Outlook 2017

Offshore Newfoundland and Labrador

Hebron, the province’s fourth major oil field development is set to come onstream in 2017. Hook up and commissioning activities will continue until the platform is ready for tow-out to the offshore field in mid-2017.  The Hebron tow will require eight anchor handling vessels and the timing will be critical – due to the delicate nature of the operation, the tow will need to be completed before the storm season begins offshore in late fall.  Drilling will commence shortly after installation, with first oil anticipated before the end of the year.

The Hibernia platform has restarted drilling, following upgrades to its two drilling rigs last year, and continues in steady state operations. The semi-submersible rig West Aquarius will complete an intensive drilling program of production wells by the second quarter. The installation will celebrate 20 years of production in November 2017 and continues as one of the most productive on the east coast. It marked its one-billion-barrel milestone late in 2016, and is expected to continue producing oil for another 15 to 20 years.

In October 2016, Switzerland-based Transocean announced a 15-month planned drilling program on the Terra Nova field, scheduled to begin in the third quarter of 2017. The program, which has a total value of $119 million, will deploy the Transocean Barents, a harsh-environment, ultra-deepwater semi-submersible drill rig. The work scope includes maintenance of existing wells and drilling of new wells in the Terra Nova field.

“We are currently in the process of evaluating and awarding contracts for the provision of services and materials in support of the project work scope,” said a Suncor spokesperson. “Transocean is also recruiting rig personnel for the program.”

Suncor continues to advance planning work in pursuit of the Terra Nova Asset Life Extension project, which has the potential to add 10 years of production life to the field.

A turnaround for planned maintenance on the Terra Nova FPSO is scheduled for the third quarter of 2017.

The semi-submersible drill rig Henry Goodrich returned last year on a two-year contract at the White Rose field and satellites. The rig is expected to be in place until April 2018, with options to extend if required.

“To date the rig has completed production wells at North Amethyst Hibernia and South White Rose Extension, as well as an infill well at North Amethyst,” said a Husky spokesperson. “We will also use it for some near field delineation and exploration. The rig could be used for drilling on any of our current licenses.”

Husky continues to evaluate development of West White Rose using a wellhead platform or subsea tieback. The project will be considered for sanction this year.

A three-week turnaround is planned at SeaRose in the third quarter.

Statoil announced in February that it plans to drill two exploration wells in the Flemish Pass Basin. The two wells will be near-field prospects in the area of the company’s 2013 Bay du Nord discovery, with an estimated 300 mmbls recoverable. According to a February article in “Upstream”, Seadrill has been contracted to drill the two wells, using the semi-submersible West Aquarius. The contract has a reported value of $14 million. Drilling is expected to begin in the second quarter, after the West Aquarius finishes its current commitment to ExxonMobil on the Hibernia field.

Western Newfoundland

In January, the C-NLOPB issued exploration licence (EL) 1153 to Corridor Resources, in exchange for the surrender of EL 1105 on the Old Harry Prospect in the Gulf of St. Lawrence.  Corridor announced that it plans to purchase a user licence for a Controlled Source Electro Magnetic (CSEM) program over the Newfoundland side of the Old Harry Prospect on EL-1153. CSEM is a recently-developed marine geophysical tool that investigates resistivity of geological prospects, similar to resistivity logging in well bores of potential hydrocarbon zones. The data is used to help identify potential hydrocarbon-bearing reservoirs, reducing exploration risk and increasing the likelihood of new discoveries. Corridor says the CSEM work will be performed by a contractor in the fall of 2017, subject to regulatory approvals and vessel availability.

NU-Oil & Gas concluded an agreement in January with PVF Energy Services over the onshore petroleum lease PL2002-01(A), the onshore Garden Hill site in western Newfoundland.  PVF would conduct a two-phase work program to restore production from the well. The first phase will involve coiled tubing or wireline operations to clean up the well and mill out a physical obstruction in the completion that has been restricting flow. The well would then be flowed for an anticipated period of 15 to 30 days to allow for reliable analysis and evaluation of the resulting production.

“Subject to satisfactory results, a rig will be mobilized to site to undertake the second phase of the work program, which will include recompletion of the well and installation of an appropriate artificial lift system,” the company said in a statement.

Work is expected to begin in the second quarter of 2017, after all regulatory approvals are granted and when weather conditions are suitable.

Geoscientific data acquisition

Nalcor Energy’s exploration strategy will continue through 2017 with seismic data acquisition, regional oil seep mapping and interpretation and seabed coring multiclient work. The resource assessment for the Labrador South Region is expected to be released publicly in the third quarter of this year.

“It’s still a bit early to predict exploration activity for 2017 with any certainty, but from

what we do know at this point, it is possible that several 2D, 3D and electromagnetic

programs will take place this spring to fall,” said Scott Tessier, Chair and CEO of the C-NLOPB, at the Northern Exposure conference in January.

According to that presentation, geophysical exploration activity in 2017 could include four 2D seismic data acquisition programs (two in Eastern Newfoundland, and one each in Labrador and Southern Grand Banks regions), four 3D seismic programs (three in Eastern Newfoundland and one in Labrador regions); and two electromagnetic programs (one each in Eastern Newfoundland and Gulf of St. Lawrence regions).

Land Tenure

In mid-January, the C-NLOPB issued eight licences to oil & gas companies that bid successfully in last year’s land sale in the Eastern Newfoundland Region.  All licences were effective January 15, 2017 and have a period 1 expiry date of January 15, 2023.

The deadline for the C-NLOPB’s NL17-CFN01 Call for Nominations (Areas of Interest) in the South Eastern Newfoundland Region is April 26, 2017.  The call was issued in February.

The deadline for the C-NLOPB’s Call for Bids NL16-CFB03, issued last November for 10 parcels of land in the Labrador South Region, is November 8, 2017, or a minimum of 120 days after completion of the updated strategic environmental assessment.

The C-NLOPB’s “Timeline for Active Rounds” chart outlines the following additional land tenure activity planned this year:

  • a Call for Bids for the mature Jeanne d’Arc Region will take place in March with a November closing date.
  • a Call for Nominations (Parcels) will be made for the high activity Eastern Newfoundland Region in August, with an October closing date.

Nova Scotia

The province’s Energy Department has commissioned Beicip-Franlab, based in France, to conduct a four-year, $12-million study to better understand the hydrocarbon potential in the Sydney Basin, which extends northeast of Cape Breton Island. The study will utilize geoscience, mapping and modeling to develop a clearer picture of hydrocarbon potential in the area, which is not well documented at this time. The results will be released publicly.

Statoil is moving forward with plans to explore two parcels offshore Nova Scotia. The company has committed to spending $82 million during the first two years of a nine-year exploration licence.