Nova Scotia’s offshore is relatively unexplored. The two parcels that comprise the present bid round are deepwater blocks that lie in 3,600 to 11,800 ft (1,100 to 3,600 m) water depth. (Image courtesy of the CNSOPB)

In late November 2008, the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) issued Call for Bids NS08-2 consisting of two board-nominated deepwater parcels. Both blocks lie 100 miles (160 km) southwest of Sable Island.

The Big Tancook structure in Parcel 1 has a closure area measuring approximately 15 sq miles (40 sq km) and has an estimated 1.3 to 4.1 Tcf of in-place gas in this one structure. The Big Thrum structure in Parcel 2 has a closure area of up to 21 sq miles (55 sq km), and an estimated 2 to 5.9 Tcf of in-place gas in this single structure. Both parcels are in 3,600 to 11,800 ft (1,100 to 3,600 m) water depth.

According to the CNSOPB, there are several promising structures in an area down-slope from a major Early Cretaceous river system, where seismic stratigraphic studies suggest deepwater sands were deposited.

Gas bearing sands encountered in the nearby Newburn H-23 deepwater well (and several other deepwater wells on the Scotian slope) demonstrate that a working hydrocarbon system is present in deep water.

Information, incentives

In 2007, the CNSOPB made a decision to hold at least one bid round per year to promote exploration activity in its largely unexplored offshore. The province also has been working to encourage interest in its onshore and offshore basins.

Tim Church, spokesperson for the CNSOPB, said his organization is supporting a federal-provincial group that is promoting the current bid round. The team will attend a number of industry conferences and exhibitions where it will present geological data.

“Two data packages are available to potential bidders,” Church said. “One is a CD that contains regional and sub-regional geological data. The other package contains more in-depth information from the region, including all of the available well data and seismic data.” The second package can be downloaded from the Data Management Center, a site set up by Schlumberger Information Solutions about a year ago.

“The CNSOPB’s geoscience experts have taken quite a bit of care to rationalize the latest seismic and drilling results in their recent work over the Call area. NS08-2 presents a new geological model of the Call area with very significant hydrocarbon potential,” said Sandy MacMullin, director, Petroleum Resources, Nova Scotia Department of Energy.

In addition to providing extensive data, the CNSOPB has been working to improve investment terms and has introduced new licensing terms and conditions.

The new licenses require the successful bidder to post only US ~$40,000 up front for a three-year term. After year three, the operator is required to deposit 25% of the work expenditure bid. The minimum expenditure for offshore blocks has been reduced to from ~$790,000 to $397,000. Successful bidders will be required to perform a project-specific environmental assessment before activity can begin.
Interested companies must submit bids by Friday, June 26, 2009.

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