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Canada’s Far North edges back into exploration spotlight
Gary Park
Canada’s exploration interests are shifting back to the Far North, now that the East Coast offshore is stalled and possibly in decline.
With hopes of a gas pipeline from the Mackenzie Delta higher than they have ever been, the potential of the region’s 13 exploration basins is again being taken seriously.
Gerry Reinson, of Reinson Consultants Ltd., told a Calgary seminar in February that once a pipeline is in place the Arctic will be “highly economical.”
In particular, the gas prospects are the major current magnet. Current estimates of the region’s potential range as high as 175 trillion cubic feet, compared with 270 trillion in the Western Canada Sedimentary Basin.
For all of Canada reserves are placed at 594 trillion cubic feet, of which 121 trillion have so far been produced, 105 trillion have been found and 368 trillion are yet to be discovered.
Using figures from a study by Sproule Associates Ltd., Reinson said 102 trillion cubic feet are in the Arctic, with 62 trillion in the Mackenzie/Beaufort Sea region and 11 trillion in mainland Northwest Territories fields. In addition, discovered oil reserves are rated at 1.29 billion barrels, with undiscovered oil estimated at 5.74 billion barrels, dominated by the Beaufort at 767 million (discovered) and 4.35 billion (undiscovered) and the Mackenzie Delta at 248 million (discovered) and 1.05 billion (undiscovered).
On the gas front, the Beaufort resources are estimated at 4.08 trillion cubic feet (discovered) and 40.7 trillion (undiscovered); Mackenzie Delta 4.96 trillion (discovered) and 12.6 trillion (undiscovered); and Liard 1.28 trillion (discovered) and 4.07 trillion (undiscovered). The rest are concentrated in the Mackenzie Plain, Colville Hills, Peel Basin and Eagle Plains areas of the Northwest Territories and Yukon.
Typical of the regions that Reinson said would benefit from more intensive exploration is the Peel Basin, just north of the Mackenzie Plain and sitting astride the Northwest Territories-Yukon border, where 72 wells have been drilled with no discoveries. The estimated potential is placed at 4.4 trillion cubic feet of gas and almost 50 million barrels of oil.
Eagle Plain, west of Peel in the Yukon, has reported discoveries of 11.7 million barrels of oil and 83.7 billion cubic feet of gas from 33 wells. In the undiscovered category, the potential is estimated at another 28.2 million barrels of oil and 1 trillion cubic feet of gas.
But Reinson gave his highest rating to Mackenzie Delta/Beaufort Sea, where almost two-thirds of the gas resource is undiscovered, although 53 discoveries have yielded 1 billion barrels of oil and 9 trillion cubic feet of gas. Successful Hunt bid One sign of growing Arctic interest was the successful C$1.16 million bid by Hunt Oil Co. of Canada Inc. for 100,000 acres in Peel Plateau, which a resource assessment of the area by the National Energy Board said holds a potential 2.26 trillion cubic feet of gas and 21.3 million barrels of oil. The Yukon’s two previous calls for bids yielded successful bids from only Anderson Exploration Ltd., which was taken over last fall by Devon Energy Corp. Hunt senior geologist Chris Wickens said his company, taking its first foothold in the area, is confident it has identified some “significant” gas prospects, but will not decide on any drilling until it has reprocessed some seismic data and awaits developments on the Arctic pipeline front. He said Hunt, from its midpoint between the two pipeline routes, could work with either an Alaska Highway or Mackenzie Valley pipeline.
For now, the company is giving priority to building a relationship with the Tetlit Gwich’in First Nation and the Nacho Nyak Dun First Nation. Wickens said Hunt will explain its plans and timing, hear the concerns of the aboriginals and develop access and benefits agreements.
Meanwhile, the Yukon government is anxious to cash in on the prospects by pushing ahead with its next oil and gas rights disposition slated for this spring.
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