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Providing coverage of Alaska and northern Canada's oil and gas industry
July 2014

Vol. 19, No. 28 Week of July 13, 2014

Nunavut edges toward comeback

A demanding process that could lead to a revival of oil and natural gas exploration in Canada’s High Arctic has taken a key step forward with conditional approval of a 2-D seismic survey in Nunavut’s Baffin Bay and Davis Strait.

The National Energy Board completed a painstaking public examination of an application to conduct the survey over five years of open water seasons by issuing a Geophysical Operations Authorization, GOA, along with 15 conditions the proponents must meet.

The survey partners are operator Multi Klein Invest AS, Norway’s TGS NOPEC Geophysical Co. and Petroleum GeoServices.

In response to a “high degree of public interest” the federal regulator conducted four days of hearings last year in Pond Inlet, Clyde River, Qikiqtarjuag and Iqaluit, noting that the public participation was unprecedented in its environmental assessment process for a GOA.

Initial recommendations were prepared by board member David Hamilton, with the public invited to submit written comments and provide oral responses.

The environmental assessment report concluded that implementation of MKI’s commitments, environmental protection procedures and mitigation measures, and compliance with the board’s regulatory requirements and conditions, the project was “not likely to result in significant adverse” impacts.

MKI is required to make status updates of environmental commitments and marine mammal observer reports that will be available to the public.

Those reports may provide information on sightings of whales and birds in offshore areas that would not otherwise be made public, while MKI will be required to hold project update meetings with interested communities.

First move in almost 30 years

There has been no announcement of the schedule for the survey work.

But the seismic plans are the first industry move in almost 30 years after exploration companies pulled out of the Nunavut area in 1986 after posting 20 discoveries, most of them in the Sverdrup basin, a sedimentary formation that covers about 200,000 square miles.

The finds were highlighted by three large deposits: Cisco, 1 billion barrels of oil equivalent; Drake Point, 6 trillion cubic feet on Melville Island; and Hecla in the Prince Gustaf Adolf Sea, 2 billion boe of oil and 10 tcf of gas.

But, beyond a handful of annual demonstration shipments of crude, the remote region never came close to full-scale commercial development, despite geological surveys that pointed to 67 billion boe of resources in Nunavut from 180 completed wells.

The geological surveys of Canada and the United States estimate the territory could hold recoverable resources of 9.2 billion to 23 billion barrels of oil and 97.2 tcf to 262.3 tcf of gas.

Concerns over the dangers of exploration in the area were heightened in 2011 when S.L. Ross Environmental Research was commissioned by the NEB to assess options for cleaning up spills in Canada’s Arctic offshore, including Davis Strait west of Greenland’s Disko Bay.

The consulting firm said those options would be impractical 20 percent to 84 percent of the time during the open-water season because of bad weather and sea ice.

Against that backdrop, aboriginal communities in the High Arctic have insisted on greater care in weighing exploration plans at a time when the industry is urging the NEB to drop its requirement for same-season relief wells to deal with blowouts or spills.

- Gary Park






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