Drilling delayed

The earliest ConocoPhillips Canada can drill its first exploration well off Newfoundland’s south coast is 2009.

The company says the lack of available deepwater rigs and longer than expected evaluation of seismic surveys have pushed back its drilling schedule in the Laurentian Basin.

That natural-gas-prone basin was the subject of a lengthy offshore boundary dispute between Newfoundland and Nova Scotia. It was settled by an arbitration panel in April 2002.

“A well in 2009 would be what we’re currently working towards,” said John Hogg, manager of frontier and new venture exploration for ConocoPhillips in Calgary.

“We’re still interpreting the data. By the fall we should have a good feel for … where the best location for the first well would be.”

It is likely to be just one well to start.

“It’s pretty difficult in that environment to be drilling back to back.”

While the Laurentian Basin is ice-free compared with the Grand Banks, it is in the path of hurricanes and winter storms that move along Newfoundland’s south coast.

ConocoPhillips had tentatively planned to drill the first of seven exploration wells sometime between April and June of this year.

That was pushed back to 2008.

Hogg says the company warned about the potential drilling delay at an offshore oil conference in St. John’s last summer.

The provincial Department of Natural Resources is still developing a natural gas royalty regime — and Hogg says that regime is an important factor in drilling any well.

But, he said, that’s not the reason ConocoPhillips has yet to drill a well in the Laurentian Basin.

“We’re still trying to map the structures.”

Hogg also says the company will continue to work with the province as it develops the royalty regime.

“That being said, it is important to us to have the royalty (regime) before we drill the well.”

Without it, he says the company cannot factor in the cost of drilling off Newfoundland and compare it with projects elsewhere in the world.

The Geological Survey of Canada estimates the Laurentian Basin contains 8-9 trillion cubic feet of natural gas and about 700 million barrels of oil.

When ConocoPhillips carried out its three-dimensional seismic surveys there in 2005, it encountered some unexpected difficulties.

The biggest was the hard sea floor that caused multiple echoes as the seismic signals bounced back from the seabed.

“That’s just part of learning in a new basin what you need to do,” said Hogg.

Seismic surveys are used to map what lies beneath the ocean floor. Waves of compressed air are shot toward the seabed, and the signal reflected back creates an image of rocks and pools of oil and gas that are found kilometres below the ocean floor.

In the case of the Laurentian surveys, the pulse bounced back multiple times and the images were unclear. What might have taken 10 months to evaluate took 18 months to clean up the images.

“The Laurentian Basin is an absolute frontier basin. There are no wells in the deepwater portion of that basin,” said Hogg. “We are in our infancy in understanding the basin.”

The seismic survey focused on two main exploration licences where the company expects to drill a well — one west and the other east of the French-owned corridor that cuts the basin in half.

The west parcel of seabed lies in 1,100 metres of water, while the east parcel is in almost 2,200 metres of water. To drill there, the company needs one of two kinds of drill rigs that move under their own power.

They are:

‰ A deepwater semi-submersible similar to the Eirik Raude that recently drilled a well in the Orphan Basin off the northeast coast of Newfoundland. It can operate year-round in harsh environments.

‰ A drill ship similar to the Deepwater Pathfinder, which can operate in water depths up to 3,000 metres. In the harsh ocean environment off Newfoundland, Hogg says a drill ship would be limited to working from May to September.

ConocoPhillips is partnered with Murphy Oil Corp. and BHP Billiton Ltd. in the Laurentian Basin. They hold seven of the eight exploration licences in the basin. Imperial Oil Resources has the eighth licence.

Source : www.thetelegram.com