Developments

Making calls, and calls waiting
N.S. has made dozens of pitches to industry on oil and gas potential; will get indication on level of interest when parcel bids close in January

SANDY MACMULLIN has been a man on the move, spinning the compass and being spun around the globe on roughly 30 visits through eight countries this year.

MacMullin, the executive director of petroleum resources with the Nova Scotia Department of Energy, has been pitching the results of a new analysis of the province’s offshore potential to super-majors and major oil companies.

The $15-million Play Fairway study indicated there could be upwards of 120 trillion cubic feet of natural gas and eight billion barrels of oil in the region — as much as triple previous estimates. Perhaps surprisingly, the report found not just more gas potential, but also the possibility of oil in the rock deep off Nova Scotia’s shores. (see map below)

“I think it’s fair to say that industry, at this point, likes the source rock story, thinks it’s pretty solid,” MacMullin said in a presentation to delegates at the recent Core All Energy conference in Halifax.

The oil potential is “a very big thing,” added Steve Bigelow, director of resources and rights with the Canada-Nova Scotia Offshore Petroleum Board. “It’s a very significant thing for offshore Nova Scotia. We may now not be able to say that we are entirely just gas prone. There is now this … possibility that there could be oil exploration and development offshore Nova Scotia.”

Nova Scotia officials will soon get some insight into industry interest in the local offshore. Eight calls for bids will close on Jan. 10 for parcels of lands in deep water roughly 200 kilometres south of Halifax.

The initial signs are encouraging. Four of those eight calls for bids were industry driven. The number of bidders will remain confidential, with only the names of successful companies made public. The winning bidders will have to pony up 25 per cent of their overall bid amount.

MacMullin said Nova Scotia is currently pondering its next steps, taking into account a variety of scenarios — the plan, he noted, won’t necessarily be the same depending on whether the results are mediocre, good or excellent.

Momentum in the Nova Scotia oil and gas industry has stalled in recent years. “We’ve gone through a period of a number of dry wells that have turned up,” Nova Scotia Energy Minister Charlie Parker acknowledged in an interview.

Parker said the provincial government investment of $15 million is money well spent, and could provide a jolt to the sector. “We believe in what they’ve found,” Parker said. “Our job now is to market that.”

Parker said those marketing efforts have resulted in “some companies that have expressed quite a bit of interest.”

He said Jan. 10 will be a key date, when bids close on those eight offshore parcels of land. “We’ll have an idea of what that’s going to turn into.”

And how will Parker ultimately be able to judge whether the investment in the Play Fairway review has been a success?

“Well, I guess when that first well is spudded and there’s an announcement of oil production. That’s the goal. That’s what we’re working towards. It’s a fair investment, that’s true, but we believe it really can pay off.”

By Rob Antle

Map showing locations of NS11-1 parcels. Source CNSOPB

Opportunity knocking
Emera hopes to participate in more N.L. energy developments

NOVA SCOTIA power giant Emera Inc. is eyeing further business prospects in Newfoundland and Labrador, according to a senior company executive.

“We believe that there are huge opportunities in Newfoundland and Labrador for further energy development, and we would like to be able to participate in some of those opportunities,” Nancy Tower (photo below), CEO of Emera Newfoundland and Labrador and the parent company’s executive vice-president of business development, said in an address to the Core All Energy conference in Halifax last month.