ExxonMobil looks at encouraging upstream future in Newfoundland and Labrador
ST. JOHNS -- As the annual meeting of the Newfoundland and Labrador Oil and Gas Industries Association (Noia) proceeded through its first sessions on Tuesday, attendees heard encouraging words about future activity in the province from several operators. One of the speakers providing an optimistic update on his firm’s activity was ExxonMobil Canada Ltd. President Peter Larden. He said that the company is proceeding with operations geared to three main thrusts: incentivizing exploration, increasing production and development, and advancing technology and innovation.
Larden said that ExxonMobil is producing approximately 120,000 bopd from its large platforms at Hibernia and Hebron fields. Yet, with respect to growing production in the future, there obviously will be a need for additional exploration to firm up prospects. And that’s where the rub comes in, because waiting periods to obtain exploration licenses offshore the province are unacceptably long, sometimes approaching as many as 900 days. The culprit in this situation is the exploration review process, which is exacerbated by extremely stringent environmental regulations imposed by the Canadian federal government. Larden and other executives at the Noia meeting called on the federal and provincial authorities to find a way to streamline and shorten the process.
In a visit with World Oil after his conference session, Larden said that other than the exploration review process, he remains very pleased with the overall status of ExxonMobil’s operations in Newfoundland and Labrador at present. “We’re at a really exciting point, in that we’ve got an exploration program this year. One well in the Flemish Pass this summer, and one well later on this year. And then on the development front, we’re looking at a range of potential subsea developments throughout our existing facilities, which of course is always positive to capturing incremental reserves and looking to extend the field lives. So, there are some decisions to take there on the future, as well. And then, two legacy and really proud assets are Hibernia and Hebron, with the latter at the start of its life, which was just a fantastic achievement for the province, and a long life ahead.”
Larden also said that his firm is also working in line with the master plan for activity to 2030 in Newfoundland and Labrador. “That is Advance 2030; the province of Newfoundland put that out, it’s a really good and ambitious plan that’s trying to expand the activity of the oil and gas industry here, in the province. It looks at the whole range of exploration and development opportunities, industry capacity and capability, using digital technology. So, I think it’s still early days; the plan is only a couple of years old, and obviously 2030 is still some time away. But we’re very aligned with the direction of the province.”
That having been said, Larden emphasized that ExxonMobil is not necessarily in a pure exploration mode at present. “Well, Hebron is still only 18 months, not even two years old yet, and so we’re still growing production at Hebron,” he explained. “It’s been just a fantastic experience to date, as we operate safely. Currently, production is ahead of schedule, with down time at only 1.9%, which is really an industry-leading performance. So, at Hebron, we’ve still got a long future ahead. And in exploration, it’s not a certain game, but if we get a good outcome there, then certainly we’re looking at a lot more potential, as well.”
There also is some potential for tiebacks and further development at Hebron, acknowledged Larden. “There’s some of those on the radar, but we do have one bluewater exploration well this year, which is a step-out in the Flemish Pass, in the Central Ridge. So, that’s a new area for us, and we think it’s a really attractive opportunity.”
As regards the firm’s biggest technical challenges offshore the province, Larden said field life extension is a major item. “The initial development plan for Hibernia was a 20-year plan, and we’ve already actually gone past that,” he noted. “So, extending the field life of a very mature reservoir is reasonable for us there, because we want to fully monetize the resource and bring back as much value as we can to the province. That is a real technical challenge for us. We’ve adopted a lot of new technology on Hebron, with respect to how we process the crude, with the digital technology that we put into place, with the fibre optic cable. And so fully leveraging and exploiting that technology to keep it cost-competitive and take us into the future is important for us.”
