Showing posts with label offshore oil industry. Show all posts
Showing posts with label offshore oil industry. Show all posts

27 July 2018

Bay du Nord and Equity #nlpoli

In a staged political event Thursday that was woefully short of basic details,  the provincial government and Equinor announced they will proceed with development of the Bay du Nord field in the Orphan Basin.  The news release for the event referred to a framework agreement only.

Bay du Nord is located approximately 500 kilometres east of St. John's,  in between 1.0 and 1.2 kilometres of water.  Equinor and its partner Husky Canada believe the field contains at least 300 million barrels of light crude.

The project will cost $6.8 billion to bring into production using a floating production storage and offloading vessel similar in concept to the FPSOs used for Terra Nova (1996)  and White Rose (2002).  The provincial government acquired 10% equity in the project in addition to royalties under the Offshore Oil  Royalty Regulations (2017).  The provincial government will therefore pay $90 million initially as well as $680 million during the construction phase.

Project sanction is expected in 2020 with first oil in 2025.

The following table shows a comparison of Terra Nova,  White Rose, and Bay du Nord, with all dollar amounts in 2018 dollars.

22 July 2010

Drill, baby, drill: Dunderdale rebuffs Quebec concerns about border, offshore oil spills

In a letter to Quebec natural resources minister Nathalie Normandeau, Newfoundland and Labrador deputy premier Kathy Dunderdale said that the provincial government had no plans for a moratorium on oil drilling offshore and dismissed any question about the interprovincial border in the Gulf of St. Lawrence.

The Montreal Gazette reported Wednesday on the exchange of correspondence between the two ministers in a story that highlights the border dispute and its impact on oil exploration in the Gulf.

According to the Gazette, Normandeau wrote Dunderdale to ask what measures were contemplated in light of the disaster in the Gulf of Mexico.

Dunderdale replied that Newfoundland had adopted "new oversight measures," had no plans for a moratorium on offshore drilling, and noted Normandeau's reference to a " 'cross-border geological structure,' by which I assume you are referring to the Old Harry prospect."

There’s no clear indication when the letters flew back and forth but the provincial government’s position has been clear since the Deepwater Horizon rig exploded in late April.

ood harry

Premier Danny Williams dismissed calls for an offshore drilling moratorium in early June.  As in his remarks in early May, Williams focused on three fields in the north Atlantic.  He ignored other areas including the Gulf of St. Lawrence where the Old Harry field promises to match or dwarf Hibernia in size.

Williams referred to meetings he held in Calgary with officials of two companies operating offshore Newfoundland and Labrador.  As CBC reported,

The premier said he's confident the companies are doing everything possible to prepare in case a similar situation ever happens off the province's shores.

"I also asked them to elaborate for me on what additional measures have been put in place and am actually in the process of preparing a list and would only be too delighted to provide a list of the safeguards that were in place and the additional safeguards that are being put in place," Williams said…

It was not clear from the context of his comments if he was meeting with them in his capacity as premier of the province or as their de facto partner in offshore oil development. In some respects that wouldn’t matter since under some conditions of the Hebron agreement, Williams is legally obliged to follow the position dictated by the oil companies to oppose any new regulations that would  - in the opinion of the oil companies – adversely affect Hebron development.

Corridor Resources holds exploration permits from Quebec and from the Canada-Newfoundland and Labrador Offshore Petroleum Board for the Old Harry field.  Work on the permits has been hampered by a dispute over the border between Quebec and Newfoundland and Labrador and by the absence of a jurisdiction arrangement between the Government of Quebec and the Government of Canada over the seabed resources in the Gulf.

While Danny Williams has been focusing his public comments on the distant offshore – and downplaying the implications as a result -  a spill from any future Old Harry development could have disastrous consequences.  This map, produced earlier this year, shows a map of the British Petroleum spill superimposed on Old Harry.

The dashed lines represent interprovincial boundaries but, for Newfoundland and Labrador,  only the one between the province and Nova Scotia is formally in place.  The boundary with Quebec shown in this map has never been formally adopted.

- srbp -

02 June 2010

North Amethyst pumps first oil

A few things to note about the news that the White Rose extension field – called North Amethyst – pumped its first oil this week;

  1. It took only four years to go from discovery to production. reducing the time from discovery to production is huge for the future of the offshore industry.
  2. Tiebacks.  Expect to see more of them as Terra Nova dries out, for example.  Floating platforms are the most cost-effective way to exploit the numerous small fields that have already been discovered offshore. The gang at Terra Nova and eventually at White Rose can just float their hulls around, hook up to underwater pipes and pump the crude cheaply, efficiently and in a way that should be as environmentally sound as oil production can be.
  3. An established royalty regime is a key part of promoting development.  That’s what worked for this deal and helped speed up development. Thankfully, while the 2007 energy plan called for a complete overall of the royalty regime, the generic regime is still in place.  Given the rate the current crowd do things, we wouldn’t see a royalty regime to replace the current one for decades.  As it is, the existing, pre-2003 royalty regimes – not the Old Man’s tweaks – are producing the lion’s share of offshore cash these days.

-srbp-

27 April 2007

But is the Premier going?

Natural resources minister Kathy Dunderdale is off to the Offshore Technology Conference (OTC) in Houston next week.

But there's no mention the Premier is going, as he has done in the past.

According to some industry sources, the Premier is going down for a conference pre-show but has to flip to Toronto for a Council of Federation meeting in Toronto.

So how come there's no public mention of it?

22 April 2007

NS improves offshore competitiveness

The Canada-Nova Scotia Offshore Petroleum Board has introduced a new exploration license at a lower cost but with a shorter term.

17 April 2007

Conoco Canada boss looking at expanded presence

ConocoPhillip's new chief executive officer in Canada is interested in developing the company's Canadian assets.

Of the Newfoundland and Labrador offshore, Kevin Meyers said:
"There are a multitude of options out there [to reduce greenhouse gas emissions]. A lot of them will require technologies to be developed, so we are looking for greenhouse gas policies that are cognizant of this." Newfoundland: The company wants to explore in the Laurentian Basin off Newfoundland, but won't move forward until the province sets fiscal terms for natural gas production, likely in conjunction of Premier Danny Williams' long-awaited energy policy, expected this spring. "Do we want to drill? Yes. It is difficult for us to come forward with any public plans about drilling exploration wells in the Laurentian Basin until we have an understanding of what the fiscal regime is going to be," Mr. Meyers said.
Meyers told the National Post that Canada is an attractive investment prospect since its stable political and fiscal climate offsets many of the challenges of developing oil and gas fields which, as Meyers describes it "can be marginal in nature. They are always in the cutting edge of cost and service or supply, but that stability of fiscal regime helps offset that.

Meyers warned though: "You do worry when government starts to take away that advantage it has."

Like in Newfoundland and Labrador, one wonders.

Meyers should understand the political climate on Canada's Eastern Front. His last post was running Conoco's operations in Russia under Vladimir Putin.

-30-

04 April 2007

Mid-week round-up

1. Even the nationalists are moving from Newfoundland and Labrador. Greg will be missed by many of us.

2. This piece on Scottish separatism has been getting plenty of hits over at Offal News.

3. Then there's this Offal News devastating critique of Danny Williams' comments on Tuesday about the offshore oil industry.

4. It only took a decade, but the federal government is finally building new offices and training facilities for the Canadian Forces at St. John's. The new facility will house CFS St. John's, as well as army, air force and communications reserve units and cadet units.

It's a$101 million capital project.