Potential 25 billion barrels of oil in Orphan Basin: report

A new report suggests the Orphan Basin could hold twice as muchoil asthe Flemish Pass.

• Orphan Basin offers 'compelling opportunities on a global basis,' says Nalcor

The provincial governmentreleased a resource assessment by Beicip-Franlabon Thursdaythat suggests there arepotentially 25.5 billion barrels of oil in the West Orphan Basin, compared to the12.5 billion barrelsthe Flemish Pass is believed to hold.

It's a studythe provincial government hopes will attracteven more investment than the FlemishPass, which garnered $1.2 billion in bids last year.

"The 2016 assessment adds to our growing knowledge about our offshore oil and gas potential leading to more exploration work by global companies and giving us assurance that we will have a thriving oil and gas industry for many years to come," said Premier Dwight Ball.

It's early days but the data to date is definitely promising.- Raymond Collins

Members of Newfoundland and Labrador's oil industry said the study isgood news for a business that's been facing a downturn for years.

"The 25.5 billion barrels estimate is larger that the remaining estimate that Norway believes itsoffshore holds, which is 18 billion barrels of undiscovered resources, so this is a hugely importantstudy at this stage in our resource development," saidRaymond Collins, chair of NOIA.

"The industry is very excited with this announcementand we are looking forward to some early drilling to kick-start some more exploration and bring more equipment into the region to help further develop the industry."

'Definitely promising'

Collins saidthere are some important differences between the Flemish Pass and the West Orphan Basin.

"Thereis really no subsurface knowledge beyond the seismic data. The Flemish Pass already had discoveries in place prior to the bid round so there was definitely a known working petroleum system," he said.

"It's early days in the Orphan Basin compared to the Flemish Pass, but the data to date is definitely promising."

Earlier this year, Nalcor said 50 prospects have been identified in the Orphan Basin following an extensive survey program.

The seismic data gatheredby Nalcor has improved the oddsof making a significant discovery, from onein 25to a current estimate ofone in six.

"Exploration is all about risk and understanding of risk and each step of our research in this area, all steps have been consistent and favourable and that's allowed that risk reduction", said Nalcor's manager of explorationRichard Wright.

"This is positive.All you can change is how muchyou know about it and so by finding large scale prospects like are in this area, some exceeding 500 square kilometres in size, these are positive developments."

Nalcoris doing $34 million in seismicwork this year for resourceestimates to attract oil companies.

The bid round on the Orphan Basin closesNov. 9, 2016.

Climate change

At the announcement Wednesday, PremierBall responded to questions about climate changeand concerns that reliance on oil should be reduced, saying it is "absolutely" on the radar.

"We recognize the fact that the world is looking at climate change. We must always look for ways to actually deal with that and we will do that we are seeing that with our hydro developments as well, we see that with our own monitoring around greenhouse gases," said Ball.

"But we also know that there is a demand for fossil fuels in the world right now and there's some jurisdictions that need to be prepared for when the oil companies are ready to produce offshore."

Ball said the priority right now is to get the data on the oil and complete the assessments to ensure the necessary information is available to oil companies who may want to develop in the province's offshore.