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Vol. 12, No. 13 Week of April 01, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

Orphan basin drilling offshore Newfoundland faces another delay

Gary Park

For Petroleum News

Offshore Newfoundland has taken another bruising with partners in a deepwater exploration venture stalling the second and third wells in the program for at least one year, possibly two.

With their schedule upset by mechanical problems affecting the drilling rig, completion of the initial exploration well in the Orphan basin has been delayed and it is no longer possible to spud a second well this year. Plans for a third well, originally scheduled for 2008, are also uncertain.

A spokeswoman for rig contractor ExxonMobil told the St. John’s Telegram the second well should be drilled in 2008-09, pending regulatory and owner approval.

The semisubmersible rig Eirik Raude, owned by Norwegian-based Ocean Rig, is back on location at the Great Barasway well site after undergoing repairs at the Marystown shipyard in Newfoundland, Chevron Canada spokesman Dave Pommer told Petroleum News.

Eirik Raude booked for Gulf work

He said the partnership “needs to complete the work,” but when is not certain.

Pommer said it was initially anticipated that the wildcat would be finished by about mid-February, six months after spudding, “but you never know when you set out on an exploratory well in deep water how long it will take or what you will encounter.”

The Eirik Raude is under a two-year contract with ExxonMobil and is next booked to drill wells for the company in the Gulf of Mexico.

But ExxonMobil and others in the Newfoundland industry are confident exploration of the Orphan basin will proceed, although Pommer said a rig has to be procured if a decision is made to continue the drilling program.

The exploration licenses covering eight parcels were acquired in 2003 for C$628 million in work commitments.

Partners in Great Barasway, estimated by outsiders to carry a price tag of at least C$140 million, are operator Chevron Canada 50 percent, Shell Canada 20 percent and sister companies Imperial Oil and ExxonMobil Canada 15 percent each.

Continuation of the Orphan program is important for rig hands and support companies in Newfoundland, where activity has taken setbacks from cancellation of the Hebron-Ben Nevis project, delays in opening up a new portion of the Hibernia field and the absence of a natural gas royalty regime.

Some of this is being blamed on spillover from Premier Danny Williams’ hard line on improving returns for his province from offshore activity.



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