With production levels at approximately 350,000 bopd from two producing fields, Hibernia and Terra Nova, and a third field White Rose approaching first oil at a 100,000 bopd, the Canadian Province of Newfoundland and Labrador is emerging as a major oil player on the international oil and gas stage. The primary exploration focus during the past twenty-five years has been within the proven reservoirs and shallow waters of the Jeanne d'Arc Basin, but recent landsales and the locations of seismic surveys demonstrate that the industry is ready to expand its efforts into vast untested areas, including the essentially untouched plays along the continental shelf of the Laurentian Basin, within the slope and deep water basins such as the Orphan Basin, Flemish Pass, Carson-Salar and South Whale, or in long dormant areas such as the on-shelf South Whale and Labrador Sea. All these basins are part of a widespread interconnected network of rift basins that formed during the Mesozoic continual break-up and Atlantic Ocean opening and contain world quality reservoir and source rocks. Recent large seismic 2D and 3D seismic programs, novel geological concepts and easy access to immense exploration blocks are fuelling the quest for new oil and gas reserve along the Newfoundland and Labrador continental margin, extended now from proven basins to less explored or unexplored areas.
Although the first offshore drilling occurred in 1966, only 133 exploration wells have been drilled to date on the entire continental shelf around the Province of Newfoundland and Labrador. The area of jurisdiction includes about 1.6 million square km of which about half is judged to have petroleum potential (Figure 1). The area of hydrocarbon potential is by all accounts - vast, and the well density is very low. By comparison consider that more than 15,000 exploration wells have been drilled within the Gulf of Mexico and more than 3,000 in the North Sea. The offshore drilling has been almost entirely confined to Mesozoic age basins, although petroleum potential is also recognized in several Paleozoic Basins, which in some areas are known to underlie the Mesozoic sediments. While exploration on the Newfoundland continental shelf has been constrained by the reality of harsh climatic conditions, it has long been proven that seismic, drilling and production operations can be successfully executed. Profitable field development can be executed in today's market, as the two fields currently on production are estimated to be breaking even in the US$9.00 - $10.00 per barrel range. Operating costs were recently reported by the operators to be around US$1.50 per barrel for the Hibernia field and US$1.89 per barrel for the Terra Nova field (Enachescu and Fagan, 2004). According to Canada-Newfoundland Offshore Petroleum Board (C-NOPB), the discovered recoverable reserves, all located in Jeanne d'Arc Basin, are estimated to be: 2.1 billion barrels oil and 5.6 Tcf Gas with 324 million barrels of associated liquids, while potential recoverable reserves for this basin were recently estimated at 4.6 billion barrels oil and 18.8 Tcf gas.