Why two Israeli companies are making a big bet on Newfoundland’s offshore
WHEN ISRAEL-BASED NAVITAS PETROLEUM LTD. dipped its toe into the Newfoundland and Labrador offshore oil industry by grabbing an exploration licence in the Orphan Basin for $48 million in 2016, it did so with ambitions to be a major player here someday.
“We’re hoping to replicate the times we had 10 years ago in the Eastern Mediterranean where we didn’t manage to drill a dry hole in a frontier basin,” says Peter Mikkelsen, exploration manager for Navitas Petroleum. “It’s like a drug. You get hooked.”
The times Mikkelsen is referring to occurred in the Eastern Mediterranean’s Levant Basin where Navitas and partner Delek Group—another Israel-based company—discovered approximately 42 trillion cubic feet of natural gas between 2000 and 2013.
Navitas partnered with DKL Investments Ltd, a subsidiary of Delek Group, on the Newfoundland licence. Navitas owns a 30 per cent interest in the exploration block and is the operator while Delek owns a 70 per cent interest.
Mikkelsen says after examining non-proprietary data on the licence, it has already discovered a promising lead it’s calling Picadilly, which is approximately 400 square kilometres in size. “There are potentially billions of barrels [of hydrocarbons] there. It’s pretty hard to find things of that size in a frontier basin,” he says.
Mikklesen says such a find could help Newfoundland and Labrador’s offshore oil industry as the Jeanne d’Arc Basin (where the province’s three producing oil fields are located) matures.
What Navitas and DKL want to do next is shoot three-dimensional seismic on the block. However, Mikklesen says they know the prospect also extends into acreage owned by BP Canada, Hess Canada and Noble Energy Canada. He says they would like to do a joint seismic program on Picadilly with BP and its partners, but haven’t been able to come to an agreement with them yet. “We’re exploring for ways with seismic contractors even if BP doesn’t participate to see if we can do it on our own next year. But we’re not sure we can yet.”