ConocoPhillips, the fifth-largest refiner in the world, figures the chance of finding hydrocarbons in the eight million-plus acres of land beneath the ocean in the Laurentian Basin, about 200 kilometres south of the Burin Peninsula, range from one in 10 to one in 15.
Al Powell, ConocoPhillips’ negotiations manager for frontier exploration in Atlantic Canada, told The Telegram Tuesday those expectations are based on limited evidence obtained through two-dimensional seismic programs.

The Laurentian Basin project represents “a very high risk, but high potential aspect of our worldwide exploration program,” he said.

Kent Lissack, director of business development and government affairs with ConocoPhillips Canada, told

delegates at the Newfoundland Ocean Industries Association (NOIA) conference in St. John’s this week that if there’s a commercial discovery, “it’s probably eight to 10 years after drilling.”

However, Lissack said, the drilling of exploratory wells will only occur after the company and its Laurentian Basin partners — Murphy Oil and BHP Billiton Ltd. — analyse data from the 3-D seismic program to be carried out this summer.

The partners are in a unique situation in that future development in the Laurentian Basin will be different than what has occurred with other fields in offshore Newfoundland and Labrador, such as Hibernia, Terra Nova and White Rose — all of which were bound by provincial and federal government regulations.

As the lead partner in the Laurentian Basin project, ConocoPhillips, which employs about 36,000 employees worldwide and is the ninth largest oil and gas producer in Canada, has to deal with three separate jurisdictions inside the basin.

About 7.1 million acres are controlled by this province, roughly 400,000 acres lie inside the French boundary off St-Pierre-Miquelon and 1.1 million acres belong to Nova Scotia.

The partners also have to deal with the federal government.

Powell said it’s been a challenge getting used to the different regulatory regimes.

“It’s not impossible to deal with, but it certainly is a challenge to work through all the bodies that are there,” he admitted.

Powell, meanwhile, said the company has no plan to undertake 3-D seismic work in the Nova Scotia-owned section of the Laurentian Basin this year. Most of it will occur within Newfoundland’s jurisdiction, with some occurring inside the French boundary.

ConocoPhillips plans to discuss a formal exploration licence with the Nova Scotia regulator later this year.

“There’s a number of administrative issues that need to be settled there with respect to this acreage,” Powell said, referring to Nova Scotia’s jurisdiction.

“We’re working with the (Nova Scotia) board on getting those issues resolved, hopefully, by the end of the year.”

The company chose to conduct 3-D seismic work mostly within Newfoundland’s territory because the results of 2-D seismic programs suggested there should be followup testing there.

Powell compared 2-D seismic work to an ultrasound, and 3-D seismic to an MRI scan, which gives a better indication of whether there are hydrocarbon systems present.

This year’s 3-D seismic program will run from June to October.

Once the data has been collected, analysed and interpreted, the company will decide whether to drill an exploratory well, possibly in 2007.

Powell said exploration and development issues are contingent on five factors: safety, the environment, technological capability, economic viability and community involvement.

In terms of the latter factor, ConocoPhillips has addressed concerns from the fishing community about its operations off Newfoundland’s south coast.

In November 2004, the company met with fish harvesters in Burin, as well as municipal representatives, development board staff and officials from the Department of Fisheries and Oceans to discuss the issue.

People in the fishing industry said they worried about the impact seismic activity could have on ocean species, so the company held a followup meeting and organized a seismic workshop to address the issue.

ConocoPhillips officials, meanwhile, say drill rig availability poses challenges for oil and gas companies, since there are only a few rigs in the world qualified to operate in water more than 1,000 metres deep.

“We’ve got our eye on the rig market to see what may or may not become available,” he said, adding the company has discussed the cost of mobilizing rigs with other operators in the area.