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Atlantic Canada clears its regulatory decks Provincial, Canadian governments working toward single set of filings for companies, with goal to improve competitiveness with Gulf, Brazil, West Africa Gary Park Petroleum News Calgary Correspondent
In response to sustained industry lobbying, the Nova Scotia, Newfoundland and Canadian governments are slashing red-tape to keep the oil and gas industry active in Atlantic Canada’s offshore.
Nova Scotia has signed a memorandum of understanding with government agencies and Newfoundland is hard on its heels.
The objective is to let companies file a single set of documents, triggering concurrent reviews and speeding up approvals, putting the region on a more competitive footing with similar basins in the Gulf of Mexico, Brazil and West Africa.
It is not clear whether the changes will reverse a reputation for cumbersome, inefficient regulatory process that has contributed to the departure of several operators from Nova Scotia in particular.
But Newfoundland Finance Minister Loyola Sullivan said Feb. 24 he is hopeful that once the deal is in place it will breathe fresh life into the Hebron-Ben Nevis project that was stalled three years ago.
He told a conference that the partners — ExxonMobil 38 percent, Chevron Canada Resources (the operator) 28 percent, Petro-Canada 24 percent and Norsk Hydro 10 percent — are closing in on a joint operating agreement for a project that carried a price tag of C$3 billion in 2002 and holds an estimated 600 million barrels of recoverable oil. Another reason to look at economics A spokesman for Chevron said the regulatory changes will give the consortium another reason to look at the economics of Hebron-Ben Nevis, which is hampered by a complex reservoir that needs additional wells to remove the crude, 75-80 percent of which is 18-21 degree API gravity.
Negotiations have been taking place with the Canadian and Newfoundland governments on tax credits and royalties that recognize the heavier crude.
As well, the partners have been studying four different production options.
Spokesmen for Chevron and Petro-Canada have indicated they expect a decision to go ahead is in the cards for early 2005.
Adding to the quickening pace of activities in offshore Newfoundland, Husky Energy filed an application in February to drill 10 exploratory and delineation wells over the next two years, all of them within 25 miles of the White Rose and Trave significant discovery blocks. White Rose is due to start pumping within a year, targeting peak output of 100,000 barrels per day.
Also in the wings is the prospect of extending the 940-million barrel Hibernia field to develop the Ben Nevis/Avalon reservoir, which is “significantly” more faulted than Hibernia, but could contribute 700 million barrels and add five years to Hibernia’s 25-year operating life.
Interest is building in the Orphan Basin, where Chevron, 50 percent operator, ExxonMobil and Imperial Oil (each holding 25 percent) expect to gather about 2,100 square miles of three-dimensional seismic in the May-September period as part of their C$673 million work commitment to an area that is believed to have four pools, each holding more recoverable oil than Hibernia.
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