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Canadian Beaufort up for bids
The Canadian government has reloaded the trap to see if it can repeat last year’s success when it lured Imperial Oil and ExxonMobil Canada to the Beaufort Sea with one of the region’s largest work commitments.
Interest in the Northern Oil and Gas Directorate’s 2008 offering of petroleum exploration rights will be concentrated on five parcels totaling 2.84 million acres in the Beaufort-Mackenzie Delta area.
In addition, bids have also been invited for one 203,000-acre parcel in the Central Mackenzie Valley of the Northwest Territories.
Companies have until June 2 to submit their bids.
The stunning development in the 2007 offering came from a joint bid by Imperial and ExxonMobil — sister companies and Canadian units of the Irving, Texas, supermajor.
They made a work pledge of C$585 million to secure 508,000 acres and are required to make combined spending of C$146 million within five years to gain a four-year extension of their exploration license.
For now, Imperial is keeping the wraps on exploration plans, other than saying they are at a “very preliminary stage” and nothing is scheduled for this winter.
Oil wake-up call last year What has intrigued observers is the revived interest in oil as a target in the Canadian Arctic after several years of hearing little but the struggle to bring the Mackenzie Gas Project to fruition.
Oil got its wake-up call last year when Devon Canada announced the first find in the Beaufort in 25 years, with its Paktoa C-60 well yielding an estimated 240 million barrels of recoverable crude.
That was followed with a National Energy Board declaration of a significant discovery license covering 37,000 acres — the largest license of its kind in the region.
Although Devon is taking its time in pondering the economic, environmental and regulatory challenges of oil development in the Beaufort, that prospect has never been ruled out because of Paktoa’s proximity to the 1979 Tarsuit discovery of 150 million barrels and the 1984 Amauligak find of 350 million barrels.
The significant discovery license is south of the Imperial-ExxonMobil joint venture.
Another success in this year’s offering of exploration rights would give added impetus to the debate over oil development in the Beaufort — with environmentalists and aboriginal communities fearful of what an oil spill would mean and troubled about the impact on bowhead whales.
There is no infrastructure to get Beaufort oil to southern markets across the Northwest Territories, but some observers have suggested the obvious connection would be through the underutilized trans-Alaska oil pipeline.
—Gary Park
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