Page 5 - NorthAmOil Week 06 2023

NorthAmOil COMMENTARY NorthAmOil

Developing
Cappahayden would
involve a subsea tie-
back to Equinor’s Bay
du Nord project.

produce less than 8 kg of carbon dioxide (CO2) to be home to 124bn barrels of crude, 3.2bn
per barrel of crude, which it noted is less than barrels of which have been discovered, and an
half the global average. estimated 8.3 trillion cubic metres of natural
The Cappahayden discovery could boost the gas.
$12bn Bay du Nord project’s business case, in There is also optimism over the Cape Freels
a turnaround after Equinor confirmed disap- prospect, located 400 km east of St. John’s, where
pointing results for the nearby Sitka and Camb- 50% owner BP is set to drill an initial explora-
riol discoveries in the autumn of 2022. tion well this summer. Hess and Noble Energy
Equinor and BP drilled an exploration well each own a 25% stake in the prospect.
at Sitka and an appraisal well at Cambriol. A Waters there are ultra-deep at 1,250 metres.
spokesperson told CBC News that drilling had Estimates of oil reserves have reached 4-5bn
ended early at Sitka because of “operational barrels, about double the size of the operating
challenges”, which it did not identify. Hibernia project, which is located in far shal-
Equinor will now “take time to assess the lower waters.
operational challenges experienced with the Further south, the Canada-Nova Scotia Off-
well and conclude on further operational plans shore Petroleum Board put out a call for bids
for the prospect at a later date”, the spokesperson on eight parcels on the Scotian Shelf and Slope
said. Meanwhile, Equinor said that the appraisal in September 2022. Bids are due in September
well at Cambriol did not find oil or gas. 2023. There is also
Oil companies are increasing focus on their
What next? offshore businesses globally owing to improved optimism over
Newfoundland and Labrador is currently in oil prices and the lower carbon intensity of off- the Cape Freels
talks with Equinor and BP regarding royalties shore production. Crude prices rose last year,
and how much of Bay du Nord’s construction including in Canada, while Russia’s exports were prospect, located
will be sourced in the province. hit by sanctions after its invasion of Ukraine.
“Obviously [the new resource estimate is] This boosted interest in offshore exploration, 400 km east of
good news, but to us it doesn’t change anything,” including off Canada’s Atlantic coast. A rebound
said the Newfoundland and Labrador Minister from the early days of the COVID-19 pandemic St. John’s.
of Industry, Energy and Technology, Andrew has also helped oil exploration to rise.
Parsons. Offshore exploration and construction are
This comes as an oil exploration boom is costly compared with onshore shale develop-
underway in Canada’s Atlantic waters. New- ments. But because of the large scale involved,
foundland and Labrador hopes to double off- offshore production can be more profitable.
shore oil production by 2030. Three new areas Emissions per barrel are also lower, though off-
are due to be opened up for bidding round this shore spills are hard to clean up, especially if the
summer. platform is far from the coast.
In 2020, the Atlantic province launched an Nonetheless, despite the challenges involved,
Offshore Exploration Initiative to reimburse the picture looks better for offshore oil and gas
oil companies for exploration until 2024. The exploration and production currently than it
waters offshore the province are estimated has for some time.™

Week 06 09•February•2023 www. NEWSBASE .com P5