ARCHIVED - Beaufort Sea and Mackenzie Delta Open for Posting

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Bulletin
Volume 2, Number 1
January 1995

Request for Postings Launched Around Amauligak

Industry is invited to post, until April 10, 1995, parcels that might be of interest to them in the Beaufort Sea and Mackenzie Delta regions of the Northwest Territories. The area of the call also includes the Tuk Peninsula and the westernmost Arctic Islands.

The Northern Oil and Gas Directorate is calling for nominations over approximately 98.8 million hectares (385,000 square miles). The selection process is entirely confidential.

Posted parcels may be included in a competitive call for bids scheduled to close in September, 1995. Winning bidders will be awarded an exploration licence for a term of nine years divided into two periods.

Depending on the location of the parcel, the drilling of a well during the first five or six years of the term qualifies the explorer to keep the exploration licence for the full nine years. A single criterion is used to select winning bids. Exploration licences will be awarded on the basis of the highest bid; the bid is the total amount proposed to be spent doing exploratory work on the parcel during the first period - either 5 or 6 years - of the term. Tenure is not related to whether or not the total amount bid has been spent.

The Call Package

To receive a copy of the Call for Nominations document, or to learn more about the management of oil and gas resources in Canada's North, please contact the Northern Oil and Gas Directorate of the Department of Indian Affairs and Northern Development in Ottawa at (819) 994-1606.

Copies of the Call for Nominations are also available from the Frontier Information Office of the National Energy Board located on the 6th floor, 311 - 6th Ave S.W., in Calgary.

Regular Issuance Process

In recognition of the long lead time required by industry to develop financial partnerships to pursue rights acquisition strategies in the Beaufort Sea and Mackenzie Delta area, yearly Calls for Nominations have been instituted to provide certainty and a firm basis for planning long-term exploration programs. Since 1989, six Calls for Nominations have been held and the subsequent Calls for bids have resulted in the award of 7 Exploration Licences: 3 in 1990 and 1 in 1991 for the Central Beaufort Sea, and 3 in 1991 for the Mackenzie Delta.

Lands Under Licence

At the end of 1994, 309,494 hectares were held under Exploration Licence, 277,293 hectares were held under Significant Discovery Licence and 16,618 hectares under Production Licence status in the region.

Geology and Reserve Estimates

Despite a limited amount of exploration, some 250 wells in the Beaufort-Mackenzie Basin have been drilled to date, this region is already an established hydrocarbon province with 53 oil and gas discoveries.

The Geological Survey of Canada conducted an assessment of the petroleum resources of the Mackenzie Delta-Beaufort Sea Basin in 1988. For oil, it is estimated that a total endowment between 6.2 and 7.8 billion barrels (mean expectation of 7.1 billion barrels) may exist in the region, of which 1.5 to 2.0 billion barrels, or about 24 percent, are discovered resources. For natural gas, the total endowment in the region is estimated between 57.5 and 73.1 TCF (mean expectation is about 67 TCF), of which 10.4 to 12.6 TCF, or about 17 percent, have been discovered (see Geological Survey of Canada Bulletin 474). The potential of the basin for further discoveries is deemed high.

Although most of the hydrocarbons already discovered in the area of the call are found within the Tertiary deltaic section of the Beaufort-Mackenzie Basin, hydrocarbons have been discovered from Palaeozoic carbonates and Lower Cretaceous sandstones in the southern Mackenzie Delta and along the Tuktoyaktuk Peninsula. Lands outside of the above areas (generally north of latitude 71° and east of longitude 131° 30') are lightly explored, with the exceptions of a small part of the western end of the Sverdrup Basin and onshore Banks Island. Potential varies greatly, from very high for the Mesozoic and Upper Palaeozoic strata of the Sverdrup Basin and the adjacent flank of the Parry Islands Fold Belt to possibly high along the continental shelf where the Tertiary margin is essentially unexplored, to moderate where Palaeozoic strata are thick and local Mesozoic basins occur, to low in the thinning Plaeozoic wedge overlying Precambrian strata which flank the Canadian Shield. That part of the Sverdup Basin encompassed in the call hosts the very large Hecla gas discovery. The discovery was made in 1972 on a broad, low amplitude anticline after drilling into Jurassic sandstones near their subcrop edge.

Development

Of this large discovered resource base, it is estimated that it would only require the discovery of an additional 100 million barrels onshore to justify extending the oil pipeline northwards from the Norman Wells oilfield in the central Mackenzie Valley. The likelihood of extending the Norman Wells pipeline northwards has increased with the settlement of land claims in the Mackenzie Valley with the Gwich'in and Sahtu peoples and the re-opening of the area to new exploration rights.

The largest offshore oil pool is Gulf's Amauligak discovery, with discovered resources estimated in the 335 million barrels range, accompanied by 2.2 TCF of gas. Amauligak will likely be the lead offshore project, eventually shipping the offshore oil to shore at Richards Island on the Delta, down the Mackenzie Valley to southern markets.

The largest discoveries onshore, Taglu, Niglintgak and Parson's Lake, are gas-bearing. The Delta Gas Project, put forward to develop the resources from the above three discoveries, projects a production rate in excess of 1 BCF per day and shipment to southern markets via a large diameter pipeline up the Mackenzie Valley. In 1989, the NEB awarded an export licence for 9.2 TCF of gas over a 20 year period.

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