Header Menu: Top-Right


Commodity Pricing

BP and BHP delay Canada drilling plans in further blow to east coast offshore sector

Orphan basin drilling postponed to at least 2023, although CNOOC on track to spud Pelles probe this year

UK supermajor BP and Australian conglomerate BHP have delayed plans to drill key exploration wells in the frontier Orphan basin offshore Newfoundland & Labrador (NL), Canada next year, while US giant Chevron and Norway’s Equinor consider their drilling plans.

The delays by BP and BHP — and the lack of detail — are a further blow to the province’s upstream sector, already reeling from the impact of Covid-19, low oil prices and the energy transition.

However, on a positive note, China’s CNOOC International remains on course to spud its Pelles wildcat in NL’s Flemish Pass basin in the coming months.

Ephesus put off
BP had planned to drill its highly anticipated Ephesus probe in 2022, but the company told Upstream that it has pushed back that plan by one year.

A spokeswoman said that “2023 is the latest estimate for potentially drilling one well — Ephesus — offshore Newfoundland,” but cited no reasons for the delay.

The Ephesus prospect lies in about 1250 metres of water in exploration licence (EL) 1145, where BP’s partners are New York-based Hess and Chevron.

BHP’s decision came just one month after it was given, together with Chevron and Equinor, the environmental all-clear by the federal government to push ahead with multi-well drilling campaigns.

BHP ‘remains committed to province’
The Australian operator told Upstream: “BHP (has) elected not to drill in the Orphan basin in 2022, with a decision on our drilling schedule to be made at a future date. The additional time will enable us to complete the technical work needed to mature all options within our portfolio.

“BHP remains committed to the province and we intend to continue to progress the regulatory approvals needed to undertake offshore exploration activity on our NL licences.”

BHP operates ELs 1157 and 1158 with 100% equity.

Chevron yet to make final decision
Chevron was given the go-ahead to drill in EL 1138 in the West Flemish Pass basin on 11 January but has yet to decide on when a well could be drilled.

“A final decision on whether or not to progress future drilling plans for EL 1138 is dependent on internal business decisions,” said a spokesperson for the US supermajor.

“Chevron is not able to disclose any further information at this time.”

Chevron controls a 50% working interest in this acreage, with French giant Total being its sole partner.

Equinor has ‘no plans’ for now
Equinor also secured Ottawa’s approval to drill on ELs 1159 and 1160 in the Central Ridge play but told Upstream that it currently has no firm plans.

“At this time, it is too early to comment on potential exploration plans and activities in this area,” said a spokesperson, while stressing that “there are no plans for exploration drilling activities in 2021.”

Equinor has a 70% stake in EL 1159, with Cenovus Energy on 30%, while it holds 60% equity in EL 1160 and is partnered by Suncor Energy on 40%.

As for the company’s Bay du Nord project in the Flemish Pass basin, the operator’s spokesperson said the development “remains delayed while Equinor continues to work on the project and evaluate our activities in light of the economic challenges faced by the energy industry”.

The project — involving a newbuild floating production, storage and offloading vessel — was due to be sanctioned last year but the schedule has been impacted by the Covid-19 pandemic, low oil prices and competition for capital within Equinor.

CNOOC’s Pelles probe, meanwhile, is due to be drilled in the second quarter of this year in the company’s 100%-controlled EL 1144.

The Stena Forth semi-submersible is due to drill the wildcat.

From Upstream | Issued February 8, 2021