Why the East Coast’s offshore oil sector will rise again

Attending various oil and gas industry events often makes me feel like an advance scout on the front lines. That’s because talking one-on-one with industry insiders gives me the inside scoop on where the sector is headed. It’s all confidential, of course, but when you’ve been around as long as I have, people know they can count on me to respect my sources.

And I do. But that doesn’t stop me from sharing what I learned – and what I’m hearing is this: the pace is about to pick up again in the Atlantic Canada offshore. And it’s going to happen a lot sooner than people think.

Exactly how soon? I’ve been told we could be back up to full speed in terms of offshore exploration and drilling activity by 2019/2020. One industry veteran told me that he anticipates 54 offshore wells in the next decade. In fact, I’ve heard that the sector is set to rebound bigger and better than ever.

I know what you’re thinking: trade show scuttlebutt isn’t always the most reliable intelligence. One or two whispers of growth wouldn’t convince me either, but I’ve heard it so frequently, and from so many divergent sources, that I’m confident in this rumour’s accuracy.

But don’t take my word for it. Research it for yourself – the hard evidence is already trickling in. Just this past February, Statoil announced plans for a new deep-water exploration drilling program in the Newfoundland and Labrador offshore. The company hopes to start work on the two-well project in the Flemish Pass (where the company’s Bay du Nord discovery is located) around mid-2017.

The Bay du Nord find, about 500 kilometres from the capital city of St. John’s, was discovered in 2013. With at least 300-million barrels of recoverable oil, it was promising enough to warrant a follow-up campaign last year. And, with an environmental application already submitted for yet another drilling program (to start after 2018), it’s clear Statoil is bullish on the region. They wouldn’t be here, investing millions and millions of dollars, if they weren’t confident it would be profitable for them down the road.

“This is really good news for our industry, the two wells alone, the drilling program will create some activity,” Robert Cadigan, president and CEO of the Newfoundland and Labrador Oil and Gas Industries Association (NOIA), told CBC News on February 8.

This, my friends, is just the beginning. Stay tuned…

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