Hibernia has been the benchmark by which Canadian offshore projects are judged since its beginning. Now Deep Panuke, White Rose and the second phase of the Sable Energy project are under way, marking a major upsurge in activity off Canada's Atlantic coast.

Deep Panuke and White Rose probably are the two hottest properties off Newfoundland.
PanCanadian is working on a development plan for the estimated 1 Tcf of gas in Deep Panuke following three appraisals drilled during the past year in succession to the discovery well. PanCanadian said it will cost about US $646 million (C $1 billion) to develop the discovery, and the company has plans for up to four exploration wells offshore Nova Scotia this year.
At the same time, Husky Oil has set out on the road of approvals for its White Rose project, having submitted the application for development to the Canadian-Newfoundland Offshore Petroleum Board. And the second phase of the Sable Energy gas project has been launched, with Kværner and SNC Lavalin undertaking front-end engineering and design (FEED) work on behalf of operators ExxonMobil, Shell Canada, Imperial Oil and Nova Scotia Resources.
Deep Panuke, which underlies the existing Panuke oil field, is about 155 miles (250 km) off Halifax, Nova Scotia. The plan is to refurbish the existing Panuke platform and possibly build a second.
In February, PanCanadian's board approved the start of commercial development for Deep Panuke, which involved engineering design and work on a development application plan for submission to the Canadian-Nova Scotia Offshore Petroleum Board. That plan involves plateau gas output of 400 MMcf/d with a target onstream date in early 2005.
David Tuer, PanCanadian's president and chief executive officer, at the start of field development work said: "The scope of this field will provide us with significant market volumes. And while there is a lot of engineering and optimization design work to be done, we are very confident that the development of Deep Panuke will create long-term value for our shareholders and for the province of Nova Scotia."
PanCanadian plans to drill four more exploration wells on other blocks offshore Nova Scotia during 2001, and at least one of these will be on its new leases. At the same time, the company is looking to acquire seismic data over four potential drilling prospects: Weymouth (EL 2380), Barrington (EL 2397), Torbrook (EL 2384) and Plympton (EL 2394). Water depths range from 3,000 ft to 8,200 ft (915 m to 2,500 m).
Meanwhile, Marathon Canada is looking to kick off exploration work with a deepwater well scheduled for this year. However, its timing appears uncertain, and the drilling program could drift to 2002. Marathon is aiming to drill on a prospect called Annapolis in a water depth of 5,740 ft (1,75 0m). Veritas acquired seismic data over the 672-sq mile (1,740-sq km) EL 2377 off Nova Scotia in 1999 and 2000.
Elsewhere off Canada's eastern coast, Husky Oil's White Rose is gradually blooming. Mærsk Contractors is planning to offer Husky a complete floating production, storage and offloading (FPSO) vessel package involving a new-build hull from Samsung, South Korea, outfitted with process topsides capable of handling between 75,000 b/d and 100,000 b/d of oil and 1 million bbl of storage. The field is on the eastern edge of the Jeanne d'Arc Basin, about 31 miles (50 km) from Hibernia and Terra Nova and 217 miles (350 km) east of Newfoundland.
Overall project costs are put at $1.13 billion ($1.75 billion), and based on three delineation wells drilled in 1999, the field is estimated to contain between 178 million and 274 million bbl of oil in addition to between 1.509 Tcf and 2.09 Tcf of gas. Assuming Husky and partner PetroCanada sanction the project in 2002, first oil could be achieved by 2004.
Step forward
This project took a big step forward in March when the Canada-Newfoundland Offshore Petroleum Board announced it had completed a review of Husky Oil's development application for the field.
While White Rose is expected to be a floating production project, European interest in this development is expected to be strong, with Denmark's Mærsk Contractors having already won work on the FEED for the production vessel.
Processing capacity on the FPSO is specified at between 70,000 b/d and 110,000 b/d of oil, and the field reserves are estimated at 230 million bbl of oil, although Husky suggests this figure could be higher.
Ten to 14 production wells are thought likely to be needed for the field, and these are expected to be drilled during the project's first 4 to 6 years. Field life is expected to be 14 years.
The same strong emphasis on European content for Canadian projects can be seen in the decision in February to award Kværner the FEED work for the next phase of the Sable Energy Offshore Project.
Kværner's work for Sable - in a joint venture with SNC Lavalin for the Alma platform on the project - represents the second stage of this gas development with a planned onstream date of August 2002.
Included within Kværner and Lavalin's work scope is engineering, procurement and construction management for a jacket, wellhead platform and subsea pipeline to be tied back to the Thebaud processing facility, about 31 miles (50 km) away.
Work on the FEED is being performed in Halifax, and the two contractors are working to a projected onstream date of August 2003.
The second tier of Sable comprises development of Alma, Glenelg and South Venture before 2010.
The project cost is put at $1.9 billion ($3 billion). First gas from Sable was achieved at the end of 1999 from the Thebaud platform, and with estimated reserves of 3.5 Tcf, the six-field complex is expected to serve the Canadian Maritimes and northeastern US regions for 20 to 25 years.
Follow the money
Big numbers are being considered for expenditure levels offshore Canada. The exploration budget is in the region of $582 million ($900 million). Pan Canadian in one recent estimate suggested offshore exploration drilling commitments were worth $1 billion ($1.6 billion).
PanCanadian reportedly is spending $93 million ($144 million) on exploration work on its 14 operated licenses, Mobil $188 million ($291 million), and several others have committed sizable budgets for Nova Scotia in the short term. A good proportion of PanCanadian's spending has been committed to hiring Ocean Rig's Bingo 9000 design semisubmersible Eirik Raude for work off Canada's east coast.
This commitment involves a partnership between PanCanadian and Ocean Rig to provide deepwater drilling to several east coast operators, including PanCanadian, for 15 months initially. Thereafter the semisubmersible will be available to other east coast exploration companies, depending on the exercise of options by PanCanadian, including the time necessary to meet its exploration drilling commitments.
The Eirik Raude is being outfitted in Pascagoula, Miss., and is expected to go on contract in the second quarter of 2002. The only potential fly in the ointment is that the deal requires approval from Ocean Rig creditors, and in April Ocean Rig issued a request for more cash - $60 million ($93 million) - to complete the Raude and the Leif Eiriksson.
PanCanadian's Tuer described the deal as a strategic one, which not only gives his company access to reliable deepwater drilling facilities, but also "positioned PanCanadian for enhanced business relationships with other operators in the region requiring these services."
Seismically speaking
2000 was a bumper year for seismic companies offshore Canada, and 2001 is heading that way too, with at least three vessels due to be operating in the region this summer.
TGS-Nopec has contracted a vessel for this summer's seismic acquisition program, focusing predominantly on Nova Scotia's offshore regions. This will mark the fourth consecutive year the company has been operating there.
"We have acquired more than 35,000 km (21,735 miles) of data in deepwater Nova Scotia and an additional 15,000 km (9,315 miles) in deepwater Newfoundland. This season's program will infill and extend those surveys. We have over 12,000 km (7,452 miles) planned for this summer," said Kim Abdallah, vice president of international new ventures at TGS-Nopec.
Meanwhile, several other acquisition programs have taken place during the past year. "The summer season off the east coast looks to be busy," said Ruth Graham of Schlumberger Oilfield Services.
"Activity levels in the year 2000 reached an all-time high for both the number of vessels working as well as kilometers recorded."