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Long shot: Nunavut invites high Arctic nominations Canadian government issues call for exploration interest in new territory; drew blank in 2001, operators committed elsewhere Gary Park PNA Canadian Correspondent
The Canadian government’s Northern Oil and Gas Directorate is making a second attempt to attract oil and natural gas explorers to Nunavut Territory after a call for nominations two years ago drew a blank.
Depending on the response to a call for nominations, Indian Affairs and Northern Development Minister Robert Thibault will decide on Jan. 14 whether to issue a call for bids.
The nominations cover government reserve lands north of the 60th parallel, with a maximum posting size of about 534,000 acres.
In early 2001, the directorate came up empty-handed in a call for nominations for the Arctic islands of Nunavut, including the Sverdrup basin, which has recorded 19 discoveries including the Drake Point gas field and Melville Island’s Bent Horn oil field, which produced 43 degree gravity crude for 11 years to 1996 and shipped the oil to a Montreal refinery in a series of annual tanker loadings.
Proven gas reserves in basin The basin has estimated proven reserves of 17.7 trillion cubic feet, although the National Energy Board has rated potential reserves at 50 trillion cubic feet based on results from 120 wells drilled during the 1970s Arctic exploration boom.
The assumption among industry observers in 2001 was that explorers were reluctant to extend their interests beyond the Mackenzie Delta and shallow waters of the Beaufort Sea.
Directorate Director Mimie Fortier conceded at the time that the hopes of a positive response to the first call since the Nunavut was separated in 1999 from the Northwest Territories as a separate territory to be governed by aboriginals were based on the fact that “exploration rights have not been offered there in a long time.”
She conceded that the shut-out indicated exploration companies were fully committed to the Arctic regions which have the best chance of delivering gas to market this decade.
Drilling success in the Sverdrup Basin has been one discovery for every six wells completed, the directorate said, noting there is high potential for further discoveries of oil and gas offshore and onshore.
National Energy Board data estimates discovered oil and gas in the Arctic islands of Nunavut and the Northwest Territories at 5 percent and 15 percent respectively of the remaining discovered recoverable reserves in Canada.
Updated estimates put the total discovered and potential oil and gas resources of the region at 10 percent and 23 percent respectively for Canada.
But without the massive government incentives that fueled exploration 30 years ago, the chances of any exploration programs being launched this decade are rated as a long shot.
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