BP ready to drill off Nova Scotia – and other musings from the 2014 CORE Energy conference

Sable Energy Project's future, and fracking, also hot topics at annual event

Well, the CORE Energy Conference in Halifax is in the books, and here is a brief roundup of some of the news that came out of the October 7-8 event.

Drill, baby, drill

The biggest development – in my opinion – came during the last session on Oct. 7 when BP exploration manager Rob O’Connor gave attendees an update on the company’s activities in Nova Scotia.

O’Connor told the audience that BP completed its seismic program in September, and apparently, it liked what it saw in the data. O’Connor said the company is now beginning the planning to start a drilling program that he thinks will start in the second half of 2017. “It will either be one or two wells,” O’Connor said. “We’re going to work this seismic (data) hard and choose the best locations possible.”

This is big news for Nova Scotia’s oil and gas industry. Natural gas production from the offshore is declining. There’s not much happening onshore, and the Liberal government’s legislation to ban high volume hydraulic fracturing onshore will keep it that way.

New discoveries must be found, and the province’s offshore is its best hope for that. It needs companies to poke some holes beneath the sea for that to happen.

That O’Connor confirmed BP will be doing exploration drilling in the near future – something Shell did not commit to when it gave an update on its exploration activities in Nova Scotia’s offshore at last year’s conference – is a big deal for the province’s oil and gas sector and the businesses that work in it.

Of course, it’s hard to talk about BP operating in offshore environments without bringing up the oil spill disaster in the Gulf of Mexico it was involved in back in 2010. But if there was any concern about the possibility BP could screw up royally in Nova Scotia’s offshore like it did in the Gulf of Mexico, it wasn’t apparent at the conference. (It’s worth noting this is an energy conference generally attended by people who work in the industry and are supporters of it.)

Anyway, Nova Scotians seem ready to let BP drill to its hearts content in its waters.

Sable project’s murky future

There’s been a fair bit of speculation in Nova Scotia about when the Sable natural gas field will be abandoned by operator ExxonMobil Canada and its four partners.

Sable is one of two producing fields located in Nova Scotia’s waters (Encana Corp.’s Deep Panuke is the other) and its life is nearing an end, as gas production continues to decline.

CORE attendees didn’t get much clarity on this subject from outgoing ExxonMobil Canada president Andrew Barry during his speech on Oct. 8, however.

During the tail end of his remarks, Barry finally addressed the Sable project and when production will cease.

“The answer is eventually,” Barry said. “The date when production will cease has not been determined.”

Thanks for clearing that up, Andrew.

Fracking fuss

I was curious to see how Nova Scotia Energy Minister Andrew Younger would be received at the conference just weeks after his government introduced legislation to ban fracking in the province. It’s a move that couldn’t have been very popular with the pro-industry crowd that attends this event every year.

As it turns out, Younger was politely received as he delivered the opening remarks for the conference and explained why the Liberal government has gone this route.

One interesting aspect of this issue came up during a panel session involving senior management from utility companies in Newfoundland and Labrador, New Brunswick and Nova Scotia.

It’s clear from what was said during this panel that N.B. Power and Emera Inc., which owns Nova Scotia Power, see natural gas as an important part of the future energy mix in those two provinces – if they can get an affordable supply.

In theory, gas coming from Nova Scotia and New Brunswick should be cheaper than gas sourced from Western Canada or the U.S.

But Nova Scotia’s fracking ban, and the moratorium New Brunswick’s new premier Brian Gallant is proposing, means development of onshore shale gas reserves in both provinces is probably not going to happen for quite some time – if it happens at all.

N.B. Power’s president and CEO Gaetan Thomas, for one, indicated he’s OK with fracking. “I think over time, studies will show it can be done safely,” Thomas said.

Thomas does not make the laws, though. That is now the job of Brian Gallant and his Liberal government.

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