Shell has four ships on standby
Shell Canada (ticker: RDSA) has four ships on standby in Halifax Harbor as company waits for approval to drill offshore Nova Scotia. The company expects to begin drilling two exploration wells in the Shelburne Basin within the next few months, pending approval from the Canada-Nova Scotia Offshore Petroleum Board, reports CBC.
“What we are waiting on at this point is the very important regulatory approvals and the availability of the ship conducting the drilling activity,” said Shell spokesperson Cameron Yost.
The drilling will be done from a platform aboard a harsh-weather drill ship leased by Stena, a Norwegian company.
“About half of the crew on the Stena IceMAX will be Canadian and half of that number will be from Nova Scotia,” Yost said. “Ninety per cent of the folks that will be staffing the supply vessels come from Nova Scotia.”
The Stena IceMAX is still working in the Gulf of Mexico and can carry up to 180 crew. Yost says the ship will take about ten days to move to offshore Nova Scotia.
Shell pulled out of the Arctic offshore Alaska this week, citing disappointing well results, high costs and the unpredictable federal regulatory environment. Despite its decision to end its Alaska offshore operations “for the foreseeable future,” Shell is committed to drilling at least two exploration wells as part of a multi-year billion-dollar program.
Nova Scotia offshore likely has both oil and gas
The Nova Scotia provincial government this week announced the results of research started in June, which showed that the resources off its coast included oil as well as natural gas. At least two core samples taken from the ocean floor, roughly 2,600 meters beneath the surface, showed “good evidence of petrogenic hydrocarbons,” according to the government’s analysis.
“This supports the suggestion that we happen to be in an area that’s oil dominant as opposed to gas dominant,” said Sandy MacMullin, head of the provincial Department of Energy’s petroleum branch.
He said an earlier seismic analysis — called the Play Fairway Analysis — suggested there is currently 121 trillion cubic feet of natural gas and 8 billion barrels of oil off Nova Scotia’s coast.
These latest core samples offer more data to support the claim that oil exists offshore, which will make the project more enticing for Shell. In 2012, the company said it was looking for oil, not natural gas, reports CBC.
BG makes bet on Newfoundland
BG Group (ticker: BG), which is currently in the regulatory process with Shell to finalize the latter’s $70 billion acquisition of the former, announced yesterday that it has acquired three non-operated positions offshore Newfoundland from Spain’s Repsol (ticker: REP), according to a company press release.
BG will have an equity stake ranging from 10% to 25% in the three blocks. In the EL1123, BG will hold a 25% stake with partner and operator Statoil (ticker: STO). In the other two blocks, EL1125 and EL1126, BG will have a 10% stake in the blocks, both of which will be operated by Statoil, with Chevron (ticker: CVX) partnering in the project as well. The blocks are located in the Atlantic Ocean, approximately 200 kilometers (about 124 miles) from St. John’s, Newfoundland.
