Offshore oil exploration heats up in the gulf
The closest oil exploration to the southwest coast to date is set to kick into high gear over the next two years.
A Nova Scotian resource exploration company believes there are two billion barrels of oil off the southwest coast of Newfoundland, and they hope to start drilling test holes for it in 2011 or 2012.
This summer the company plans to do the exploratory and environmental work to will allow it to drill.
Norman Miller, president and CEO of Corridor Resources Inc, said his company’s prospect, known as ‘ Old Harry’, lies about 100 kilometres due west of Codroy in the Laurentian Channel.
“ The name comes from a place on the Magdalens – Old Harrys are sort of rocks that stick up in the harbour.”
If the estimated two billion barrels of oil in Old Harry proves true, it would make the prospect larger than Hibernia, which holds an estimated 1.2 billion barrels of oil.
With the possible exception of the Magdalen Islands, the southwest coast is the nearest land to the Old Harry prospect. Mr. Miller said if oil or gas is found, it will be up to the company extracting it to determine where their land base will be for any future operations.
He explained the company’s claim straddles the Newfoundland and Quebec sea floor. Technically, there is no official boundary between the two provinces.
Because the site is likely to straddle any boundary that is drawn, revenues could possibly be split between the two provinces.
It’s all speculation until a significant find is made and the proper permits are issued.
Corridor Resources plans to drill on the Newfoundland side because they can’t get a permit to operate in Quebec, even though Mr. Miller admitted the Quebec side seems to be the best site to drill.
“Quebec doesn’t have an accord with Canada. So the only place we can get a drilling permit to drill in is on the Newfoundland side.”
This summer’s work will be a site survey. The company will use techniques such as coring, side scanning sonar and sparker surveys.
It also plans to do much of the environmental surveying needed before drilling can begin.
Corridor Resources has budgeted $800,000 on this summer’s work, to determine if the site is viable for commercial development.
Mr. Miller said “ We’ve done quite a bit of seismic there. We’re pretty excited about the prospect.
“ We have to get a rig lined up – but our intention is to get (a rig) out there in 2011 or 2012.”
As a junior resource company, Corridor Resources’ job is to locate possible oil and gas reserves. Usually larger, estab-
– Norman Miller, Corridor Resources
lished oil companies then buy out or partner with junior firms to develop potential sites.
LACK OF BOUNDARIES
Although Mr. Miller said the company has a permit for exploration on the Newfoundland side, Natural Resources Minister Kathy Dunderdale said as far as the province is concerned, there is no boundary between Newfoundland and Quebec on the gulf floor.
“ No, there isn’t (a sea floor boundary) in terms of oil and gas development, which is the perspective from which we’d be approaching it.”
Quebec is aware of Corridor Resources’ intentions and that province’s natural resource minister has publicly said the province wants to settle the boundary issue so Corridor can drill on the Quebec side.
Ms. Dunderdale said the province has no problem with Quebec’s plans.
“ We’re quite satisfied for the boundary to be established as long as it’s done by the terms of international maritime law. We’re happy enough that they want to establish a boundary.”
Mr. Miller said he too is pleased Quebec wants to make a deal with the federal government. If they do, it means his company will be able to access the prime drilling sites closer to the Magdalen Islands.
Sean Kelly of the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) explained how Corridor Resources could be granted a licence to explore on the Newfoundland side when there is no legal boundary.
He said the licence is based on a conservative estimate of where an eventual Quebec-Newfoundland line might be drawn.
Under its current exploration licence, Corridor Resources must stay well east of what is known as the ‘ Stanfield Line,’ a line that was drawn in 1964 in an attempt to divvy up the sea floor among the provinces.
Ottawa rejected the province’s proposal. In 1973, thenpremier Frank Moores also rejected the line.
Quebec continues to maintain the Stanfield Line is legitimate, but Mr. Kelly, who recently wrote a thesis on this subject, said Newfoundland is correct when it claims there is no legal boundary.
He said Quebec will have to come to an agreement with the federal government, similar to what Newfoundland has in its accord with Ottawa. He said until that happens, it’s unlikely any oil or natural gas will be pumped out of the Old Harry prospect.