OTC: Nova Scotia draws deepwater interest with latest bid round

The Canadian province of Nova Scotia reported the addition of seven new offshore blocks in its deepwater region May 5 at the Offshore Technology Conference in Houston.

Parcels No. 1-4 are on the western Scotian shelf adjacent to Shell Canada Ltd.’s deepwater acreage acquired in 2012 (OGJ Online, Jan. 30, 2012). Drawing on its seismic work completed in 2013, Shell plans to drill its first well in this year’s third quarter. Suncor Energy Ltd. and ConocoPhillips are partners on Shell’s existing licenses.

Parcels No. 5-7 are on the central Scotian shelf north of BP Canada Energy Group ULC’s four existing licenses, also acquired in 2012. In 2014, BP brought in 10 exploration vessels to Nova Scotia to conduct a major 3D seismic program that covered much of Nova Scotia’s offshore region. For BP’s four parcels it picked up Hess Corp. and Woodside Petroleum Ltd. as partners in 2014. “It’s important to note that both Hess and Woodside came on to BP’s project after the oil price began to decline,” said Murray Coolican, Nova Scotia deputy minister of energy.

Parcels 5, 6, and 7 are on underexplored synrift basins, with presalt potential. They are located on the landward side of the deepwater exploration parcels controlled by BP and its partners.

BP and Shell have committed $1 billion each to their deepwater operations off Nova Scotia. Coolican told OGJ, “These parcels were industry nominated based in large part on Nova Scotia’s Play Fairway Analysis. Initially, we received inquiries from a number of companies but soon realized they were examining partnerships with BP and Shell.” Activity indicates that partnerships may be the best option for Nova Scotia’s frontier deepwater area.

In May 2014, Nova Scotia Premier Stephen McNeil announced the ministry would invest $12 million over 4 years to provide new geoscience research on the previous work brought forth in the Play Fairway Analysis, which identified potential of 8 billion bbl of oil and 120 tcf of natural gas offshore Nova Scotia.

The bid round is open for nine parcels total, two of which are in the shallow water region near the Sable Island discovery. Nova Scotia is providing its seismic data to interested bidders at no additional cost. Bidding will remain open until Oct. 29.

Contact Tayvis Dunnahoe at tayvisd@ogjonline.com.

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