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

A third basin in Newfoundland's offshore is stirring up interest in the global oil industry after seismic work sanctioned by Nalcor Energy points to prospects that could rival finds in Brazil's offshore.

Nalcor'smanager of exploration, Richard Wright, said 50 prospects have been identified in the Orphan Basinfollowingan extensive survey program.

That's in addition to positive results in other frontiers, the Flemish Passand the Jeanned'Arc Basin, where the province's three producing oil fields are located.

Siobhan Coady speaks about the Orphan Basin prospects

8 years ago

Duration 1:16

Natural Resources Minister Siobhan Coady says seismic data in the Orphan Basin in offshore Newfoundland shows "absolutely huge" potential for the oil industry, perhaps even more promising than the highly touted Flemish Pass.

Wright highlighted just one of those prospectsgiven the nameCape Freels because that northeast coast community is the closest point of land,300 kilometres away during a presentation Thursday to delegates at an oil and gas conference in St. John's.

He said it has all the characteristics from a geophysics perspective of the massive Marlimfield in Brazil, with has billions of barrels of recoverable oil,and offers "compelling opportunities on a global basis."

Natural Resources MinisterSiobhanCoadywent even further, saying the basin offers"absolutely huge" potential for the oil industry.

More encouraged than a year ago

Wright said it's too early to say how much recoverable oil may be in the region, but said a completed resource assessment will be made public before bids close on the latest round of exploration rights in November.

"Will it work out and have material-sized fields?It's too early to say. We're certainly moreencouraged than we were a year ago," he said.

The Orphan Basin is expected to be a focal point for companies in November.

The seismic work, meanwhile,is part of an ongoing effort by Nalcor to map the province's offshore to gain a better understanding of the resource potential, and reduce the risk for companies that may decide to further explore for hydrocarbons.

I think it may even be larger than what you're seeing in the Flemish Pass.- Siobhan Coady

The Crown corporation has invested some $50 million in seismic data acquisitionover the past five years, but has recovered much of that by selling the data to oil companies.

The data has improved the odds of making a significant discovery from 1 in 20 to 1 in 7, which is very competitive internationally, Wright explained.

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The data was acquired by Nalcorthrough a partnership with two seismic companies, and includes both2D and 3D imaging.

Last fall, Nalcor released seismic data from the Flemish Pass that showed the potential for up to 12 billion barrels of oil, with a market value of up to $600 billion.

Oil companies have been flocking to area, where significant discoveries have been made by Statoil and its partners.

"I think it may even be larger than what you're seeing in the Flemish Pass," Coady said.

It's the latest sign of hope for an industry that is struggling through a painful downturn.

Despite a slump, Coady said exploration is continuing in the offshore, and new companies such as Nexen and BP are getting involved.

The sale of exploration rights in 2015 attracted a record bid of $1.2 billion, and Coady is hoping for similar interest this year.

Industry 'very upbeat'

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Word of the potential in the Orphan Basin was welcomed by those in the industry.

Sean Power, vice-president of DFBarnes, said it's an exciting time, and industry players are very supportive of the exploration being carried out by Nalcor.

We are just beginning the oil industry in Newfoundland.- Sean Power

"It looks like from their seismic work they found potential for a huge new oil basin, that is probably bigger than anything we've seen before," he said.

Combined with future prospects off the coast of Labrador, discoveries in the Flemish Pass and existing production in the Jeanne d'Arc Basin, Power believes comparisons to the resource-laden North Sea off Norway are slowly being realized.

"The industry is very upbeat about it. We are just beginning the oil industry in Newfoundland," said Power.

The land sale in November hasparcels in the Orphan Basin, Flemish Pass and Jeanne d'Arc Basin up for grabs.