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The Other North Atlantic

Canada’s offshore oil and gas industry was born off the coasts of Newfoundland and Nova Scotia and is seeing promising signs of a rebirth.
This article appeared in Vol. 8, No. 2 - 2011

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Mesozoic rifted basins (in magenta type) and Paleozoic basins (in blue type) off Canada’s North Atlantic coast. Courtesy: Michael Enachescu Canada’s North Atlantic fishing industries are rebounding alongside a very robust offshore oil and gas industry. Photo: Thomas Smith Exploration drilling for oil and gas in the Northern Atlantic off of Newfoundland, Labrador and Nova Scotia began in the mid-1960s. It was not until 1979 that any significant fields were found and for those discoveries, development would be difficult and years off. The late 1990s would be the start of the region’s oil and gas industry, which has slowly grown for two decades. Now, however, new discoveries and prospective frontier basins could lead to a successful future. 

Painful Path to Production


Location of producing fields and leases off the Newfoundland coast. Source: Michael Enachescu The Hibernia platform is one of the world’s largest gravity based structures. Source: HMDC Oil and gas exploration in the Canadian North Atlantic offshore area started with geophysical surveys in the late 1950s; the first shallow water wells were drilled the following decade. Wells were few and far between off Labrador and Newfoundland owing to the remoteness of the area and low oil prices until in 1973, dramatically increasing oil prices led to more exploratory drilling. Only small fields were found before 1979 when the Hibernia oil field was discovered off the Newfoundland coast. Between 1967 and 1978, 71 wells were drilled off Nova Scotia, resulting in four significant oil and gas discoveries. Again, it was not until 1979 that a major gas find would be announced by Mobil and Petro-Canada east of Sable Island. In fact, the Venture well found as much gas as had been found to date in the area. More drilling would confirm 15 additional discoveries, but development of these fields would prove to be difficult.   

The Cohasset Field, discovered in 1973, and Panuke, discovered in 1986, became Canada’s first commercial offshore development, known as COPAN. The project produced 44.5 MMb of 50° gravity oil from 1992 to 1999. The first major gas project off Nova Scotia occurred with the Sable Offshore Energy Project (SOEP). The initial discovery was made in 1979 but low gas prices delayed production until 1999. The development is located 225 km of the east coast and involves six gas fields containing 85 Bcm (3 Tcf) recoverable gas reserves. The Deep Panuke gas field was discovered in Jurassic carbonates beneath the Cohasset and Panuke fields in 1999 and is due to go into production this year.   

At about the same time as the Sable gas project was getting under way, oil production started further north in the Grand Banks of Newfoundland at Hibernia. Discovered in 1979, 315 km south-east of St. John’s, Newfoundland, many obstacles had to be cleared before development could take place. There was a jurisdictional dispute with the federal government and after that an agreement amenable to both the oil companies and governments was needed for development to move ahead.   

ExxonMobil Canada is the lead owner along with the five other companies that formed the Hibernia Management and Development Company (HMDC) to tackle this very technologically complex and investment-intensive project. The area of the discovery is not only one of the foggiest places on earth, but also noted for high waves, icebergs, sea ice and hurricanes. Building the world’s first and only iceberg-resistant gravity-based structure (GBS) occurred in Bull Arm, located about 150 km from St. Johns, Newfoundland. Starting in 1990 and using owner capital and government grants, the entire dry dock and fabrication facility had to be built. It took six years to complete the massive GBS and first oil was achieved on November 17, 1997, four weeks ahead of schedule.

Three more fields, Terra Nova (2002), White Rose (2005), and North Amethyst (2010) have since been brought into production using floating production, storage and offloading (FPSO) systems. A fifth field, Hebron is slated to be developed using a stand-alone concrete GBS with oil flowing by 2017. The Jeanne d’Arc area had recoverable resources of 6 Tcf gas and three billion barrels of oil; over one billion barrels have already been produced.

Twenty-seven wells have now been drilled off the Labrador coast, resulting in five significant gas discoveries with recoverable reserves of 4.2 Tcf. However, development could still be years off.

Nova Scotia Basin

The Scotian Basin cross-section showing structural elements and gas discoveries in the Late Jurassic deltaic sandstones. Deformed salt formations are shown in green and extend north into the Jeanne d’Arc Basin. Source: Hogg and Enachescu Underlying 900 km of Nova Scotia’s offshore along the southern margin of Canada’s Atlantic shelf and slope and up to 200 km wide, the Scotian Basin contains numerous sub-basins, separated by ridges or local highs, and by faults.  

“The petroleum system here, in common with the other prospective Mesozoic basins, starts with widespread, high quality Late Jurassic source rocks,” says Dr. Michael Enachescu, petroleum geoscientist for MGM Energy Corporation in Calgary and an Adjunct Professor for Memorial University in St. John’s, Newfoundland, Canada. “Where mature, these source rocks have generated large quantities of hydrocarbons as is the case offshore Nova Scotia. To date, 6 Tcf gas and 75 MMbo have been discovered primarily on the shelf in an area known as the Sable Basin.”

“Several slope fan plays have been drilled with only one announced success - the Annapolis G-24 well,” says Dr. Enachescu. “Good source rocks were found by some of these wells but very little reservoir rock was encountered. More studies into the basin evolution and reservoir distribution of the deeper water sections are needed in this poorly understood area.”   

BEPCo Canada Company was the successful bidder for two deep water parcels located about 160 km south-west of Sable Island, and is preparing to drill a well in deep water about 200 km south of Halifax. This will be the first deep water well drilled off Nova Scotia since 2005. Still, this complex basin, the size of the Gulf of Mexico, remains little explored, with less than 200 exploration and development wells drilled to date.

Southern Grand Banks

“The Laurentian and South Whale Basins have a similar evolution with the Scotian Basin area during most of the Mesozoic era,” says Dr. Enachescu. “These two rift basins have a strong imprint of salt tectonics that continues south off Nova Scotia and north into the Grand Banks.”  

The 60,000 km² Laurentian Basin had long been in a boundary dispute between France and Canada that is now settled. As a result, only one well had been drilled until 2010. That well, located in French territorial waters, was a dry hole but reported to intersect several reservoir intervals. ConocoPhillips and BHP Billiton drilled the East Wolverine G-37 well on a deep prospect within this basin. A company spokesperson said that their expectations of success were low going into the project giving that it was a ‘rank exploration well’. They are said to be still analyzing the data collected by the well, however they have dropped some licenses and only two of the smaller licenses remain.   

“The South Whale Basin is the other prospective area in the southern end of the Grand Banks,” says Dr. Enachescu. “Because of its shallow water depths and ice free environment, it was the first location drilled offshore Newfoundland. It is also the most prospective basin in the area and contains a nearly complete Mesozoic section. The other basins, namely Whale, Horseshoe, South Jeanne d’Arc and the southern Carson basins have undergone an erosional event during the Early Cretaceous Avalon Uplift. With erosion removing the Late Jurassic source rocks, the petroleum systems in these basins may have been destroyed.”  

This basin was tested by 14 wells through the 1980s, all unsuccessful. Another medium depth well was drilled in 2005 but abandoned without testing some Late Cretaceous strata and without reaching the Early Cretaceous reservoir sandstones. No other exploration activity for the area has been announced.

Grand Banks

“The Jeanne d’Arc Basin has a proven petroleum system,” says Dr. Enachescu. “Mature, Jurassic (Kimmeridgian) source rocks are a key element of the petroleum system for these Atlantic basins to be prospective. Based on mass-balance and hydrogen-index techniques, Fowler and McAlpine estimated that the Egret Member has generated 245 Bbo (39 Bcm) of oil in the Jeanne d’Arc Basin. This basin combines these rich source beds with excellent Late Jurassic to Mid-Cretaceous reservoir rocks and large structures. It remains relatively lightly explored in spite of the past successes, with only 62 exploratory wells having been drilled in the 14,000 km² half-graben basin. Past exploration has concentrated on the oil play but plans to bring the area’s gas to market could change that.”   

Some recent developments could mean more exploration activity for the basin. According to a company spokesperson, Suncor Energy, operator of the Terra Nova field, “has numerous prospects on the table”. It is drilling a sidetrack well on its Ballicatters prospect. No announcements have been made on the first well drilled last year, but they have said “it is our intention, based on the success of Ballicatters, to continue with further exploration.” Statoil Canada is a new operator in the area and plans to drill on their Fiddlehead License in 2011/2012. It is also a partner in the Ballicatters wells.

Northern Grand Banks

North and east of the Jeanne d’Arc Basin are three very sparsely explored moderate to deep water basins. Only the Flemish Pass Basin has a discovery, made in 2009 at Mizzen O-16 by Statoil. It is planning a second well here in 2011/2012. A total of seven wells have been drilled in the basin.

Lying north of Flemish Pass is the East Orphan Basin. “A major focus of exploration in Atlantic Canada,” says Dr. Enachescu. “The East Orphan Basin is set in water depths ranging between 1,500m and 3,500m and has the potential to become a major deep water producing area.”  

Published regional maps made from seismic surveys reveal at least six large structures that each could hold several billion barrels of oil. While only two wells have been drilled here, the first, in 2007, encountered good quality reservoirs and a second well was drilled in 2010 in 2,600m water depth (a record for offshore Canada). The operator, Chevron, is still evaluating data from the Lona O-55 well.  

According to tectonic models, the West Orphan Basin is slightly younger and shallower than the East Orphan Basin. There is no current exploratory activity but much of the section and basin remain unexplored.   

These three basins, East and West Orphan and Flemish Pass, comprise a vast exploration frontier of more than 200,000 km². With only 16 wells drilled to date, much work remains to evaluate these high potential petroleum systems.

Offshore Labrador


The Canadian North Atlantic is crossed by enormous icebergs and has some of the stormiest conditions anywhere. In exploring and developing the area's resources, the oil and gas industry has proven that they can overcome these most challenging conditions. Photo: Larry Hicks Dr. Enachescu has worked for the past 40 years as a researcher, explorationist, consultant and professor. He is a renowned authority on the geology of the Canadian East Coast and Arctic frontier basins. Photo: Michael Enachescu Encompassing a vast area of about 200,000 km², with good hydrocarbon potential, are two rift basins off the Labrador coast. The drilling of 27 wells during the 1970s and 1980s resulted in the discovery of five large gas fields. The two main basins are the Hopedale and Saglek, the northernmost of this chain of rift basins along Atlantic Canada and the least understood geologically. These two basins are slightly younger than the other rifted Atlantic Canada basins but there is new evidence of basins containing older, possibly Late Jurassic rocks in deeper water on the continental slope. While little interest has been shown in this area for some time, a new seismic survey was conducted in 2010 and four exploration licenses have been awarded in the past two years.

As Dr. Enachescu points out “Canada possesses petroleum resources second only to Saudi Arabia. Our East Coast is the only North American area with oil and gas production outside the Gulf of Mexico. While sparsely drilled - approximately 500 wells in comparison to over 30,000 in the Gulf of Mexico - the Canadian Atlantic coastal basins are located along a Late Jurassic source rock super-highway. These high quality source rocks have generated huge quantities of hydrocarbons in one of the world’s most politically stable and democratic countries and close to the world’s largest petroleum market. I have no doubts that current efforts to understand all the elements of this complex margin will generate new information and ideas and ultimately conduce to new oil and gas discoveries.”

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