Bid sub­mit­ted

BP seek­ing out sup­ply base for drilling op­er­a­tion ex­pected to be­gin in 2017.

Cape Breton Post - - BUSINESS - BY CHRIS SHAN­NON DUNDEE

The Strait of Canso Su­per­port Corp. is look­ing to cap­i­tal­ize on an ex­pected up­swing in the province’s off­shore oil and nat­u­ral gas in­dus­try as one of the world’s largest energy com­pa­nies pre­pares for ex­ploratory drilling in 2017.

BP was awarded li­cences for four deep wa­ter parcels over an area of al­most 14,000 square kilo­me­tres three years ago. Lo­cated in the re­gion south­west of Sable Is­land, it to­tals a work com­mit­ment of more than $1 bil­lion.

In 2011, Shell Canada was awarded four deep wa­ter parcels in the south­west for a com­bined work ex­pen­di­ture bid of $970 mil­lion.

The su­per­port cor­po­ra­tion and Port Hawkes­bury Pa­per LP pre­sented a joint sub­mis­sion this spring to act as a sup­ply base for BP’s drilling op­er­a­tion.

Of­fi­cials from BP — the world’s sixth largest oil and gas com­pany — got a first­hand look at the su­per­port’s fa­cil­i­ties in Mul­grave, as well as a tour of Port Hawkes­bury Pa­per in Point Tupper on May 13.

BP is ex­pected to short-list the bid­ding process early next year, and Strait of Canso Su­per­port Corp. CEO Tim Gil­foy is op­ti­mistic his com­pany will make the grade.

He said BP of­fi­cials were left with a “very favourable” im­pres­sion of the in­fra­struc­ture avail­able.

“It’s a nice ice-free deep wa­ter port in rel­a­tively close prox­im­ity to where they’re do­ing their ex­plo­ration work,” Gil­foy said at the Strait Su­per­port Days con­fer­ence in Dundee, Thurs­day.

The su­per­port has 500 me­tres of dock­ing space in wa­ter eight to 10 me­tres deep. It also has more than 1.5 hectares of fencedin area at dock­side.

The win­ning bid will come down to which­ever com­pany can put to­gether the best evalu- ated pro­posal, he said.

Gil­foy said dis­tance to the pro­posed drilling sites do give a slight edge to the su­per­port cor­po­ra­tion.

It’s likely BP will make its de­ci­sion on sup­ply base ser­vices in ei­ther the sec­ond or third quar­ter of 2016.

Nine deep wa­ter parcels on the cen­tral and western sec­tions of the Sco­tian Shelf are up for bids this year. The dead­line is Oct. 29.

The Canada-Nova Sco­tia Off­shore Petroleum Board, the in­de­pen­dent body re­spon­si­ble for reg­u­lat­ing the in­dus­try off the province’s coast­line, is ex­pected to make at least one par­cel avail­able for bids in 2016.

It’s also an­tic­i­pated the board will then open at least one par­cel for ex­ploratory work off the Cape Bre­ton coast in 2017.

An up­dated anal­y­sis of Nova Sco­tia off­shore oil and gas re­serves iden­ti­fied di­verse rich hy­dro­car­bon po­ten­tial with as much as 120 tril­lion cu­bic feet of gas and 8 bil­lion bar­rels of oil, off­shore petroleum board CEO Stu­art Pinks said.

“That’s within the re­gion you see on the map,” he told the busi- ness au­di­ence in Dundee.

“There are other re­gions in off­shore Nova Sco­tia that have po­ten­tial that weren’t in­cluded in that par­tic­u­lar anal­y­sis.

“That’s driven some of the cur­rent bids and we’re hop­ing it will con­tinue to draw at­ten­tion on the fu­ture qual­i­fied bids.”

To com­pare, the Sable Off­shore Energy Pro­ject that has been pro­duc­ing since 1999, has ex­tracted 2 tril­lion cu­bic feet of nat­u­ral gas to date, Pinks said.

Sable is now be­gin­ning to wind down oper­a­tions.

At a point in time where com­mod­ity prices on in­ter­na­tional mar­kets are very low, many in the in­dus­try are herald­ing the in­ter­est in Nova Sco­tia’s off­shore.

“We know to­day in very un­cer­tain times both Shell and BP have been ac­tively pur­su­ing these op­por­tu­ni­ties. …That’s a re­ally pos­i­tive sig­nal for this province,” said Mar­itimes Energy As­so­ci­a­tion CEO Ray Ritcey.

The off­shore has cre­ated ap­prox­i­mately $1.7 bil­lion in roy­al­ties for the Nova Sco­tia gov­ern­ment since pro­duc­tion be­gan.

Gil­foy

Ritcey

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