Let the Games Begin: Drilling Offshore Newfoundland

ENVIRONMENTAL APPROVALS COMMENCE

And we are off to the races! April 17, 2019, marked the first series of environmental approvals that signal the green light for further exploration and discovery offshore Newfoundland. That is extremely good news. Having been thoroughly assessed and deemed ‘fit’ to proceed, it is clear that these two recent approvals signify that oil exploration and production are not likely to cause adverse environmental effects offshore Newfoundland.

Many people fret about the time it takes for environmental assessments to take place, but they are a crucial component of the process of oil and gas exploration. They ensure that an oil project is safe and sound before proceeding. Consultations with the public, Indigenous Peoples, scientific evidence and a full assessment of greenhouse gas emissions all take place before a project proceeds.

42 WELLS TO BE DRILLED

The Honourable Seamus O’Regan, Minister of Indigenous Services, said, “All Newfoundlanders and Labradorians know how important offshore oil and gas is for the future of our province. These exploration projects provide excellent opportunities for jobs while providing operators with critical information regarding the potential of their offshore plays. The Government continues its commitment to protecting the environment while growing the economy, creating secure jobs for our country’s middle class.”

These environmental approvals are significant because it means the operators responsible for finding oil will be drilling a combined 42 wells offshore over the next ten years. Given that the finding ratio of exploration wells to oil recovery is approximately 1 in 7, the probability of discovering oil is exceptionally high from these two drilling scenarios. Could we double our oil and gas industry with these two initiatives?

Bets are on yes!

APPROVAL #1

Equinor Canada Ltd. (Equinor) is proposing to conduct an exploration drilling project within offshore exploration licenses located in the Flemish Pass Basin, a minimum of 460 kilometers east of St. John’s, Newfoundland and Labrador. The proposed Flemish Pass Exploration Drilling Project would take place between 2019 and 2027, during which Equinor could drill up to 24 offshore wells (up to six per exploration licence) to determine the presence, nature, and quantities of the potential hydrocarbon resource in exploration licences 1139, 1140, 1141, and 1142

APPROVAL #2

ExxonMobil Canada Ltd. (ExxonMobil) is proposing to conduct an exploration drilling project within offshore exploration licences located in the Jeanne d’Arc Basin and the Flemish Pass Basin, a minimum of 265 kilometres east of St. John’s, Newfoundland and Labrador. The proposed Eastern Newfoundland Offshore Exploration Drilling Project would take place between 2019 and 2029, during which ExxonMobil could to drill up to 18 offshore wells (up to six per exploration licence) to determine the presence, nature, and quantities of the potential hydrocarbon resource in exploration licences 1134, 1135 and 1137.

Both projects are subject to approximately 90 legally-binding conditions the proponents must fulfill. These conditions will reduce or eliminate the potential effects of the projects on the environment. For example, the proponents will be required to mitigate and monitor potential effects on marine habitat, including those related to the treatment of waste discharges, reduce supply vessel speed when marine mammals are observed nearby, verify underwater noise levels, and conduct a survey to identify and avoid corals or sponges at each well site.

Clearly, these new exploration wells hold the opportunity for oil suppliers and contractors over the next five to seven years!