Oil and Gas Developments in Eastern Canada in 1982

Abstract

A jurisdictional dispute by the federal government and Newfoundland over offshore rights has slowed exploration and development off Newfoundland and Labrador. In contrast, agreement between the federal government and Nova Scotia about offshore rights resulted in a doubling of industry activity around Nova Scotia. While only 1 well was drilled in the Atlantic provinces during 1982, 21 wells were drilled offshore. Exploratory work continued to delineate the oil-producing potential of the Hibernia structure as well as the gas-prone Venture area off Sable Island. A separate structure was discovered 9 mi (14.5 km) north of the Hibernia discovery well. In the vicinity of Sable Island, 3 separate structures were identified for a total of 4 new structures tested successfully in the Canadian Atlantic during 1982 and early 1983. The Newfoundland Offshore Petroleum Directorate estimated the resource potential of offshore Newfoundland and Labrador at 14.7 billion bbl (2,337,000 × 103 m3) of recoverable oil and 88 to 89 tcf (2,490,000 to 2,520,000 × 106 m3) of gas, both at a 50% confidence level. The Hibernia field potential was placed at 1.85 billion bbl (294,000 × 103 m3) of recoverable oil at a 50% probability level. Total financial investment estimated for development of the Hibernia field is $7 billion.(FOOTNOTE 3) Mobil Oil Canada Ltd. confirmed that the Venture gas field, off Nova Scotia, contains sufficient reserves (estimated at 3 tcf or 84,984 × 106 m3) to justify commercial development. Development of the Venture field is expected to cost between $2 and 3 billion. Other offshore exploratory work in eastern Canada consisted of the first phase of a 5-year program to search for hydrocarbons in Hudson Bay. This program will evaluate 72 million acres (29 million ha.) in the bay, which were acquired by Ontario Energy Corp., Canadian Occidental Petroleum Ltd., Sogepet Ltd., and Soquip. In Ontario, drilling activity decreased 8%, from 198 wells in 1981 to 183 wells in 1982. Of these 183 wells, offshore drilling in Lake Erie accounted for 64, a decrease of 33% from 1981. Exploratory drilling in Lake Erie decreased most significantly (68%) with only 6 wells being completed. Development drilling declined by 25% to 57 wells during 1982. Conversely, onshore exploratory drilling in Ontario increased 26% compared with 1981. The 39 onshore exploratory wells in Ontario consisted of 5 gas producers, 1 suspended gas producer, 5 oil producers, and 28 dry holes. Sixty-four development wells were drilled (25 gas producers, 27 oil producers, and 12 dry holes), a 16% increase compared with 1981. Seismic exploration onshore in eastern Canada consisted of 496 mi (799 km) in Ontario, 321 mi (517 km) in New Brunswick, and 155 mi (250 km) in Prince Edward Island. Ontario reported 629 mi (1,013 km) of offshore seismic exploration in Lake Erie, and 3,107 mi (5,000 km) in Hudson Bay. Nova Scotia reported 22,607 mi (36,381 km) of offshore seismic exploration, Quebec 1,864 mi (3,000 km), Prince Edward Island 435 mi (700 km), Newfoundland 33,012 mi (53,127 km), and New Brunswick 285 mi (458 km). During 1982, exploration rights held onshore under exploratory permits, licenses, and leases increased 11% in Nova Scotia and 79% in New Brunswick but decreased 39% in Ontario and 20% in Quebec compared with 1981. Land held under disposition offshore in eastern Canada during 1982 increased 23% in the Gulf of St. Lawrence and Atlantic Ocean and 21% in Lake Erie but decreased 1% in Hudson Bay and 10% in the Labrador Sea. Compared with 1981, production of oil and gas in New Brunswick in 1982 declined by 68% and 18%, respectively. In Ontario, oil production decreased 5%, whereas gas production increased 4%. Gas production increased from 5,913 mcf (167.5 × 103 m3) to 129,963 mcf (3,681.6 × 103 m3) in Quebec.