First oil
It was this editor’s pleasure to spend a full week last month, visiting the E&P community in St. John’s, Newfoundland. That visit yielded two conclusions: 1) Newfoundland continues to attract attention to its offshore resource potential; and 2) the Arctic remains of great interest to the upstream industry, as evidenced by last month’s Arctic Technology Conference.
First, a few words about Newfoundland’s potential. This past August, the government of Newfoundland and Labrador, along with provincial firm Nalcor Energy and Beicip-Franlab, announced that the West Orphan basin, about 185 mi from northeastern Newfoundland, contains 25.5 Bbbl of oil and 20.6 Tcf of gas in place. This estimate is based on Nalcor’s extensive, multi-year, 2D seismic program, which now totals 110,000 line km. Furthermore, a 3D survey was acquired over part of the same area during the summer of 2015. This nine-parcel NL02-EN area constitutes this year’s bidding round, for which bids were set to close on Nov. 9.
In addition, Nalcor in October 2015 had announced in-place resources of 12 Bbbl of oil and 113 Tcf of gas for the Flemish Pass area, to the south and southeast of the West Orphan basin. This 11-tract NL01-EN area constituted the basis for last year’s bidding round, which awarded seven parcels. So, if one adds together the West Orphan and Flemish Pass resources, along with existing proved reserves of 3.3 Bbbl of oil in the Jeanne d’Arc basin at the four fields under development, then one gets a grand total of 40.8 Bbbl of oil and 133.6 Tcf of gas.
And then there is Exxon Mobil, which recently filed a project plan with the Canadian Environmental Assessment Agency, to conduct a 12-year, 35-well, exploration drilling program offshore Newfoundland from 2018 to 2030. Also, XOM is operating the Hebron field development mega-project, which is still on-track to go onstream during 2017. In addition, Husky, Statoil and Suncor are rumored to be contemplating additional activity during 2017.
The R&D side of things. There also is the growing realization that St. John’s is becoming a center for R&D work on equipment and processes tailored to Arctic and other harsh-environment projects. The city’s hosting of the Arctic Technology Conference certainly helped to support this image. And, while offshore Newfoundland may not be in the Arctic geographically, the province certainly experiences Arctic-like conditions, witness frequent icebergs, high waves and fog.
This editor had the opportunity to meet with a number of local niche firms that are working on new equipment and products targeted to subsea and deepwater work. These items, such as creation of the first 3D composite images of underwater facilities (platform legs, subsea modules, etc.) from standard ROV-mounted cameras, and research on using IPM drives in ESPs that would be installed in harsh-environment wells, will be profiled in the next article of our East Canada series.
Final campaign thoughts. As we finished this issue in very early November, close to a week of the U.S. presidential race campaign was still left. And, the election remained remarkably tight and competitive, with the outcome still uncertain. Now, by the time this issue hits your mailbox, we should know who the next U.S. President will be. If Clinton wins, the industry will be in for four long, difficult years, as she tries to continue Obama’s agenda of punitive EPA rules, blocked access to federal lands, abuse of the Endangered Species Act, etc. A Clinton administration will force our industry to spend a lot of time in the courts, to block as many things as possible.
And if Trump is the winner, yes, it is automatically a better scenario, as he has professed a very pro-oil-and-gas agenda. However, the anti-industry bureaucratic measures that Obama leaves as his legacy will take some time to unwind, dismember and destroy. In fact, it could take a nearly four-year term to bring things back to a more rational footing in Washington. No matter who wins, the industry likely faces a challenging, short-term situation. 
