Atlantic Canada 'another North Sea'?

The Atlantic area off Nova Scotia, Newfoundland, and Labrador is shaping up as 'another North Sea' with enough reserves to supply an additional 2 tcf of natural gas to the growing northeast US market within a few years, Canadian officials said Tuesday at the Offshore Technology Conference in Houston.


Sam Fletcher
OGJ Online

OFFSHORE TECHNOLOGY CONFERENCE, HOUSTON
The Atlantic area off Nova Scotia, Newfoundland, and Labrador is shaping up as "another North Sea" with enough reserves to supply an additional 2 tcf of natural gas to the growing northeast US market within a few years, Canadian officials said Tuesday at the Offshore Technology Conference in Houston.

"On the East Coast of Canada, the petroleum industry momentum is growing," said John Hamm, premier of the Nova Scotia.

Brian Tobin, premier of the Newfoundland and Labrador, said his province has only 125 offshore exploration wells drilled "in an area of petroleum potential...that could be as large as, and possibly larger than, the state of Texas."

Tobin said, "Our total undiscovered oil resource is currently estimated to be over 6 billion bbl. Our undiscovered natural gas resource is estimated at over 50 tcf.

He announced upward revisions of total recoverable reserves in the Grand Banks area of the Labrador Shelf to 2.1 billion bbl of oil, 9.3 tcf of gas, and 413 million bbl of gas liquids. That's up from previous estimates of 1.6 billion bbl of oil, 4 tcf of gas, and 237 million bbl of gas liquids.

Global hot spot
The waters off the Canadian Atlantic provinces "adds up to one of the brightest spots for new oil and gas exploration and development in the world," said Hamm during a press conference at OTC.

The Sable project off Nova Scotia�the fourth largest producing gas basin in North America�"is only the beginning," Hamm said. Sable's three producing gas fields are connected to New England markets through the Maritimes & Northeast Pipeline. "With more than 500 MMcfd of gas flowing by the end of this year, Nova Scotia is definitely a part of the solution for New England's energy needs," said Hamm.

Moreover, he said, PanCanadian Petroleum Ltd. has made additional discoveries beneath its Panuke oil field in that same region. "The discovery well was drilled last year and flowed 55 MMcfd, a very good sign. The second well at Deep Panuke flowed at 52 MMcfd, another very good sign," Hamm said.

PanCanadian is scheduled to spud a third well to the west in a little more than 2 weeks, with a fourth well planned later this year. "If all goes according to plan, PanCanadian is looking at possible production within 3 years' time," said Hamm.

The geological structures off Nova Scotia are similar to those already developed off Africa and Brazil and in the Gulf of Mexico. Shell Canada Ltd., Marathon Canada Ltd., Kerr-McGee and Imperial Oil Ltd., a subsidiary of ExxonMobil Corp., have already made commitments to explore those waters.

"With companies like these ready to drill, we think the Scotian basin potential may soon be proven to be well beyond the official estimates of 18 tcf," Hamm said.

And deepwater exploration will be starting soon, with a 2-year 3D seismic program of 6,000 square miles�"the largest ever conducted on the East Coast of Canada"�to be completed this year.

Area production
Tobin said he is "confident" that the Hibernia field, which came on stream in 1997, will soon be producing 180,000 b/d, up from 100,000 b/d a year ago. Hibernia's estimated reserves also have been upgraded to 884 million bbl of oil, 1.4 tcf of gas, and 145 million bbl of gas liquids, from previous levels of 666 million bbl, 1 tcf, and 111 million bbl, respectively.

Development drilling currently is being done in Terra Nova field in the Jeanne d'Arc basin. That field, with reserves estimated as high as 500 million bbl of oil, is scheduled to begin production next spring using a floating production, storage, and offloading vessel, said Tobin.

And last month, Husky Oil announced plans to develop White Rose field in that same basin, to add as much as 100,000 b/d of production by late 2003 or early 2004. White Rose contains the single largest discovered gas resource on the Grand Banks and is still not fully delineated, Tobin said. That's in addition to the other 3 tcf of discovered gas resources in the Jeanne d'Arc basin, he said.

Moreover, in the most recent lease sale, companies bid a total $134 million (US) for four parcels in the Flemish Pass basin in deeper waters east of the Jeanne d'Arc, where only three wells have been drilled so far. "Petro-Canada has already indicated that it has identified five prospects in the Flemish Pass basin, each of which could contain up to 500 million bbl," said Tobin.

The latest call for bids on 14 parcels totaling 5.6 million acres in the Jeanne d'Arc and Flemish Pass Basins offer "a chance for oil companies to get involved in the Newfoundland and Labrador offshore play," Tobin said.

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