New rig-sharing agreement in effect in province’s offshore

The signing of a new three-year rig-sharing agreement between three operators in Newfoundland and Labrador’s offshore oil and gas industry highlights the significant opportunities for exploratory drilling and development, says Shawn Skinner.

Skinner, Minister of Natural Resources, said in a news release today that Husky Energy, Statoil Canada and Suncor Energy have all reached an agreement with drilling contractor TransOcean for the use of the Henry Goodrich semi-submersible drilling unit.

“By their very nature, rig-sharing agreements encourage increased partnerships and co-operation between companies involved in the oil and gas industry while supporting continued exploration, a crucial step to finding new discoveries,” Skinner said.

The release notes that rig-sharing agreements enable oil operators to pursue exploration drilling and development programs that without such an arrangement may prove too costly to be commercially viable. The prior agreement signed between these three companies successfully led to the drilling of the Ballicatters well on the Grand Banks by Suncor Energy, Statoil Canada’s Mizzen discovery in the Flemish Pass Basin and exploratory drilling on the Glenwood well in the Jeanne d’Arc Basin by Husky Energy.

Known as the Rig Share 2 Agreement, the agreement was signed on April 27, 2010, but just recently came into effect.

With this new agreement in place, operator Suncor Energy has started drilling a second exploration well, Ballicatters M-96Z and Husky Energy is pursuing further development opportunities. In addition, Statoil Canada plans to drill a delineation well for the Significant Discovery Licence received from the Canada-Newfoundland and Labrador Offshore Petroleum Board for the Mizzen discovery and an exploration well in the southern Grand Banks.