Minister Noel says offshore industry remains vibrant

Mines and Energy Minister Walter Noel said recent offshore drilling results in the Flemish Pass are disappointing, but should not be exaggerated. "Exploration and development will continue," he says.

Yesterday, Petro-Canada and partners Encana and Norsk Hydro announced they were abandoning their Tuckamore prospect in the Flemish Pass Basin. This follows the abandonment of the Mizzen prospect in April, in the same area.

"Our offshore has tremendous oil and gas wealth. But it will not be identified and developed without patience, investment and exploration," said Minister Noel. "The normal success rate for finding hydrocarbons in commercial quantities is about one in every 10 exploration wells drilled. Our offshore is very large. Finding oil and gas requires a lot of scientific and seismic research. Experiences here are no different from the Gulf of Mexico, the North Sea or other such offshore jurisdictions. Petro-Canada and their partners will use the results of this year�s drilling program to gain more knowledge about the geological properties of the area, and use the information to determine future drilling plans.

"Our offshore resources have great potential, and are currently producing significant economic benefits for our people. We have two projects producing oil, with White Rose to begin producing in 2005. We hope to see more progress on the Hebron/Ben Nevis project soon. The recent offshore Call for Bids issued 14 parcels of land for auction, most in the Flemish Pass and Orphan Basins. These areas are relatively unexplored and should see significant interest.

"We expect to see new seismic work in the Laurentian Sub-basin in the near future. Companies have already expressed interest in moving forward.

"Although we would have preferred to see a significant discovery at the Tuckamore and Mizzen prospects, we are realistic and understand that offshore exploration drilling is very risky and uncertain. Not every exploration well can produce a Hibernia or Terra Nova. The important thing is that Petro-Canada and their partners remain committed to our region, and optimistic about our offshore.

"Government is doing everything reasonable to promote exploration and development, streamline our regulatory system, and keep our industry competitive. We realize there are a lot of resources in the world, and a lot of competition for investment. We are doing what is necessary to make sure our industry continues growing."

Media contact: Darrell Mercer, Communications, (709) 729-5777

2003 06 05                                      3:45 p.m.