CNLOPB approval for Husky project comes with five conditions attached
Husky Energy is pushing ahead with plans to drill a pair of producer wells at its next White Rose expansion field.
The Sea Rose at the White Rose field on the Grand Banks. Telegram file photo
A Husky spokeswoman said the company expects to start drilling the first well at West White Rose this month.
With estimated reserves of 120 million barrels of oil, the western satellite is believed to be the largest and most complex of the three White Rose expansion fields.
The Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) announced Monday it had conditionally approved Husky’s plan known as the West White Rose pilot scheme.
It’s a partial development of the expansion field.
The pilot plan calls for drilling a pair of wells — one oil producer, one water injector — to refine Husky’s oil reserve estimates and come up with a long-term development plan for West White Rose.
Submitted to the CNLOPB last October, the pilot scheme also calls for initially producing the western reserves using the existing production equipment at the main White Rose oilfield.
Husky will use the drill rig Henry Goodrich to start drilling the upper section of the first well this month.
A Husky spokeswoman said the well be completed at a later date.
The Henry Goodrich, which has been undergoing a 75-day refit, is expected to leave the Marystown shipyard this week.
The board that regulates the province’s oil industry attached five conditions to its approval of Husky’s pilot plan. They are:
• The company must report the West White Rose production results to the CNLOPB within six months of first oil.
• The company must also deliver a second report within two years detailing “how the results relate to a better understanding of the West White Rose pool in terms of recoverable reserve ranges and a depletion strategy.”
• If the reservoir performance varies from Husky’s predictions, or if the two pilot wells adversely affect the overall “potential petroleum recovery” at West White Rose, the board said it will reassess the merits of the pilot scheme.
• Husky must not alter the pilot plan without prior approval from the board.
• Prior to the start of oil production, the West White Rose partners must submit a unitization agreement to the board. That agreement sets out each partner’s share of the development costs and is usually required before production starts.
Husky, the operator of the White Rose oilfield, is partnered with Suncor Energy and Nalcor in the three expansion fields.
The first White Rose expansion field, North Amethyst, started production May 31. It contains an estimated 90 million barrels of crude oil. Improved reserve estimates will also help to determine the final price Nalcor Energy pays for its five per cent equity stake in the three White Rose expansion fields.
Nalcor has paid $7 million of the $30-million purchase price.
The next installment could be $23 million, or less, depending on a determination of the western oil reserves.