In mid-August, Chevron Canada will
drill the first exploratory well in the Orphan Basin. According to industry experts, the exploration of the Orphan Basin could mean the beginning of a new and potentially lucrative phase of Newfoundland and Labrador’s offshore oil industry. The basin is in an area that has not been explored before, where the weather is harsh and the water is deep. However, the potential is massive — the Orphan Basin could hold more oil than the Jeanne D'Arc Basin on the Grand Banks, which is home to the Hibernia field, the Terra Nova field, as well as the White Rose and Hebron projects.
However, some caution that it's too soon to know exactly what the Orphan Basin may hold.
The Orphan Basin, which is just north of the Jeanne D'Arc Basin, sits on the edge of the continental self and in water 30 times deeper than on the Grand Banks. According to the Canadian Broadcasting Corporation, the Orphan Basin, however, poses more challenges that just deep water. The area's severe environmental conditions marked by high winds and cold water have prompted Chevron to bring in a drilling rig built for extremely harsh conditions. The massive Eirik Raude rig, one of the largest, toughest and most modern in the world, will sail to the Orphan Basin in a few weeks to drill the well.
The project It will cost upwards of $44m to drill just one well. It will take Chevron and its partners four months to know if they find oil in the Orphan Basin, and whether it is commercial. The Orphan Basin first made news three years ago when a consortium of oil companies including Exxon Mobil (XOM)
, Imperial Oil (IMO.TO)
and Chevron bid a record $591.5m for the right to explore it. (Source: Canadian Broadcasting Corporation)