Class Big Oil has some grand ambitions indeed for exploring Newfoundland and Labrador's offshore
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World
class
Big Oil has some grand ambitions indeed for
exploring Newfoundland and Labrador’s offshore
BY DARREN CAMPBELL
NR26 NATURAL RESOURCES MAGAZINE | Vol. 21 No. 2 2019
At
the biggest oil and gas conference in Atlantic Canada back in
June of 2018, Nalcor Energy’s Jim Keating strode to the podium
with confidence.
The Crown corporation’s executive vice-president for
corporate services and offshore development is a regular speaker at NOIA’s
annual show. On this day he came to tout the potential of Newfoundland and
Labrador’s offshore to a packed crowd at the St. John’s Convention Centre.
That potential had already been brought up by previous speakers. That day
J.D. Irving, Limited CEO Jim Irving talked up the Flemish Pass and Orphan
Basins, which he said held potentially 37 billion barrels of oil and 33 trillion
cubic feet of natural gas. But Irving said that potential was in danger of being
stranded due to an onerous Canadian regulatory regime.
Keating struck a more positive tone, reminding his audience the province’s
offshore contains “a couple of dozen monster prospects.” He also told a story
about the time his father asked him, perhaps impatiently, when exploration
wells were going to start being drilled in the province. Keating’s response
to his dad was simple and measured: “It’s the oil and gas industry. We need Jim Keating, Nalcor Energy’s vice-
patience.” president for corporate services
That patience is paying off. The Canada-Newfoundland and Labrador and offshore development, says
Newfoundland and Labrador’s offshore
Offshore Petroleum Board received a record bid total of $1.38 billion during its has multiple “monster” oil and gas
2018 land sale. What’s more, there are seven applications for drilling projects prospects. Photo courtesy Nalcor Energy
before the Canadian Environmental Assessment Agency (CEAA) involving
some of the biggest oil and gas companies in the world. In those applications,
the companies are proposing to drill more than 100 exploration, delineation
and appraisal wells in provincial waters over the next 10 years.
That represents a tremendous amount of activity for the sector. In the
following pages, we provide a snapshot of each project and what Big Oil has
planned for Newfoundland and Labrador’s offshore.
CNOOC PETROLEUM NORTH AMERICA
Flemish Pass exploration drilling project
Formerly known as Nexen Energy ULC, drilling depth and expected weather and CNOOC PETROLEUM
the Canadian division of the Chinese ice conditions and associated mobility NORTH AMERICA
government-owned company filed its requirements,” CNOOC writes in its project FAST FACTS
project description with CEAA in April 2017. description. It adds that two MODUs could
100-200
CNOOC says between 2018-2028 it be used at the same time. It’s proposing to Personnel required on a
wants to conduct exploration drilling on drill as many as 10 exploration and appraisal MODU during offshore
two exploration licences―1144 and 1150― wells between 2018-2028. operations
it holds in the Flemish Pass Basin. The The location of the well sites hasn’t been
western edge of the project area is over selected yet. CNOOC says no excavated 10,634 km²
400 kilometres from Newfoundland. The drill centres or underwater construction The size of the
maximum water depth found in the project will be needed for the planned exploration project area
area is 1,200 metres. activities. If any of the wells show
The company says the wells may be commercial amounts of hydrocarbons, a well 45-160 days
drilled by a semi-submersible mobile flow test may be done to sample and identify The approximate time
offshore drilling unit (MODU) or a harsh formation fluids and to measure produced CNOOC says it will take
environment drill ship MODU. The type flow rates. As this magazine went to press, to drill and evaluate each
of MODU used for a well will “be based CEAA was still waiting for responses to well
primarily on the characteristics of the its request for information regarding the
physical environment at the proposed drill company’s environmental impact statement
site, particularly water depth, expected for the project.
ONLINE EXTRAS: naturalresourcesmagazine.com NR27
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EXXONMOBIL CANADA LTD. Like other exploration drilling projects
in Newfoundland and Labrador’s offshore,
Eastern Newfoundland offshore exploration
the project will include other activities and
drilling project techniques such as possible delineation
ExxonMobil Canada Ltd, the Canadian arm drilling in the case of a hydrocarbon discovery,
of the Houston-based super-major, submitted geophysical surveys, batch drilling,
its project description for the drilling project formation flow testing, geotechnical surveys,
EXXONMOBIL CANADA in November of 2016. It and its partners― environmental surveys, video surveys,
LTD. FAST FACTS Equinor Canada Ltd and Suncor Energy― and eventual wellhead decommissioning
want to conduct exploration, delineation and and removal. ExxonMobil says exploration
35 appraisal drilling offshore Newfoundland activities may occur at any time of the year.
The maximum number of
and Labrador between 2018-2029. An environmental assessment of the project
exploration, delineation
The activity will take place on two by CEAA is currently in progress.
and appraisal wells
ExxonMobil is proposing exploration licences, 1135 and 1137, and could
to drill include drilling up to a whopping 35 wells
during the project period. The drilling will
8-10 take place in the Jeanne d’Arc and Flemish EXXONMOBIL CANADA LTD.
Pass Basins approximately 250 kilometres
The estimated number Southeastern Newfoundland offshore
of return trips per month east of St. John’s.
Specific well sites haven’t been decided exploration drilling project
made by supply vessels
to one drilling installation on yet. That will occur as project planning ExxonMobil Canada filed its project
during the project and design activities move ahead. When the description for this proposed project in what
wells are drilled, the company says it will is known as the Carson Basin in September
29 days use a semi-submersible drilling installation of 2018.
The approximate time or drill ship. The planned project timeframe The company is applying to CEAA to
modelling estimates a of 12 years provides “an adequate and conduct an exploration drilling program
sub-surface release of oil conservative timeframe within which project on exploration licence 1136 in the basin.
from EL 1135 would reach activities may occur”, ExxonMobil says in its Suncor Energy and Total E&P Canada Ltd.
coastal Newfoundland environmental impact statement. are ExxonMobil’s partners on this licence,
NR28 NATURAL RESOURCES MAGAZINE | Vol. 21 No. 2 2019
which has had no exploration wells drilled EXXONMOBIL CHEVRON CANADA LIMITED
on it so far. CANADA LTD.
West Flemish Pass exploration drilling
During a 10-year period, from 2020-2029, FAST FACTS
ExxonMobil says it will drill at least one well, project
5
and possibly as many as five exploration The maximum number of Chevron Canada filed its project description
and delineation wells, on the licence. “Upon wells ExxonMobil says it with CEAA in October of 2018, making it the
evaluation of the first well and the analysis will drill on EL 1136 most recent project description submitted
of its results, a potential second well location for exploration drilling activities in offshore
site will be determined,” ExxonMobil writes 24,335 km² Newfoundland and Labrador.
in its project description. However, the The size of the Carson The company is applying to conduct
company says more wells could be drilled Basin exploration drilling the program on exploration licence 1138
if more exploration licences are added to the project area in the Flemish Pass Basin, 375 kilometres
project. If it gets regulatory and company northeast of St. John’s. Chevron’s partners in
approvals in time, the company plans to 2,730 metres the proposed program are Equinor Canada,
drill its first well in 2020. The maximum water which has interests in numerous exploration
A semi-submersible drilling unit will be depth of EL 1136 licences offshore Newfoundland and
used for the project. ExxonMobil says these Labrador, and Anadarko Canada. Chevron
units are generally used in deep waters or Canada says in its project description that as
in areas where more mobility is needed due many as eight exploration, delineation and
to ice or other factors and operational risks. appraisal wells could be drilled from 2021-
The drilling program won’t require any 2030. It plans to drill the first exploration
excavated drill centres or other underwater well in 2021 pending regulatory approval.
construction activities. ExxonMobil Either a semi-submersible rig or a drill ship
estimates each well will take between 60- will be used.
75 days for drilling and possible testing, But the drilling activities won’t be
followed by abandoning or suspending the continuous. The California-based firm says
well. On Nov. 5, 2018, CEAA announced the drilling will be determined by “rig
an environmental assessment of the project availability and previous wells results.”
was required. When drilling does occur, Chevron Canada
ONLINE EXTRAS: naturalresourcesmagazine.com NR29
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CHEVRON CANADA would prefer it take place between May and Between 2019 and 2026, BP Canada says it
LIMITED FAST FACTS September―avoiding the winter and spring may drill up to 20 exploration wells in the
seasons when vicious winter storms can project area. It says the first well could be
180 days bring eight-metre-high waves and winds drilled in 2020 pending regulatory approval.
The time Chevron Canada gusting over 100 kilometres an hour, along As with the other drilling programs
estimates it will take to with sea ice, to the North Atlantic. The being proposed in offshore Newfoundland
drill each well company also says it will not be building and Labrador, BP Canada says in its project
onshore facilities as part of the project and description that it will use either a semi-
187,700 tonnes will use third-party facilities to carry out any submersible rig or a drill ship to drill the
The estimated maximum work required for this proposed exploration wells. It’s possible the same MODU may not
amount of carbon dioxide drilling campaign. On Dec. 20, 2018, CEAA be used to drill all the wells in the program.
equivalent emitted announced an environmental assessment of Logistics support for this campaign will be
annually due to the the project was required. provided through a fleet of platform supply
drilling program vessels and helicopters.
As for the drilling, BP Canada says
20 specific drill sites haven’t been decided
The number of marine BP CANADA ENERGY GROUP ULC on yet. “Prospective well locations within
mammals that frequent Orphan Basin exploration drilling project the ELs are being identified based on data
the waters off Eastern
BP Canada submitted its project description obtained through two-dimensional and
Newfoundland
to CEAA for this exploration drilling three-dimensional seismic data collected
campaign in January 2018. between 2012 and 2015 within the Orphan/
The London-based super-major, and Flemish Pass basins,” BP Canada writes in
its partners in the project―Noble Energy its project description. In March of 2018,
Canada and Hess Canada Oil and Gas CEAA began its environmental assessment
ULC―are proposing an ambitious program of this project.
that encompasses four exploration licences
(1145, 1146, 1148 and 1149) that lie within
the Orphan Basin approximately 343- and
496-kilometres northeast of St. John’s.
NR30 NATURAL RESOURCES MAGAZINE | Vol. 21 No. 2 2019
one. The company says up to 30 wells could
BP CANADA ENERGY EQUINOR CANADA LTD. be drilled. A semi-submersible unit or a
GROUP ULC
FAST FACTS
Flemish Pass exploration drilling project drill ship may be used to drill the wells.
This is a proposed exploration drilling project It hasn’t decided what type will be used.
$425,805,000 for offshore Newfoundland and Labrador “The type of installation chosen will be
The amount BP and its that has been in the Canadian regulatory based primarily on the characteristics of
partners bid to obtain the system for a while. Equinor Canada filed its the physical environment at the proposed
four exploration licences project description in August 2016. drill site, particularly water depth, expected
in the project area The Canadian arm of Norway-based drilling depth and expected weather and
Equinor is proposing an exploration drilling ice conditions and associated mobility
9,432 km² program in the remote Flemish Pass Basin requirements,” Equinor writes in its project
The size of the Orphan between 2018 and 2027. The project area
Basin exploration drilling environmental impact statement.
includes exploration licences 1139, 1140, 1141 The environmental assessment of this
project area and 1142 that are located approximately project is still ongoing. As this magazine went
480 kilometres east of St. John’s. Equinor is to press, CEAA said it was still reviewing
60 partners with BP Canada and ExxonMobil
The number of days BP additional information Equinor Canada had
Canada on ELs 1140, 1141 and 1142. On EL submitted in November 2018 relating to its
Canada estimates it will
1139, Equinor is partnered with ExxonMobil environmental impact statement.
take to drill each well.
Canada and Anadarko Canada.
The drilling campaign is a significant
EQUINOR CANADA LTD. FAST FACTS
1 in 333,333 10 2-5
The chance of a well blowout The maximum number of return trips The number of days flaring
based on oil spill probability made per month by supply vessels to a would last if a flow test is
analysis, according to Equinor drilling installation during the project done during the project
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ONLINE EXTRAS: naturalresourcesmagazine.com NR31
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Husky Energy’s proposed
drilling project involves three
exploration licences that
neighbour the province’s four
producing offshore oil fields
Image courtesy Husky Energy
HUSKY ENERGY INC.
FAST FACTS
HUSKY ENERGY INC. In its project description, the company
86 says drilling will be carried out by a semi-
The number of wells Husky Energy exploration drilling project
submersible rig, a drill ship or a jack-up
Husky Energy has drilled This project has been on CEAA’s books rig. The drilling will be done in shallow
in offshore Newfoundland for a while. Husky Energy filed its project water, as the average water depth in the
and Labrador description in September of 2016. Grand Banks is just 75 metres. The plan was
The Calgary-based company, which has been to drill the first well by the first quarter of
63,033 tonnes
exploring for oil and gas in Newfoundland 2018. However, that date has come and gone
The amount of carbon
and Labrador’s offshore since 1982, is as the project is still in the environmental
dioxide equivalent Husky
proposing an exploration drilling program assessment phase. In fact, in December
Energy estimates will be
within exploration licences held in the Jeanne of 2018, CEAA had requested additional
emitted annually from the
project d’Arc Basin, approximately 350 kilometres information from Husky Energy regarding
east of St. John’s. The project area includes its environmental impact statement for the
5 exploration licences 1151 and 1152 (in which project that it filed in September 2018. |nrm
The average number of Husky Energy holds 100 per cent interest) and
helicopter trips required 1155. Husky Energy and BP Canada each hold
per week to transport a 50 per cent interest in 1155. The company is FEEDBACK
crew and light supplies proposing to drill up to 10 exploration wells at * dcampbell@naturalresourcesmagazine.com
during drilling activities any time between 2019 and 2027. a @NRM_Editor; #WorldClass
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NR32 NATURAL RESOURCES MAGAZINE | Vol. 21 No. 2 2019
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