The province has not one, but three new offshore basins to promote for oil and gas exploration, as a result of provincial investment into offshore research.
The discoveries are not in and of themselves oil finds, but the basins have the potential to hold one or more reservoirs large enough for development, according to Nalcor Energy president and CEO Ed Martin.
Ultimately, oil can only be found through exploratory drilling.
As The Telegram reported in Thursday’s edition, reports had been circulating among local players in the oil and gas sector that Nalcor Energy’s Oil and Gas division had identified a single, new, highly prospective basin off the Labrador coast.
Martin clarified it is actually three new basins — as he addressed the annual general meeting of the Newfoundland and Labrador Oil and Gas Industries Association (NOIA) in St. John’s Thursday.
Seismic testing, core analysis and other, early exploration work completed by Nalcor Oil and Gas and its contractors in recent years identified the offshore areas.
The early exploration work, costing between $26 and $30 million, has also generally offered a clearer view of Labrador’s shelf and deepwater areas.
The identified basins — the Henley Basin, Holton Basin and Chidley Basin — have been named after locations found along the coast: Henley Harbour, Holton Harbour and Cape Chidley.
The already-identified Hawke Basin has also been expanded as a result of Nalcor’s work.
Word of the new basins and the research data is expected to draw renewed interest from major oil companies in the area off of Labrador.
“So far, we’ve had discussions with numerous oil companies regarding this data, many of whom are not yet active in Newfoundland and Lab-rador, and they have all expressed strong interest in our findings,” Martin said.
He did not identify the companies, citing the anonymity involved in the process of offshore licensing provincially, “but we are very encouraged because they are very interested.”
The interest will only be proven with the response to a call for bids on exploratory licences for offshore Labrador by the Canada-Newfoundland and Labrador Offshore Petroleum Board.
Both Martin and Nalcor vice-president and Oil and Gas division lead, Jim Keating, said the Crown corporation is not interested in spending the big money required to drill, instead laying the groundwork to draw the interest of large oil companies.
“We’re adding value where we should,” Keating said.
He told The Telegram analysis on the data for offshore Labrador is continuing. As part of the spending to date, Nalcor has also conducted research into areas closer to the Jeanne D’Arc Basin, offshore Newfoundland.
“This is just the sort of vision we could only have hoped for,” said outgoing NOIA chair Mike Critch of the early exploration work and discoveries.
Critch predicted the information collected to date would result in competitive bidding on exploration licences offered for the area in the future.
“The offshore Lab-rador area is doubled in size and that will be of great interest to the oil companies,” said Natural Resources Minister Tom Marshall, noting the investment to date has extended from the 2007 Energy Plan.
“I’m very pleased with the results today and what (the Nalcor Oil and Gas team) have accomplished.”
In addition to encouraging the efforts of Nalcor, Marshall said his department will be taking the new information to international oil industry events in Houston, Scotland and Norway — promoting the province for deepwater exploration.
"Thursday, Jan. 31 story"
A collection of exploration projects by Nalcor Oil and Gas has outlined a highly prospective basin off Labrador — one with the potential to contain large oil reserves, sources have told The Telegram.
It is expected the find will be confirmed by Nalcor Energy president and CEO Ed Martin today, during a presentation at the annual general meeting of the Newfoundland and Labrador Oil and Gas Industries Association (NOIA).
Martin will be sharing early results from a multimillion-dollar program of early exploration — pre-drilling work — the Crown corporation has pressed forward with during the last four to five years.
While there is no guarantee of oil at this point, what the results show has already stirred up members of the oil and gas industry.
The buzz of oil potential is a large part of why Nalcor has been investing in the exploratory work.
As The Telegram reported in late November 2012, Nalcor will have spent more than $20 million on early exploration projects by the end of 2013.
That work includes 2-D seismic testing, mapping of seepage of naturally occurring oil into ocean waters, analysis using tectonic plate movements, biostratigraphic analysis using trace fossils, rock physics study and analysis of seabed cores.
A regional pore pressure study, will cover an area the size of the Gulf of Mexico, using data from 30 existing offshore wells in the province to produce information on the risk associated with exploration drilling.
The projects are meant to draw in increased private investment into detailed exploration and test drilling offshore.
Spending on such data sets by the Government of Nova Scotia, known as the Play Fairway Analysis, costing to the tune of $15 million, was credited with drawing oil giant BP to commit $1 billion to detailed exploration in that province’s offshore area.
Martin’s presentation on Nalcor’s information program is scheduled for just after noon at the Sheraton Hotel Newfoundland in St. John’s. The presentation is titled “Nalcor Energy’s Exploration Strategy — Lowering Barriers to New Entrants.”
Before the luncheon is over, NOIA will also name its new board of directors. NOIA’s vice-chair, John Henley with North Eastern Constructors Ltd., has already been acclaimed. Henley was born and raised in St. John’s, is a graduate of Memorial University of Newfoundland and the Massachusetts Institute of Technology. He has worked on oil and gas projects around the world, including in Newfoundland and Labrador.
Nominees for the NOIA board include: Anne Whelan, BrenKir Industrial Supply; Karen McCarthy, Cape Consulting Group; Steve Power, Grant Thornton LLP Chartered Accountants; Bill Fanning, Kvaerner Newfoundland Ltd.; David Jerrett, Maderra Engineering; Carol Bartlett, McGregor GeoScience & Environmental Ltd.; Tony Chaytor, Noble Drilling (Canada) Ltd.; Raymond Collins, PF Collins International Trade Solutions; Doug Youden, Upstream Solutions Inc. (USI); Matthew Stanley, Weatherford International and Marty Gaulin, WorleyParsons Canada Services Ltd.