50 % decrease in GHG

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3 We see the possibilities. For Suncor Energy, growth brings opportunity and a set of new challenges. The biggest one of all: balancing increased development with the need to live up to our social and environmental responsibilities, both as an individual company and collectively as part of Canada s oil sands industry. We believe the key is collaboration. A great example is the Oil Sands Leadership Initiative where Suncor works closely with four companies to improve environmental, social and economic performance in the oil sands industry. With a shared commitment to excellence and innovation, we can work together to build a more sustainable energy future. 18 % reduction in emission levels in 2010 Terra Nova s total GHG compared to 2005* 50 % decrease in GHG emission intensity at Suncor s oil sands operation from 1990 levels* $1.2 billion actual and planned investments in Suncor s new tailings technology Vincent Saubestre, executive director, Oil Sands Leadership Initiative performance partnerships possibilities Find out more about Suncor s track record and how we are planning to responsibly develop North America s energy supply. *As at December 31, Trademark of Suncor Energy Inc.

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5 Contents Noia NEWS CONTENTS ISSN X Fall/Winter 2011/2012 Volume 25, Number President s Report - Industry Highlights/This Quarter at Noia Noia Serves Up Fresh Look Northern Exposure: Newfoundland & Labrador oil & gas supply and service sector s latest mission to Greenland Paving the way: CARD begins work on Arctic Development Roadmap Making a Difference 55 reasons to be happy Noia Fall Seminar: Research and Development Priority Areas Hebron Public Review Year in Review Behind the Scenes: Studying the petroleum potential of Western Newfoundland 23 Noia Board of Directors 2011 Chairperson - Tim Lawrence, Oceaneering Canada Ltd. Noia News Editor in Chief: Deborah Inkpen Vice-Chair - Past-Chair - Treasurer - Directors - Michael Critch, Fabcon Canada Ltd. (Dovre Group) Jack Lawlor, Killick Group Trevor Giles, Technip Canada Rob Strong, Blue Water Agencies Ltd. John Henley, Cahill Group of Companies Sean Power, DFB Group Bruce Grant, QC, Partner, Stewart McKelvey Raymond Collins, P. F. Collins International Trade Solutions Paul Dwyer, Schlumberger, Canada Ltd. Marty Gaulin, WorleyParsons Canada Services Ltd. Doug Youden, Upstream Solutions Inc. Editor: Erin Molloy Layout & Design: Leigh-Ann Payne info@idodesign.ca Contributing Writers: Deborah Inkpen, Kristann Templeton, Beverley Bishop, Erin Molloy, Moira Baird Published by Noia; Printed by Hutton International Press Opinions expressed in this publication do not necessarily reflect the views of NOIA. For advertising call , fax or bbishop@noia.ca 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. Contact Noia: noia@noia.ca Box 44, Suite 602, Atlantic Place, 215 Water Str St John s, NL, Canada, AIC 6C9 Fall/Winter 2011/2012 5

6 President s Report Robert Cadigan President s Perspective p Robert Cadigan - Noia President & CEO Photo: Paul Daly We appreciated the process and the time commitment the Commission gave to this very important project. More than three-quarters of our members are based in the province and have a stake in the sustainable development of the province s petroleum resources and in the responsible development of the fourth oilfield off our shores. We support the development of the Hebron oilfield and our members are enthusiastic to see it move ahead. When we spoke to our members to identify key areas of discussion for the public sessions and the written submission, a resounding point of importance was the procurement process for local supply and service firms. As we say goodbye to 2011, it is the perfect time to take a step back and reflect on what a tremendous year it s been for Noia and the oil & gas industry in Newfoundland & Labrador. This past fall has been especially busy and full of activity with two major initiatives, notably, the Hebron review getting in to full swing and the launch of Noia s new brand. With a fresh new look and direction for Noia, and a solid stance on how our members can benefit from large projects like Hebron, I look forward to what the year ahead has to offer and seeing our local industries thrive. Noia has been an active participant in the review process of the Hebron Development Plan and Benefits Plan applications since the first phase when we submitted our request for additional information. Those requests for additional information were answered by the proponent through the public release of responses on October 20 th, Through guidance from our board, an advisory committee and our member engagement sessions, Noia also presented recommendations to the Hebron Public Review Commission during public sessions held in late November and early December. The Atlantic Accord Act requires all offshore petroleum projects have a benefits plan and one that gives first consideration for employment and training to Newfoundland & Labrador residents. The Act also states first consideration must be given to services provided from within the province and to goods manufactured in the province, where those services and goods are competitive in terms of fair market price, quality and delivery. Noia believes that supply and service companies resident in Newfoundland & Labrador must be provided with first consideration and full and fair opportunities to bid for work on the Hebron project. To achieve this, a more transparent and consistent procurement process is required during both the development and operations phases of offshore projects, such as Hebron. We appreciate the efforts to date by the proponent and its engineering, procurement and construction (EPC) contractors to hold supplier sessions with local businesses. These sessions help educate the local supply and service community on the Hebron project requirements and procurement process. However, additional work remains to be done and a collaborative industry effort is required to create a transparent 6 Noia News

7 President s Report Robert Cadigan and consistent bid process that is followed from project to project, and from company to company. As stated in our recommendations, Noia believes the procurement process should include regular and timely publication of: detailed procurement forecasts; expressions of interest; bidders lists and contract awards. Regular updates enable local companies to stay informed, track their progress at each stage of procurement, and build business relationships with the contractors who do qualify to bid. The local supply and service community must have timely access to the proponent and its main EPC contractors, but also to bidders for the major components of the Hebron production platform to help them become part of the bidders supply chain. International suppliers not based in the province with frame agreements should partner with locally based, tax-paying companies to ensure technology transfer. With sufficient notice of an operator s requirements, our members are able to deliver better products and better service to operators. We have seen an erosion of local benefits in other jurisdictions and we do not want to see this happen here. Good communication and consistent bid practices are a key element in delivering projects on time and on budget. Noia has taken on its own initiatives, which align with our new brand and philosophy in efforts to improve clarity, consistency and accessibility to procurement information for our members, the real inspiration for our new identity. As such, our new website noia.ca promises better navigation and functionality with a modern and sophisticated look, reflecting that of our members. Our member area offers an improved Procurement Section and the daily bulletin has also been updated and is now known as The Daily Barrel. Both online tools promise more ease in navigation while showcasing the vibrancy of the new brand. As we move forward together to ensure Newfoundland & Labrador is thriving as it should from opportunities both locally and globally, I commend all of those involved with Noia and the industry for a productive 2011 and extend best wishes for a prosperous, safe and successful Robert Cadigan Noia President & CEO Fall/Winter 2011/2012 7

8 President s Report Last Quarter at Noia Last Quarter at Noia Q Committees & Meetings August: President & CEO Bob Cadigan attended the Husky Energy announcement of $750,000 in funding to Dr. H. Bliss Murphy Cancer Centre for leading-edge treatment equipment in the fight against cancer. September: Bob Cadigan and Noia Chair, Tim Lawrence met with Geoff Parker & Dave McCurdy of ExxonMobil for a Hebron Project update Noia Executive met with Diana Dalton, the new Deputy Minister of Natural Resources Tim Lawrence and Vice-President, Communications & Policy provided a jurisdictional overview to representatives of the United States Embassy in Ottawa, Economic, Energy and Environment Section Noia s Executive and staff had a welcome session with new Deputy Minister of Natural Resources, Diana Dalton October: The Noia Executive met with new General Manager of Husky Energy Malcolm McLean for an update on Husky s activities in the region Members of NOIA staff held a session with representatives of the Canada Transportation Agency regarding CTA regulations Noia board and staff attended the Chevron Canada Limited announcement on its $12 million contribution to Memorial University Statoil provided an update to NOIA Executive and staff about their plans in the region President & CEO, Bob Cadigan met with representatives from Union Fenosa Gas of Spain Also During This Quarter: NOIA was well represented at the 2011 Offshore Europe conference held September 6-8 in Aberdeen, Scotland. The delegation led by the Government of Newfoundland & Labrador s provincial Department of Natural Resources who provided support for the group in partnership with NOIA was made up of Newfoundland and Labrador oil & gas supply and service sector companies. Organized by NOIA, a delegation representing over 20 local companies travelled to Greenland in September to attend industry-related conferences and make business connections. During their stay in Greenland, delegates attended the Joining Forces 2011: Greenland Conference on Minerals and Oil, which took place September 21 and 22, 2011 in Nuuk. Others also attended the Arctic Dialogue forum (September 24-26), which was dedicated to issues of resource development in the High North with the primary goal of educating future Arctic leaders and contributing toward building Greenland s capacity for managing, regulating and developing skill-sets that resulting benefits from these new economic opportunities. 8 Noia News

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10 Industry News Noia serves up fresh look!...serves Up Fresh Look! Nearly 200 Noia members filled the Sheraton Hotel Newfoundland on December 8 to celebrate not only the holidays but a new era for the organization - the official reveal of Noia s new brand. Noia has played a major part in helping the offshore petroleum industry transform the economy of Newfoundland & Labrador by providing a voice for the province s supply & service sector, said Tim Lawrence, Chair, Noia Board of Directors, Like our industry, Noia, too, must grow and evolve. The new brand is intended to lead to more compelling and clear communication that better meets the needs of Noia s stakeholders. The new website noia.ca is a major feature of Noia s refreshed direction in improving its services to members, especially the site s new procurement section. One of Noia s most valued services, the daily bulletin, has also been updated and is now known as The Daily Barrel. Both online tools promise more ease in navigation while showcasing the vibrancy of the new brand. Borrowing some elements from its previous look, Noia s refreshed brand builds on its strong past and current brand equity Noia is no longer viewed as just an acronym, but it has become a word in the industry, and this has been built in to the new logo. p Noia Holiday Reception & Brand Launch Photo: Paul Daly The stylized O in the logo expresses movement and communicates energy; the energy of Noia board, volunteers, staff and members, as well as the petroleum energy that drives the industry. The two halves of the O are facing each other, symbolizing the collaborative nature of the organization. This new visual identity is about more than look and feel, said Bob Cadigan, President & CEO of Noia. It truly is a new era for us, a new focus to better serve our members the real inspiration for this change. We represent a supply & service sector that is dynamic and sophisticated and we re happy that our brand now reflects that. 10 NOIA NEWS

11 Industry News Northern Exposure... Northern Exposure: Newfoundland & Labrador oil & gas supply and service sector s latest mission to Greenland With global oil supplies diminishing rapidly, operators are looking with keen interest towards the north as a potential future supplier of oil & gas resources. This interest led to a mission to Greenland by over 20 local supply & service sector companies. The delegation was organized by NOIA and provided participants with the opportunity to attend industry-related conferences and make business connections. NOIA is working to encourage relationships with Greenland and our local service and supply companies who may be able to bring their harsh environment expertise to Arctic operations, said Bob Cadigan, President & CEO, Noia. Newfoundland and Labrador is well-positioned to become a gateway to the North due to its close proximity, historical ties to Greenland and harsh-environment operating Fall/Winter 2011/

12 Industry News Northern Exposure... expertise and technology. We were happy to share with our colleagues in Greenland some of the lessons we learned in the development of our industry. During their stay in Greenland, delegates attended the Joining Forces 2011: Greenland Conference on Minerals and Oil, which took place September 21 and 22, 2011 in Nuuk. This event s focus was on future opportunities in oil & gas and mining in Greenland. Others also attended the Arctic Dialogue forum (September 24-26), which was dedicated to issues of resource development in the High North with the primary goal of educating future Arctic leaders and contributing toward building Greenland s capacity for managing, regulating and developing skill-sets that allow benefit from these new economic opportunities. I was proud to be part of a solid team of companies representing the drilling supply and service community in St. John s. We clearly demonstrated our desire to work with the Greenlandic people and the oil companies poised to drill off Greenland s shores in the future, said Geoff Cunningham, Manager, Offshore Operations, A. Harvey & Co. Ltd. I have no doubt the Newfoundland and Labrador sector will provide better harsh environment and logistics solutions for future drilling operations. By doing so, future drilling programs can be supplied on a more timely basis lowering costs and increasing drilling performance which is critical in the short drilling season off Greenland. Our goal was to provide business development and networking opportunities while building relationships with business and operators in Greenland, and from what I witnessed, this was achieved, said Mr. Cadigan. Also, from the feedback we have received, it is clear that delegates viewed it as a valuable business opportunity, and together we will continue to pursue northern potential. Newfoundland & Labrador Delegation by Company A. Harvey & Co. AMEC Earth & Environmental Atlantic Towing ASCO C-CORE Cartwright Drilling Cougar Helicopters Dynamic Air Shelters East Coast Tubulars Ltd. Fugro Jacques GeoSurveys Inc. Noia NOSO Oceans Ltd. PF Collins International Trade Solutions Provincial Aerospace Schlumberger Shoregroup & Associates Inc. Subsea 7 Tailwinds Worley Parsons/Intecsea 12 Noia News

13 Industry News Noia member achieves safety milestone NOIA member achieves safety milestone The anchor handling tug supply vessel, Maersk Placentia reached a major milestone in its safety record by achieving 10 years without a lost-time incident on board. NOIA congratulates the crew of the Maersk Placentia, SeaManning Services Limited and Maersk Supply Service on this outstanding achievement. Fall/Winter 2011/

14 Industry News Paving the way: Card begins work... Paving the way: CARD begins work on Arctic Development Roadmap The excitement in Dave Murrin s voice is evident as he discusses the work that lies ahead of him as Executive Director of Newfoundland and Labrador s newest research and development initiative aimed at addressing the challenges of Arctic development. Since taking on the position at the Centre for Arctic Resource Development (CARD) in September, Mr. Murrin and his team have begun a series of consultations with local and international industry to begin piecing together an Arctic Development Roadmap. By year end his travels will take him to industry hubs such as Calgary, Houston, Norway and possibly Russia. The information gathered will help CARD identify key potential research areas. We ll look at what s being done in other parts of the world because we don t want to duplicate anything, and then we ll be looking at what makes sense for us, said Mr. Murrin. We ll have this huge matrix to go through and we ll carve out a small piece that makes sense for CARD. Based on that we ll come up with our five-year R&D plan. The roadmap will be made public upon completion, offering other R&D institutions the opportunity to engage in areas not pursued by CARD. We re trying to be the gateway to the Arctic, stated Mr. Murrin. So this document will be the perfect opportunity for many organizations who already have an interest in this area to identify new initiatives. CARD is being established in St. John s with the help of $16.5 million in combined funding by the Hibernia and Terra Nova projects and the Research & Development Corporation of Newfoundland and Labrador (RDC). When funding was announced in June, the centre was positioned as an opportunity to fill the technology and knowledge gaps that exist in Arctic development. It will bring together industry, academic and technology partners to conduct medium- to long- term research and development focused on improving Canada s capacity and capability to support safe, responsible, cost-effective and sustainable hydrocarbon development in the Arctic and other ice-and iceberg-prone regions. CARD will function as a stand-alone research centre within C-CORE, with C-CORE providing space and business support services, as well as an initial start-up investment of $500,000. The 14 Noia News

15 Industry News Paving the way: Card begins work... p Ice Island rivers and coves taken during C-CORE field research in Photo courtesy of C-CORE funding includes plans for a 1,260 square metre expansion to C-CORE s existing Dr. Jack Clark Geotechnical Engineering Building on Memorial s St. John s campus, scheduled to be completed in March Until then, the CARD team is occupying temporary space at C-CORE. The centre s research program will be overseen by an Industry Advisory Committee which will provide direction for the research programs, projects and technology development. That way we re hitting directly on industry priorities and also areas where we think we can make the biggest improvement, noted Mr. Murrin. He said a major difference between CARD and C-CORE is that CARD will be looking more at long-term challenges. We know that solving many of the issues, or at least learning more about them, is going to take a while. We need to start looking at some of those issues so when we actually go into the Arctic we ll be in a better position to address those challenges. CARD currently employs a small team, but plans to expand to 30 or more once the research and development plan is complete. Murrin said there are many local opportunities for future R&D funding which could allow the Centre to grow even more. We hope that it will just get bigger and bigger. Mr. Murrin is being assisted in the consultation process by Dr. Charles Randell, President of C-CORE, and Dr. Rocky Taylor. Dr. Ian Jordaan Fall/Winter 2011/

16 Industry News Paving the way: Card begins work... and Dr. Eleanor Bailey are currently working on some small projects that have already been identified. Mr. Murrin said the goal is to have the Arctic development roadmap completed by year-end, followed by the five-year research and development plan in the spring. Hiring will then begin in earnest. He said talent will come from industry and academia, as well as possible secondments. The centre will be seeking world experts in the fields it pursues. We see CARD not only as an opportunity to employ some local experts, but also as a way to bring in visiting experts from around the world to help train the next generation of researchers. international travel both at conferences and during the consultation process. With world-class facilities and expertise already in place in the province, he anticipates a great deal of interest. So far everyone s been really excited. We have a lot to offer. People have been thinking about Arctic challenges for a long time, looking for an opportunity to properly address some of them, explained Mr. Murrin. People working in this field are passionate about the Arctic, so I think it s going to excite a lot of people to be able to offer them the opportunity to come here and do work that is directly applicable to meeting the needs of industry. Mr. Murrin said they have already received a lot of positive feedback on the initiative and will identify potential researchers during their 16 Noia News

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18 Making a Difference Rhonda Zygocki s career has taken her many places since she graduated from Memorial University in With a bachelor s degree in civil engineering in hand, the St. John s native began her career as a petroleum engineer supervising oil rigs for Chevron in Alberta. Since then she has taken on increasingly challenging roles all over the world, including becoming the first female managing director with Chevron. Now the executive vice-president of policy and planning, Ms. Zygocki holds one of the most senior executive positions with Chevron Corporation s global operations. Ms. Zygocki s corporate and community efforts were recognized on October 17 when she was honoured with the Memorial University Alumna of the Year Award in St. John s. During her 31-year career with Chevron Ms. Zygocki has been credited, among other things, with developing progressive corporate policy initiatives in the areas of health, environment, safety and community engagement which have had a worldwide impact. Ms. Zygocki has also been recognized as a community leader, contributing to many boards and giving of her time to mentor young people. She serves on the boards of directors of the Bay Area Council, the San Francisco Ballet, the United States Energy Association, GBCHealth and the Woodrow Wilson International Center for Scholars Canada Institute. She has also played a key role in Chevron s humanitarian efforts, including HIV and AIDS relief in Africa and economic development projects in posttsunami Indonesia. u Rhonda Zygocki Photo: Greg Locke 18 Noia News

19 Industry News Making a Difference Although Ms. Zygocki now calls the San Francisco Bay area her home, she still has strong ties to Newfoundland & Labrador. She has been described as a dedicated ambassador for Memorial University and a steadfast contributor to the growth of her alma mater. I think the engineering degree really set the foundation for me, she told the Telegram newspaper. At MUN, they taught us about critical thinking, looking at things in an unbiased, factual way. To me, that really underpins strong decision-making and leadership. MUN president and vice chancellor Dr. Gary Kachanoski said Ms. Zygocki and the three other alumni honoured for achievements this year have made incredible contributions to the province, country and the world. The common thread that runs throughout their work is a commitment to making a difference in their communities, and that commitment is also a core of our mandate at Memorial University, he said. While in St. John s, Ms. Zygocki also took part in an event at Memorial to announce an expansion of the partnership between Memorial and Chevron. Chevron is contributing $2 million to fund scholarships, bursaries and international co-operative education opportunities. The funding will be provided to Memorial beginning this year and will flow to both undergraduate and graduate students during the next 10-plus years. Engineering, earth sciences, business and economics students will be eligible for the awards. At Chevron, we believe that business success is linked strongly to society s progress, said Ms. Zygocki. She said that Chevron investments in communities around the world, including at Memorial, are also investments in the long-term success of the company. This generous contribution from Chevron Canada will significantly enhance Memorial s capacity to financially support students in these key academic areas, said Dr. Kachanoski. By investing in students in this way, Chevron is providing essential assistance as well as invaluable academic encouragement, laying important groundwork for their future achievements, he said. In 2008, Memorial was selected for Chevron Corporation s University Partnership Program. Through this program, support is provided to more than 95 colleges and universities worldwide to develop talent in key academic disciplines, foster research capacity, increase community engagement and build relationships critical to Chevron s global workforce and meeting world energy demands. Fall/Winter 2011/

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21 Industry News 55 reasons to be happy 55reasons to be happy Noia marks Kevin Roche s impressive career and contribution to the industry p Kevin Roche What does Freedom 55 mean to Kevin Roche? Born in December 1955 and retiring from the oil and gas industry at 55, he is now shifting focus to manage his own projects including the development of 55.5 acres of land in his home community of Outer Cove, and the renovation of a 55-year old house in Brigus. Retirement means different things to different people said Mr. Roche. In his case, it looks like retirement and 55 go well together. A Class of 78 Memorial University Mechanical Engineering alumnus, Mr. Roche worked in the oil & gas industry since graduating. From 1978 to 1983, he worked for Canadian Marine Drilling, based in Calgary as part of the offshore drilling operations and (sub sea) engineering project groups working in the Beaufort Sea. He then joined Bow Valley Offshore Drilling and spent the next six years working as Sub Sea Systems Fall/Winter 2011/

22 Industry News 55 reasons to be happy Engineer, Assistant Rig Manager and Rig Manager based in Halifax and St. John s. His next three assignments were with Maersk Drilling working various sectors of the North Sea as Rig Manager in Aberdeen, Drilling Superintendent in Copenhagen, and Operations Manager in Stavanger. Mr. Roche returned home to Newfoundland & Labrador in 1994 and accepted the position of General Manager at Noble Drilling (Canada) Ltd. In this capacity, he was responsible for Noble s contract with Hibernia Management and Development Co. (HMDC) to provide drilling and drilling system maintenance services, and safety management programs for the two drilling rigs on the Hibernia Platform. He progressed within the Noble organization to become President of Noble Drilling Canada, Vice President of Noble Corporation (Houston), and VP Technology Systems (Houston). Noble International Ltd. seconded him in 2002 to perform Organizational Consistency Audits in Noble s seven divisions worldwide. He was seconded again in 2008 to the Mexico Division as Division Manager where he worked on a rotating basis for two years. Kevin Roche has played an integral part in building sustainable resource development processes for the East Coast oil & gas industry. He has been a member of numerous community and industryrelated boards including Noia and his expertise on industry training, recruitment, leadership skills and technology is continually sought after by his peers in the industry. In 2003, he was recognized as one of the Top 50 CEOs in Atlantic Canada. When asked what he would like to see next for the oil & gas industry in Newfoundland & Labrador, he said We have already reached one important milestone: we have finally reached the stage where we have sustainability in our oil and gas industry where we can reasonably forecast positive growth and realize the benefits of have province status. The next milestone that we should all hope for and expect is to have our kids stay at home, gain valuable experience here in our province, and advance to senior management and positions of influence in steering us towards new world-class successes in our oil and gas operations. For the long-term, he sees the development of our gas resources as one of our most interesting challenges for the province and its future workforce. Attracting investment to build the new infrastructure needed to make gas development viable - while maintaining effective fiscal management of oil resource revenues will be an interesting challenge. Now, he is busy with his own kinds of projects and working for himself. Noia wishes him the best in his retirement. 22 Noia News

23 Industry News Header To Go Here Noia Fall Seminar: Research and Development Priority Areas Developing East Coast Canada s oil & gas resources has required many technological solutions to the unique operating challenges. Innovation is key to staying competitive and ensuring a vibrant and sustainable future for the oil & gas industry in Newfoundland & Labrador. As such, industry has identified some major research and development priorities which will be addressed in the coming years. Trenching has been identified as one area of critical importance for future offshore developments. INTECSEA Canada is undertaking Phase 1 of a joint industry project to develop a trenching system for subsea pipelines, flowlines and umbilicals in ice environments. Developing a proven trenching system for protecting pipelines from ice scouring on the seabed is very important for future developments. The cost-effective recovery of much of Newfoundland and Labrador s known oil resources is challenged by complex reservoirs. Subsurface/Advanced Well Design is therefore another R&D focus area as industry works to develop knowledge and technology to increase recovery from declining and future field developments, as well as marginal reservoirs. Ice Management continues to be another area of critical importance. The challenges of exploring and producing in ice-prone regions are not new to the province, but technology continues to be developed to effectively deal with the issues faced by icebergs and pack ice offshore Newfoundland and Labrador. Finally, Health, Safety and the Environment (HSE) are of paramount importance to all facets of the oil and gas industry. Fall

24 Industry News Noia Fall Seminar: Research and Development Priority Areas The development of new technologies can be critical in helping reduce the health, safety and environmental risks for oil and gas operations in Arctic and harsh environments. Noia and Petroleum Research Newfoundland and Labrador brought members of the local oil and gas community together to learn about these topics and more during an exclusive seminar November 16 in St. John s entitled Fall Forward: Innovation through R & D. Representatives from Chevron, Husky, INTECSEA, Virtual Marine Technology and Suncor delivered valuable insight into the major research priorities identified by the industry. The seminar also provided a firsthand look at Petroleum Research Newfoundland and Labrador s (formerly known as Petroleum Research Atlantic Canada - PRAC) new structure and its programs and processes for engaging Noia members. u The Honourable Jerome Kennedy, Minister of Natural Resources, Government of Newfoundland & Labrador, delivering the keynote address at Fall Seminar luncheon. Photo: Paul Daly 24 Noia News

25 Industry News Hebron Public Review Hebron Public Review The Hebron Public Review Commission wrapped up 11 days of sessions in St. John s, Marystown and Clarenville on Dec. 7. Commissioner Miller Ayre expects to submit his final report to the CNLOPB and to the provincial and federal ministers of Natural Resources by the end of February. The commission heard 43 presentations and has posted written submissions on its website: hebronpublicreview.ca/public-review-sessions/. The Newfoundland and Labrador oil industry is maturing, stated Ayre on the closing day of public sessions. This was reflected in the number of presentations that indicated willingness of diverse members to work together to solve problems, strengthen the economy and find new ways to benefit all Newfoundlanders and Labradorians now and in the future. The commissioner said common themes heard during the sessions focused on: the need for more transparency in reporting in terms of local benefits, safety management system, and environmental protection; better communications and cooperation; a call for representatives from the workforce, business, the oil industry and government to work together to strive for continuous improvement towards procurement opportunities and labour planning; the problems of inadequate housing and infrastructure in some municipalities as a result of economic growth; suggestions for different approaches to regulation, project monitoring and benefits creation; the need to proactively engage representatives from the fishery. sustainability and creation of a legacy for the future. The commission s mandate is to review human safety, environmental protection, development approach and exploitation of resources, and the benefits expected to accrue to the province from the Hebron project. Providing environmental research, planning and consulting services to governments, industries, other consulting firms, and other organizations in Canada, the U.S., and elsewhere in the world. Environmental Assessments Mitigation Design and Environmental Protection Plans Marine Mammal and Seabird Observers Environmental Effects Monitoring Bird Hazard Studies Fish and Fisheries Studies Underwater Acoustics Contact: Bob Buchanan, M.Sc., Vice President, Atlantic St. John s, NL (709) lgl_nfld@lgl.com Fall/Winter 2011/

26 Industry News Year in Review Year in Review p The north single anchor loading system was lowered from the vessel at the Hibernia oil field. It s part of the replacement of the production platform s offshore loading system. Photo courtesy of ExxonMobil It was a busy year for the Newfoundland & Labrador offshore as work progressed on the expansion of the Hibernia and White Rose oil fields, the development of the Hebron project and exploration of the Flemish Pass. Hibernia The Hibernia platform pumped first oil from the Hibernia Southern Extension (HSE) in June, and development of the $1.74-billion subsea tieback continues. Hibernia Management and Development Co. (HMDC) expects to start dredging an excavated drill centre in 2012 and subsea equipment is scheduled for installation in 2013 the same year HMDC is scheduled to begin drilling water-injector wells for HSE. On Dec. 9, the Hibernia partners issued an EOI in their search for up to three supply ships to support 20 to 36 months of drilling operations scheduled to start during the fourth quarter of 2012 or the first quarter of Those ships will cover the HSE drilling program, along with unspecified drilling operations by Statoil Canada. 26 Noia News

27 Industry News Year in Review The Hibernia platform also underwent upgrades in In September, HMDC completed its $200-million gas lift project designed to improve oil field production. During the summer, HMDC also started a $200-million replacement of its two offshore loading systems (OLS) that transfer crude stored in the platform to oil tankers. Using two Technip Canada ships, the Wellservicer and the Deep Constructor, the north OLS was replaced early in the fall of 2011, while replacement of the south loading system was scheduled for completion in December. White Rose Husky Energy continues to progress its slimmed-down wellhead GBS for the White Rose oil field. The company announced Dec. 14 that four engineering firms are in the running for the pre-feed and FEED contract. They are: Arup; Grand Banks Contractors, which includes Doris Conpro, the St. John s subsidiary of Paris-based Doris Engineering that designed and built the Hibernia GBS; Kvaerner Newfoundland, a subsidiary of the Norwegian-based Kvaerner Corp. and partner in the consortium contracted to design and build the Hebron GBS; and SNC-Lavalin. Bids are due Jan. 20 for the wellhead GBS front-end engineering and design contract. Husky expects to award the pre-feed and FEED contract very early in 2012, according to Paul McCloskey, Vice-President of East Coast operations. Speaking at Husky s investor day held Dec. 5, McCloskey said the company has targeted 2016 to start production from the wellhead GBS. The company continues to assess the resource base and sees the West White Rose satellite as a significant underpinning of that wellhead platform concept, McCloskey told investors. By about the middle of next year we should be in an even better position to determine that we have a strong resource base. That being the case, we re into execution. Husky started production from West White Rose on Sept. 5. That oil producer (E-18-10) was the first of two wells the company will use to gather production information and determine how to fully develop the satellite field. Husky was in the completions phase of the second well, a water-injector (E-18-11) on Nov. 25 when the offshore supply ship Maersk Detector collided with the drill rig GSF Grand Banks. The E well was drilled to total depth, cemented and cased. It s currently plugged and work has been suspended until the rig is repaired. The collision resulted in a five-metre gash above the water line in one of the rig s eight columns. The GSF Grand Banks is undergoing repairs at the Irving Shipbuilding yard in Halifax, N.S., where it arrived under tow Dec. 11. The rig will remain at the yard for about 60 days as part of its previously scheduled five-year survey for Fall/Winter 2011/

28 Industry News Year in Review maintenance and certifications. Husky expects the GSF Grand Banks to return to the Jeanne d Arc Basin by late February, including towing time to the oil field. Husky is also in the hunt for three drill rigs. It issued an EOI for one rig to work in the NL offshore and a pair of rigs to drill wells off Greenland. Husky holds two exploration licences in West Disko off Greenland and has an interest in a third licence operated by ExxonMobil. In 2013, a Husky spokeswoman said, the company is aiming to drill an exploration well in each of the two licences it operates. The company spokeswoman also said the drill rig EOI is part of Husky s ongoing assessment of the rig market and efforts to secure long-term rig capacity. The GSF Grand Banks contract ends January 2013, according to an October fleet update by rig owner Transocean. There is an option to extend the contract. The SeaRose floating production, storage and offloading (FPSO) vessel is scheduled to leave the White Rose field in 2012 for 125 days in dry dock. Hebron ExxonMobil submitted the Hebron development application to the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOBP) in April 2011 outlining it plans to develop the oil field by 2017 using a gravity base structure at a capital cost of $6.5 billion. Drilling costs are also estimated at $1.9 billion. A potential subsea tie-back to develop Pool 3 could add approximately $3.5 billion to the development cost. ExxonMobil has said further technical work and studies are required to refine the Pool 3 development, cost and schedule. That work is expected to be completed in Noia News

29 Industry News Year in Review In July, the CNLOPB named businessman and former newspaper publisher Miller Ayre as the Hebron public review commissioner to conduct an independent assessment of the Hebron project. The Hebron Public Review Commission concluded 11 days of sessions on Dec. 7. In all, the commission heard 43 presentations from business leaders, municipalities, unions, environmental groups and contractors. The commissioner s final report will be submitted to the CNLOPB by the end of February Meanwhile in October, a project labour contract was signed for the Bull Arm Site between the Hebron Project Employers Association and the Resource Development Trades Council of Newfoundland & Labrador. Preliminary site work at Bull Arm also started in the fall and is expected to continue throughout most of Bull Arm will be the construction site for the Hebron GBS and integration of the topsides modules. During Day 3 of the Hebron Public Review sessions, Geoff Parker, ExxonMobil s Senior Project Manager for the Hebron project, said the company is planning to build the platform s living quarters at the Bull Arm site. As well, Parker said the company will build the drilling support module at the Kiewit Offshore facilities in Marystown and Cow Head. That module exceeds anything that the Kiewit yard has ever built before and we feel that we can complete that to meet the project requirements, Parker told the commission on Nov. 23. The drilling equipment module, we have not yet found a fabrication yard in Newfoundland with the capacity to build that module. ExxonMobil has issued a second EOI for the drilling equipment module. Fall/Winter 2011/

30 Industry News Year in Review In its 2008 Hebron agreement with the provincial government, the company committed to build the living quarters, drilling support and drilling equipment modules in the province, if there was sufficient local labour and yard capacity. Flemish Pass Statoil Canada was the successful bidder in a pair of parcels during the 2011 offshore land sale. Statoil, which is partnered with Chevron Canada and Repsol E&P Canada, will be the operator of both exploration licences located west of its Mizzen discovery in the Flemish Pass. Step by step, we are building a solid resource base so we can become a producing operator offshore Newfoundland, stated Hege Rogno, Vice-President of Offshore Upstream for Statoil Canada, on Nov. 16. We look forward to exploring these new opportunities with our partners in close cooperation with the regulatory authorities. The company completed a 3D seismic survey of an exploration licence north of the Mizzen discovery on Sept. 1. The Western Geco ship, WG Amundsen, spent 60 days surveying EL 1123 in the Flemish Pass. Statoil also spudded two wells this year a delineation well known as Mizzen F-09 near its 2009 discovery and an exploration well dubbed Fiddlehead D-83 south of the Terra Nova field. 30 Noia News

31 Industry News Year in Review Spud Oct. 4, drilling wrapped up at Fiddlehead in late November. The drill rig Henry Goodrich then headed for the Gulf of Mexico where it is scheduled to spend 70 days undergoing repairs and upgrades at Signal International s rig-building facility in Pascagoula, Miss. Signal will also upgrade the rig s crew quarters, expand the lifeboat capacity, and renew coatings and piping. The work was expected to begin in early December. The Henry Goodrich is shared among Husky, Suncor Energy and Statoil. That contract expires January 2014, according to Transocean s November fleet update report. Meanwhile, Statoil and HMDC are looking for as many as three supply ships to provide support services for months of drilling operations starting in late 2012 or early 2013, according to an EOI issued Dec. 9. The EOI didn t specify where Statoil expects to drill wells. Terra Nova Suncor Energy said completion of a new production well Terra Nova G-90 9 early in the third quarter of 2011 increased production rates at the Terra Nova oil field. Production also received a boost from installation of a new flowline that allowed oil to flow from some of the Terra Nova wells that have been shut in for the past year due to hydrogen sulphide (H2S). The new flowline was hooked up using remotely operated vehicles (ROVs) and specialized dive teams aboard the Wellservicer. Suncor expects to continue its H2S remediation during the second half of 2012, when the Terra Nova production ship is scheduled to leave the oilfield for 15 weeks of dockside maintenance. That work includes replacement of a damaged swivel in the ship s turret and further equipment upgrades to handle sour gas at the oil field. Suncor also continues to assess drilling results at its Ballicatters prospect (EL 1092 and EL 1113) northeast of the Hibernia oil field. The company spent 162 days drilling and testing hydrocarbons at the well. In 2012, Suncor expects to use the rig Henry Goodrich to drill a pair of development wells in the Terra Nova oilfield. Offshore Crane Operator Training Certification Assessments Crane Support Crew Training Rigger Banksperson St. John s, NL Canada Offshore Crane Operator & Rigger Staffing Service Stephenville, NL Canada Project Planning & Lift Supervision info@sleipnirlogistics.com Certified OH&S Training Provider Crane & Rigging Inspections Fall/Winter 2011/

32 Industry News Year in Review Orphan Basin Chevron Canada is prepping to drill a third exploration well in 2012 in the Orphan basin, though no final decision has been made. Tim Murphy, Chevron s External Affairs Manager for Atlantic Canada, said the decision to drill the well will be made in 2012 and is subject to co-venturer and regulatory approvals. In the meantime, Chevron is preparing for a summer drilling program and has issued several EOIs for drilling services ranging from supply ships to weather forecasting. The likely drillship for the job is the Stena Carron, which is under contract to Chevron Upstream Europe and is currently working in the U.K. North Sea. In mid-august 2011, Chevron completed a 66-day seismic survey southeast of the Orphan Basin where the company holds one exploration licence (EL 1074R). The Western Geco seismic vessel, WG Tasman, surveyed the seabed between the northern Grand Banks and the Orphan knoll collecting about 6,100 line kilometres of 2D data that was processed on board the ship. Chevron, which is a partner in the Hibernia, Terra Nova and Hebron oil fields, also teamed up with Statoil Canada and Repsol E&P Canada in successful bids for a pair of parcels in the Flemish Pass/North Central Ridge offered during the 2011 offshore land sale. Land sale The Canada- Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) received about $350 million in exploration work commitments for four parcels offered in the 2011 offshore land sale two in the Jeanne d Arc Basin and two off Newfoundland s west coast. No bids were received for four parcels offered off Labrador. Statoil Canada (50 per cent), Chevron Canada (40 per cent) and Repsol E&P Canada (10 per cent) bid more than $347 million for two parcels in the Flemish Pass/North Central Ridge. Both border a pair of Statoil ELs in the Flemish Pass. Ptarmigan Energy Inc., with offices in St. John s and Calgary, landed 100 per cent interest in a pair of parcels off Newfoundland s west coast for more than $2 million. The bid entitles Ptarmigan to a nine-year exploration licence that will be issued in January The company currently holds an offshore exploration licence EL 1120 north of Port au Port Peninsula. Allnorth Consultants Limited is pleased to be a part of NOIA and a supplier to the Oil and Gas community in Newfoundland and Labrador. Allnorth is a multidisciplinary engineering firm with over 450 employees, offering the following services: Surveying QA/QC Reporting Engineering For more information, please contact our office: 2 Hunts Lane, St. John s, Newfoundland A1B 2L info@allnorth.com Safety In Everything We Do 32 Noia News

33 Industry News Year in Review West Coast Corridor Resources/Old Harry review In February 2011, Corridor Resources filed an application with the CNLOPB to drill one exploration well on its Old Harry prospect (EL 1105) in the Gulf of St. Lawrence. The application triggered an environmental review of the drilling program in water depths of 460 metres. During the public comment phase of that review, the CNLOPB received more than 50 submissions many of them from the Maritimes and Quebec raising concerns about potential environmental damage from an oil spill and the impact on fish habitat and fisheries. By August, the CNLOPB announced that the federal environment minister had called on the board to take a twopronged approach to the environmental assessment of the Old Harry drilling program. First, the CNLOPB will address public concerns about the drilling program by updating the strategic environmental assessment (SEA) previously done for the Western Newfoundland offshore area in The board has invited public comment on the SEA by Jan. 18, Second, the board announced an independent review by former New Brunswick ombudsman Bernard Richard of the potential environmental effects of the Old Harry drilling program. In November, Corridor also filed an environmental assessment report with the CNLOPB noting that drilling would occur during ice-free seasons between 2012 and the end of The offshore regulator is conducting a completeness review of the submission. Vulcan Minerals Vulcan Minerals returned to its Flat Bay No. 1 discovery well on Newfoundland s west coast in late September collecting core samples to delineate the boundaries of the 1999 oil discovery south of Stephenville. By November, the company announced it had found more oil and had expanded its drilling program from five to six holes totalling 1,673 metres. The core samples are being analysed and field activities are ongoing. Statoil is a world leader in applying technology and innovative solutions to accommodate the world s energy needs in a responsible manner. We are committed to supporting local research and development and education and training to facilitate the growth of Newfoundland and Labrador s oil and gas industry as well as contribute to Statoil s growth ambitions offshore Canada. The shallow Flat Bay oil deposit occurs primarily in low permeability conglomerates and sandstones, stated Vulcan s news release of Nov. 11. Although the oil is light, at 34 Fall/Winter 2011/

34 Industry News Year in Review degrees API, it has a pour point of 9 degrees Celsius, which exceeds the reservoir temperature at the shallow depths currently intersected. Therefore, the oil does not flow freely. An input of energy into the shallow reservoir will be required to stimulate flow. Results from the current drill program will assist in designing an oil recovery method. NWest Energy NWest Energy received approval from the CNLOPB to consolidate its four exploration licences off Newfoundland s west coast into one EL now set to expire Jan. 15, The company can extend this expiration date by two years in a number of ways, including posting a $1-million refundable drilling deposit or drilling a well. As part of the licence consolidation, the company surrendered about 457,000 hectares of land contained in ELs 1097, 1098, 1103 and It will retain exploration rights to 203,000 hectares under EL 1097R. NWest said Dec. 12 that the licence consolidation will allow the company to focus specifically on the near-shore development of the Green Point oil shale unconventional resource across all four licences. The near-shore acreage will allow for the unconventional potential to be tested by drilling from onshore locations. Canadian Imperial Venture Corp./Shoal Point Energy Canadian Imperial Venture Corp. and partner Shoal Point Energy spud the Shoal Point 3K-39 well in the shallow waters of Port au Port Bay in January. Drilled from shore into the seabed, the well in EL 1070 will help the companies evaluate the oil production potential of the Green Point shale formation. The well was drilled within 100 metres of the 2008 oil-in-shale exploration well, 2K-39. Testing of the 3K-39 well was scheduled to begin in December. In April, Shoal Point Energy completed a farm-in deal with Ptarmigan Energy for the shallow-water exploration rights in EL 1120 north of the Port au Port Peninsula. Under the deal, Shoal Point Energy must drill a test well before Dec. 31, 2012, to assess the petroleum potential of the Green Point formation. 34 Noia News

35 Industry News Lobsterfest 2011 Lobsterfest 2011 It s been eight years of Lobsterfest fun and organizers Phil Whelan of Whelan Affilated Services, Matt Shinkle of NOSO Limited/Beattie Industrial Limited and Alexia Giles of The Oil & Gas Magazine, have donated profits exceeding $50,000 to support Noia operations. Thank you! p (L-R) Phil Whelan, Bob Cadigan, Alexia Giles, Matt Shinkle Fall/Winter 2011/

36 Industry News Header To Go Here p Richard Callow and field assistant, Liam Herringshaw, former MUN postdoc. Photo: Duncan McIlroy Behind the Scenes: Studying the petroleum potential of western Newfoundland Noia representatives attended the Western NL Symposium in August 2011 where Richard Callow, postdoctorate researcher at Memorial University, was among the presenters. A native of the Isle of Man in the United Kingdom and a geologist, he came to St. John s from Oxford in 2009 to do research work at Memorial. In July of 2011, Mr. Callow began a nine-month project funded by the Petroleum Exploration Enhancement Program or PEEP as part of the provincial government s Energy Plan. PEEP was put in place to encourage and promote exploration activity in western Newfoundland. His research is focused on assessing million-year-old sandstone rocks known as the Hawke Bay Formation to determine whether the sandstone is suitable reservoir rock for hydrocarbons. Specifically, he is looking for trace fossils (bioturbation) the structures produced by the activities of organisms living in, modifying and processing sediments on the ancient sea floor. Burrowing organisms can change the physical properties of sedimentary rocks and can increase the permeability and porosity of sandstones. The actions of organisms therefore have the ability to make a reservoir more favourable as a hydrocarbon reservoir. 36 Noia News

37 Industry News Behind the Scenes... Mr. Callow did three weeks of field work in western Newfoundland during summer A lot of data was collected and we investigated all aspects of the deposition and lithification of the rocks, he said of the field work. He studies the rock s constituents, the processes that led to deposition of the rocks and looks for post-depositional changes due to the actions of organisms (bioturbation). Evidence of bioturbation can be difficult to recognize in the field, so samples were brought to Memorial for further analysis. As such, the rock is cut into extremely thin slices, mounted to glass plates and polished until the rock is translucent. The thin slices of rock are studied microscopically to reveal details about the deposition and bioturbation of the sediment. As part of this process, the rock s pore space is also injected with blue dye to provide an assessment of the porosity. Permeability (how easily gas or fluids can flow through a porous rock) is also measured in the laboratory at Memorial. There is a lot of excitement regarding hydrocarbon exploration in western Newfoundland, said Mr. Callow. What we re doing may seem like a small piece of the puzzle but it is an important part of the bigger picture. This kind of fundamental research is essential in order for us improve our understanding of possible hydrocarbon reservoirs in western Newfoundland. The results of this project will be reported to the provincial government, and will be used to encourage investment and continued exploration in that part of the province. Along with helping to unlock the potential of western Newfoundland, Mr. Callow and his research colleagues are organizing an international conference called Ichnia 2012, starting August 2011 at Memorial University in St. John s. The conference is expected to attract scientists from around the world. For more information visit: Fall/Winter 2011/

38 Industry News Socials - Thank-yous Thank you to the Sponsors of our Fall Networking Socials - KKC and Government of Newfoundland & Labrador Thank you to our gold, silver and bronze Fall Seminar Sponsors GOLD Sponsors: SILVER Sponsors: BRONZE Sponsors: Thank you to our Holiday Reception Sponsor - FMC Technologies 38 Noia News

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