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As the sixth largest oil producer in the world, Canada is ramping up its vast, underexplored areas offshore Nova Scotia and in the Northwest Territories offshore Beaufort Sea.
It’s no secret that Canada holds the third largest oil reserves in the world with 174 Bbbl of oil. This number includes 169 Bbbl of oil sand reserves, and the country is intent on increasing its offshore count to this balance.
“In 2012, Canada’s crude oil production is expected to climb over 3 MMbbl per day and projections show Canada producing about 4 MMbbl per day within the decade,” said Paula Caldwell St-Onge, Consul General of Canada, speaking at the Offshore Technology Conference (OTC) on May 1. Hebron, a major project offshore Newfoundland, is anticipated to begin construction later this year. However, the big news for the OTC was the recent opening of new acreage offshore Nova Scotia.
In January, the Canada Nova Scotia Offshore Petroleum Board (CNSOPB) announced that Shell Canada bid a total of US $ 970 million dollars in work expenditures for four offshore parcels. “This was the largest exploration bid ever in eastern Canada and the third largest bid in all of Canada’s offshore regions,” said Michael A. Johnson, executive director, Energy Business Development and Corporate Services, Nova Scotia.
The prime target for these parcels is oil. “That’s the new story for Nova Scotia at OTC this year,” Johnson said.
Nova Scotia’s offshore region is huge and vastly under-explored compared to other regions. Since 1967, the region has seen 207 wells drilled, which shrinks in comparison to a region such as the Gulf of Mexico where that number exceeds 50,000.
“We knew that uncertainty around our offshore geology was a factor for super majors when making their investment decisions,” Johnson said. As a result, Nova Scotia invested public funds to undertake the very early first phase of exploration and make it freely available. The plan was to develop a very detailed petroleum geology atlas showing the country’s offshore potential. “We followed the models of Australia, New Zealand, and Ireland, who have had success with a similar approach,” Johnson said.
After two years of intensive study, the data indicates there could be upward of 120 Tcf of natural gas and 8 Bbbl of oil potential in the region. Last June, the CNSOPB issued a call for bids in response to industry expressions of interest. Now the country has announced its next call for bids.
“This is the largest call ever for offshore Nova Scotia, with 7.6 million acres up for bid,” Johnson said. The bid area consists of 11 parcels, six of which were nominated by industry. The area is largely located in the deep water, but skirts into the shelf area.
“This includes sites near our current Sable Offshore Energy Project and Encana’s Deep Panuke gas projects, which will begin production this year,” Johnson said.
Bids are open until November 7, and the country expects serious interest. In addition, the country continues to market its offshore potential and has already selected new areas to be offered in 2013 and 2014. “Our new and compelling geosciences analysis of Nova Scotia’s offshore potential strongly points to the existence of big oil,” Johnson said.