Interest in Canadian Laurentian acreage may overshadow extended French block
ExxonMobil Canada Properties and Conoco Canada Resources Ltd. have been awarded an extension of the Saint-Pierre-et-Miquelon permit in the Atlantic south of Newfoundland.
The companies obtained the permit, covering 3,251 sq km, from April 1998 to April 2001. They drilled the Bandol-1 wildcat, which proved dry (OGJ, Aug. 12, 2002, p. 29).
When an extension of a permit is solicited, the companies involved must relinquish half the initial acreage. They sought the extension in April 2001, but it was only made official at the end of February 2004.
This was due to protracted negotiations on the terms required by the Saint-Pierre-et-Miquelon authorities, which wanted ExxonMobil and Conoco to drill a second hole. The companies declined to do so before thoroughly reassessing the acreage.
When agreement was finally reached, there remained only two years of the renewed permit, valid to Apr. 10, 2006. It covers 1,610 sq km (see map) and involves a financial commitment of 8 million euros.
Canadian waters
This might well be the beginning of the end of the venture, however.
France's hydrocarbon department told OGJ that ExxonMobil and ConocoPhillips's Canadian unit are not very sanguine about pursuing exploration. It is clear that they are far more interested in the contiguous Newfoundland/Labrador-Nova Scotia acreage (not demarcated above) in Canadian waters, which they are now allowed to prospect.
The Canada-Newfoundland Offshore Petroleum Board awarded the eight exploration licences in the Laurentian subbasin in early May. ConocoPhillips Canada and Murphy Oil Corp. took EL 1081 through EL 1087, and Imperial Resources Ventures took EL 1088.
The ConocoPhillips-Murphy blocks range from 309,000 to 339,000 ha each, while the Imperial Resources block covers 195,000 ha. Each is for a maximum of nine years. The Conoco- Phillips-Murphy licenses take effect July 1, 2004, while the Imperial Resources license is effective upon execution of the negotiated agreement.
ConocoPhillips is operator with an average 70% working interest (OGJ Online, May 11, 2004).
Work commitments total $1.5 million for Imperial Resources and $18 million for ConocoPhillips-Murphy, which has spent more than $23 million there since 1997.
These licenses result from negotiated agreements with former federal permit holders to convert the federal permits in the Newfoundland and Labrador portion of the Laurentian subbasin into ELs. Federal and provincial ministers of natural resources have approved the negotiated agreements and the terms and conditions of the licenses.
In any case, should the companies request a further extension of the Saint-Pierre-et-Miquelon permit beyond April 2006, they will forfeit a further 25% of the original acreage.
Flemish Pass resource
Meanwhile, the CNOPB and Geological Survey of Canada estimated that the Flemish Pass basin, east of and similar in size to the Jeanne d'Arc basin, contains mean undiscovered volumes of 1.7 billion bbl of oil. Expected field size range is 44-528 million bbl.
Five wells have been drilled in the Flemish Pass basin. Some found shows but no commercial accumulations.
Undiscovered hydrocarbon resources is a term normally used to describe those volumes of hydrocarbons that are inferred to exist and assessed to be technically recoverable but have unknown economic viability.
