about 285 miles southeast of St. John's, Newf., in the Jeanne d'Arc basin, holds about 406 million bbl of light, sweet crude oil.
Production is expected to start up in 2001 and reach about 100,000 b/d. Field life is put at 15-18 years.
Project details
About $400 million has been spent to date on Terra Nova exploration, delineation, and preliminary engineering of the field.
Estimated capital cost to start up is about $1.6 billion. Total capital and operating cost for field development, excluding transportation costs, is estimated at $4.2 billion.
Separately, PCL Industrial Constructors Inc., Edmonton, joined the Grand Banks Alliance, one of three groups expected to bid for work on development of Terra Nova oil field, 22 miles southeast of Hibernia field, also under development on the Grand Banks (OGJ, July 15, p. 17).
Terra Nova is to be developed with an alliance contracting strategy, teaming contractor and supply companies that share risk and rewards with development partners under an agreed target cost and schedule.
The field will be developed without government grants or loan guarantees.
Applications
The Petro-Canada group signed a letter of intent with the government of Newfoundland and Labrador covering benefits principles and fiscal terms, including royalties and taxes.
It also filed a development application with the Canada-Newfoundland Offshore Petroleum Board (Cnopb) that includes:
- A development plan containing technical information on field development.
- A Canada-Newfoundland benefits plan.
- An environmental impact statement.
- A socioeconomic impact statement.
- A development application summary.
Filing of the development application marks the beginning of the public and regulatory review of the project, which is expected to take about a year.
The Terra Nova group will make a decision on whether to proceed with development once approval is provided by the Cnopb.
Participants are operator Petro-Canada Ltd. 49.2%, Mobil Oil Canada Ltd. 20.7%, Husky Oil Operations Ltd. 15.8%, Murphy Oil Co. Ltd. 10.7%, Mosbacher Operating Co. Ltd. 3.6%
Final working interests will change after unitization of the field is completed and conclusion of an agreement between Petro-Canada and Norway's Norsk Hydro AS involving and exchange of Canadian and Norwegian interests.
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