Plans are forming for a dramatic revival of Arctic offshore exploration in deep Canadian waters of the ice-infested, natural gas-prone Beaufort Sea with a new generation of jumbo polar-class drilling equipment, according to evidence filed with the National Energy Board (NEB).
Imperial Oil Ltd. and its 70% majority owner, ExxonMobil Corp., stand at the head of the industry line. The pair have selected the first well location on the Arctic continental slope of North America and designed a drilling ship capable of working in the forbidding region.
The partners put some flesh on previously skeletal outlines of the planned exploration campaign as part of a safety review by the NEB. The board is reconsidering a Canadian tradition of conditioning approvals of Arctic offshore drilling in the Beaufort's coastal shallows with a requirement to stop any blowout with rapid drilling of a second, relief well to siphon off leaking gas or oil in the same season that an accident happens.
The Canadian Association of Petroleum Producers -- in tandem with Imperial, ExxonMobil and other potential Arctic fortune hunters such as Chevron Canada, ConocoPhillips Canada and BP Exploration Operating Co. -- are calling on the NEB to scrap the old policy as unrealistic for the deeper, more remote targets of the forthcoming drilling revival.
The well location chosen by Imperial and ExxonMobil, on an offshore lease called Ajurak, is 180 kilometers northwest of Tuktoyaktuk, an old whaling port on the Beaufort shore of the Mackenzie Delta that served as the base for 1970s and '80s Canadian Arctic offshore drilling. The site is in 650 meters (2,145 feet) of frigid sea water. The partners expect to need up to three drilling seasons to bore all the way down to their geological target, 5,300 meters (17,490 feet) beneath the seabed.
The nature of the target, uncovered by a 2007 seismic exploration survey, is a closely guarded secret. The Canadian Arctic is notorious for being long on gas and short on oil. Observers speculate that the companies are onto a target resembling the Alaska's rich Prudhoe Bay combination of oil, gas and liquid byproducts of gas. More than one well is planned, depending on results of the first one. Canadian drilling rights leasing rules enable explorers to keep northern results confidential for extended periods.
Drilling is tentatively scheduled to start in 2013. A three-season well could be completed and tested in 2016, the new date set by the Mackenzie Gas Project consortium of Imperial, ExxonMobil, ConocoPhillips and Shell Canada for a decision on whether to build a Mackenzie Valley gas and liquids byproduct pipeline system and a Mackenzie Delta processing plant (see NGI, March 22).
To do the exploration job, the international corporate partnership has designed a jumbo ice-strengthened drilling ship with a length of 229 meters (756 feet), a beam of 24 meters (119 feet), and packing 69,000 hp -- a northern industrial cruiser five times the size of the biggest 1970s-generation Arctic exploration vessel.
Imperial and ExxonMobil engineers estimate their brainchild can work in frigid seas up to 2,591 meters (8,550 feet) deep. The previous generation of Canadian Arctic offshore equipment had to settle for shallow coastal waters no deeper than 305 meters (1,000 feet) The mammoth new drillship will be supported by a mini armada of up to four next-generation icebreakers and strengthened supply vessels, the exploration partners say.
Projected costs of all the equipment and the forecast total price tag for a deep-water Arctic well are not yet disclosed. About C$150 million has already been spent on preparations including the Ajurak offshore seismic survey and preliminary engineering work for the exploration campaign. The well site is the first target selected on a 2,053-square-kilometer lease that Imperial and ExxonMobil obtained from the Canadian government in exchange for a commitment to conduct at least C$585 million in exploration work.
The new generation of enlarged, strengthened and more powerful vessels -- plus a storehouse of old Arctic drilling lessons, combined with new blowout prevention devices and engineering experience in other northern locations -- renders the old Canadian Arctic relief well requirement obsolete, the NEB is being told. The board's northern drilling safety review -- a mostly technical exercise, but including some public participation by northern community representatives -- is scheduled to wrap up in August.
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