Majors to exit Nova Scotia gas project

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ExxonMobil and Shell have invited bids for their combined 18 percent stake in the planned Deep Panuke natural gas project offshore Nova Scotia.

Project operator EnCana is not saying whether it will enter the bidding by the Aug. 8 deadline. The two majors acquired the interests after EnCana drilled on their leases to determine the extent of Deep Panuke’s reserves after the field’s 1998 discovery and made the MarCoh discovery.

Estimates of recoverable reserves now stand at 632 billion cubic feet, a big drop from initial projections of about 1.5 trillion cubic feet.

But EnCana insists the field is a “keeper,” which it hopes to bring on stream in 2010 at about 300 million cubic feet per day for export to New England.

ExxonMobil and Shell are partners in the MarCoh discovery, which they say has attracted “industry interest” and could be part of the Deep Panuke development.

Final regulatory rulings are expected in the current quarter and EnCana has indicated it will decide before year’s end whether to go ahead with the C$700 million undertaking.

—Gary Park