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History of the Offshore Industry


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Presentation by Paul Barnes, CAPP Manager, Atlantic Canada, Presentation in Halifax, NS, February 19, 2013

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History of the Offshore Industry

  1. 1. History of the Offshore Industry Maritimes Energy Association Oil and Gas 101 February 19, 2013
  2. 2. Overview● Who is CAPP● Lifecycle of an oil and gas field● Atlantic Accord – History● History of the NS offshore oil and gas industry● Atlantic Canada Offshore industry today
  3. 3. Who is CAPP● We are the voice of Canada’s Upstream Oil and Gas Industry • To enhance the well being and sustainability of the upstream Canadian oil and gas industry in a socially, environmentally and technically responsible and safe manner● CAPP members produce more than 90 per cent of Canada’s natural gas and crude oil  Producer member companies explore for, develop and produce natural gas, natural gas liquids, crude oil, synthetic crude oil, bitumen and elemental sulphur throughout Canada  Associate members provide a wide range of services that support the upstream crude oil and natural gas industry● Offices in St. John’s, Ottawa and Calgary
  4. 4. Lifecycle of an oil and gas fieldExploration Development Production Decommissioning/ AbandonmentSeismic Drilling wells Recovering the Completion of resource projectExploration Engineering drilling Transportation to Removal of Fabrication/ market installationDelineation construction drilling Environment, Health and Safety
  5. 5. Canada Offshore History● Canada’s first offshore well was drilled in the 1940s off PEI● Exploration really began in earnest in the 1960s● Seismic surveys began off the BC West Coast in 1958● First offshore well in the Beaufort Sea drilled in 1972● Major successes came in NS/NL the 1970s and 1980s thanks to advancements in exploration technology,  knowledge and federal fiscal incentives
  6. 6. Atlantic Accord - History● In early 1980s Canada Oil and Gas Lands Administration was regulatory agency for all frontier lands● Federal and NS/NL Provincial Governments both claimed ownership of offshore jurisdictions  Supreme Court of Canada confirmed federal ownership● 1982: Canada – Nova Scotia Agreement on Offshore Oil and Gas Resource Management and Revenue Sharing● NL and NS Accords in 1985/86 set aside resource ownership and jurisdiction issues● Mirror legislation passed in 1987/88; Accord Acts passed in 1990
  7. 7. Nova Scotia - Offshore History (exploration)● Exploration Cycle 1:  First well in Sable Island region was drilled in 1967; Between 1967-1978 a total of 71 wells drilled● Exploration Cycle 2:  In 1979 the Venture natural gas discovery marked the beginning of a new era in exploration; discoveries delineated and drilling moved to deeper reservoirs  54 wells drilled; 15 significant discoveries confirmed● Exploration Cycle 3  Announcement of development of the Cohasset Panuke project sparked drilling on the shallow Scotian Shelf  Drilling also occurred on the deepwater Scotian Slope
  8. 8. Nova Scotia – Offshore History (cont’d)● Production from the Cohasset-Panuke oil project in 1992  Major milestone for both NS and Atlantic Canadian offshore● First natural gas production from the Sable Offshore Energy Project in 1999● Deep Panuke gas discovery announced in 2000 Sable Offshore Energy Project (credit: Prisma Productions)
  9. 9. Nova Scotia Offshore - Today
  10. 10. Georges Bank Offshore● Canada and the U.S. share jurisdiction over Georges Bank● Area known for a number of commercial species of fish● Contains the potential for large hydrocarbon reserves  From 1976-1982 ten exploratory wells drilled on the U.S. portion● Currently a moratorium in place on oil & gas exploration● The Government in Canada and the NS provincial government have a joint agreement to extend the moratorium until 2015
  11. 11. Newfoundland and Labrador – Offshore History● First drilling on the Grand Banks (offshore NL) – 1966● Only one discovery in the first 40 wells drilled● From 1973 – 1983 exploration off Labrador found substantial natural gas reserves but no commercial crude oil resources● First production in NL was from the Hibernia project in 1997 Hibernia Gravity Based Structure
  12. 12. Newfoundland and Labrador Offshore - Today
  13. 13. Atlantic Canada’s Offshore - Today● Nova Scotia  Gas production at Sable  Deep Panuke Project under development  Renewed interest in exploration offshore NS● Newfoundland and Labrador  Oil production from 3 projects: • Hibernia • Terra Nova • White Rose  Fourth major project under Deep Panuke Project under development (credit: SBM development Offshore)  Significant exploration activity planned