To ensure its longevity and encourage more exploration, a commercial discovery offshore Nova Scotia needs to happen soon, Shell Canada’s CEO said on Thursday.

Linda Cook, who took over the Calgary-based subsidiary this summer, told delegates at the Canadian Offshore Resources Exhibition conference that her company remains “cautiously optimistic” about Scotian offshore development. However, “the disappointing results of late remind us of the risks involved in the region.”

Cook confirmed rumors that had surfaced last week that Shell and EnCana Corp. will drill a deepwater exploratory well offshore near Sable Island on the Weymouth license. However, she did not know when the drilling would begin on the C$80 million project.

“This part of the basin is in need of a commercial discovery to provide it renewed impetus,” Cook said. “We believe this well will be an important indicator of future exploration potential in the deepwater play and we look forward to its drilling.”

According to EnCana, the test well would be located near the recently drilled Margaree well, which is located about 250 kilometers southeast of Halifax. The Margaree well is rumored to be a strong gas discovery for EnCana, but the company has provided few specifics. The Margaree F-70 well spudded on May 21 using the Rowan Gorilla V jack-up, and was drilled to a depth of 3,677 meters.

The Weymouth well, Cook said, is “our first, next step,” to determine whether Shell continues to hold its other deepwater licenses on two blocks near the EnCana well.

Cook reminded the delegates that Nova Scotia’s long-term energy future may be in deepwater exploration because technological advances have been encouraging.

“But there remains great uncertainty about Nova Scotia’s ultimate deepwater potential,” she said. “We continue to view it as a high-risk, but ultimately high-payoff, opportunity.”

Cook said there were no “specific timeframes” as to how long Shell would be interested in the Scotian offshore without a discovery. “There’s no urgency or no need to pull out anytime soon,” she said. “We hope there will be additional discoveries, and we look forward to testing them out.”

Shell estimates that gas consumption will double in the next 25 years and to meet demand, supplies will have to be found in emerging basins like Nova Scotia and the Arctic, said Cook. Of Nova Scotia, she reminded delegates that Shell has “500,000 hectares of exploration licenses on the shelf and the deepwater, so hopefully there are many, many more prospects that will be interesting enough to pursue going forward.”

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