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Imperial’s plans put at risk NEB won’t issue advance ruling on same season relief well in Beaufort Gary Park For Petroleum News
Turned down by Canada’s federal energy regulator in its efforts to gain an advance ruling on its plans for an exploration well in the Canadian section of the Beaufort Sea, Imperial Oil is now taking time to re-evaluate the project.
Working in partnership with ExxonMobil Canada, it had asked the National Energy Board to issue an advance ruling on its same season relief well capacity in the Beaufort before the board completed a comprehensive policy review of the proposal.
Imperial had already issued a warning that a delay in the advance ruling would cost it one year of a nine-year term on Exploration License 446 which is due to expire in October 2016.
The license was obtained in 2007 based on a work commitment — shared jointly by the two companies — of C$585 million to secure rights to 508,000 acres. A seismic program was conducted in 2008.
Imperial has indicated it is now at a crucial decision-making point that requires corporate approval of major new investment to start work on an Arctic drillship to complete an exploration well.
The advance ruling was deemed by Imperial to be important if it was to move forward with its Beaufort exploration plans, which in turn could be a key aspect of opening a new northern basin.
NEB can’t predetermine But the NEB said in a Dec. 15 letter to Imperial that it could not predetermine whether, or on what terms, it would approve drilling.
It said a decision would be made based on the evidence contained in a complete application, adding that a policy review would help both the applicants and the board to decide whether or not to order same season relief well capability.
The letter suggested a separate review for Imperial would take about the same time as a comprehensive review.
“Given public concern, Imperial’s application for a separate policy review would, in the board’s view, require the participation of the public as well as those who could be affected by any resultant policy,” the regulatory agency said.
“These are likely the same parties expected to participate in the comprehensive review.”
The NEB has previously said it would directly deal with matters related to same season relief well capability in the Beaufort rather than leave them with the chief conservation officer because same season relief well capability is an “issue of significant public concern.”
Imperial has estimated it has so far invested about C$150 million working up its plans for a well, including preliminary engineering for a new drillship and, through geosciences manager Michael Peacock, has warned the NEB that delays will only add to the costs and the “already onerous inhibitions to development of Canada’s Arctic resource.”
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