NEWS INSIDE. 2015: The year in review Offshore boards announce bid call results Newfoundland and Labrador s offshore potential grows

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1 NEWS INSIDE 2015: The year in review Offshore boards announce bid call results Newfoundland and Labrador s offshore potential grows Newfoundland & Labrador Oil & Gas Industries Association Volume 29, Number Quarter 4

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3 Noia Board of Directors 2015 Chair Vice-Chair Treasurer Past-Chair Sean Power, DF Barnes Raymond Collins PF Collins International Trade Solutions Bruce Grant Stewart McKelvey John Henley Cahill Group of Companies 4 PRESIDENT S PERSPECTIVE Contents President & CEO Robert Cadigan Noia Directors Noia News Andrew Bell, K&D Pratt Group Inc. Bill Fanning, Kvaerner Canada Limited Paul Lannon, Harbour Grace Ocean Enterprises Liam O Shea, Atlantic Offshore Medical Services Craig Ralph, ABM Torfi Thorarinson, Technip Canada Inc. Anne Whelan, Brenkir Industrial Sales Stephen Young, Subsea 7 Canada INDUSTRY NEWS 6 Newfoundland and Labrador s offshore potential grows 8 Offshore boards announce bid call results 12 C-NSOPB requires shorter well-capping timetable 14 Labour market outlook updated for coming 10 years 18 New simulator and riser design R&D add to local capabilities Editor-in-Chief: Jennifer Collingwood Editor: Marilyn Buckingham Layout & Design: Steffanie Martin NudgeDesigns.ca COVER STORY : The year in review Contributing Writers: Marilyn Buckingham, Kristann Templeton, Advertising: Karen Whittle Moira Baird FEATURE STORY 30 Redefining Oil: Noia s vision for an industry legacy Published by Noia Printed by Transcontinental Opinions expressd in this publication do not necessarily reflect the views of Noia. INSIDE NOIA 35 Noia Fall Seminar focuses on navigating remote logistics 36 Noia - Hibernia scholarship awarded Letters and guest articles are welcomed. Submissions must be signed and include your address and telephone number. Noia reserves the right to reject or edit submissions. Editors of other publications may reprint articles from Noia News, with appropriate credit. Canada Post Publications Mail Agreement Contact Noia: noia@noia.ca Box 44, Suite 602, Atlantic Place, 215 Water Street St. John s, NL, Canada A1C 6C9 Noia News 3

4 NOIA PRESIDENT S PERSPECTIVE President s Perspective With oil prices remaining low, 2015 continues to be a challenging year for the global oil & gas industry and there is no doubt that the impact has been felt by Noia s member community here at home. Reductions in prices for services and products result in reduced margins, which are harder for smaller local companies to absorb. There is a real risk that local entities will be displaced by global supply chains and decision makers have to look to obtain savings in a way that helps strengthen the local supply chain. However, 2015 was also the year that we learned of the game-changing long-term potential of our industry. As you will read later in this issue, Nalcor Energy s resource assessment of a mere 1.6 per cent of our offshore which covered the area involved in the 2015 Flemish Pass land sale revealed in-place oil & gas potential of a staggering 12 billion barrels of oil and 113 trillion cubic feet of gas. The assessment came in advance of the Flemish Pass land sale, which resulted in a total of $1,204,953,713 in work commitments from 13 bidders on seven of 11 offered blocks of land, representing the largest bid Newfoundland and Labrador has ever seen in a land sale despite a price of $45 for Brent on the day the land sale closed. These work commitments of $1.2 billion bring the total work commitments in the Flemish Pass Basin to approximately $2.3 billion since As importantly, we also welcomed new investors BP Canada Energy Group ULC and BG International to our industry and, for the first time since Statoil became an operator some years ago, we have a new entrant and operator, Nexen Energy. The international arm of the Chinese National Oil Company, Nexen is an experienced operator in the North Sea and active in Canada s Oil Sands. With this renewed optimism, Noia officially launched Redefining Oil our vision for a renewed, long lasting provincial oil & gas industry to our members at our 2015 Fall Seminar in November. Redefining Oil is a forward-thinking plan designed to ensure that the oil & gas industry leaves a lasting impact on the province s local business community, for the benefit of all Newfoundlanders and Labradorians. It Robert Cadigan - Noia President & CEO is grounded in a number of Noia s core beliefs, such as: The need to move forward with clear, rational and measurable objectives with a long-term focus. The need to move forward guided by lessons learned locally and globally. The need to focus on building local competitiveness, capability and sustainability. The need for the current exploration strategy to continue to enhance prospectivity and create new opportunities. The need for investors to get a competitive return on investment on a risk adjusted basis. You will find more about Redefining Oil later in this edition, with future Noia News publications focusing on each of these core beliefs and strategic aims in greater detail. Redefining Oil represents more than two years of extensive research and consultation. During this time, Noia conducted 16 jurisdictional reviews and also consulted with you, our members, to fully understand your thoughts on the challenges you face and how these challenges could best be addressed, as well as Noia s role in supporting your success in the industry. We listened and feel that the strategy we have developed truly reflects your concerns and your hopes for a more competitive, enduring oil & gas industry. On behalf of the Board and the staff at Noia, thank you for your input. Noia will continue to lobby for the implementation of Redefining Oil on your behalf. Robert Cadigan President & CEO 4 Noia News

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6 Ed Martin, Nalcor Energy President & CEO, speaks during the October 1 resource assessment announcement. Photo courtesy of the Department of Natural Resources. Newfoundland and Labrador s offshore potential grows A recently completed resource assessment of an area of the Newfoundland and Labrador offshore has renewed optimism for the long-term future of the province s oil & gas industry. The resource assessment covered 11 offshore parcels offered in the Flemish Pass land sale area which closed November 12. It is the first of a series of assessments, each of which will be released in advance of future licensing rounds. The results were released at a news conference held October 1. The assessment revealed that the in-place oil & gas resource potential for the area is estimated at 12 billion barrels of oil and 113 trillion cubic feet of gas. International petroleum consultancy firm, Beicip-Franlab, which completed the assessment, based its estimate on analysis of new geoscience data covering the 11 parcels on offer. The area covers less than 2 per cent of Newfoundland and Labrador s offshore area, approximately 24,000 square kilometres of a 1.5 million square kilometre area. Newfoundland and Labrador Premier Paul Davis said the results will help secure the future of the province s offshore industry. 6 Noia News

7 INDUSTRY NEWS Newfoundland and Labrador s offshore potential grows This is an exciting day for the people of Newfoundland and Labrador and the future of our province s oil & gas industry, said Davis. I m pleased to announce today that we will have a viable and sustainable oil & gas industry like never imagined, and it will be an oil & gas industry for generations to come. The Premier explained that future licencing rounds will follow the same process of conducting detailed resource assessments over land sale areas and releasing results prior to the round closings. Through this information we know more about our resource potential than we ever have before, he said. For the first time, detailed oil & gas resource numbers will be released in advance of a licence round closing, providing a fair and level playing field for the global industry prior to bidding on licence rounds. Nalcor President and CEO, Ed Martin, said the study provides the province and industry with detailed knowledge that there is much more oil to be developed in the Newfoundland and Labrador offshore. He compared the results to Hibernia the province s largest oil & gas discovery that started the local industry. At 12 billion barrels of in-place oil potential, we will have several more Hibernia-sized developments in an area covering a very small percentage of our offshore, said Martin. We are seeing similar prospectivity in other areas it is safe to say offshore Newfoundland and Labrador is poised for growth. Noia President & CEO Robert Cadigan said this news comes at a good time for the province s supply and service sector. It s a very important day at this time when a lot of our members are feeling a little pain, noted Cadigan. He said that these results have the potential to attract new players to the Newfoundland and Labrador offshore, adding that the spin off benefits from drilling operations are enormous. This is groundbreaking, he said. We believe it will accelerate exploration. Noia News 7

8 INDUSTRY NEWS Offshore boards announce bid call results Offshore boards announce bid call results The offshore boards responsible for Newfoundland and Labrador and Nova Scotia each made announcements on November 12 regarding the results of their most recent land sales. C-NLOPB announces $1.2 billion in work commitments The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) announced November 12 that its 2015 Call for Bids (NL15-01EN) fetched more than $1.2 billion in exploration commitments for seven offshore parcels in the Flemish Pass, where Statoil Canada made the Bay du Nord discovery in Overall, 13 bids were submitted, nine companies participated and seven parcels were awarded in the NL15-01EN licencing round. Statoil Canada was the predominant bidder, having involvement in six of the seven parcels awarded. In all but one of its bids, Statoil partnered with other companies, including ExxonMobil Canada and Chevron Canada both existing operators in the Newfoundland and Labrador offshore and BG International Limited and BP Canada Energy Group ULC new entrants to the local industry. Nexen Energy, also a newcomer, was awarded one lot in a sole venture. The license awards were: NL (274,732 hectares) Chevron Canada Limited (35%), Statoil Canada Ltd. (35%) and BG International Limited (30%) for $43,175, NL (267,403 hectares) Statoil Canada Ltd. (40%), ExxonMobil Canada Ltd. (35%) and BG International Limited (25%) for $11,030, NL (262,230 hectares) Statoil Canada Ltd. (34%), ExxonMobil Canada Ltd. (33%) and BP Canada Energy Group ULC (33%) for $225,158, NL (254,321 hectares) Statoil Canada Ltd. (34%), ExxonMobil Canada Ltd. (33%) and BP Canada Energy Group ULC (33%) for $206,258, NL (268,755 hectares) Statoil Canada Limited (50%) and BP Canada Energy Group ULC (50%) for $35,140, NL (139,477 hectares) Statoil Canada Ltd. (100%) for $423,189, NL (163,008 hectares) Nexen Energy ULC (100%) for $261,000, The total value of the bids was $1,204,953,713 in work commitments. Exploration licences (ELs) will be issued in mid-january This is the largest value of bids the province has ever received in a land sale and it demonstrates that the Newfoundland and Labrador deepwater region is a desirable investment area for global E&P companies - even in light of current low oil prices, said Robert Cadigan, Noia President and CEO. It is good news for the people of Newfoundland and Labrador and for the continued growth of the oil & gas industry in the province. The C-NLOPB placed the 11 parcels, spanning almost 2.6 million hectares of seabed, up for bids on March 31. Those land blocks surround six ELs and two significant discovery licences (SDLs) in the Flemish Pass. Five of the existing ELs are operated by Statoil, including EL1112 where the Bay du Nord discovery well tapped into an 8 Noia News

9 INDUSTRY NEWS Offshore boards announce bid call results estimated million barrels of crude. The sixth EL was awarded earlier this year to operator ExxonMobil. Statoil holds both SDLs. Statoil sole winner in C-NSOPB round The Canada - Nova Scotia Offshore Petroleum Board (C-NSOPB) also announced on November 12 that its NS15-1 Call for Bids process had resulted in two successful bids, both by Statoil Canada Ltd., which committed $82,000,000 in work expenditures for Parcels 1 and 2. No bids were received on Parcels 3-9. The C-NSOPB has notified the Federal Minister of Natural Resources and the Provincial Minister of Energy of these bids and awaits the approval of the Board s Fundamental Decisions to issue licences, said Stuart Pinks, C-NSOPB CEO. The terms of the Call for Bids required that bidders have experience in the drilling of exploration wells in water depths greater than 800 metres in the past ten years. The C-NSOPB stated that Statoil Canada Ltd. had demonstrated extensive worldwide experience in deepwater drilling including deepwater exploratory wells drilled offshore Newfoundland and Labrador. If Ministerial approvals are granted, the C-NSOPB will issue two Exploration Licences on January 15th, The C-NSOPB Call for Bids NS15-1 was announced on April 28th, The Call included nine parcels in Nova Scotia s offshore area. Parcels 1 and 2 are located on the outer shelf and slope along the southwestern most parts of the Scotian margin. Portions of these two parcels have been contained within other Exploration Licences (ELs) previously issued by the C-NSOPB. In 2001, Kerr-McGee Offshore Canada Ltd. was awarded an EL for a parcel which includes some of the area included in the current Parcel 2. In 2002, Canadian Superior Energy Inc. was awarded an EL for a parcel which is similar to the current Parcel 1. Parcels 1 and 2 are considered underexplored areas. Since 1969, all or a portion of Parcels 1 or 2 have been Noia News 9

10 INDUSTRY NEWS Offshore boards announce bid call results covered by 25 seismic surveys. No wells have been drilled on either parcel. Other 2015 Newfoundland and Labrador land tenure activity The November land sale results capped off a busy year in land tenure activity in Newfoundland and Labrador. Jeanne d Arc region: In August, the offshore board issued a call for the nomination of parcels (NL15-01JDA) in the oil-producing Jeanne d Arc region, which follows a one-year land sale cycle. The nomination of parcels closed October 20, and the C-NLOPB will consider the nominations in selecting parcels for a 2016 call for bids. Eastern Newfoundland region: The board issued a call for the nomination of parcels (NL15-01EN) in August for the high-activity region, which includes the Flemish Pass and the Orphan Basin. The region follows a twoyear land sale cycle. Nominations closed October 20, and the board will consider the nominations in selecting parcels to be included in a 2016 call for bids. In February, Sector NL02-EN was also identified in the Eastern Newfoundland region. Sectors are identified at the beginning of a land tenure cycle. The next step will be a call for the nomination of parcels within the sector. Labrador South region: Sector NL02-LS was identified in June. Under the region s four-year cycle, oil & gas companies will have an opportunity to nominate parcels in the sector in early A call for bids is expected in the summer of Bids are scheduled to close in the fall of 2019 and exploration licences will be awarded to successful bidders in early Another sector (Sector NL01-LS) was identified in the Labrador South region in May The nomination of parcels is anticipated in 2016, followed by a call for bids later the same year. The offshore board anticipates a call for bids in 2017, with licences awarded in South Eastern Newfoundland region: In June, the board identified a sector (Sector NL01-SEN) for the region, which includes the Carson Basin. Interested parties will have an opportunity to nominate parcels in early A call for bids is anticipated in the summer of 2018, with a closing date sometime in the fall of Successful bidders will be awarded licences in early ELs awarded In mid-january, the CNLOPB issued three new ELs to operator ExxonMobil following the results of land sales in 2014: EL 1135: Issued to ExxonMobil Canada (40 per cent) and partners Suncor Energy (30 per cent) and ConocoPhillips Canada (30 per cent) in the Flemish Pass. At $559 million, this was the largest bid for a single block of land in the history of offshore Newfoundland and Labrador. EL 1136: Issued to ExxonMobil (50 per cent) and Suncor (50 per cent) for a bid of $21 million for the Carson Basin block. EL 1137: Issued to ExxonMobil (100 per cent) for a bid of $16.7 million for the Jeanne d Arc Basin block. 10 Noia News

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12 Drillship Stena IceMAX will assist with Shell Canada s program offshore Nova Scotia. C-NSOPB requires shorter well-capping timetable Deepwater drilling off Nova Scotia just became a little more environmentally challenging at least for oil & gas companies submitting well-capping plans. Starting this year, Shell Canada will spend up to 12 months drilling a pair of exploration wells, dubbed Cheshire and Monterey Jack, in the Shelburne Basin located 250 kilometres south of Nova Scotia. The drillship Stena IceMAX arrived in Nova Scotia waters October 19 to prepare for the drilling program. As part of its original environmental impact statement filed last year, Shell proposed a timetable of days to transport and deploy a primary well-capping stack in the event of a subsea blowout. In June, the Canadian Environmental Assessment Agency approved that plan and then-federal Environment Minister Leona Aglukkaq signed off on it. 12 Noia News

13 INDUSTRY NEWS C-NSOPB requires shorter well-capping timetable In October, as public opposition to Shell s well-capping timetable grew, the Canada-Nova Scotia Offshore Petroleum Board (C-NSOPB) asked the company to reduce its deployment schedule. The C-NSOPB said regulators have beefed up their requirements for deepwater drilling since the Macondo blowout in the U.S. Gulf of Mexico. Shell submitted a new plan, reducing the time to deploy a well-capping stack to days. The company also reiterated an earlier commitment to deploy a second well-capping stack at the same time. The primary wellcapping stack would be deployed from Stavanger, Norway, while the secondary stack would come from Aberdeen, South Africa, Singapore or Brazil. On October 20, the C-NLOPB announced it had approved the revised plan. With the stringent requirements now in place for blowout preventers, independent well examiners, real time monitoring and C-NSOPB s deep water drilling oversight plan all new requirements since the Macondo incident in 2010 we are confident that all reasonable precautions to protect safety and the environment have been taken, stated Stuart Pinks, C-NSOPB CEO. The initial phase of the program will see two exploratory wells drilled, Cheshire, followed by Monterey Jack. Prior to drilling Cheshire, Shell received an Approval to Drill a Well (ATW) from the regulator. A separate ATW will have to be received prior to drilling Monterey Jack. In all, Shell has proposed drilling up to seven wells over a four-year drilling program that is scheduled to wrap in The drilling program will be supported by four offshore supply vessels, three helicopters and Dartmouth s Woodside Supply Base, which comes complete with a quay-side mud plant. The company holds six exploration licences ELs 2324, 2424, 2425, 2426, 2429 and 2430 in the Shelburne Basin where water depths range from 1,500 metres to 3,000 metres. The company acquired the licences in 2011 for a bid of $970 million and is partnered with ConocoPhillips (30 per cent) and Suncor (20 per cent) Canadian Underwater Conference & Exhibition Man & Machine Underwater Save the Date April 3-5, 2016 Halifax, Nova Scotia Conference Focus Join your colleagues and industry professionals for exhibits and technical presentations that will address occupational diving operations, as well as ROV & AUV activities across North America. For information on Sponsoring, Exhibiting or Speaking visit our website: Noia News 13

14 New government outlook will help young people decide promising career paths for the coming years. Labour market outlook updated for coming 10 years The Government of Newfoundland and Labrador has released a detailed labour market report which looks at trends for the coming 10 years. Labour Market Outlook 2025 was released in late August to provide updated information about the provincial workforce, labour demands, employment outcomes and current and emerging job prospects. It provides an outlook for 120 occupational groups in the province from Newfoundland and Labrador s Minister of Advanced Education and Skills, Clyde Jackman, said the report will give those entering the workforce the information they need to make informed decisions about their education and careers. Labour Market Outlook 2025 achieves this and provides critical data and a detailed outlook of the provincial labour market landscape, including current and emerging employment, labour supply and occupational trends, Jackman said. The information is also intended to help attract newcomers to existing and emerging opportunities and to respond to current and future labour market realities. Employment levels to fluctuate The report highlights that significant job openings are expected over the next decade due to an increasing number of retiring workers. Almost 64,000 job openings are anticipated between 2015 and 2025 in the province. Some 80 per cent of these will be in the areas of Sales and Service; Business, Finance and Administration; Management; Health; and Occupations unique to Primary Industry (which includes the oil & gas industry). Employment fluctuation is anticipated over the next few years as major projects such as Hebron and Muskrat Falls wind down their development phases. For the next three years there will be almost 7,000 fewer jobs in skilled trades as a result. The report expects that beginning in 2019, however, the number of workers will increase by 12,000 as major project expansion resumes. Voisey s Bay underground mining development and Statoil s Bay du Nord discovery, as well as expanding employment in the service sector to meet the needs of the aging population, are among the reasons for this anticipated labour demand. During the final seven years of the forecast period, a general upward trend is expected. Industries that expect to see the largest increase in employment include health care and social assistance; mining and oil & gas extraction; arts, entertainment and recreation/accommodation and food services; finance, insurance, real estate and leasing; and wholesale and retail trade. The report also highlights that approximately 57 per cent of job openings between 2015 and 2025 will be in management 14 Noia News

15 INDUSTRY NEWS Labour market outlook updated for coming 10 years Table 4. Occupational Groups and Occupations with the Largest Increases in Employment (2015 to 2025) Occupational Group Occupation (by NOCs) Sales and service Childcare and home support workers Retails salespersons and sales clerks Cashiers Health Nurse supervisors and registered nurses Assisting occupations in support of health services (includes personal care assistants, dental assistants and other aides/assistants) Other technical occupations in health care (except dental) Occupations unique Underground miners, oil and gas drillers to primary industry Supervisors, mining, oil and gas Mine services workers and operators in oil and gas drilling Source: Labour Market Outlook 2025 occupations or will require some form of post-secondary education. Other industries, however, are expected to experience declining employment. Construction; professional, scientific and technical services; manufacturing (excluding seafood processing); public administration; and educational services are among the areas expected to see lower employment levels. Supply considerations With an aging and declining population will come a tightening of labour market conditions. The report particularly notes that new entrants, specifically young people at the beginning of their careers, will be the single biggest source of new labour supply. Attrition (retirements and death), however, is anticipated to exceed the number of new entrants. As a result, attracting new workers from the rest of Canada and around the world will be essential to maintaining a sufficient labour supply. This need is highlighted in the provincial government s recently released Population Growth Strategy. So what does this mean for the oil & gas industry? The provincial government is taking steps to attract new workers to the province and to prepare new entrants to the workforce for current and emerging opportunities. The Workforce Development Secretariat was established within the Department of Advanced Skills to ensure that labour market policies and investments reflect employer demands, to increase labour force participation rates, to collaborate with employers to recruit and train FABRICATION INDUSTRIAL PIPE SPOOLING PROTECTIVE COATINGS OFFSHORE SERVICES RothLochston Subsea specializes in the fabrication, surface preparation and protective coating services of subsea components, carbon and alloy piping systems, process modules, skids, structural steel, storage tanks, stacks, offshore containers, tool baskets and pressure vessels. rothlochstonsubsea.com Safety Commitment Success Noia News 15

16 INDUSTRY NEWS Labour market outlook updated for coming 10 years skilled workers and to highlight skill needs and identify solutions to fill skill gaps. The province is also working with the College of the North Atlantic to develop a strategic, industry-driven approach to trades education. With a 250 per cent increase in the number of immigrants that the province can nominate annually, it is also hoped that immigration initiatives will be successful in meeting some of the forecasted labour needs. As well, the Canada-Newfoundland and Labrador job grants are meant to provide support for employers looking to invest in high quality training for current or potential new staff. On the industry side, the Petroleum Industry Human Resources Committee (PIHRC) is dedicated to promoting careers in the oil & gas industry to young Newfoundlanders and Labradorians. Established in December 1998 by federal, provincial and industry stakeholders, PIHRC is the primary industry resource for career information and the promotion of careers to students in the Newfoundland and Labrador oil & gas industry. It identifies labour market issues in the oil & gas sector by drawing on current research, and works with or through other agencies, such as government departments, school districts, and educational institutions, to provide information to students and their key influencers. Information contained in Labour Market Outlook 2025 is considered by PIHRC as it chooses its direction for career promotion efforts. The committee s website career resources, video project and public speaking engagements are geared towards the in-demand and future-demand oil & gas industry career options available in Newfoundland and Labrador. We continue to strive to ensure that Newfoundlanders and Labradorians are the ones who receive the greatest benefit from our oil & gas resources, said Bob Cadigan, Noia President and CEO and PIHRC co-chair. Labour market intelligence, such as Outlook 2025, supports our efforts to encourage our young people to consider directions that allow them to be best positioned and best qualified to staff our industry in the future. Connecting Newfoundland to the World! Lynden International is pleased to announce our new service center in St. John s, Newfoundland to support the oil & gas sector! Call your local representative for more information. 40 Commonwealth Ave. Suite 110, Mount Pearl, NL A1N 1W Noia News

17 Mile One Centre, St. John s, Newfoundland & Labrador Held in partnership with: Noia Conference 2016 Canada s offshore industry is here Atlantic Canada Petroleum Show is now over 50% sold! Don t miss the opportunity to be a part of the only major event servicing Canada s offshore oil and gas industry. The show runs in conjunction with Canada s flagship offshore oil and gas information event, hosted by Noia, and attracts over 2,500 visitors and 155 exhibitors annually. Contact us now to take part in this unparalleled event Betty Shea +1 (866) bettyshea@dmgevents.com June 22 & 23, 2016 Mile One Centre St. John s, NL atlanticcanadapetroleumshow.com

18 View from the helm of the newly opened Hibernia Offshore Operations Simulator. Photo courtesy of the Marine Institute. New simulator and riser design R&D add to local capabilities The Fisheries and Marine Institute of Memorial University of Newfoundland officially opened the Hibernia Offshore Operations Simulator Facility on October 30. This new simulator will provide offshore operators with advanced and customized training for the supply and support of offshore facilities and production platforms. The simulator is housed at the Institute s Centre for Marine Simulation (CMS) in a new two-storey facility that was added to the Marine Institute campus this past winter. The facility includes a six degree of freedom motion platform that replicates a wide range of at-sea conditions and vessel vibrations, a visualization system to represent offshore operations in real-time and an instructor station to coordinate and oversee training scenarios. The construction of the facility was made possible by donations of $4.4 million from the Hibernia Management and Development Company Ltd. (HMDC) and $750,000 from the Provincial Government s Infrastructure Funding Program. Creating a learning environment that simulates Newfoundland and Labrador s offshore conditions will enhance our overall approach to safety, said Jennifer Walck, president of HMDC. This simulator will 18 Noia News

19 INDUSTRY NEWS New simulator and riser design R&D add to local capabilities better prepare our workforce for the conditions they encounter offshore, and ensure they have the ability to practice operations in a controlled environment. Our advanced technology sectors such as ocean technology continue to grow and are attracting people from all over the world to our shores, and the Hibernia Offshore Operations Simulator Facility is an excellent addition to our suite of training infrastructure to supply and support our offshore industry, said the Honourable Clyde Jackman, Minister of Advanced Education and Skills. As a government we are very pleased to provide financial support for continued excellence in training for the offshore. Both the growing offshore sector and continued excellence in post-secondary training further support the goals of our Population Growth Strategy, the Government of Newfoundland and Labrador s 10-year strategy for supporting individuals and families who choose Newfoundland and Labrador as their home. Using the Hibernia Offshore Operations Simulator, CMS will train new and existing personnel in complex tasks, such as positioning and mooring of offshore structures, deep water anchor handling, supply operations alongside platforms, iceberg management and subsea operations. The simulator will also be used to rehearse operations and develop and evaluate procedures as part of risk assessments. The facility will also enable CMS to continue spearheading research in the areas of equipment design, ice navigation, technology transfer, and simulation development with the aim of making offshore operations safer and more efficient. The Fisheries and Marine Institute prides itself on being Canada s most comprehensive centre for education, training, applied research and industrial support for the ocean industries, said Glenn Blackwood, vicepresident, Memorial University (Marine Institute). The Hibernia Offshore Operations Simulator is the latest in training technology for the offshore sector and will ensure today s workforce is equipped with the unique training they require to safely perform complex tasks and react to conditions in the harsh marine environment such as that off the coast of Newfoundland and Labrador. We are grateful to Hibernia Management Local Knowledge Global Reach Call us for more information about your international logistics needs pfcollins.com St. John's Halifax Moncton Calgary Noia News 19

20 INDUSTRY NEWS New simulator and riser design R&D add to local capabilities and Development Company Ltd., the Atlantic Canada Opportunities Agency and the Provincial Government for their support in making this new facility possible. The new simulator will complement the wide range of marine and offshore training simulators currently housed at CMS, including one of only three full motion ship s bridge simulators in the world. R&D centre to strengthen province s capacity in riser design Earlier in October, the Research and Development Corporation of Newfoundland and Labrador announced an investment of $592,535 in Technip Canada s High Performance Computing Centre to strengthen the province s capacity in riser design research and development. A riser is a pipe or assembly of pipes used in the offshore oil & gas industry to transfer fluids between the seabed and surface facilities. The High Performance Computing Centre will allow Technip to process complex riser configurations with minimum processing time. The development of this technical expertise has the potential to enhance R&D capacity and open new opportunities in the field of riser design R&D. As well, through this project, Technip Canada will expand its local capabilities in providing riser design services to oil & gas industry clients around the world. The announcement was made during Technip s Technology Day on October 7 in St. John s. Jason Muise, Managing Director for Technip Canada, stated, This investment will enable Technip Canada to leverage its experience gained in the local offshore industry to become world leaders in the area of Riser Dynamic Analysis. The High Performance Computing Centre will ensure competitiveness, and will enable exporting of engineering expertise to Technip s international client base. The centre will be based in St. John s and will service Technip s global clientele. Total project cost is $2,379,977. Irving Marine Fuels Serving Atlantic Canada St. John s, NL Dartmouth, NS Saint John, NB marinefuel@irvingoil.com Noia News

21 Completed Hebron flare boom ready for transportation from Talon Energy s Port aux Basques facility. Photo courtesy of Talon Energy. 2015: The year in review Flemish Pass Basin Statoil Canada s 18-month drilling program began in October 2014 with the arrival of the West Hercules drill rig in Newfoundland waters. As of early November, the semisubmersible had drilled five wells and two sidetracks in the Flemish Pass, where Statoil is delineating its Bay du Nord discovery estimated to contain up to 600 million barrels of oil. All but one of the wells targeted exploration licence (EL) 1112, home to the Bay du Nord discovery well. Statoil is partnered with Husky Energy, which holds a 35 per cent interest in the EL. One well Cupids A-33 was drilled in EL 1123 in which Statoil is partnered with Repsol E&P Canada Ltd. (25 per cent). Statoil s drilling program is expected to wrap up in late 2015 or early On November 2, provincial Natural Resources Minister Derrick Dalley said talks with Statoil about developing oil in the Flemish Pass were at an impasse, while Statoil said it had not withdrawn from talks and was hopeful of reaching a mutually beneficial agreement. In June, at Noia s annual conference, Premier Paul Davis said the province and Statoil were close to signing a term sheet. Noia News 21

22 COVER STORY 2015: The year in review HSE consists of up to five production wells drilled from the GBS and up to six water-injector wells drilled by the rig West Aquarius. The $2-billion southern expansion will enable additional wells to further develop the Ben Nevis- Avalon reservoir, which has been in production since Production from HSE is expected in late On September 18, a planned maintenance shutdown started on board the Hibernia platform, with production resuming in October. Statoil s Jez Averty cautions that the Flemish Pass is in a global fight for capital. Also at Noia s June conference, Jez Averty, Statoil s Senior Vice President of Exploration for North America, told delegates of the logistical, harsh-environment and capital challenges of developing Bay du Nord, located 500 kilometres east of St. John s. The Flemish Pass is in a global fight for capital where only the most competitive projects win. We believe that the Flemish Pass can be a winner, but winning will take smart and innovative solutions, he said June 17. Winning will take collaborative spirit, mutual respect and beneficial working relations between Statoil, our partner, the authorities, the regulator and the supplier industry everybody has a part to play. Hibernia Work continued on the Hibernia Southern Expansion (HSE), the oilfield s first subsea tieback. Terra Nova In mid-may, Suncor Energy s Terra Nova oilfield started a planned 10-week maintenance shutdown to repair crude oil and storage tanks, replace the flare tip and conduct a major inspection of the starboard main power generator. The turnaround wrapped up ahead of schedule in early July. During the annual Noia conference, Suncor s East Coast Vice President, Brent Janke, said the company believes there is more oil at the field than originally thought. Extending the life of Terra Nova, however, will depend on cost effectiveness and competiveness. Our current focus is on extending Terra Nova by improving field recovery, said Janke on June 18. In March, the Transocean-owned rig Henry Goodrich wrapped up work. A mainstay in the region since 1999, the semi-submersible drilled about 80 wells offshore Get us working for you GOLD WINNER 2014 ATLANTIC JOURNALISM AWARDS Atlantic Canada s leading resource development publication Finalist, Best Trade Magazine in Canada, 2015 Free bonus distribution at int l conferences & trade shows Largest audited circulation of any energy publication in the region Hubert Hutton Publisher ext. 226 hhutton@atlanticbusinessmagazine.com Tonia Sheridan V.P. Sales/NB & PEI inquiries ext. 223 tsheridan@atlanticbusinessmagazine.com Linda Bidgood Director of Sales (NL) ext. 222 lbidgood@atlanticbusinessmagazine.com Sharon Resky Director of Sales (NS) sresky@atlanticbusinessmagazine.com 22 Noia News

23 including the Terra Nova development wells. The drill rig headed for Scotland to be cold-stacked following the end of a rig-sharing contract with Suncor, Statoil and Husky. In February, Terra Nova hit a production milestone, pumping 370 million barrels of oil the field s reserve estimate when the project was sanctioned in In 2013, the C-NLOPB increased its Terra Nova reserve estimate from 419 million barrels to 506 million barrels, bringing it more in line with Suncor s reserve estimate. White Rose Husky Energy announced that production had started from a second well at the South White Rose satellite on September 6. The first well came onstream in late June. South White Rose is the second subsea tieback development at the Grand Banks oil field. Drilling of the North Amethyst Hibernia well has been deferred until pending rig availability, according to the company s third-quarter results issued October 30. Production from the zone deep beneath the White Rose oilfield had been scheduled for the fourth quarter of this year. In mid-september, rig contractor Seadrill Ltd. cancelled its purchase of the West Mira, a new-build semi-submersible destined for the province s offshore under a five-year contract to Husky. The company had worked closely with Seadrill to customize the rig for the harsh environment off the coast of Newfoundland and Labrador. Construction of the sixth-generation, ultra-deepwater rig in South Korea was behind schedule when Seadrill cancelled the purchase in the midst of continued low oil prices, low demand for rigs and pressure to reduce rig rates. In early September, the GSF Grand Banks rig completed the last of more than 100 wells it drilled in the Newfoundland offshore many of them at White Rose, including the field s discovery well in Husky s contract with rig owner Transocean ended September 19 and the semi-submersible was towed to Scotland. Meanwhile, Husky continues to assess development options to develop 115 million barrels of oil at the West White Rose satellite. The company is assessing both a fixed wellhead platform, which has received both government and regulatory approvals, and a subsea tieback option. In June, Husky s development plan for the West White Rose Extension Project (WREP) utilizing a wellhead platform received conditional approval from the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB). The C-NLOPB also increased its oil reserve estimate for the White Rose oilfield based on the WREP development plan increasing the board s previous estimate by 165 million barrels for a total reserve estimate of 404 million barrels of oil. Last December, as oil prices plunged, Husky announced it was deferring its investment decision on the wellhead platform development for West White Rose for one year. The company has since said the production from the satellite is expected in the 2020-plus timeframe. COVER STORY 2015: The year in review Noia News 23

24 COVER STORY 2015: The year in review Hebron s caisson roof was complete on October 7. Photo courtesy of Kvaerner. During Noia s annual conference in June, Malcolm Maclean, Husky Energy s Senior Vice President for the Atlantic Region, told delegates the company is looking for ways to reduce the capital costs and risks associated with both development options. Maclean also noted Husky is completing the design of the concrete gravity structure (CGS) in St. John s to de-risk the wellhead platform option, minimize design changes and enable the company to more accurately estimate the construction schedule. In March, Husky completed work on the Argentia graving dock, the planned construction site for the CGS. The SeaRose FPSO underwent a planned 18-day maintenance shutdown that started in August. Hebron Work continued this year on the gravity base structure (GBS) with mechanical outfitting, installation, posttensioning and solid ballasting the structure. Installing steel plates was the next step to support the roof slab before work on the centre shaft can begin. The next big GBS activity is the final concrete slip form operation that will take the center shaft to its final height of about 120 metres. Construction, including installing the piping and electrical systems, will continue for the next year. All structural levels of the living quarters module have been completed by a joint venture between North Eastern Constructor s Ltd. and Apply Leirvik. Assembly and architectural finishing is underway. In October, the flare boom was completed by Talon Energy Services in Port aux Basques. The drilling support module built by Kiewit Offshore Services in Marystown will be transported to Bull Arm by year end. The helideck and lifeboat stations fabricated by C&W Offshore in Bay Bulls were nearing completion in November. 24 Noia News

25 COVER STORY 2015: The year in review ExxonMobil s Technical Manager for the Hebron project, Sadie Sellars, told the Placentia Bay Industrial Showcase in late September that the derrick equipment set is scheduled to arrive from South Korea by the end of this year. It s one of two modules being built at the Hyundai Heavy Industries yard; the other is the process and utilities module. Integration of the modules is scheduled for Tow-out of the completed Hebron platform to the Grand Banks oilfield is scheduled for 2017, with first oil expected in late Offshore resource assessment On October 1, Nalcor Energy Oil and Gas and the provincial government released the results of the first in a planned series of resource assessments of the Newfoundland and Labrador offshore. The assessment showed hydrocarbon potential in 11 parcels up for bids in the Flemish Pass Basin to be 12 billion barrels of oil and 113 trillion cubic feet of natural gas. (See page 8 for full details) Generic oil royalty regime The provincial government released a framework for its new generic offshore oil royalty regime November 2 calling it internationally competitive, simplified and transparent. Rather than negotiate royalty agreements for each field, the government said the new royalty regime will apply to all future offshore oil developments. Implementation of the new regime will require formal regulation and legislation in The regime is built around the R (or return) factor, which is a ratio of project revenue over costs and accounts for variables that affect project economics such as sales revenue, pre-development and development costs, transportation costs, and historical royalties paid, said the provincial government news release. Among the highlights of the generic oil royalty framework: Royalty rates will increase as fields become more profitable. The highest rates will be paid by oil fields that have returned $3 to the producers (after royalty) for every $1 spent. Basic royalty, which is applied to gross revenue, begins at first production and increases from one per cent to 7.5 per cent as the project recovers its costs. Net royalty, which is applied to net revenue, begins once project costs are fully recovered. The rate ranges from 10 per cent to 50 per cent. (Basic royalty is a credit against net royalty once it becomes payable.) Seismic and exploration In June, ExxonMobil began seismic exploration of a new Flemish Pass exploration licence (EL 1135) awarded to the company earlier this year. The company hired Multi Klient Invest (MKI) to collect 4,300 square kilometres of 3D data using the vessel Ramform Valiant. The survey wrapped up in October. MKI operated four seismic research vessels in the Newfoundland and Labrador offshore this year, and Nalcor was a partner in three of those surveys. MKI is a Noia News 25

26 COVER STORY 2015: The year in review subsidiary of the Norwegian seismic company Petroleum Geo-Services (PGS), which is in turn partnered with TGS, another Norwegian seismic firm. The MKI seismic data is marketed worldwide and sold to multiple clients. The vessel Atlantic Explorer started a 2D survey of the southern Grand Banks in June to collect 19,814 line kilometres of multi-client data in that area. Ramform Viking began a 3D survey in July targeting 4,500 square kilometres in the Labrador Sea, where a licensing round is scheduled in Sanco Spirit started work in late July on a multi-client, 2D seismic survey in the southern Labrador Sea, where licensing rounds are also scheduled. The vessel did infill surveys in Areas of Interest (AOI), a term is used by the C-NLOPB to identify areas where future land sales will occur under the board s scheduled land tenure system. By the end of this year, Nalcor estimates that more than 100,000 line kilometres of multi-client 2D data will have been collected in the offshore since 2011 and made available to the global oil & gas industry. The vessel Western Trident carried out a 4D survey of the Hibernia oilfield between June 10 and the end of August, collecting 760 square kilometres of data. This survey is designed to show changes in a reservoir as oil & gas is produced over time. In early February, drilling wrapped up at Husky s Aster C-93A exploration well in the southern Flemish Pass, where the company is partnered with Suncor (40 per cent) and Repsol (20 per cent). In its third-quarter results issued October 30, Husky noted the well did not encounter economic quantities of hydrocarbons. BG Group and Teekay Offshore In September, U.K. oil & gas company BG Group announced the purchase of Repsol E&P Canada s stake in three deepwater exploration licences ELs 1123, 1125 and 1126 operated by Statoil in the Flemish Pass. The purchase price was not disclosed. BG acquired a 25 per cent interest in EL 1123 where Statoil spud the Cupids A-33 well on April 6. BG also acquired a 10 per cent interest in the remaining ELs in which Statoil (50 per cent) is also partnered with Chevron Canada (40 per cent). Offshore & Marine Logistics Stevedoring Container & Tank Rentals Trucking 26 Noia News

27 COVER STORY 2015: The year in review On June 1, nine oil & gas companies operating in the Jeanne d Arc basin signed a 15-year contract with British Columbia-based Teekay Offshore Partners LP to transport crude from the Hibernia, Terra Nova, White Rose and Hebron oilfields. The shuttle tanker contract had been held by Canship Ugland Ltd. since oil first flowed from the Hibernia oilfield in Land tenure activity In January, the C-NLOPB issued three new exploration licences to operator ExxonMobil for total bids of $596.7 million following the conclusion of land sales in This marked the start of a flurry of land tenure activity which continued over the year and included the October 20 closing of the nomination of parcels (NL15-01EN) in the Eastern Newfoundland region, which includes the Flemish Pass and the Orphan Basin; a sector identification (NL02-LS) in Labrador South, the first step in the region s four-year land sale cycle; a sector identification (NL01- SEN) in South Eastern Newfoundland which includes the Carson Basin and follows a four-year cycle; and a sector identification (NL02-EN) in Eastern Newfoundland, the first step in the region s two-year cycle. The highlight was the end-of-year announcement of land sale results for the Eastern Newfoundland region, where nine companies bid a total of $1,204,953,713 for seven parcels of offshore land in the Flemish Pass. (A detailed overview of 2015 land tenure activity is contained in the article on page 8 of this issue.) Western Newfoundland In October, the Newfoundland and Labrador Hydraulic Fracturing Review Panel held a round of public consultation sessions in Rocky Harbour, Stephenville, Port au Port East and Corner Brook. The five-member panel was appointed by the provincial government in October 2014 to review the socioeconomic and environmental implications of hydraulic fracturing in Western Newfoundland. The panel has a mandate to make recommendations on whether or not hydraulic fracturing should be undertaken in Western Newfoundland. If the panel recommends proceeding with hydraulic fracturing, it will also make recommendations on the appropriate practices and procedures for potential hydraulic fracturing operations in the province. A provincial government moratorium on the acceptance of proposals to hydraulically fracture wells in Western Newfoundland has been in place since November On the exploration front, Black Spruce Exploration is planning a scaled-down drilling program off Western Newfoundland that does not include hydraulic fracturing or other reservoir stimulation techniques. The company is proposing to drill one onshore-to-offshore exploration well, targeting EL 1120, in , according to a revised project description filed with the C-NLOPB in May. Last January, Black Spruce announced it had paid a drilling deposit for a one-year extension on EL 1120, giving the company until January 2016 to spud a well on the licence. WHEN CAPABILITY COUNTS From surveying and mapping of offshore locations or navigation and positioning to submeter accuracy, Fugro leads the way in Geoscience, Survey and Geotechnical. Fugro GeoSurveys Tel: (709) fgi-mail@fugro.com COUNT ON FUGRO Noia News 27

28 COVER STORY 2015: The year in review Nova Scotia Shell Canada received approval in October from the Canada-Nova Scotia Offshore Petroleum Board (C-NSOPB) to begin drilling in the Shelburne basin off Nova Scotia. (Information on this offshore initiative can be read earlier in this issue, on page 12.) The Deep Panuke natural gas field resumed production in late October following five months of inactivity. Earlier this year, Encana Corp. announced the field would become a seasonal operation producing during the winter when natural gas prices are higher and shutting in during the summer months when demand and prices decline. It s expected to increase the life of Deep Panuke, which has been producing high rates of water since last fall. Encana also cut its remaining reserve estimate for the field by more than half from 200 billion cubic feet to 80 billion cubic feet. Deep Panuke started production in BP remains committed to start drilling a well off Nova Scotia in the latter half of 2017 despite declining oil prices. The company s drilling plans are in the environmental assessment stage. During the summer of 2014, BP acquired 7,090 square kilometres of wide azimuth 3D data. It operates four exploration licences in deep water southwest of Sable Island. BP acquired the licences in 2012 for a bid of $1.05 billion, and in late 2014 partnered with U.S.-based Hess Corp. (40 per cent) and Australian-based Woodside Petroleum (20 per cent). ExxonMobil Canada said it could start plugging wells at the Sable Offshore Energy Project as early as 2017, though no firm date has been announced for decommissioning the natural gas field that started production in The field was expected to have a 25-year lifespan, but in recent years natural gas production has dwindled. 28 Noia News

29 Noia News 29

30 FEATURE STORY Redefining Oil: Noia s vision for an industry legacy Redefining Oil: Noia s vision for an industry legacy Two years of research, consultation and collaboration has culminated in the release of Noia s vision for a renewed, long-lasting oil & gas industry in Newfoundland and Labrador. Redefining Oil is a forward thinking plan designed to ensure that the oil & gas industry leaves a lasting impact on the province s local business community, for the benefit of all Newfoundlanders and Labradorians. Noia President and CEO Bob Cadigan said the Redefining Oil initiative is about setting the stage for the future. It s a strategy to initiate a process of long-term thinking, focused strategy and a means to achieve it. Core beliefs Redefining Oil is grounded in a number Noia s core beliefs, such as the need to move forward with clear, rational and measurable objectives with a long-term focus, guided by lessons learned locally and globally. It is also focused on building local competitiveness, 30 Noia News

31 FEATURE STORY Redefining Oil: Noia s vision for an industry legacy capability and sustainability, as well as a continuation of the current exploration strategy s approach to enhancing prospectivity and creating new opportunities. Finally, it is rooted in the belief that investors must get a competitive return on investment on a risk adjusted basis. The collaborative process began with an analysis of other jurisdictions. There were lessons to be learned from each, but Norway, in particular, stood out because of its local content requirements. Norway s approach to local content (more commonly referred to as industrial benefits in Newfoundland and Labrador) was different than other areas in that it ended up with an incredible capability in areas such as technology, research and development (R&D) and commercialization of product. In contrast, the United Kingdom took a more laissezfaire approach, focusing on immediate benefits, such as engineering and fabrication, rather than technology development and building capabilities for the future. Byron Sparkes, Noia s senior policy advisor and coordinator for Redefining Oil, said Norway showed great foresight in developing management and control for the long term, even before it knew the magnitude of its resources. He quoted Norway s Minister of Industry who summarized this philosophy in 1971, Let this be an epoch rather than an episode. Norway s 10 commandments set the framework for development of its petroleum resources and still govern developments today. The creation of state-owned Statoil was one critical element, as well as development of an integrated petroleum community involving all stakeholders. Enhancing R&D and technological capabilities has also been central to the Norwegian strategy, building on its historical marine capabilities with an eye to exporting its expertise worldwide. The jurisdictional review was partially to get the details but also to see what works and what doesn t, and how can we bring this all together to determine what a strategy framework would be for us, Sparkes explained. You have to learn from the best and apply it. The process The strategy, vision and beliefs for Redefining Oil were developed with the guidance of a committee consisting of Noia Board members. The process involved meeting with operators, Noia members, government and other political party leaders to explain the process and beliefs. An independent consultant also surveyed operators. The process culminated in a two-day off site session with the Noia Board in October 2014 to work through the details. The next year was spent defining and redefining the approach to achieve the final product. Cadigan noted that since the process began two years ago, several positive developments have taken place in the Newfoundland and Labrador offshore. The new scheduled land tenure system has helped increase the province s attractiveness for new entrants by ensuring predictability, and also ensures that discovered resources won t be left undeveloped for extended periods. As well, the recently released resource Elegant Event Space Elegant Event Space From the smallest team meeting rooms to truly unforgettable receptions for up to 350 underneath the planets, the Johnson GEO CENTRE offers space and services for any corporate or private event. geocentre.ca craig.murphy@geocentre.ca Noia News 31

32 FEATURE STORY Redefining Oil: Noia s vision for an industry legacy assessment of 11 parcels in the Flemish Pass shows the massive untapped potential of just a small percentage of the province s offshore. Our whole view of the future has changed, said Cadigan. We believe now we re somewhere near where Norway was and our eventual resource endowment will be in the billions of barrels of oil. So that sets the stage for this work. It also hoped that in the long term many local companies will become integrated into global supply chains and producing services and products in a global market, rather than just being dependent on what s happening here in the offshore at any given time. This is about two to three generations out so let s get it right. Everything we do should really be focused on the long term, noted Cadigan. enhance expertise and skills for the long term. The concept of local content driven procurement (now called supplier development) is another important focus. It is believed that all elements of the contracting process can be formulated in a manner which will work towards supporting development and participation of local suppliers, and the oversight agency should play a critical role in this. Fully realizing the Atlantic Accord s economic growth and development purpose is also paramount. Noia believes that new guidelines and industry driven procurement standards will work towards fulfilling the spirit of the Accord. To that end, a Procurement Code of Practice is recommended to make the process more predictable. There are also many expectations within the guidelines that the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) need to monitor to ensure that the principles of full and fair opportunity and first consideration are being met. Noia believes that the provisions of the Atlantic Accord have played a crucial role in the development of Newfoundland and Labrador s supply and service industry and must continue to do so. Realizing the vision To realize Noia s vision, a collaborative partnership between industry and government is required that will, first of all, change the way it establishes the vision and strategy and then sets it into motion. This would include recommendations on elements that should be contained in project agreements to We believe that benefits agreements need to continue but they should be focused on what s in the strategy and vision: more focus on R&D, commercialization and technology transfer, said Cadigan. Renewed Governance Another critical element of Redefining Oil is a call for renewed governance in the offshore. Reduce Worker Injury and Boost Productivity with Source Atlantic s Full Line of Safety & Protective Apparel We have you covered from head to toe with a wide variety of products all designed to ensure you stay safe on the job Beclin Road, Mount Pearl 32 Noia News

33 FEATURE STORY Redefining Oil: Noia s vision for an industry legacy Noia calls on government to lead in the creation of an Industry Council made up of all stakeholders, including government ministers, oil companies, supply and service companies, educational institutions and R&D institutions. The goal is for this group to come together to formulate the vision, execute a strategy and ensure that governance activities surrounding oil & gas will be aligned with that strategy. It must adopt global best practices on collaborative governance and support objective, well-informed policy-making across government for the supply and service sector. By way of example, the United Kingdom recently created an industry council in response to industry challenges. It was meant to ensure that its strategy for enhanced oil recovery and growth of the supply industry was done in a cooperative manner and with a new collaborative, participatory approach. Noia believes that Newfoundland and Labrador has an opportunity to do the same as part of its vision and strategy, not in reaction to a challenge. Redefining Oil also highlights the critical importance of creating a new Industry Development Agency. The agency would be responsible for driving strategy, goals and objectives as determined by the industry council and dialogue with the council on progress and challenges. Cadigan said the province can once again learn from Norway s integrated, collaborative approach. Norway s 10 commandments were drafted because of the huge opportunity the country foresaw. Newfoundland and Labrador needs to take a similar approach. We know we have the resources there. We want them to contribute to the long-term wealth and economic health of this province. Government can t do it alone. Industry can t do it alone. We need to get together. Forward Looking This new approach to developing Newfoundland and Labrador s petroleum resources also means looking ahead at how offshore developments will evolve in the future. It s about purposeful control and direction rather than responding to an opportunity as it arises. Cadigan noted that slope, deep water and ultra deep water developments are where the big opportunities lie. With industry moving increasingly towards subsea factory models, more autonomous operations and remote monitoring, standardization of equipment and more proprietary commercialization of equipment will be critical. We need to shoot ahead of the target and not where it is or where it has been, said Cadigan. When this works we will become leaders. The Redefining Oil initiative is a call to action for a renewed approach based on shared interests of the supply and service community, operators and government to creating a competitive and sustainable industry. We re saying now that we believe that we have an incredible resource out there beyond which we ever imagined and dreamed of, so let s take a different approach, said Cadigan. We are calling on government and industry to share in Noia s vision and help us move in the right direction in order to seize the opportunity, realize our potential and create the legacy industry we know we can have. Noia News 33

34 Private investment in Conception Bay South, Newfoundland & Labrador has grown over the last decade as the population has grown to a level that can support a strong and diversified commercial, industrial and retail sector. Conception Bay South s favorable climate, rural feel, and central location neighboring the city of St. John s, as well as the offshore servicing and mining projects, have made it a prime location on the Avalon Peninsula for families. jlake@conceptionbaysouth.ca For more information please visit enterprisecbs.ca MULTI USE DOCK WELCOMES Oil Tankers Construction Barges Offshore Supply Vessels Large Fishing Vessels TRANS SHIPPING Located near St. John s Major Industrial Park LARGE SHOREFRONT LAYDOWN AREA Ideal for offshore fabrication projects. Jim House Business Manager longpondport@outlook.com portoflongpond.ca

35 Sean Power, Noia Board Chair, launches Redefining Oil to a packed house at Noia s Fall Seminar. Other seminar speakers on stage during his presentation were (L to R): J.J. Gerber of Cougar Helicopters, Tom Swift of Atlantic Towing, Geoff Cunningham of A. Harvey & Company, Stephen Henley of Subsea 7, Power, Stephen Young of Subsea 7 and Paul Ferley of RBC. Noia Fall Seminar focuses on navigating remote logistics Noia s 2015 Fall Seminar took place at the Delta Hotel St. John s on Thursday, November 19. Titled Navigating Remote Logistics: Recognizing the Challenges. Knowing the Solutions, several hundred Noia members in attendance heard local, national and international experts speak about the challenges of oil & gas operations in a remote, deepwater environment. The topic was timely, given Nalcor Energy s October 1 announcement of its new resource assessment of the Flemish Pass area offshore Newfoundland and Labrador an area which lies farther offshore than our current oil projects and mostly beyond the 200 mile limit. The panel discussion within the event covered the many factors involved in a remote offshore project, including shorebase operations, supply vessels and air transfer of personnel. Panelists provided an overview of how their companies currently operate and discussed what the supply community, government and regulators need to do to help them and project operators respond effectively to the challenges they face. Noia News 35

36 INSIDE NOIA Fall Seminar Moderated by Stephen Henley, Vice-President of Subsea 7, panelists included: Geoff Cunningham, Director of Offshore Operations with A. Harvey & Company, who spoke about shorebase operations and the challenges that exist for a marine base in supporting a remote field. Tom Swift, Offshore Operations Manager with Atlantic Towing, who addressed the requirements of offshore supply vessels operating in remote locations and the challenges of working farther offshore. J.J. Gerber, Director of Flight Operations with Cougar Helicopters, who outlined the technology and logistical considerations, challenges and opportunities involved in the air transfer of workers farther offshore. Also during the event, Noia members heard presentations from Paul Ferley, Assistant Chief Economist with RBC, who talked about the impact of lower oil prices on our provincial and federal economies; Ron Davis, Technical Manager of CVA, regarding the challenging rig requirements to operate offshore Newfoundland and Labrador; and Richard Wright, Manager of Exploration with Nalcor Energy, on the recently announced offshore resource assessment. Finally, during the keynote luncheon address, Outside the 200 Mile Limit: Who Makes the Rules?, Wylie Spicer of law firm McInnes Cooper addressed the power of the offshore regulatory boards to reach out to far-from-shore oil & gas activity; how that will affect oil exploration licensed by the boards; and the limited umbrella of Canadian laws applicable beyond 200 miles offshore. Noia Hibernia Scholarship Recipient Announced: Keirsten Maloney has been named as the recipient of the 2015 Noia Hibernia Scholarship. A resident of Holyrood and graduate of Roncalli Central High School in Avondale, Keirsten was accepted directly into Memorial University s Faculty of Engineering in her first year of university and is currently studying mechanical engineering. Presented annually, the Noia Hibernia scholarship provides $1,000 to a graduating high school student in Newfoundland and Labrador who is entering post-secondary studies with the intention of pursuing a petroleum-related career. It recognizes excellence not only in academics, but in extra-curricular areas as well. Pictured presenting Keirsten with her scholarship are Torfi Thorarinson (L) and Paul Lannon (R), members of Noia s Board of Directors and this year s scholarship selection committee. 36 Noia News

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38 THANK YOU TO OUR SPONSORS SPRING NETWORKING SOCIAL FALL NETWORKING SOCIAL SAVE THE DATE CONFERENCE June 20-23, 2016 St. John s Convention Centre

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40 One Port. Three Thousand Strong. If there s strength in numbers, then the Port of St. John s is a force to be reckoned with. 3,000 professionals employed by 350 supply and service companies in the St. John s region. All with one focus doing the best job possible each and every day. For 30 plus years the hard work of our partners has resulted in St. John s becoming the primary offshore energy supply and service centre on the East Coast of Canada. And they continue to work hard, delivering everything the energy sector requires: from advanced infrastructure, to water, fuel and synthetic fluids, to on-the-spot maintenance and repair. With a shared vision of safety and sustainability and a work ethic unmatched anywhere in the world, it s no wonder that some of the largest offshore energy ventures call our port home. Go online or call us today to learn more about how the Port can work for you. One Port. One Focus. THE ST. JOHN S PORT AUTHORITY One Water Street, St. John s, NL, Canada Tel: