NEWS Industry 101 2020 Noia’s Tribute to Exploration Drilling Industry Wrap-Up John Crosbie Newfoundland & Labrador Oil & Gas Industries Association Volume 35, Number 1 2020 Noia Board of Directors 2020 Chair Karen Winsor Atlantic XL Vice-Chair James Parmiter Cahill Group Treasurer Christian Somerton Contents Pennecon Past-Chair Mark Collett 4 CEO CORNER Crosbie Group INDUSTRY NEWS Directors Heather Beresford, TechnipFMC Paul Broders, Wood 6 Industry 101 – Exploration Drilling: Breaking new ground in Beverley Evans, KBRS Knightsbridge Robertson Surrette the search for oil Jennifer Haley, Aker Solutions Canada 12 2020 Industry Wrap-up Sheldon Lace, Atlantic Towing Denis Mahoney, McInnes Cooper 25 Working to be part of a sustainable energy future Gerry Mayo, PF Collins International Trade Solutions 28 John Crosbie played pivotal role in launching oil & gas industry Gregory Stacey, KCA Deutag Drilling Canada 32 Environmental Stewardship – good for the environment and business Noia News Editor-in-Chief: Ken Morrissey INDUSTRY PROFILES 35 Atlantic Offshore Medical Services: Noia member for 30 years Editor: Marilyn Buckingham 36 PanGeo Subsea celebrates 30 years with Noia Layout & Design: Steffanie Martin | NudgeDesigns.ca 37 Maritimes Energy Association marks 30 years of Noia membership Contributing Writers: Kristann Templeton, Geoff Meeker, 38 Delta St. John’s Hotel and Conference Centre: a prime Marilyn Buckingham, Ken Morrissey convention destination Advertising: Daniel Osmond 40 Crosbie: Rooted In Experience, Helping You Reach Further 41 Cougar Helicopter’s world class SAR capability Published by Noia The contents of this publication do not constitute professional advice. The publishers, editors and authors, as well as the authors’ firms or INSIDE NOIA professional corporations, disclaim any liability which may arise as a result of a reader relying upon contents of this publication. Opinions 43 Extensive advocacy campaign resulted in support of expressed in the articles do not necessarily reflect the views of Noia. the offshore Material from this publication may not be reproduced without written permission from Noia. 48 Meet Noia’s newest Board members Letters and guest articles are welcomed. Submissions must be signed 50 Noia’s 2020 Board of Directors and include your address and telephone number. Noia reserves the right to reject or edit submissions. 52 Noia membership benefits include events for entire family Contact Noia: www.noia.ca | [email protected] IN BRIEF Box 44, Suite 606, Atlantic Place, 215 Water Street 55 Operators aim to enhance environment, health and safety St. John’s, NL, Canada A1C 6C9 collaboration in the offshore ON THE COVER: The Transocean Barents leaves Newfoundland and Labrador waters for Norway, after making a final hydrocarbon discovery in the Flemish Pass for Equinor. Noia News 3 CEO Corner Noia CEO Charlene Johnson So much has changed since the last edition of Noia News Predictions for consumer consumption and the price of oil that I hardly know where to begin. Our industry is facing a are as varied as the global response to the pandemic. At crisis, with our members suffering the effects of COVID-19, Noia we also face significant challenges. Not being able to the collapse of oil prices and a generally repressed economy. host our annual June conference is one tangible example. Like you, we have been forced to do things differently while While there is so much to say about this, first I would like continuing to provide value. For the first time, Fall Seminar to offer a thank you to Noia’s members for supporting is virtual and you are reading a digital-only Noia News. We the organization and each other. I recognize the last eight are examining ways to offer the services you have come to months have been extremely difficult as most of you have expect from Noia, just a little differently. seen colleagues leave your organization and you have wondered how you will make payroll, pay rent or simply While I admit it was hard to remain optimistic, the resilience survive. Not a week goes by that I do not hear heartbreaking of the people who work in our industry helped reaffirm my stories and I know this situation is taking a terrible toll. belief that we will succeed. It is going to take a lot of hard work, but that is not something we have ever shied Despite this, our members have stood with us as we strived away from. to have our elected officials recognize the desperate need of our industry and provide support. After months of advocacy As always, feel free to contact me about how Noia can best we did receive help, and while it may not have been help your organization and our industry. Working together everything we needed, the financial assistance provided and supporting one another, we will persevere. by the federal government is a step in the right direction. It recognizes there is a problem and hopefully provides us with resources to begin recovery. The exploration initiative Stay well, announced by the provincial government should help us attract offshore exploration, activity key to our future success. Yet, much work remains. Layoffs continue and the future of the global industry is in question. Exploration Charlene and development expenditures are scarcer than ever. Noia News 4 Noia News 5 Stena Drilling’s drillship, Stena Forth, will arrive in Newfoundland and Labrador waters next year to conduct CNOOC’s drilling program. Photo credit: www.stena-drilling.com Prospectivity plays a critical role in the search for new Industry 101 – hydrocarbon discoveries offshore. Industry operators use the best available tools – including detailed 3D seismic surveys – to inform that search, but no one truly Exploration knows what is down there until they lower a drill bit into Drilling: the earth. This is the role of exploration drilling – to bore into the ocean floor and reveal whether oil or gas is actually Breaking new contained in the targeted geological formation. Even with the best research, the typical success rate globally is one well in 10. In the Newfoundland offshore, that rate ground in the is closer to one in six, due largely to the excellent quality of the province’s prospectivity work, which has resulted search for oil in a flourish of exploration activity in recent years. Oil companies review seismic survey information and other data to identify the areas of a prospect that are most likely to contain hydrocarbons and confirm their well thought out theories about the geological structure itself. They then hire drill rigs on a competitive basis to carry out that exploration program, working with the drilling contractor to execute a drilling plan that will hit their target zones in the prospect accurately. Drilling a typical exploration well can cost anywhere from $80 to $120 million – sometimes more – depending on what factors are at play and what complications may arise during drilling. Noia News 6 INDUSTRY NEWS | Industry 101 – Exploration Drilling “Some oil companies like to share the risk around,” “The rigs are held in position by a mooring system said Captain Kristopher Drodge, offshore installation composed of mooring chain and anchors, which can manager with Transocean. “For this reason, they will be deployed out from the rig to lengths of 1800 metres typically bid jointly on parcels of land, with the majority or more, depending on the rig and system used. shareholder usually taking the role of lead operator. Maintaining position with a mooring system is suited They will then put the exploration drilling program out to shallow water,” said Drodge. “Dynamic positioning to tender. It could be anything from a single well to (DP) or thruster-assist can assist to hold them precisely an extended contract for multiple wells, and several in position, but the moorings are important in shallow operators could take turns using the same rig for various water in order to maintain tight “watch circles,” or programs over a number of years. These decisions are restrictions on how much the rig can move above usually driven by market conditions and the short- to the well location. This helps prevent damage to rig long-term outlook for that particular jurisdiction.” or subsea equipment when connected to the well, especially in harsh weather environments like ours. Operators must receive environmental assessment DP alone – whether with semi-submersible rigs or approval on exploration wells before proceeding and drill ships – is more ideally suited for the deep waters rigs must complete an extensive regulatory review beyond the Grand Banks.” process before being certified to operate offshore. These procedures, processes and approvals can spend The installations are either towed or sail under their many months of research before a rig can proceed to own power to the drilling location, where they are its drilling location. positioned in place to very precise coordinates. Semi-submersible drill rigs, which float on submerged “The well location and moorings – if required – will have pontoons, have been the most commonly used floating been predetermined, the ocean floor will have been installations on the shallow waters of the Grand Banks. surveyed and sometimes you will need to plan around Noia News 7 INDUSTRY NEWS | Industry 101 – Exploration Drilling existing subsea assets, such as wellheads, pipelines and so on. There will be a meticulous understanding of whatever Quick Reference - is already out there and this is taken into account.” Rig Components In this process, environmental mitigation efforts to protect sensitive marine life and their habitats, such as the use Drilling derrick of remotely-operated vehicles (ROVs), may also be used Metal-framed structure that towers high over the rig as a non-destructive means of identifying biological and environmental characteristics of the seabed. Topdrive Powerful motor that turns the drillstring Finally, it is time to “spud” the well; that is, to begin and circulates drilling mud drilling into the earth.