Statoil’s substantial oil discovery of 300 million to 600 million barrels of oil at Bay du Nord, in the Flemish Pass Basin, is a frontier find about 500 kilometres from St. John’s.
However, closer to home, in the Jeanne d’Arc Basin, exploration and delineation work continues around producing oil projects. There, significant discovery licences continue to be awarded.
While a discovery can be described as “significant,” based on a company announcement of an estimated resource, whether or not a find leads to a significant discovery licence is left to staff at the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) to determine.
The CNLOPB confirmed Friday it has issued a new significant discovery licence for Suncor for Ballicatters — a Jeanne d’Arc Basin prospect. Statoil is a partner.
No estimates for total oil have been released on the discovery.
If you look at a map of the province’s producing offshore oil projects, Ballicatters would fall somewhere in the centre.
“Ballicatters is a valuable resource; seeking the significant discovery licence classification allows us to retain the land for future development. We are pleased to have the significant discovery licence declaration in place,” stated a spokeswoman for Suncor, in an emailed response to questions.
“We are continuing to evaluate the asset, including opportunities that may exist to commercialize it. We have no firm plans at the moment.”
Significant discoveries are not always commercial, but continued finds in the Jeanne d’Arc basin promote future exploration there, as much as in areas like the Flemish Pass.
The next big project
As for producing more oil from the province’s offshore, Statoil’s partner in exploration work in the Flemish Pass — Husky Energy — is more likely to have the next producing project, in the Jeanne d’Arc Basin.
As of Oct. 1, Husky Energy was cleared from environmental assessment on all fronts for its West White Rose development.
The provincial government had announced a release from assessment in late August, but it was dependent on release by the CNLOPB.
The next step will be the submission of a development plan, wherein Husky will indicate whether it will produce oil at West White Rose using mostly subsea infrastructure or a wellhead platform — a gravity base structure smaller than those being used for the production of oil at Hibernia and Hebron.
The selection is expected to come soon, given Husky is suggesting a start to construction before the end of the year.
“We have not yet announced a method of development for West White Rose, but welcome news that the wellhead platform option has been released from the federal environmental assessment process,” stated Colleen McConnell, a spokeswoman for Husky Energy, in an emailed response to questions Friday.
Husky representatives have previously said the wellhead platform is a preferred option and the company has negotiated with the Town of Placentia to pay the town $2.25 million from 2014-17 as a construction permit and grant in lieu of taxes.
The wellhead platform would be built in a graving dock at Argentia. “Should the wellhead platform option be finalized in the near future, we would hope to begin graving dock construction during the current quarter,” O’Connell stated.
First oil from the new development is expected in 2016-17.
The board has set the estimated recoverable reserves for West White Rose at 40 million barrels of oil, but that estimate is expected to be updated in the near future, based on recent work on the find. A new number — what sources suggest might land closer to between 100 million and 120 million barrels — will be set once the CNLOPB completes a resource update, following the submission of Husky’s development plan.
Meanwhile the South White Rose extension received final approvals earlier this year, prompting the start of construction on that project, at a cost $1.2 billion.
The work is on schedule and oil is expected in 2014.
Potential in new discoveries
New projects depend on significant discoveries, and significant discoveries come out of exploratory drilling.
“From an industry perspective, I think the industry believes there is still a fair amount of potential left in (Jeanne d’Arc) basin and it still remains a basin of interest to a number of oil and gas companies,” said Paul Barnes at the Canadian Association of Petroleum Producers (CAPP).
Plenty of discoveries in the Jeanne d’Arc — even designated significant discoveries — remain undeveloped, as a result of current technical challenges and costs. These discoveries are often too small to develop on their own.
With that said, companies continue to make new finds, while advancing technology with the eye of making it possible to produce known discoveries.
“There are a number of companies who are looking at those discoveries now that are fairly close to existing production facilities and are doing assessments as to whether they can tie those discoveries back to a current facility to produce them,” Barnes suggested.
Companies have also increased the resources tied to existing oil developments.
Earlier this year, the CNLOPB confirmed it was increasing the estimate for the amount of oil to be pumped from the Terra Nova project by 87 million barrels, extending the life of Terra Nova by as much as seven years.
Nalcor Energy vice-president Jim Keating, the head of Nalcor Oil and Gas, said more exploration in the Jeanne d’Arc and elsewhere offshore will ultimately sustain the industry into the future.
That exploratory work, he said, will be a mix of concentric exploration, around existing developments, and frontier exploration in areas like the Orphan Basin, Carson Basin and newly discovered areas off Labrador.
“The mark of a sustainable oil exploration region is when you see multiple (exploration) strategies put into play by multiple companies,” he said.
These numbers are for total estimated recoverable oil:
Jeanne d’Arc Basin
Hibernia 1,395 million barrels
(Including Hibernia Southern Extension)
Hebron 707 million barrels
Terra Nova 506 million barrels
White Rose 373 million barrels
(Including satellite fields)
Flemish Pass Basin
Bay du Nord 300-600 million barrels
Mizzen 102 million barrels
Harpoon To be determined