As I wrote yesterday, this will be the second (and final) installment in a two-part series providing readers with some of the more noteworthy quotes I heard at last week’s NOIA oil and gas conference in St. John’s.
Even though the conference was short on big announcements, there were plenty of comments made by the various speakers that were worth tracking. What follows are a few more of them.
We have a lot of potential. But potential isn’t enough.
Canadian Association of Petroleum Producers president Tim McMillan issued that warning to conference attendees last week. McMillan made that statement as he was talking about hydraulic fracturing in the region. Nova Scotia has a ban on onshore fracking, New Brunswick has an indefinite moratorium on the controversial extraction method and Newfoundland and Labrador recently concluded a review that called for the fracking moratorium there to remain in effect until more research is done. McMillan praised Newfoundland and Labrador’s response, saying it was “scientific-based.” He seemed less impressed with Nova Scotia and New Brunswick’s handling of the fracking file. New Brunswick, in particular, holds promise as a producer of shale natural gas, which would require fracking to extract. But Brian Gallant’s Liberal government doesn’t seem interested in allowing fracking. McMillan says CAPP is willing to “work through the challenges [New Brunswick is] facing and allow opportunities to be tapped.” However, it’s going to take a lot more than encouragement from a pro-oil and gas industry organization like CAPP to get a social licence to frack in New Brunswick.
We can’t have projects that are break even in the $80s and $90s.
That is Statoil Canada president Paul Fulton’s view of the future as the company wades through the current industry downturn. The downturn is forcing all players to re-think their investment strategies. Fulton’s comments about the new standard for profitability should pique the interest of industry veterans in Newfoundland and Labrador because Statoil has made five discoveries in the Flemish Pass Basin, including the Bay du Nord find. However, those discoveries are 500 kilometres from St. John’s, in deep water and in a harsh operating environment. Operating there is not cheap. Can oil be extracted from these discoveries at a cost well below Fulton’s stated financial threshold? That’s a big question that no one can answer right now.
We will be making a decision in the next few weeks if we will have a drilling program or not.
Brent Janke, Suncor Energy’s vice-president of East Coast operations, said that drilling program – if it happens – will focus on the Terra Nova field the Calgary-based company operates in the Jeanne d’Arc Basin. Once upon a time, Suncor figured Terra Nova would produce until 2022. But Janke told conference attendees the company thinks Terra Nova has “growth potential of 100 million barrels of recoverable resources.” If that proves to be true, the offshore oil field could produce another 10 years or so beyond 2022.