Big Oil has some grand ambitions indeed for exploring Newfoundland and Labrador’s offshore
At the biggest oil and gas conference in Atlantic Canada back in June of 2018, Nalcor Energy’s Jim Keating strode to the podium with confidence.
The Crown corporation’s executive vice-president for corporate services and offshore development is a regular speaker at NOIA’s annual show. On this day he came to tout the potential of Newfoundland and Labrador’s offshore to a packed crowd at the St. John’s Convention Centre.
That potential had already been brought up by previous speakers. That day J.D. Irving, Limited CEO Jim Irving talked up the Flemish Pass and Orphan Basins, which he said held potentially 37 billion barrels of oil and 33 trillion cubic feet of natural gas. But Irving said that potential was in danger of being stranded due to an onerous Canadian regulatory regime.
Keating struck a more positive tone, reminding his audience the province’s offshore contains “a couple of dozen monster prospects.” He also told a story about the time his father asked him, perhaps impatiently, when exploration wells were going to start being drilled in the province. Keating’s response to his dad was simple and measured: “It’s the oil and gas industry. We need patience.”
That patience is paying off. The Canada-Newfoundland and Labrador Offshore Petroleum Board received a record bid total of $1.38 billion during its 2018 land sale. What’s more, there are seven applications for drilling projects before the Canadian Environmental Assessment Agency (CEAA) involving some of the biggest oil and gas companies in the world. In those applications, the companies are proposing to drill more than 100 exploration, delineation and appraisal wells in provincial waters over the next 10 years.
That represents a tremendous amount of activity for the sector. In the following pages, we provide a snapshot of each project and what Big Oil has planned for Newfoundland and Labrador’s offshore.
Flemish Pass exploration drilling project
Formerly known as Nexen Energy ULC, the Canadian division of the Chinese government-owned company filed its project description with CEAA in April 2017.
CNOOC says between 2018-2028 it wants to conduct exploration drilling on two exploration licences―1144 and 1150―it holds in the Flemish Pass Basin. The western edge of the project area is over 400 kilometres from Newfoundland. The maximum water depth found in the project area is 1,200 metres.
The company says the wells may be drilled by a semi-submersible mobile offshore drilling unit (MODU) or a harsh environment drill ship MODU. The type of MODU used for a well will “be based primarily on the characteristics of the physical environment at the proposed drill site, particularly water depth, expected drilling depth and expected weather and ice conditions and associated mobility requirements,” CNOOC writes in its project description. It adds that two MODUs could be used at the same time. It’s proposing to drill as many as 10 exploration and appraisal wells between 2018-2028.
The location of the well sites hasn’t been selected yet. CNOOC says no excavated drill centres or underwater construction will be needed for the planned exploration activities. If any of the wells show commercial amounts of hydrocarbons, a well flow test may be done to sample and identify formation fluids and to measure produced flow rates. As this magazine went to press, CEAA was still waiting for responses to its request for information regarding the company’s environmental impact statement for the project.
100-200 Personnel required on a MODU during offshore operations
10,634 km² The size of the project area
45-160 days The approximate time CNOOC says it will take to drill and evaluate each well
Eastern Newfoundland offshore exploration drilling project
ExxonMobil Canada Ltd, the Canadian arm of the Houston-based super-major, submitted its project description for the drilling project in November of 2016. It and its partners―Equinor Canada Ltd and Suncor Energy―want to conduct exploration, delineation and appraisal drilling offshore Newfoundland and Labrador between 2018-2029.
The activity will take place on two exploration licences, 1135 and 1137, and could include drilling up to a whopping 35 wells during the project period. The drilling will take place in the Jeanne d’Arc and Flemish Pass Basins approximately 250 kilometres east of St. John’s.
Specific well sites haven’t been decided on yet. That will occur as project planning and design activities move ahead. When the wells are drilled, the company says it will use a semi-submersible drilling installation or drill ship. The planned project timeframe of 12 years provides “an adequate and conservative timeframe within which project activities may occur”, ExxonMobil says in its environmental impact statement.
Like other exploration drilling projects in Newfoundland and Labrador’s offshore, the project will include other activities and techniques such as possible delineation drilling in the case of a hydrocarbon discovery, geophysical surveys, batch drilling, formation flow testing, geotechnical surveys, environmental surveys, video surveys, and eventual wellhead decommissioning and removal. ExxonMobil says exploration activities may occur at any time of the year. An environmental assessment of the project by CEAA is currently in progress.
35 The maximum number of exploration, delineation and appraisal wells ExxonMobil is proposing to drill
8-10 The estimated number of return trips per month made by supply vessels to one drilling installation during the project
29 days The approximate time modelling estimates a sub-surface release of oil from EL 1135 would reach coastal Newfoundland
Southeastern Newfoundland offshore exploration drilling project
ExxonMobil Canada filed its project description for this proposed project in what is known as the Carson Basin in September of 2018.
The company is applying to CEAA to conduct an exploration drilling program on exploration licence 1136 in the basin. Suncor Energy and Total E&P Canada Ltd. are ExxonMobil’s partners on this licence, which has had no exploration wells drilled on it so far.
During a 10-year period, from 2020-2029, ExxonMobil says it will drill at least one well, and possibly as many as five exploration and delineation wells, on the licence. “Upon evaluation of the first well and the analysis of its results, a potential second well location site will be determined,” ExxonMobil writes in its project description. However, the company says more wells could be drilled if more exploration licences are added to the project. If it gets regulatory and company approvals in time, the company plans to drill its first well in 2020.
A semi-submersible drilling unit will be used for the project. ExxonMobil says these units are generally used in deep waters or in areas where more mobility is needed due to ice or other factors and operational risks. The drilling program won’t require any excavated drill centres or other underwater construction activities. ExxonMobil estimates each well will take between 60-75 days for drilling and possible testing, followed by abandoning or suspending the well. On Nov. 5, 2018, CEAA announced an environmental assessment of the project was required.
5 The maximum number of wells ExxonMobil says it will drill on EL 1136
24,335 km² The size of the Carson Basin exploration drilling project area
2,730 metres The maximum water depth of EL 1136
West Flemish Pass exploration drilling project
Chevron Canada filed its project description with CEAA in October of 2018, making it the most recent project description submitted for exploration drilling activities in offshore Newfoundland and Labrador.
The company is applying to conduct the program on exploration licence 1138 in the Flemish Pass Basin, 375 kilometres northeast of St. John’s. Chevron’s partners in the proposed program are Equinor Canada, which has interests in numerous exploration licences offshore Newfoundland and Labrador, and Anadarko Canada. Chevron Canada says in its project description that as many as eight exploration, delineation and appraisal wells could be drilled from 2021-2030. It plans to drill the first exploration well in 2021 pending regulatory approval. Either a semi-submersible rig or a drill ship will be used.
But the drilling activities won’t be continuous. The California-based firm says the drilling will be determined by “rig availability and previous wells results.” When drilling does occur, Chevron Canada would prefer it take place between May and September―avoiding the winter and spring seasons when vicious winter storms can bring eight-metre-high waves and winds gusting over 100 kilometres an hour, along with sea ice, to the North Atlantic. The company also says it will not be building onshore facilities as part of the project and will use third-party facilities to carry out any work required for this proposed exploration drilling campaign. On Dec. 20, 2018, CEAA announced an environmental assessment of the project was required.
180 days The time Chevron Canada estimates it will take to drill each well
187,700 tonnes The estimated maximum amount of carbon dioxide equivalent emitted annually due to the drilling program
20 The number of marine mammals that frequent the waters off Eastern Newfoundland
Orphan Basin exploration drilling project
BP Canada submitted its project description to CEAA for this exploration drilling campaign in January 2018.
The London-based super-major, and its partners in the project―Noble Energy Canada and Hess Canada Oil and Gas ULC―are proposing an ambitious program that encompasses four exploration licences (1145, 1146, 1148 and 1149) that lie within the Orphan Basin approximately 343- and 496-kilometres northeast of St. John’s. Between 2019 and 2026, BP Canada says it may drill up to 20 exploration wells in the project area. It says the first well could be drilled in 2020 pending regulatory approval.
As with the other drilling programs being proposed in offshore Newfoundland and Labrador, BP Canada says in its project description that it will use either a semi-submersible rig or a drill ship to drill the wells. It’s possible the same MODU may not be used to drill all the wells in the program. Logistics support for this campaign will be provided through a fleet of platform supply vessels and helicopters.
As for the drilling, BP Canada says specific drill sites haven’t been decided on yet. “Prospective well locations within the ELs are being identified based on data obtained through two-dimensional and three-dimensional seismic data collected between 2012 and 2015 within the Orphan/Flemish Pass basins,” BP Canada writes in its project description. In March of 2018, CEAA began its environmental assessment of this project.
$425,805,000 The amount BP and its partners bid to obtain the four exploration licences in the project area
9,432 km² The size of the Orphan Basin exploration drilling project area
60 The number of days BP Canada estimates it will take to drill each well
Flemish Pass exploration drilling project
This is a proposed exploration drilling project for offshore Newfoundland and Labrador that has been in the Canadian regulatory system for a while. Equinor Canada filed its project description in August 2016.
The Canadian arm of Norway-based Equinor is proposing an exploration drilling program in the remote Flemish Pass Basin between 2018 and 2027. The project area includes exploration licences 1139, 1140, 1141 and 1142 that are located approximately 480 kilometres east of St. John’s. Equinor is partners with BP Canada and ExxonMobil Canada on ELs 1140, 1141 and 1142. On EL 1139, Equinor is partnered with ExxonMobil Canada and Anadarko Canada.
The drilling campaign is a significant one. The company says up to 30 wells could be drilled. A semi-submersible unit or a drill ship may be used to drill the wells. It hasn’t decided what type will be used. “The type of installation chosen will be based primarily on the characteristics of the physical environment at the proposed drill site, particularly water depth, expected drilling depth and expected weather and ice conditions and associated mobility requirements,” Equinor writes in its project environmental impact statement.
The environmental assessment of this project is still ongoing. As this magazine went to press, CEAA said it was still reviewing additional information Equinor Canada had submitted in November 2018 relating to its environmental impact statement.
1 in 333,333 The chance of a well blowout based on oil spill probability analysis, according to Equinor
10 The maximum number of return trips made per month by supply vessels to a drilling installation during the project
2-5 The number of days flaring would last if a flow test is done during the project
Husky Energy exploration drilling project
This project has also been on CEAA’s books for some time. Husky Energy filed its project description in September of 2016.
The Calgary-based company, which has been exploring for oil and gas in Newfoundland and Labrador’s offshore since 1982, is proposing an exploration drilling program within exploration licences held in the Jeanne d’Arc Basin, approximately 350 kilometres east of St. John’s. The project area includes exploration licences 1151 and 1152 (in which Husky Energy holds 100 per cent interest) and 1155. Husky Energy and BP Canada each hold a 50 per cent interest in 1155. The company is proposing to drill up to 10 exploration wells at any time between 2019 and 2027.
In its project description, the company says drilling will be carried out by a semi-submersible rig, a drill ship or a jack-up rig. The drilling will be done in shallow water, as the average water depth in the Grand Banks is just 75 metres. The plan was to drill the first well by the first quarter of 2018. However, that date has come and gone as the project is still in the environmental assessment phase. In fact, in December of 2018, CEAA had requested additional information from Husky Energy regarding its environmental impact statement for the project that it filed in September 2018.
86 The number of wells Husky Energy has drilled in offshore Newfoundland and Labrador
63,033 tonnes The amount of carbon dioxide equivalent Husky Energy estimates will be emitted annually from the project
5 The average number of helicopter trips required per week to transport crew and light supplies during drilling activities