Newfoundland and Labrador is proceeding with the high-risk game of oil exploration in ultra-deep water, as regulators in the province express confidence in industry’s safety practices despite the ecological catastrophe of BP PLC’s Gulf of Mexico blowout.
Canada’s East Coast is now the only region in North America where oil companies can continue to drill deep-water exploration wells after President Barack Obama last week ordered the industry to suspend such operations in the Gulf of Mexico, pending a review of the BP disaster.
Max Ruelokke, chair of the Canada-Newfoundland Labrador Offshore Petroleum Board, said Wednesday that it appears BP employed questionable drilling methods that would not be condoned in the Canadian offshore.
“We believe things were done in the Gulf that were not in compliance with regulations and probably not even good oil field practices,” Mr. Ruelokke.
The federal-provincial regulatory board has increased its supervision of Chevron Corp.’s operation in the Orphan Basin, some 430 kilometres off the coast.
The province already has four production areas in relatively shallow water, but Chevron is now leading an industry move into the deeper water off the continental shelf. The company drilled an inconclusive well three years ago at more than 2,000 metres.
Last month, it returned to the area and is now drilling in 2,600 metres of water, a record depth in Canadian waters, though some wells have been drilled in deeper water internationally.
“We think it is safe to go ahead with the well; we don’t think there is any additional risk,” Mr. Ruelokke said in a teleconferenced briefing from St. John’s.
While the board added some precautionary procedures, “we didn’t think it was necessary or appropriate to take that out to the extreme and say, ‘You can’t drill the well,’” he said.
BP was drilling in 1,500 metres of water in the Gulf of Mexico and the tremendous pressures at that depth have complicated its efforts to cap the blowout. The company had told U.S. regulators that it would be able to manage any potential accident. Those assurances have proven wildly optimistic, with fears now that the blowout will gush at up to 19,000 barrels a day (about three million litres) until relief wells can be completed in August.
In the aftermath of the Gulf disaster, Newfoundland Premier Danny Williams has faced calls from environmental groups for a moratorium on deep-sea drilling and from opposition critics to dramatically increase safety measures and the supervision of the entire industry.
The Newfoundland board – which is made up of federal and provincial appointees – said its first priority is prevention of a blowout and that it will closely monitor each step of the process to ensure Chevron follows appropriate procedures.
After drilling through the rock under the seabed, Chevron must pause its drilling operation before tapping into the targeted oil-and-gas zones so that board officials can assess its procedures. It must also have regulators on board the drill ship when crews are ready to terminate the well.
Oil companies typically drill exploration wells, then plug them with cement while they assess whether there are commercial quantities of oil. It was at that “termination” stage that BP apparently encountered a surge of pressure and escaping natural gas. The blowout preventer – a massive valve that sits atop the well – inexplicably failed.
Mr. Ruelokke said BP appears to have prematurely switched from pumping heavy drilling fluid into the well, which acts as a cap, to using seawater, which is lighter and less effective as a barrier. He insisted that would not happen in the Newfoundland offshore.
