Shell starts CBM wells in northwestern B.C.

Gary Park

Shell Canada is making the industry’s first exploration foray into northwestern British Columbia in more than 30 years.

Having gained rights to almost 1 million acres in the Bowser basin, the Calgary-based company has started drilling the first of four wells to assess the commercial potential for coalbed methane development.

The British Columbia Oil and Gas Commission has rated the undiscovered coalbed methane potential for Bowser and the Nechako basin to the south at 16 trillion cubic feet, with the undiscovered conventional gas prospects for the two basins estimated at 23.2 tcf.

A spokesman for Shell Canada said any decisions on advancing to the commercial level will hinge on the results of pilot projects.

Bowser was last drilled by the now-defunct Dome Petroleum, which abandoned two oil-targeted wells after they made gas shows that were uneconomic at the time.

Lagging well behind Alberta in bringing coalbed methane on stream, British Columbia has logged 39 coalbed wells, only one of them in the first half of this year.

The province’s hopes of tapping its 90 tcf of coalbed methane resources took another setback in August when the industry spurned an auction in the Elk Valley area of southeastern British Columbia in the midst of claims by the Montana government, which said coalbed methane activities would pollute cross-border rivers.

As an incentive, the British Columbia government is offering a royalty credit of C$50,000 for coalbed methane wells drilled before mid-2008.