A program to explore for natural gas in the Beaufort Sea is squarely in the sights of Devon Canada.
The unit of Devon Energy will not have to face any further environmental scrutiny before launching a revival of drilling in the shallow waters off the Mackenzie Delta with the first of four possible wells in early 2006.
Michel Scott, vice president of government and public affairs, also disclosed to Petroleum News on April 13 that contracts have been signed for a drilling platform and ice breaker.
Canada’s Environment Minister Stéphane Dion said April 12 that he had decided the project was “not likely to cause significant adverse environmental effects” based on the mitigation measures outlined by Devon Canada and, therefore, did not need further assessment by a review panel or mediator.
Scott said the company had spent millions of dollars preparing a comprehensive study for the National Energy Board and meeting with northern communities and environmentalists.
“We don’t anticipate we have left any gaping holes,” he said.
The final regulatory hurdle is a “technical” approval from the NEB for drilling.
The drilling contracts were awarded after Devon Canada opted for an SDC – short for steel drilling caisson — over a land-fast tender-assist drill unit or an ice island.
The SDC is a former crude oil tanker converted into a mobile Arctic platform. It has previously been used for exploration drilling in the Beaufort.
Scott said the ice breaker will tow the SDC into place this August. Once the platform has frozen into place drilling can start, likely in January.
Depending on results, three more wells could be drilled — one each winter until 2008-2009.
The wells are expected to cost C$55 million to C$60 million each in projected water depth of about 40 feet to depths of about 11,500 feet.
Gas would go into Mackenzie lineThe objective is to find gas reserves large enough to flow into the proposed Mackenzie Valley pipeline.
Scott doubts Devon Canada could bring any gas on stream before 2012-2015.
Before drilling stopped in the Beaufort in 1989, 26 significant discoveries were posted — 41 in shallow water and 50 in deep water.
The NEB has estimated marketable reserves at 4.1 trillion cubic feet and believes the area has the potential for 50 tcf.
Despite delays in the scheduled start of public hearings and opposition from the Deh Cho First Nations, Scott said Devon Canada is “generally encouraged” by progress on the pipeline.
Meantime, Devon Canada has plugged and abandoned the first exploratory well in the Eagle Plains area of the northern Yukon after failing to find commercial accumulations of hydrocarbons.
Scott said Devon Canada was motivated to drill by looming expiries on its licenses — it was “either drill or drop.”
Although it has no plans to drill further wells, the company has qualified to drill again within three or four years, he said.
Eagle Plains is estimated to hold about 6 tcf of gas, which, if discovered, could be fed into the Mackenzie pipeline.