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Canadian Beaufort plans; JV in regulatory phase for 2020 drilling
An Imperial Oil partnership with ExxonMobil and BP Canada has entered the formal regulatory phase that could see an initial exploration well start drilling in the Canadian sector of the Beaufort Sea in summer 2020.
But even if a commercial-size strike was made the joint venture has no thoughts on how development would proceed.
Imperial spokesman Pius Rolheiser told Petroleum News the companies view the area as “potentially prospective for exploration, but it has a high degree of exploration uncertainty and has significant challenges.”
In filing a project description with the Inuvialuit Environmental Impact Screening Committee, which acts as advisor to Canada’s National Energy Board, and the Northwest Territories government, the partnership has indicated growing confidence following the collection of seismic data in 2008 and 2009 and three years of gathering field data in 2009-11.
Rolheiser said the submission “in effect initiates the formal regulatory review,” which operator Imperial hopes will be completed by 2016.
Sanctioning after approval Assuming regulatory approval, the joint venture would then make a sanctioning decision, allowing it to secure a floating drilling system which it believes is best suited to the area.
A well would be expected to take two years to complete based on an annual drilling season of 120 days from May to November.
The two exploration licenses — 476 (Ajurak) and 477 (Pokak) — carry combined work commitments of C$1.76 billion.
The water depths are estimated at about 5,000 feet and target subsea vertical depths of 12,500 feet to 22,300 feet.
Rolheiser said the licenses, which are about 110 miles northwest of Tuktoyaktuk on the shores of the Beaufort, would be the farthest offshore and deepest that Imperial has ever drilled in the area.
The venture is at the leading edge of possible revival of Beaufort exploration which has included 92 wells that have so far yielded two major discoveries — the 1984 Amauligak strike by Gulf Canada Resources, since taken over by ConocoPhillips, estimated at 235 million barrels of oil and 1.36 trillion cubic feet of natural gas and a 2005 find by Devon Energy, reported to hold 240 million barrels of oil. Neither has advanced to commercial development plans.
Chevron Canada is evaluating results from its 2012 seismic program covering 1,412 square miles, 145 miles northwest of Tuktoyaktuk, while Norway’s Statoil has farmed in on a 508,000-acre parcel in the Beaufort, which is west of the joint-venture licenses.
NWT wants venture to proceed Northwest Territories Industry Minister David Ramsay said his government is now “anxious” to see how far the Imperial venture can proceed given its importance to the regional economy since the sidelining of the Imperial operated Mackenzie Gas Project, which had been designed to ship up to 1.8 billion cubic feet per day natural gas from the Mackenzie Delta to southern Canadian and U.S. markets.
The next three years, building up to a final investment decision in 2016, could include a public environmental hearing, authorizations for drilling operations, agreement on a plan to employ and train Canadians and northerners and a program to dredge and install facilities at Tuktoyaktuk Harbor.
Still to be resolved is how the partnership would comply with a National Energy Board regulation, which followed the BP Macondo well rig explosion and oil spill in 2010, that operators must be prepared to drill a same-season relief well if there is a blowout.
Imperial said its primary well control approach, which will be outlined in future applications for specific wells, would be prevention, including wells designed for the range of expected risk.
Industry interest in Canada’s Arctic region, despite a flurry of drilling in the Central Mackenzie Valley, is otherwise lukewarm.
Aboriginal Affairs and Northern Development Canada reported the annual call for bids in the Central Mackenzie Valley that closed Sept. 19 yielded only two successful bids, with four other parcels bypassed.
High Level Energy bid C$18 million for 100 percent of a parcel covering 200,000 acres, while International Frontier Resources landed rights to a lease covering 163,000 acres for C$1.2 million. The leases require qualifying exploration work within five years to gain an extension to a nine-year permit.
—Gary Park
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