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December 2013
Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©1999-2019 All rights reserved. The content of this article and website may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.
Vol. 18, No. 51 Week of December 22, 2013

Shell gives Nova Scotia a boost

Gary Park

For Petroleum News

Royal Dutch Shell is answering a long-held hope of the Nova Scotia government by announcing plans to drill up to seven deepwater wells over four years starting in 2015 — the first exploration wells in the province’s offshore since 2002.

The program is part of a six-year agreement Shell signed almost two years ago after making work commitments of C$998 million for a project area covering 7,870 square kilometers, or 40 percent of the company’s total license holdings.

Shell said it expects to use either an ultra-deepwater, year-round drillship or a semi-submersible. The water depths range from 1,000 to 3,500 meters in a region known as the Shelburne Basin, about 250 kilometers southeast of Halifax.

The company holds 28 significant discovery licenses offshore Nova Scotia, drilling its last 100 percent well on the old Onondaga B-84 discovery.

Shell acquired its first Nova Scotia leases in 1963 and has participated in 77 of nearly 200 wells drilled in the offshore, including the initial discovery well.

Primary target oil

Randy Hiscock, Shell’s manager of business development and new ventures, said oil is the primary target for what the company hopes could be a presence in the area for “another, 70, 80 or 90 years.”

He said the “sun is rising hopefully on a new day in the offshore Nova Scotia,” which has seen the Cohasset-Panuke oil project wind down, the Sable offshore gas project (in which Shell is a partner) reduce output by about half from a peak of 600 million cubic feet per day and Encana’s Deep Panuke, after falling years behind its schedule, come on stream this year and start ramping up to 300 million cubic feet per day. The bulk of gas from the two operations is exported to the northeastern United States.

Hiscock said that although it would be difficult for Shell to profit from a gas find in its new exploration round, that would not necessarily be a deal-breaker.

“We have the technology to monetize gas if the volumes are economic and if it ranks in terms of Shell’s global portfolio,” he said.

Hiscock has high praise for Nova Scotia, describing the regime as “world-class ... that’s one of the reasons we entered here.”

BP has also secured exploration rights after making a successful bid last year of C$1 billion for four deepwater blocks.

A detailed analysis of the offshore, funded by the government, estimated the resource potential at 8 billion barrels of oil and 120 trillion cubic feet of gas.






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Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©1999-2019 All rights reserved. The content of this article and website may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law.