[Graeme]

Oil exploration off Canada’s East Coast attracting ‘worldwide’ interest

Oil exploration off Canada’s East Coast is reaching fever pitch as oil companies warm up to the potential beneath the frigid waters near Newfoundland and Labrador and the Maritimes.

“I would say literally there is worldwide interest, including companies that were never active at least in terms of licensing seismic data offshore in Labrador,” said Rod Starr, senior vice-president western hemisphere, at TGS-NOPEC Geophysical Company ASA. “Definitely those people are calling us now.”

TGS has teamed up with Petroleum Geo-Services ASA and Newfoundland and Labrador’s Nalcor Energy over the past three years to map out about 47,000 square kilometres of seismic data and is set to chart another 30,000 square kilometers this year to create a wealth of information for prospective companies to assess the potential of crude oil and natural gas beneath the ocean.

“More two-dimensional seismic data will be gathered in 2014 than has ever been gathered before in a year all the way back to 1983,” said Jim Keating, vice-president of oil and gas with Nalcor Energy.

“1983 was our previous exploration peak — a year before the Terra Nova discovery — that goes back to our exploration heydays more than three decades ago,” Mr. Keating said.

As monopolistic national oil companies dominate some of the world’s largest reserves, oil majors are expected to inject over US$100-billion during the next decade in offshore exploration activity in benign jurisdictions.

“It seems that our frontier is going to be the next one examined in detail,” said Robert Cadigan, president and chief executive officer of Newfoundland and Labrador Oil & Gas Industries Association (NOIA). “As companies have declines in the North Sea, they are taking a second look at Newfoundland.”

financialpost

[ROCKMAN]

Oil exploration off Canada’s East Coast caught the exploration flu fever decades ago. Oil companies warmed up to the potential beneath the frigid waters of the East coast of Canada with the discovery of significant production at Hibernia, Terra Nova, and White Rose fields. For instance Hibernia has produced 700 million bb's of its 1.4 billion bbls of oil since 1997. Once again what's old is new again. The East coast of Canada has been the focus of exploration by companies for more then 40 years. What was worth drilling for based on the price of oil at that timed was drilled. With higher oil prices smaller/riskier prospects in the trend can now be drilled. The same reasons companies are poking holes in the shales, the Deep Water GOM, etc.

[Plantagenet]

I've got a friend who is a geologist for Shell, based out of Houston. Shell has launched a major effort offshore from Nova Scotia---he opened up his laptop and showed me the seismic lines---Shell has found some nice looking salt domes there that have never been drilled.


Drill baby drill

[ROCKMAN]

Yep. Geologic potential in the trend has never been the problem. It's been the high cost of developing fields in that tough environment. Just needed to bump the price up to justify it. Maybe some folks don't appreciate the effort to develop Hibernia: it's the largest offshore production platform on the planet. That ain't cheap.

[rockdoc123]

I was involved in some of the early exploration on the east coast and as Rockman points out it was super expensive. Hibernia took for ever to get commissioned and White Rose looked like it was never going to be developed at all. The rise in oil price changed the ultimate fate of this area but it still isn't going to be a cake walk. If memory serves me correctly the salt dome area is almost exclusively in the Jeanne d'Arc basin, the only basin with significant hydrocarbon discoveries to date. That area sits in what has been referred to as ice berg alley and Hibernia was constructed to take a full on hit from up to a 1 MM tonne chunk of floating ice. This part of the Atlantic can also get quite stormy which also leads to a challenge of supplying the platform and crew changes.

I'm surprised there seems to be a lot of new attention being paid out here. Shell Canada has been muddling around the basins out here continuously without much post Jeanne d'Arc success to this point in time. It will be interesting to see what they have in mind.