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The Oil Patch Insider Total demobs rig in NPR-A; Chretien takes the stand in Calgary court
It was a day many Albertans have dreamed about for years.
Jean Chretien in court in Calgary, the city that has refused to elect a single Member of Parliament from Chretien’s Liberal party since 1968.
But it wasn’t the kind of appearance that posed a threat to the freedom of a man who has been out of politics for less than three months.
He was merely testifying in a drawn-out lawsuit by the Samson Cree Nation, near Edmonton, which has accused the Canadian government of mismanaging its oil and natural gas revenues to the tune of about C$1.4 billion.
Initially he balked at acting as a witness in the case because he is an honorary chief of the Samson Cree, but the federal court ordered him to testify once he stepped down as prime minister, making him the first former prime minister to testify at such a hearing.
Samson attorney Jim O’Reilly said the government mishandled the royalties over 60 years and prevented the band from collecting better rates of interest.
Chretien was the minister of Indian Affairs and Northern Development from 1968 to 1974 as well as being minister of justice and finance at other times.
He told the court Feb. 23 that as minister in charge of Native issues he had wanted to abolish his own department, tear up the Indian Act and give full self-government to the reservations.
But he said the Indian leaders did not want to “lose the special link that they had with the federal government,” even though they wanted to manage their own money.
The case has already involved 295 days of hearings at a cost of millions of dollars to the Samson Cree and taxpayers. Federal attorney Alan McLeod estimated it could stretch through another four years. Total demobs rig at Caribou prospect Total and its partner Fortuna Energy Inc., a subsidiary of Calgary-based Talisman Energy, are demobing the drilling rig at their Caribou prospect in the National Petroleum Reserve-Alaska. The Caribou 26-11 #1, drilled by Nabors Alaska 14E, is in the vicinity of the old Inigok test well.
“They do not plan to drill another well this winter,” U.S. Bureau of Land Management spokeswoman Jody Weil told PN Feb. 23.
When asked if Total drilled a sidetrack, Weil said, “There was some discussion about a second well ... or sidetrack ... this year, but they told us this morning that they (were not going to) … drill a second well because they were not budgeted with Houston to drill another well this year.”
Jack Bergeron, Alaska manager for Total E&P U.S.A., confirmed Weil’s statement. “We only planned to drill one well this year as per our exploration plan. … After the well data is analyzed at our corporate headquarters in Houston the next steps in our exploration plan will be finalized.”
Bergeron said Caribou 26-11 #1, a tight hole, was “spud on Jan. 29 and drilled to its planned TD.” Nova Scotia well has investors in a flap There’s a growing buzz that Canadian Superior Energy and El Paso Oil and Gas Canada may be the answer to Nova Scotia’s faltering hopes.
With the partnership nearing completion of a deepwater exploration well, Canadian Superior shares took flight Feb. 23, rising 25 percent to C$4 in heavy trading of 4 million shares, eight times the average daily volume.
That closely followed some troubling news from the Mariner I-85 well, where drilling was suspended for four days in mid-February to correct an obstruction in the well bore.
Mile Coolen, the company’s director of East Coast operations, said the “potentially serious situation was addressed swiftly in a safe and efficient manner” and drilling resumed Feb. 16.
He said the minimum target depth of about 18,500 feet should be reached at the end of February, followed by an assessment of the results in March.
The C$30 million well is one of the few current prospects of a badly needed breakthrough for a region that is now littered with drilling failures and reserve write-downs and the prospect of 23 exploration licenses expiring this year.
The investor edginess over Mariner has been reflected in the past week, with Canadian Superior shares dropping 10 percent on Feb. 18 before the Feb. 23 rebound.
Headed by industry maverick and eternal optimist Greg Noval, the Calgary-based company, which holds interests in 1.3 million acres in the region, has predicted a possible find of 1.2 trillion cubic feet from the Mariner well and a total of 2.5 tcf of reserves from three major structures.
If those goals are achieved, the play will have almost double the reserves of the nearby Sable field, which has been hit by a succession of downgrades since coming on stream in 1999.
El Paso is paying two-thirds of the tab for Mariner to gain a 50 percent stake in the exploration block, which is now its main Canadian interest after its decision to sell its Western Canadian oil and gas assets to BG Group for C$455 million. Marathon emerges victorious in flag dispute The flag flap has folded in Nova Scotia, allowing Marathon Canada to set a May spud date for a deepwater well on the Scotia Slope.
What was seen as a threat to the single deepwater exploratory well scheduled for offshore Nova Scotia this year — and an even more damaging blow to the region as a whole — has been averted by a Canadian Transportation Agency ruling that Marathon and its partners can use their first choice of a rig.
The federal agency rebuffed attempts by Norwegian-based Ocean Rig to gain an edge over Transocean’s Deepwater Pathfinder rig by arguing that its Eirik Raude rig should get the contract because its crew consisted primarily of Canadians and a Halifax shipyard refitted the semi-submersible at a cost of C$250 million.
It also asked the agency to reflag the Eirik Raude as a Canadian vessel, in which case the Ocean Rig would have been required to pay Canadian taxes because of federal rules giving preference to domestically flagged vessels.
Marathon countered that the Eirik Raude was unsuited to its job and would need C$10 million in modifications.
Three arbitrators appointed by the transportation agency concluded that “there is no Canadian ship or non-duty-paid ship suitable and available to provide the service or perform the activity described in the application.”
Marathon said it was happy to be able to move forward with the well, a follow-up to the 2002 Annapolis G-24 discovery it made with EnCana, Norsk Hydro and Murphy Oil. Marathon, as 30 percent operator, has estimated the block could hold 5 trillion to 15 trillion cubic feet of reserves.
Equally satisfied is the Offshore/Onshore Technologies Association of Nova Scotia, which made a plea to the agency to decide the matter before a late March deadline, warning that delay could see Marathon scrap its plans.
Ocean Rig has declined to say whether it will appeal the ruling. Kenai Peninsula Borough website ready for visitors The Kenai Peninsula Borough’s new website, www.cookinletoilandgas.org, is ready for visitors.
Bill Popp, the Southcentral Alaska borough’s oil and gas liaison, said the website is an excellent tool for researching issues involving the Cook Inlet’s oil and gas industry.
Any “comments, information, PowerPoint presentations, pictures or graphics” that visitors would like posted to the site should be sent by email ([email protected]) or snail mail to Popp at the Kenai Peninsula Borough, 43335 Kalifornsky Beach Road, Suite 16, Soldotna, AK 99669.
Editor’s note: Gary Park, Kay Cashman and The Associated Press contributed to this report.
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