Offshore Development and Production
Hibernia produced 52.8 million barrels of oil in 2000, up 45% from 1999. The value of this production was estimated at $2.23 billion and accounted for 27% of provincial exports. The project owners obtained approval during the year to increase the annual production limit from 50 to 66 million barrels, however, management indicates that it is unlikely that this level will be reached in the short-term due to higher than expected gas/oil ratios. Hibernia’s reserves are estimated at 884 million barrels, representing between 17 and 22 years of production at current rates of extraction.
Terra Nova development work continues. The project employed 1,900 on average in the Province during 2000, up from 1,000 in 1999. Oil production was recently re-scheduled to start late this year instead of mid-year as previously expected. The additional time is required for remedial work to address design engineering problems identified in several vessel systems. Production in 2001 is expected to be minimal but reach a peak of 47 million barrels in 2002, pending approval of an annual production limit increase. With about 400 million barrels of recoverable oil, Terra Nova is expected to produce for about 15 years. Its life span could be expanded if delineation drilling in the Far East portion of the field yields positive results.
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| Outlook for 2001 |
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First oil from Terra Nova expected by year end. Oil production expected to be about 55 million barrels (Hibernia and Terra Nova combined). |
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Review of the White Rose Development Application will continue. Owners expect approval by year end. |
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Hebron-Ben Nevis development concept selection will continue with possible Development Application by year end. |
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Onshore oil production from Port au Port/Garden Hill expected mid-year. |
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Onshore exploration drilling will continue in Western Newfoundland. |
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An offshore well will be drilled in the French Economic Zone off the South Coast of the Island, marking the first drilling in this area. The results of this activity could create considerable more interest in this region. |
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Offshore seismic data collection will continue at last year’s levels. |
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Activity on the third potential oil development, White Rose, is accelerating. In January 2001, theWhite Rose partners submitted a Development Application (DA) to the Canada-Newfoundland Offshore Petroleum Board. The plan outlines a development which will yield 230 million barrels of oil. Project management is anticipating sanction by year end and first oil is expected by 2004. This project is discussed in more detail
in the White Rose article.
Pending the results of ongoing project evaluation, Hebron-Ben Nevis appears likely to be the Province’s fourth offshore oil development. Chevron is the operator of this project which could see the recovery of over 400 million barrels of oil. Current activity includes resource evaluation and assessment of development options. The owners hope to select their preferred development concept and submit a Development Application by year end. First oil could be produced by 2006-2007. |
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| Oil and Gas section continued on next page. |
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Photo: Terra Nova Project
At 292 metres, the Terra Nova Floating Production, Storage and Offloading (FPSO) vessel is the first of its kind, designed specifically for Newfoundland offshore conditions |
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