Players in Newfoundland and Labrador’s offshore oil industry are looking to roll a run of positive news from 2013 — with project approvals, new discoveries and increased prospectivity — into 2014.
This year is kicking off in the wake of a trio of discoveries by Statoil in the Flemish Pass Basin, the announcement by Nalcor Energy of three new basins ripe for exploration off Labrador and a go-ahead from the provincial government for Husky Energy’s extension plans for the White Rose oilfield even as construction continues on a platform to produce from the Hebron discovery.
The Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB), meanwhile, has embarked on reforming the system for awarding exploration licences offshore, in a move expected to draw even more activity to the province in the years to come.
Onshore, new office space in both downtown St. John’s and the city’s east end has several companies starting the year in fresh surroundings, as they tackle the challenges ahead for the industry.
That will include expected labour challenges, as work on offshore developments heats up.
The coming year is also setting up to be a year for further public discussions around offshore helicopter safety and the requirements of heavy industry at greater and greater distances from shore, with emerging areas of interest like the Flemish Pass about 500 kilometres from the supply centre of St. John’s.
The province will also have to watch closely as the federal government advances its plans to gain an identified extension to the country’s offshore limits — limits identified oil discoveries are already poised to press.
The talk of the town in calendar year 2013, Statoil’s trio of discoveries in the Flemish Pass Basin are likely to be referenced aplenty in 2014, particularly given the 300-600 million barrels recoverable early estimate on the Bay du Nord prospect.
Keeping the ball rolling, Statoil has announced plans for an 18-month program of drilling, focused around Bay du Nord.
The campaign is to be completed using the semi-submersible West Hercules while creating contract opportunities for local supply and service companies.
Statoil has also scheduled the collection of 1,900 square kilometres of seismic data this summer, for its use in evaluating the Flemish Pass finds.
While partnered with Statoil to explore the frontier discoveries, Husky also has the $2.5-billion West White Rose project on its plate, also known as the White Rose extension project.
The construction work ongoing at Argentia will see a reusable graving dock installed at the site for use in the development, instantaneously creating a new service centre for the provincial oil industry.
West White Rose still requires formal sanction, though several significant contracts are expected to be let by Husky in anticipation of the build and all-around approval.
The company has pre-qualified bidders for construction of the concrete gravity structure. The list includes three partnerships: Kiewit-Kvaerner; SNC-Lavalin—Dragados and Grand Bank Constructors, a pairing of H.J. O’Connell and Bouyges Construction.
Apart from the White Rose extension project, the company will continue development drilling at North Amethyst, the startup of gas injection at the South White Rose extension and the installation of equipment to allow for ultimate production from that further extension at the White Rose field.
Husky continues to produce from the field using the SeaRose FPSO.
Hibernia Management and Development Company Ltd.
Work on the $1.7-billion Hibernia Southern Extension continues, with HMDC holding the expectation to be in full production in the second half of 2015.
Reaching production will require more work at the Hibernia platform, following the installation of subsea equipment during last year.
In addition, HMDC has signed a new, 18-month contract with Seadrill for use of the West Aquarius drill rig.
The Hebron partnership
ExxonMobil is a leading partner in HMDC and a leader in the $14-billion Hebron partnership.
Hebron is still on for first oil in 2017, with continued construction of various pieces of the development’s offshore platform in 2014.
Pieces of the overall gravity-based structure (GBS) being built in this province include the living quarters, drilling support module and ancillaries (helideck, flare boom and lifeboat stations).
There is also the concrete base, in the process of being slip formed at Nalcor Energy’s Bull Arm Fabrication Site, currently in dry dock.
“This summer, the bund wall for the dry dock will be removed and the GBS will be towed to the deep water site of Bull Arm, where construction and slip forming activities will continue,” stated a spokeswoman for the project partnership.
The offshore producer also holding a strong presence “behind the scenes,” Suncor holds a partnership interest in the West White Rose, Hibernia Southern Extension and Hebron projects.
The company is also operator at the Terra Nova oilfield, where it will be looking to build on performance and profits through 2014.
Suncor will have control of the drilling rig Henry Goodrich for most of the year and will put the rig to use “primarily for Terra Nova development drilling,” according to a company spokesman.
The Terra Nova FPSO is scheduled for a four-week maintenance turnaround — a much shorter period offline than in 2013, when planned maintenance required 10 weeks due to work required on the mooring chains.
This year, Suncor is planning to bring in a light well intervention vessel (LWI), the Skandi Constructor, around mid-year for operation in the Jeanne d’Arc Basin. The LWI is a purpose-built ship allowing companies to increase production from existing wells — described by LWI companies as a cost-effective way to add to overall production.
And the company has filed a proposal with the CNLOPB for collection of 92,000 kilometres of seismic data, mainly outside the Jeanne d’Arc Basin, starting as early as this year.