ExxonMobil seeks rig to drill in Flemish Pass, sparking new hope for offshore frontier - Action News
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ExxonMobil seeks rig to drill in Flemish Pass, sparking new hope for offshore frontier

Oil giant ExxonMobil Canada Ltd. is on the hunt for a harsh-environment drill rig to carry out an exploration program in the Flemish Pass.

Offshore supply community welcomes spinoffs, job creation

ExxonMobil is on the hunt for a offshore drilling unit like the one pictured here to carry out an exploration program in the Flemish Pass Basin beginning in the summer of 2019. (Statoil/Canadian Press)

Oil giant ExxonMobil is on the hunt for a harsh-environment drill rig to carry out anexploration program in the Flemish Pass next year.

The rig hunt wasone of two expressions of interestissued in late Decemberindicatinginterest in this frontier region in offshore Newfoundland and Labrador is still high, despite an exploration setback for Statoilin 2017.

ExxonMobilis looking fora mobile offshore drilling unit to carry out operations in the summer of 2019 in exploration licence area 1135.

The 266,000-hectare parcel is located southwest of discoveries by Statoil at Mizzen, Harpoon and Bay du Nord, roughly 500 kilometres east of St. John's.

ExxonMobiland its partners committed to spend a record $559 million in exploration on this licence when it acquired the parcel three years ago.

The Dec. 22 expression of interest (EOI) calls fora rig that can operate in water depths from 80 to 1,200 metres for an exploration drilling program of one, and possibly twoadditional wells starting in the summer of 2019.

But ExxonMobil is also leaving its options open, saying it may require the rig for other potential drilling projects until 2021.

Companies have until Jan. 12 to submit their expressions of interest.

Map of Newfoundland, with the Jeanne d'Arc Basin, the Carson Basin and the Flemish Pass Basin highlighted off it's east coast.
ExxonMobil and its partners committed in 2015 to spending a record $559 million in exploration on licence No. 1135 in the Flemish Pass Basin. (Government of Newfoundland and Labrador)

A spokesperson for ExxonMobilCanada said itis in the process ofpre-qualifying companies that can supply a drill rig.

It has alsofiled an environmental impact statement with the Canadian Environmental Assessment Agency.

'It sends a message to the supply community'

The news is being welcomed bythe industry, knowing what it means for job creation and economic spinoffs, and in the longer term,potentially a fifth producing oil field in the offshore.

"There is renewed interest in the Flemish Pass area," said veteran oil industry consultant Rob Strong.

You've got to find it before you can produce it. And obviously they're looking for it.- Rob Strong, consultant

ExxonMobilhas a 40 per cent interest in the highly prospective licence area 1135, with StatoilCanada Ltd., and Suncor Energy Inc., each holding 30 per cent stakes in the licence.

The EOIfollows a disappointing exploration effortby Statoilin the Bay du Nord area, with a two-well drilling program showing that the amount of recoverable oil was in the lower range of previous estimates, or roughly 300 million barrels.

But there's no sign that companies are about to abandon the Flemish Pass Basin, despite its high costs, deep water and distance from land.

With Brent crude prices nearing $70 US, the stars are starting to line up, said Strong.

"I wouldn't hold my breath for production in the Flemish Pass. But you've got to find it before you can produce it. And obviously they're looking for it," he said.

Meanwhile, Chevron has also issued an EOIfor exploration activities inlicence area 1138. The work includes a seabed coring study for hydrocarbon detection that could be completed by this summer.

Strong said this is the type of work carried out in anticipation of exploration drilling.

"It does send a message to the supply community that there is a lot of interest in the Flemish Pass," Strong said.