Govt. Agency Amends Regulations Offshore Newfoundland and Labrador

Sections 170 and 171 of the "Newfoundland Offshore Petroleum Drilling Regulations" were amended in 2006 as a result of discussions led by the Atlantic Energy Roundtable (AER), which involved extensive industry and government consultations. The amended regulations came into force on December 31, 2006. The C-NLOPB is issuing this notice now to ensure all companies operating in the offshore are aware of the regulatory change.

The amended regulations means certain guidance respecting "formation flow testing" found in the "Joint Guidelines Respecting Data Acquisition and Reporting for Well, Pool and Field Evaluations in the Newfoundland and Nova Scotia Offshore Areas, June 2003" under Section 1-2.5.1(b) is no longer in effect in respect of the mandatory testing of exploration or delineation wells subject to the pay criteria outlined.

Under the amended regulations, an operator may conduct a formation flow test on any well(s) drilled on a geologic feature providing the operator obtain the necessary approvals from the Board. There is no regulatory requirement for an operator to conduct a formation flow test on the first well drilled on the feature. However, the Board may require the operator to conduct a test on a follow-up well drilled on the feature.

The legislation does require that a formation flow test (i.e. Drillstem Test) be conducted on the well for which an Application for Significant Discovery Declaration is to be made.

Where an operator intends to conduct a test on an exploration well, the intent should be noted in the application for Approval to Drill a Well. The relevant criteria for testing should also be listed. An operator may defer the testing of the well by notifying the Board and suspending the well and testing at a later date. The operator may also abandon the well if it chooses by notifying the Board accordingly.