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Central Mackenzie pulse quickens
Gary Park For Petroleum News
One of Canada’s hottest exploration plays in one of its coldest regions has created a fresh buzz, with Arctic-region exploration and production companies setting the stage for one of the largest land auctions in the Central Mackenzie Valley.
In response to a call for nominations earlier this year, the Canadian government’s Northern Oil and Gas Directorate, NOGD, has invited bids for seven Northwest Territories parcels covering a combined 1.3 million acres. The deadline for bids is Sept. 17. The blocks range in size from 149,000 acres to 204,000 acres.
Two parcels are in the highly rated Canol shale region south of Norman Wells, four are west of Fort Good Hope in upper Arctic Red River close to the unexplored Mackenzie mountain range and the seventh is farther north, straddling a Gwich’in-Sahtu aboriginal land boundary.
The bidding round gives a further prod to hopes for the Canol play in a region where Husky Energy, ConocoPhillips, Shell Canada and Imperial Oil, along with junior explorer MGM Energy, have formed an information-sharing explorers’ group, with made a combined C$536 million in previous work commitments.
MGM evaluating well MGM, which is seeking partners, reported in May that it is evaluating the light sweet crude content of its latest well before updating its oil-in-place estimates.
Gwich’in Tribal Council President Robert Alexie said discoveries on the Gwich’in land would pose challenges, largely because “any oil and gas we might have” is so far from market.
He is concerned that the location could be costly to explore or develop, but welcomed the chance to create jobs for Gwich’in residents.
Calgary-based Arctic energy consultant Doug Matthews told the Canadian Broadcasting Corp. he is “curious what the companies are looking for,” suggesting gas is a more likely prospect than oil.
NWT studying pipelines The postings coincide with tentative moves to open up commercial oil and gas development in the Canadian Arctic, with the Northwest Territories government studying the feasibility of pipelines from the Canol, Mackenzie Delta or Beaufort Sea across the northern Yukon to the Valdez terminal in Alaska.
The Alberta government is also spending C$50,000 to investigate the feasibility of a northern pipeline from its oil sands as an alternative to projects by TransCanada, Enbridge and Kinder Morgan which are entangled in regulatory processes and political wrangling.
The NOGD has also invited bids for a Significant Discovery License on 3,025 acres of the Bent Horn oil field on Cameron Island in the High Arctic. The license gives the holder rights over an indefinite period to develop the play.
The land was inherited by Suncor Energy in 2009 when it acquired Petro-Canada which had delivered 2.8 million barrels of crude in the 1985-96 period to Montreal refineries before commercial development was deemed uneconomic. No Arctic archipelago nominations The NOGD reported there were no nominations for a large swathe of the Arctic archipelago in Nunavut Territory, which has been little explored since a 1970s rush discovered 16 fields containing 300 million barrels of oil and 14 trillion cubic feet of natural gas and has been estimated to contain 25 percent of Canada’s undiscovered oil and gas resources.
Several calls for nominations over the past 13 years have all come up empty, affirming government and industry views that companies feel they are already fully committed to Arctic plays and face too long a wait to develop reserves beyond the Mackenzie Delta and Beaufort Sea.
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