BHP’s Exploration Manager Talks NL Drilling Play

BHP was first introduced to the world as silver, lead and zinc producer in Broken Hill, Australia. That was way back in 1885. 

BHP grew to become a powerful and well-established entity and in 2001 a merger between Global Natural Resources company and Billiton (a South African mining company) formed BHP Billiton which was headquartered in Melbourne, Australia. Operations include; mining, metals and petroleum in its portfolio and global expansion was their mandate.

In recent years, BHP’s aggressive oil and gas focus brought them to Eastern Canada. Exploration Director Mike Faust is at the helm. Mike is an ambitious guy. Driven and goal-oriented, he doesn’t mince words.  He’s got one mission and that is to explore global oil and gas regions of the world and develop their petroleum resources.

The OGM had the opportunity to interview Mike Faust and get an inside look at BHP’s exploration plans for offshore Newfoundland.

The OGM:
How did you get involved in petroleum exploration plays?

MIKE:
I grew up in Iowa, USA and did a bachelors in Geology at the University of Iowa and then went on to do a masters in Geophysics at the University of Oklahoma. I worked in exploration at Conoco Phillips for 6 years in the Gulf of Mexico, South East Asia, South America, and West Africa. I ended up jumping ship to BHP in early 2010 and since 2012 I’ve been supervising and managing different exploration projects primarily in the Gulf of Mexico and Trinidad and Tobago. Now in my current role with BHP, I look after exploration licences around the world.

The OGM:
How does BHP choose one region over another when deciding to invest and explore?

Mike:
We are constantly looking at new areas to explore. The geology has to be there, so we’re looking for world-class source rock, big reservoir systems and big traps at a very high level. Having those 3 factors line up, are what we feel make it a good place to have exploration potential. 

We also consider how risky the country is for entry. We assess the state of the industry in that region. So there are a whole host of things to consider but naturally, the geology has to be the driver behind the area. The geology indicates Newfoundland as a high priority for BHP.

The OGM:
What factors put offshore Newfoundland ahead of other exploration regions? 

Mike:
Newfoundland ticks all those boxes. A lot of times you are forced to weigh one option against one another, but there were no real drawbacks offshore Newfoundland. What’s already been found is huge. There is a proven system of operations offshore. The fiscal terms were good. Canada is a great place to do business. So I think the synergy of all those things came together and were big factors for us in coming here.

We came in eyes wide open, we’ve been studying the area for a couple of years. We know that the operating environment offshore is challenging. We knew the regulatory process is quite long. We considered all the variables. Now we are focused on ensuring we meet all the exploration requirements and standards as we go ahead.

The OGM:
Do you have any ideas about what might shorten the regulatory process? 

Mike:
That’s always a hot topic. We’ve learned from the government that they are working on speeding things up. We are going to proceed with what we know are the rules now and we understand that as legislation changes, we will simply adhere to them. 

The OGM:
The BHP exploration licenses EL1157, EL1158 how did you pick those plays offshore Newfoundland?

Mike:
Nalcor’s work has been instrumental. The seismic work done by the province has supported our decision to explore here.  We realized that the Orphan Basin was under-explored and we think there’s a lot of opportunities there.

The OGM:
What is your development timeline and what can vendors be doing right now to prepare for opportunities with BHP?

Mike:
Right now we are seeking regulatory approval for drilling. That can take a couple of years. We also need to secure a rig. That is a big one. Contracting a rig and having some certainty around when we are getting our permits is key.  Those two things have to come together. We are eager to move things forward. We like the opportunity and we want to get after it!

We will be opening up an office in the next few months, so we’ll have people on the ground in St. John’s. We will be issuing expressions of interests when we have work coming up.

The OGM:
What do you have to say to the people of Newfoundland and Labrador?

Mike:
I’d really like people to know that we are excited to be here! We are committed to being transparent and listening to the community. We recognize that we aren’t going to come up here and do all the talking. We are looking for partnership and inclusion. 

As we look to consult with indigenous groups, community stakeholders and suppliers, we will want to hear feedback. We want to make sure that operations are transparent, fair, and everyone has a right to bid on the contracts that we award.

We are very excited about working alongside a world-class industry that’s already here. We realize it’s well established and we are the new kids on the block. We can learn an awful lot from you. 

BHP – PROJECT PROTOCOL – Links

BHP CANADA EXPLORATION DRILLING PROJECT (2019-2028) Environmental Assessment Project Description

Guidelines for the preparation of an environmental impact statement pursuant to the Canadian Environmental Assessment Act, 2012 – For the BHP Canada Exploration Drilling Project BHP Petroleum (New Ventures) Corporation


SOURCE: BHP, C-NLOPB