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