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U.S.-based explorers eager to pursue Nova Scotia gas prospects Seven wildcat wells expected in 2003 as companies move into deepwater region; Marathon sees region as best hope to answer U.S. supply shortfall; Shell in lead group Gary Park PNA Canadian Correspondent
A host of United States-based E&P companies are expected to lead the most expensive exploration campaign yet offshore Nova Scotia in 2003. Seven wildcat wells, costing about C$75 million each, and an unknown number of development holes are anticipated, Jim Dickey, chief executive officer of the Canada-Nova Scotia Offshore Petroleum Board, said Oct. 15.
Leading the charge will be Marathon Canada Ltd., Chevron Canada Ltd., Shell Canada Ltd., Canadian Superior Energy Inc. and sister companies, Imperial Oil Ltd. and ExxonMobil Canada. As well, BP Canada Energy Co. and Kerr McGee Offshore Canada Ltd. may deliver on work commitments.
Dickey said that although the joint regulatory agency does not yet have any firm applications “we are looking at at least seven wells next year and it could be even more than that.”
Need to meet gas supply shortfall The pressure, said Philip Behrman, senior vice president of worldwide exploration for Marathon Oil Corp., is the anticipated natural gas supply shortfall in the U.S. Northeast.
“We’ve chosen Eastern Canada as the most likely place to fill the gap, because of the potential that might exist in the deepwater,” he said.
Harvey Klingensmith, president of El Paso Oil and Gas Canada Inc., another major leaseholder in the region, said the shallow-water Scotia Shelf and the deepwater Scotia Slope are “way, way under explored. This place is really in its infancy. But it’s a place we intend to be for a while, to help develop the industry.”
Behrman, who said Marathon has chosen Canada’s East Coast as the “most likely place” to fill the supply gap, expects his company to drill one or two deepwater wells in 2003 and up to three in 2004, chasing reserves in its three blocks of between 5 and 15 trillion cubic feet.
He said Marathon is better prepared after running into problems earlier this year with Annapolis deepwater well that had to be re-drilled after encountering an unexpected influx of gas.
The well, which cost an estimated C$100 million, was the only one this year to show any encouraging signs of hydrocarbons, but has been temporarily abandoned for re-entry and testing at a later date.
Five wells failures The other five wells completed so far this year were failures, signaling a dismal start to the first serious deepwater exploration in the region, but not enough to drive the major players away.
Klingensmith noted that less than 200 wells have been drilled in the offshore compared with about 50,0000 wells in the Gulf of Mexico, an area roughly the same size.
Interest has been spurred on by the first independent assessment of the Scotian Slope’s resource potential, which the CNSOPB said effectively doubles the gas reserves from 15 trillion cubic feet to 41 trillion cubic feet and estimates the undiscovered oil at 2 billion to 5 billion barrels.
In 1983, the Geological Survey of Canada rated the Scotian Shelf gas potential at 18 trillion cubic feet and a 2001 Canadian Gas Potential Committee placed a similar value on the area, but until the latest study was released Oct. 9 there was no publicly available assessment of the deepwater slope.
The report said the Scotian Slope appears to be in line with other Canadian frontier regions, such as the Beaufort-Mackenzie Basin, the Sverdrup Basin in the Arctic Islands and the Labrador Shelf on the East Coast.
The slope extends 510 miles from the United States international border to the Nova Scotia-Newfoundland boundary, with an average width of 60 miles in water depths from 650 feet to 13,100 feet.
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