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Oil disperses gas clouds Imperial, BP, gear up for Canadian Beaufort exploration; despair over Mackenzie Gary Park For Petroleum News
The Inuvik Petroleum Show wrapped up its ninth annual gathering June 19 with some misgiving about whether there will be a 10th celebration.
The plodding progress — some may even say that “progress” is overstating things — towards approval of the Mackenzie Gas Project causes doubt that the trade show can survive.
But it’s not all doom and gloom in Canada’s North.
A partnership of Imperial Oil and parent company ExxonMobil is gearing up for a deepwater oil exploration program in the Beaufort Sea, two years after making a work commitment of C$585 million in an exploration lease.
The two companies have indicated they could spud their first well in 2013, within the five-year limit they have to complete exploration work that qualifies for a four-year extension of their permit.
BP, which gambled C$1.2 billion last year to secure a license, is also grooming what it views as a high-quality prospect for an initial exploration well in 2014.
Mike Peacock, Imperial’s exploration and development manager, told the Financial Post that his company would sooner find oil than gas in the Beaufort because oil would be easier to develop.
Liz Jolley, exploration vice president at BP, said a lot of seismic data must first be gathered before the company moves to the drilling phase.
Tanker alternative Among the alternatives is the use of tankers, rather than pipelines, to carry oil from the production sites, which the companies regard as a new frontier that requires deepwater drilling that has yet to be conducted in the Arctic environment.
Northwest Territories Industry Minister Bob McLeod said the prospect of offshore oil exploration, even though it would not generate the economic benefits of onshore activity, would generate excitement and stimulate interest in the North.
Inuvik Mayor Derek Lindsay told the Canadian Broadcasting Corp. that with all companies paring back their spending, there was a struggle obtaining sponsorships for the C$135,000 show and attendance was down 10 percent from last year at about 450.
He blamed the decline in support on the Joint Review Panel’s delays in completing its environmental and socioeconomic impact assessment of the proposed Mackenzie Valley pipeline.
But he suggested a favorable report from the panel before the end of 2009 could revive hopes for a 2010 show.
O.D. Hansen, a spokesman for the Aboriginal Pipeline Group, which has rights to secure a one-third equity stake in the pipeline, told delegates as they prepared to leave that “We hope next time we see you, we will have bigger and better news.”
Randy Ottenbreit, Imperial’s senior officer in charge of the MGP, said a lot of work is taking place to keep the project moving ahead, including discussions between the proponents and the Canadian government on a fiscal framework.
Richard Nerysoo, head of the Gwich’in Tribal Council in Inuvik, delivered an upbeat message, saying his council refused to let “pessimism overtake the opportunities that we have” for resource development.
Nellie Cournoyea, head of the Inuvialuit Regional Corp. and a former premier of the Northwest Territories, echoed that sentiment, saying “It’s not that nothing is happening … but it’s up to us to grab those opportunities for the Inuvialuit as best we can.”
No more blind faith However, Russell Newmark, chief executive officer of E. Gruben Transport, told the show that companies are no longer prepared to operate on blind faith that the MGP will proceed.
“No one is going to do anything because there’s no degree of confidence,” he said.
Gruben built a C$14 million hotel in Inuvik in hopes that construction workers, geologists and energy executives would ensure “no vacancy” signs, but the hotel has lost money since it was opened.
Newmark said the implications extend beyond the pipeline itself to the whole spectrum of northern development, noting that the delays in the MGP regulatory phase deter companies from paying for training or offering prospective employees any kind of secure future.
He said that to be held hostage by “the seven or eight members” of the JRP is “frustrating.”
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