Report Boosts Estimates of Nova Scotia's Offshore Resources

Abstract: A new report on the potential of deepwater offshore Nova Scotia is long on speculation but short on hard evidence that will cause producers to spend more money on expensive exploration in the province's portion of the Atlantic Ocean.

Analysis: A new report on the potential of deepwater offshore Nova Scotia is long on speculation but short on hard evidence that will cause producers to spend more money on expensive exploration in the province's portion of the Atlantic Ocean.

After more than a year of work, the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) recently released its assessment of the hydrocarbon potential of the Scotian Slope. The conclusions doubled the gas potential and tripled the oil potential of Nova Scotia's offshore resources.

The board, a joint provincial-federal agency that supervises oil and gas operations offshore Nova Scotia, decided last September to provide reserve estimates for the Scotian Slope because of increasing interest in the region.

The Scotian Slope basically covers a 60-mile-wide (100-kilometer) escarpment that descends eastward from the edge of the continental shelf to the Atlantic Ocean. It lies in water ranging in depths from 650 to 13,100 feet (200 to 4,000 meters) and extends 510 miles (850 kilometers) from the U.S. border in the southwest to Newfoundland's provincial border on the northeast. No assessment of the 31,000-square-mile (80,000-square-kilometer) region had previously been made.

A 1983 study by the Geological Survey of Canada estimated the Scotian Shelf's total gas reserves (discovered plus potential) amounted to 18 trillion cubic feet (tcf). The same decades-old assessment pegged oil and gas liquids at 1 billion barrels for the shallower waters.

The CNSOPB wanted to revisit the figures in light of EnCana Corp.'s Deep Panuke discovery, estimated to contain 1.1 trillion cubic feet of gas, plus tremendous successes in other deepwater basins in the Gulf of Mexico (GOM), offshore Brazil, and West-Central Africa.

The Atlantic-facing, lookalike basins were used as analogs to help board staff and consultants come up with the new figures, although volumetric parameters, oil/gas ratios, and other factors used local data wherever possible. For example, porosity was estimated at between 10 and 25 percent while deep wells in the GOM, which has younger sands, often encounter porosity in the 30 percent range.

The CNSOPB said the Scotian Slope was similar to the GOM and other analog basins because it has supra-salt, inter-salt, and sub-salt plays.

The study looked at 12 different play types, concluding that 86 percent of the reserves could be found in the top six plays. The highest-rated plays were turbidite fans lying on the floors and flanks of inter-salt mini-basins and "upper slope turbidite fans in a structured regime associated with listric down-to-basin faults and salt features."

Sub-salt plays were assigned a lower probability of success, although the report noted poorer seismic data quality influenced the rankings. (The full document, which runs more than 100 pages, as well as a much shorter executive summary can be found at the CNSOPB website,, under the news releases section of the "what's new" category.)

The analysis concluded the Scotian Slope could contain between 15 and 41 tcf of gas, depending on assumptions used. The oil potential was estimated at between two billion and five billion barrels (plus several tcf of associated gas).

The report contains both good and bad news for Nova Scotia, which has been counting on the petroleum industry to transform it from a "have-not" into a "have" province.

The happy face comes from the assessment putting the Scotian Slope, on a hydrocarbon richness per unit basis, on about the same level as other Canadian frontier basins, such as the Beaufort in the Far North.

The bad news is that it still ranks below proven areas such as the GOM and offshore Brazil. For example, the ultimate recovery of the federal offshore portion of the GOM has been estimated to contain 60 billion barrels of oil and 428 tcf of gas.

The conclusion pours some cold water on hopes the Scotian Shelf, where producers have committed to spending C1.5 billion over the next few years on exploration and development, will turn into another GOM.

Recent deepwater drilling results have been as encouraging as an Iraqi clerk looking at a spoiled ballot in this week's sham election. Shell Canada and Chevron Canada, for example, spent more than C$170 million this year on two wells that were abandoned. Other companies have also come up empty, although Marathon Oil Corp. reported finding gas in July in 5,600 feet (1,700 meters) of water. It expects to drill up to five more wells over the next two years to determine if the discovery is commercial.

The mixed drilling results in the Scotian Slope are especially interesting since deepwater exploration holes have averaged a 30 percent success rate since 1985 as a result of better technology and increased knowledge, the CNSOPB report said.

It's too early to write off Nova Scotia's hydrocarbon potential. Less than 200 wells have been drilled on the Scotian Shelf and Scotian Slope, compared with an estimated 50,000 wells in the GOM. The region's proximity to lucrative U.S. Northeast gas markets certainly will keep the exploration dollars flowing for several more years. Unless the budgetary black holes start yielding additional commercial fields, the oil and gas reserves forecast by the CNSOPB's report could stay in the potential category forever.


Our Privacy Pledge

Most Popular Articles
Related Articles

Brent Crude Oil : $49.98/BBL 1.59%
Light Crude Oil : $49.18/BBL 1.56%
Natural Gas : $2.73/MMBtu 1.44%
Updated in last 24 hours