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Hibernia Production Platform - HMDC

 

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  • Hibernia production will rise sharply, possibly doubling to 50 million barrels.
  • Delineation drilling at Whiterose and Hebron-Ben Nevis.
  • Over $1.4 billion in spending on the Grand Banks including $850 million in development and $275 million in exploration.
  • Industry expected to provide between 2,500 - 2,600 jobs:
    1,300 - Terra Nova
    650-750 - Hibernia
    600 - Exploration
  • Grand Banks exploration includes plans to drill up to six wells. If realized, this would represent the most active year in a decade.
      


1998 offshore land sale
largest in history
Successful Bidders

*Millions $
Mobil Oil, et al 75.1
Chevron, et al 52.1
Husky Oil, Petro-Canada 16.2
Petro-Canada, et al 10.1
Norsk Hydro, et al 8.2
Mobil Oil, Chevron  5.5
Chevron, et al 4.1
Husky Oil  1.8
PanCanadian Petroleum 1.2
Tatham Offshore 1.0
TOTAL 175.3

* exploration expenditure commitments for initial 5-year term.
Canada-Newfoundland Offshore Petroleum Board

Diversifying the Economy

Oil and Gas

Hibernia

Oil production reached almost 24 million barrels in 1998, the Hibernia field's first full year of operation. Production of 56,000 barrels per day from the first well set a new Canadian record. Combined capital and operating expenditures in 1998 approximated $350 million and employment averaged almost 960. Activities associated with the development and production of oil have strengthened the private sector and enabled the economy to diversify. Crude oil accounted for about 9% of the Province's exports last year.

Terra Nova

Development of the second largest known oil field on the Grand Banks is proceeding on schedule and on budget, with first oil expected by the end of 2000. Project investment in 1998 totalled about $670 million. Activities in the Province centered around project management and procurement, vessel design testing, preparation for subsea template and manifold fabrication, and commencement of topsides module fabrication at Bull Arm. Project employment in the Province rose from about 90 in January to almost 320 by year-end.

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Infrastructure

The decision to proceed with Terra Nova, close on the heels of Hibernia, has accelerated the expansion of a well developed support service capability. This capability will facilitate, and make more economic, the development of local oil resources as well as position the industry for related opportunities abroad. The opening of a regional oil transshipment terminal in late 1998 was key in satisfying Hibernia's need for local transportation and storage facilities. Just two months after the official opening, it was announced that the terminal will undergo a $65 million expansion to accommodate product from Terra Nova. The provision of other value-added services, which will require further investment at the terminal, is currently under review.

Exploration

To date, 122 exploratory wells have been drilled resulting in 23 significant discoveries, including the newest significant discovery declaration on Amoco et al's West Bonne Bay well C-23 made last year. Seismic activity, a key component in drilling decisions, reached record levels in 1998. While declining oil prices have reduced industry cash flows and the capital budgets of most oil producers, exploration intentions for the Newfoundland offshore remain largely intact. A prime reason why the East Coast continues to attract investment is low finding cost per barrel of oil, which in the Jeanne d'Arc Basin, is about one-half of the cost in Western Canada. Three exploration rigs (one onshore and two offshore) are expected to be operating in the Province in 1999. PanCanadian is currently drilling an onshore-to-offshore well on the Port au Port Peninsula while a semi-submersible rig, the Glomar Grand Banks, is drilling the second well in its multi-well program. Glomar's first well, in the Hebron-Ben Nevis field, yielded encouraging results. A third rig, the Bill Shoemaker, is expected to arrive soon and commence drilling shortly thereafter.

 

 

 

 

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