Suncor Energy’s Alan Brown says more offshore oil exploration is needed off Newfoundland and Labrador.
Suncor, operator of the Terra Nova oilfield, is drilling a second well at its Ballicatters prospect on the Grand Banks.
It’s one of only a handful of exploration wells drilled off Newfoundland in recent years.
“Newfoundland and Labrador is running hard, but we do need to think about how we replenish through exploration and development sooner rather than later,” said Brown, Suncor’s East Coast vice-president.
“We’ve got a relatively low-density of wells drilled thus far.”
To date, 362 wells have been drilled in the waters off Newfoundland and Labrador.
Brown spoke Thursday to business people attending a St. John’s Board of Trade Business Development Summit.
Thursday was also the ninth anniversary of first oil at the Terra Nova oilfield, which has pumped 64 per cent of its estimated reserves since Jan. 20, 2002.
“We think there are more discoveries, we hope there are more discoveries to be made,” said Brown in an interview.
Among those hopes: smaller fields that can be tied back to existing production facilities on the Grand Banks. Such fields would have to contain 50 million barrels of oil, or more, to be considered economically feasible.
“Right now, we’ve only demonstrated the ability to develop 50-million-barrel-up satellite tiebacks.”
North Amethyst, a White Rose satellite field operated by Husky Energy, started producing its estimated 70 million barrels of crude last May.
“I’d like to be able to do that with 25-million-barrel prospects, and tie back and make use of the infrastructure we have,” said Brown.
“There are lots of smaller fields and it’s a higher probability of finding them, too.”
The trick is to reduce the costs of finding those fields and developing them.
Brown said one in five exploration wells off Newfoundland is successful — and drill rigs cost about $1 million per day to operate offshore.
“That’s the full cost.”
It includes bringing the rig to the province, and crewing, equipping and supplying it.
“The costs are horrendously high,” said Brown. “If we could take some of that risk out of the front-end of the exploration development production chain — that might be one way.”
Another way is rig-sharing partnerships.
Last year, Suncor, Husky Energy and Statoil Canada signed a second rig-sharing agreement to keep the drill rig Henry Goodrich in the province.
The three-year deal went into effect in November and all three companies will use the rig to drill wells.
“Without that, I think there is very little chance that any one of us would have brought a dedicated rig back,” said Brown.