Oil found near Port au Port; CIVC/Shoal Point onsh
Last updated at 12:54 AM on 01/03/08
Oil found near Port au Port; CIVC/Shoal Point onshore-to-offshore test drilling underway
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PETER WALSH
Transcontinental Media
ST. JOHN’S — It was a scene designed to impress. Six middle-aged men and one woman — all in dark suits — entered a lecture hall at the Geo Centre in St. John’s.
Moments later, the lights dimmed and an audio-visual presentation delivered high hopes for an oil industry on the province’s west coast.
Junior oil and gas exploration company Canadian Imperial Venture Corp. (CIVC) and Shoal Point Energy announced encouraging results Friday from recent seismic testing near the Port au Port Peninsula. The companies say their surveys show a 90 per cent chance of there being up to 20 million barrels of oil only a few kilometres offshore.
CIVC has been down this road before, however, going bankrupt in 2003 after years of exploration on the peninsula didn’t live up to initial promises and failed to produce oil.
It says this time is different.
“We’re not making this up,” said CIVC CEO Steven Millan. “We’re saying we’re very confident, as confident as you can be in an exploration project.”
CIVC entered into a friendly merger Thursday with Shoal Point Energy to develop the find.
“We’re back again and we’re more excited than ever. It’s a very exciting play,” said Shoal Point Energy president George Langdon.
The developers have assembled a 15-storey drill rig in Shoal Point. The rig was shipped in 60 truckloads from Alberta and assembled on land. Test drilling in support of the seismic results was set to begin Friday, roughly two kilometres offshore.
“These are old, hard rocks, with lots of faults, but we’ve got a big rig,” said Langdon.
Millan and Langdon said the initial results of 20 million barrels indicate more oil is nearby. They say their seismic results have been reviewed by 10 experts. The companies speculate the find has the potential to deliver 500 million barrels of oil.
“This is conservative. This could be twice as big,” said Langdon. “If this is true, the economic significance to the west coast and the province will be significant,” said Millan.
“We’re talking numbers comparable to (current offshore oil project) Terra Nova.”
Shoal Point Energy — which also has gas exploration interests in South Stoney Creek in New Brunswick — said it has spent $7 million so far on the Port au Port oil find.
“Finding it is the great part. Developing it will take a lot of money and effort,” said Millan.
Oil exploration and development is cheaper on the west coast of Newfoundland than the east coast because drill rigs are near coastlines and many operations are based on land