ConocoPhillips also announced that BHP Billiton Petroleum (Americas) Inc. (BHPB) has joined the Laurentian exploration group effective June 30, 2004. BHPB has agreed to participate in the upcoming 2D seismic program and in follow-up 3D seismic and anticipated well work programs over the next few years with the potential to earn a significant interest in the Laurentian Block. Terms of the deal have not been released. ConocoPhillips is the operator of the Laurentian Block and currently holds an average working interest of 70 percent with Murphy Oil Company Ltd. holding the remaining 30 percent.
"We would like to welcome BHPB to our Laurentian Basin exploration team," said Bob Spring, Vice President Exploration for ConocoPhillips Canada. "We face some very difficult geo-technical challenges in the Laurentian Basin and we look forward to working with Murphy and BHPB to pursue our exploration plans for the area."
The Laurentian Block was originally acquired under Canadian offshore permits by a COP predecessor company and others in the late 1960's and had been subject to a moratorium due to boundary disputes between Canada & France and subsequently between Newfoundland & Nova Scotia. In 1992, the International Court of Arbitration established the new boundary between Canada and France. In April 2002, a federal arbitration tribunal established a new offshore boundary between Nova Scotia and Newfoundland, settling a dispute that had been holding back oil and gas exploration in the area. In May 2004, ConocoPhillips Canada reached agreement with the CNOPB for the conversion of the Laurentian Block federal permits within Newfoundland into seven new EL's. The EL's will have a term of up to nine years, effective July 1, 2004 and include work programs that, together with previous expenditures in recent years under the permits, total more than $40 million Canadian. Discussion continues with the CNSOPB for the conversion of the permits on the Nova Scotia side.
"We have worked with BHPB in other parts of the world and they bring additional deepwater expertise and experience to the table that fits well with our business in Atlantic Canada," stated Henry Sykes, President of ConocoPhillips Canada. "This farmout agreement with BHPB moves us another step forward in our plans for this high risk frontier basin".
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