James/ Nfld. - Kerm posted earlier at the Korner.
Oilfield Could Dwarf Hibernia
The Evening Telegram
Gulf Canada could be sitting on a black gold mine off the south coast with potential reserves that could lead to the development of several production sites, The Evening Telegram has learned.
Just how much oil and gas the company's seismic work has uncovered is not known, but it's believed the 2.1 million hectares of explorable property will yield far more than the potential one billion-barrel Hibernia oilfield.
"We believe the block is very prospective," said Dennis Martin, Gulf's spokesman in Denver, Tex. Martin said a new look at old seismic data has given the company the encouragement to arrange for a larger seismic program this summer. Drilling could start as early as 2000. Martin cautioned that drilling is the key to determining the area's potential, but seismic work indicates there could be "encouraging" structures in the area.
"I can confirm Gulf is extremely excited about that part of the offshore oil and gas structure that resides in the Newfoundland territory off our coasts," Mines and Energy Minister Chuck Furey said Friday. "I think the sleeping tiger has been on the south coast and I think that tiger is about to wake up and roar.
"Gulf is extremely excited about the seismic work that was done a number of years ago and there may well be Hibernia-like structures in that zone, but that's for the company to do more exploration on." Furey said he and Premier Brian Tobin had "some very good meetings in Houston, Tex., with the senior people from Gulf" about three weeks ago.
"I can confirm for you that they've agreed . to come to Newfoundland probably in the next three or four weeks to lay out their plans for the future of that particular area," he said.
Gulf first availed of 60 exploration permits in the zone in 1967. That same year, Mobil Oil Canada secured 31 permits in the south coast area to explore 1.3 million hectares. In 1971, Texaco purchased six permits to explore 276,000 hectares of offshore property. Texaco has since passed its south coast exploration rights over to Imperial Oil.
A boundary dispute with St-Pierre-Miquelon forced a moratorium on exploration off the south coast for a time. However, the dispute was settled in 1992 when France was given control of a 10 by 200-mile economic zone extending south of the islands. About 90 per cent of Gulf's exploration property lies within the Newfoundland territory, the remainder belongs to France.
France recently gave Gulf the exclusive right to explore its economic zone, but insisted the company drill a well within three years, much sooner than the industry standard of five years. There's a strong indication there may be vast quantities of oil and gas within the zone. "If there were a major discovery in that area, the overlapping incidence between Newfoundland and France will be rectified through a sharing arrangement, as is done in other parts of the world," Furey said.
Nova Scotia, meanwhile, has thrown a wrinkle into the future development of the area by unilaterally drawing a boundary line that cuts through a small southern section of the Gulf location that Newfoundland claims.
This province has never recognized the line, Furey said.
Newfoundland and Nova Scotia are trying to settle the disputed zone. But provincial officials maintain that maritime law will prove there's no basis for Nova Scotia's claim. Both Furey and Gulf Canada officials say there shouldn't be any problem developing oil reserves that may cross the Newfoundland/France boundary.
But Gulf has no intention of exploring the southernmost section of its property until there's a decision on the disputed land between Newfoundland and Nova Scotia.
Bow Valley Energy expands North Sea operations
Canadian Press
Bow Valley Energy Ltd. is expanding its oil and gas operations in the North Sea.
The Calgary company announced today its wholly owned British unit has struck an agreement in principle to buy most of the operating licences of DSM Energy (UK) Ltd. in the United Kingdom.
No purchase price was announced on the deal, slated to close at the end of June.
The assets being bought by Bow Valley include a 4.2 per cent interest in the Claymore field, with estimated remaining reserves of 100 million barrels of oil equivalent, and 20 per cent of the Durward and Dauntless fields that now produce about 25,000 barrels of oil a day.
Other licences bought from DSM are located in the East Yorkshire region of Britain, and the rest are off the British coast. The deal is conditional upon regulatory approval, joint venture agreements and the sale by DSM of all its other energy interests in Britain.
Bow Valley said its net production from the Claymore field, which began producing in 1977, will be more than 1,800 barrels a day after today's deal. In 1994, Bow Valley's predecessor company. Bow Valley Energy Inc., was taken over by Talisman Energy of Calgary in a $1.8 billion deal.
Bow Valley Ltd. was formed in 1996 to acquire, explore and develop oil and gas properties exclusively outside Canada. The company has interests in the United Kingdom and has signed a service contract to develop the Balal oilfield off the coast of Iran in the Persian Gulf.
Bow Valley Ltd. shares rose eight cents to $1.28 on the Toronto stock exchange today.
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