Hibernia: Pioneering a new frontier

Abstract

Abstract Hibernia is the pioneer development for the emerging Canadian east coast offshore oil industry. As the first operator in this area, the Hibernia Management and Development Company Ltd. (HMDC) is developing local skills and infrastructure which can support future developments. The Hibernia field is located 315 kilometres east southeast of St. John's, Newfoundland. It consists of two reservoirs - the Avalon and the Hibernia reservoirs, located at average depths of 2400 metres and 3700 metres respectively. Containing approximately three billion barrels of oil in place, Hibernia is the fifth largest discovered oil field in Canada. Recoverable reserves are estimated to be 615 million barrels. Limited data is available on the Avalon reservoir at this time, and initial drilling activity is expected to identify significant reserves upside. A fixed drilling and production platform is being assembled in Newfoundland to produce the field. Its design includes a first-of-its-kind concrete Gravity Base Structure, which has a 15 metre thick ice belt that can withstand the impact of multi-million tonne icebergs. The completed platform is scheduled to be towed to its offshore location in June 1997, with first oil expected in December. The platform has a design production capacity of 150,000 barrels of oil per day. Average production of 135,000 barrels of oil per day is expected during the 6 year plateau period. Other discoveries around Hibernia offer the opportunity for subsea tiebacks for processing and storage of crude in the future. Hibernia has a pre-production budget of US$4.4 billion, and total development costs are estimated to be US$8.0 billion, excluding transportation costs. Introduction The waters off the east coast of Newfoundland are host to 16 undeveloped oil fields containing estimated recoverable reserves of 25 1 million m3 (1.6 billion barrels). The area also contains an estimated 234 billion m3 of gas, and 58 million m3 of natural gas liquids1. With oil in place estimated at 477 million m3 (three billion barrels) and recoverable reserves of 98 million m3 (615 million barrels), Hibernia is by far the largest discovery offshore Canada to date. In fact, it is the largest undeveloped oilfield in Canada, and by the turn of the century is expected to produce approximately 10% of Canada's light crude oil production. Once Hibernia begins production in December 1997, it will be leading the development of a new offshore oil industry for Canada. However, one field does not constitute an industry. In order for an industry to evolve, Hibernia has to prove that it can compete with similar operations by achieving its goal of top quartile industry performance in relation to the North Sea. This goal is achievable but will present challenges, especially in the area of platform support costs. Using present day technology, it will take 18 years todeplete the estimated 98 million m3 (615 million barrels) of recoverable oil from the Hibernia field.