Abstract

The Grand Banks off the coast of Newfoundland, Canada is home to several major offshore oil discoveries. Most notable are the 800+ MMbbl Hibernia and 400+ MMbbl Terra Nova fields, currently in production; the 200+ MMbbl White Rose field, currently under development towards planned start-up in early 2006; and the 500+ MMbbl Hebron field, whose development future is undetermined at this time. All discoveries are in a single producing basin, the Jeanne d'Arc.

Since the discovery of Hibernia, there have been predictions that offshore Newfoundland could become the next North Sea. But while the Jeanne d'Arc Basin has proven to be a world-class producing basin, other large discoveries have remained elusive to date. Since the inception of the industry in the North Sea, thousands of exploration and delineation wells have been drilled and hundreds of fields have been developed.

During a similar time period, well under 200 exploration or delineation wells have been drilled, and just two fields have entered production on the Grand Banks. While offshore Newfoundland and Labrador has not lived up to its early billing as the next North Sea, the opportunity remains for this region to be a more significant producing area, but probably not at the scale of the North Sea.

Petro-Canada operates the Terra Nova field, and has substantial interests in Hibernia, White Rose, Hebron and all but one of the significant hydrocarbon discoveries in the region since 1979. This paper provides one perspective on the development of the Newfoundland offshore area - the considerable environmental, geological, technological and infrastructural challenges, the significant opportunities that are driving continued interest in the region, and the factors for success.

Introduction

The question being examined in this paper - whether the Grand Banks off the coast of Newfoundland and Labrador could be the next North Sea - has been asked almost since the first oil discovery at Hibernia in 1979. The four largest oil fields discovered to date - Hibernia, Terra Nova, White Rose and Hebron - are significant in terms of their reserves. In addition, there are 14 other smaller hydrocarbon discoveries - not individually commercial at present - some of which could potentially be tied into existing field developments at some future time.

These discoveries established the Jeanne d'Arc Basin as a world class basin. This is where the development focus has been directed, with two fields in production - Hibernia and Terra Nova - and a third, White Rose, under development toward production start in early 2006. But success beyond the Jeanne d'Arc has not yet materialized.

During a similar period, more than 250 fields have been developed in the North Sea, but this is on the strength of approximately 4000 exploration or delineation wells, compared with less than 200 offshore Newfoundland.

There is undoubtedly more that can be done to maximize the potential of the Newfoundland offshore region. At the same time, perhaps some expectations have been unrealistic.

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