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Explorers reach limits
to growth in Canada’s Arctic Companies committed to Delta and shallow Beaufort spurn calls for nominations in western Arctic islands and Nunavut’s Sverdrup Basin Gary Park PNA Canadian Correspondent
Canada’s Arctic oil and gas explorers have drawn a line in the ice — for now. Twice in the last month the federal government’s Northern Oil & Gas Directorate has failed to entice companies beyond the Mackenzie Delta and shallow Beaufort Sea.
Two calls for nominations — one in the Beaufort and western Arctic islands and one Nunavut’s Arctic islands — have drawn blanks.
The Nunavut call — the first by the new territory — included the highly rated Sverdrup Basin, where the Drake Point gas field and Bent Horn oil field are among 19 discoveries.
The basin has estimated proven reserves of 17.7 trillion cubic feet and the National Energy Board has calculated potential reserves of up to 50 trillion cubic feet based on results from 120 wells drilled during the 1970s.
In mid-January, the NOGD abandoned plans to open bidding this month for 250 million acres of the Beaufort and western Arctic after a call for nominations drew a blank. Region has 53 discoveries That region has 53 significant discoveries, with discovered reserves placed at 24 trillion cubic feet and undiscovered reserves estimated at 145 trillion cubic feet.
NOGD director Mimi Fortier, who had counted on “some interest in Nunavut because exploration rights have not been offered there in a long time,” conceded exploration companies probably feel they are fully committed for now in the high-cost, high-risk Arctic.
Peter Linder, an analyst with Research Capital, said there are too many uncertainties over if — and when — Arctic reserves might be developed for explorers to venture beyond the Delta and coastal Beaufort.
He said E&P companies likely feel they are already fully committed after recent auctions have locked up all available Delta land.
The NOGD is now turning its attention to call for nominations in the Central Mackenzie Valley of the Northwest Territories, expected this spring. Oil is major target That region is an extension of the producing Norman Wells oilfield and has attracted wide-ranging interest from independents, including Alberta Energy Co., Canadian Natural Resources, Anderson Exploration, Berkley Petroleum, EOG Resources Canada, Paramount Resources and several junior companies.
The last two auctions have resulted in work commitments totaling about C$92 million for 19 parcels covering 3.6 million acres.
Oil is the major target, with the Enbridge pipeline from Imperial Oil’s Norman Wells field offering spare capacity of about 25,000 barrels per day.
Break-even at 25 million barrels
Calgary-based junior International Frontier Resources is drilling on 280,000 acres south of Fort Norman and has assembled another 100,000 acres in the Sahtu Dene First Nations land claims area.
Following significant discoveries over recent years in the lower Northwest Territories, IFR president Pat Boswell said a major find in the Central Mackenzie would generate strong interest, although he put the economic break-even point for any discovery at 25 million barrels.
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