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NOIA Golf Tournament
Thursday, 16 Sep 2010
  
5th International Symposium on Oil and Gas Resources in Western Newfoundland
Wednesday, 22 Sep 2010
  
Maritime Human Resource Conference
Tuesday, 28 Sep 2010
  
Networking Social
Thursday, 28 Oct 2010
  
Member Christmas Reception
Thursday, 9 Dec 2010
  Lorneville Mechanical Contractors
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  Weatherford Laboratories
 
NOIA News
Exploration Attraction – global strategies to drive exploration
 As upstream investors survey the globe, analyzing the best potentials for return on their exploration dollars, many petroleum jurisdictions have developed strategies to attract exploration investment.  These global conditions are likely to be top of mind as the Government of Newfoundland & Labrador finalizes its much-anticipated Energy Plan.  

Australia’s Big New Oil
In Australia, for example, gas reserves are at an all-time high and continuing to climb steeply, but oil reserves are in decline.  The continent and its marine jurisdiction are comparatively under-explored; many offshore basins have never been tested.

The Australian Government has made several key policy decisions with the aim of encouraging exploration investment in Australia.  These include the decision in 2001 to provide access to government spatial data at the cost of transfer, enabling it to be available free online.  Geoscience Australia's online geological provinces database describes a multitude of offshore basins and sub-basins (144 at last count) and is also linked to detailed well and other data.  

In 2003 the government announced the injection of an additional $61 million, over four years, into Geoscience Australia's petroleum program, to provide pre-competitive data in support of acreage release, with new data acquisition and data preservation and archiving.  

Geoscience Australia developed a portfolio of potential projects based on integrated programs of seismic acquisition, geological sampling and oil seep detection.  Deepwater frontier basins are among the most promising candidates.

This boost was followed by the introduction in the 2004 Australian Federal Budget of tax incentives for exploration in frontier areas.  The country is said to have some 40 offshore basins that display signs of petroleum potential, but half remain unexplored due to the high cost and high risk of exploration in remote frontier areas.

The tax measure allows oil and gas companies an immediate uplift to 150% cent on petroleum resource rent tax (PRRT) deductions for exploration expenditure incurred in designated offshore frontier areas.  The uplift applies to pre-appraisal exploration expenditure in the initial term of the exploration permit granted for a designated area.  Uplifted expenditure will also retain access to the transferability and annual uplift provisions of the PRRT.

The government says the measure, which applies to the annual offshore acreage releases for 2004 to 2008, should lower the cost of frontier exploration, thereby providing an incentive to explore in Australia’s remote offshore areas and increasing the probability of a new discovery.  The designated areas are defined as being more than 100 km from any existing commercialised oil discovery and cannot be adjacent to an area designated in the previous year’s acreage release.  

UK
The North Sea currently supplies around 75% of the United Kingdom’s energy needs, though reserves are declining annually.  Although over half of the UK’s petroleum reserves (37 billon barrels of oil or oil equivalent) have already been produced, there are still substantial quantities (around 15 - 20 billion barrels) remaining.
To encourage further exploration and development, the UK government has put in place a series of initiatives aimed at encouraging investment, developing new fields and revising the license structure to support these goals.

PILOT, a joint government/industry oil and gas forum set up in 1999, prompted many initiatives to promote investment and exploration in the North Sea.  The Fallow Initiative, for example, has helped identify barriers to development in "unworked" acreage and make viable acreage available to those better placed to exploit it.  The new Promote licence - at a tenth of the cost of a traditional licence - helps encourage smaller players to invest in the North Sea.  The Frontier licence has been created to stimulate more interest in the prospective but neglected West of Shetland area, supported by a working group investigating the development of a gas hub to help unlock West of Shetland’s stranded reserves.

More recently the UK government engaged industry in the Brownfields Stewardship Initiative to maximise recovery from existing producing fields, through investment and technology development.  The Stewardship initiative also encourages exploration by removing barriers to commercial deal making, such as improving the speed and simplicity of the licensing process.

Changes have also been made to the North Sea Tax regime.  It now provides a capital allowance scheme designed to encourage investment.  

Norway
To encourage exploration, Norway provides effective and easy access to data and information on plays, discoveries and fields.  The Norwegian Petroleum Directorate (NPD) is supplied by the operator with all information from offshore plays, including seismic data, well results, logs and interpretations, well cores (both exploration and development) cutting samples and oil samples.

Data is owned by the companies that pay to acquire it, but can be purchased or traded.  All the seismic data which the NPD receives from the Norwegian continental shelf are now available in the Diskos database.  
The Diskos project is a collective initiative of the petroleum industry to store all seismic data, well data and monthly production data from the Norwegian continental shelf in a single database.  The NPD and most petroleum companies active on the Norwegian shelf are members of Diskos and have direct online access to the database.  Non-members can purchase data on media (tape cassettes).  There is strict control of all access rights to data in the database.

Data reported to the NPD is kept confidential by the authorities for a specified period, depending on its specific character: 2 years for raw data (non-interpreted) from production licences, 10 years for data that is available for trade or sale and 5 years for other data.  There is a confidentiality period of 20 years for all interpreted data.

 Raw data from wells, along with NPD`s interpretations of the geological formations, are published on the NPD Fact pages and can be downloaded free of charge at www.npd.no.  Interpreted data, such as final well reports, are scanned and made available on the NPD fact pages when the period of confidentiality has elapsed.  The Fact pages contain more description of the types and volumes of data, publications and how to proceed to access the data if they are not available on the NPD web site.

The NPD Core Store has cores, cuttings and oil samples, available for geological, biostratigraphical or other special studies, by permission of the NPD.

Norway has also sought to bring new competent companies onto the Norwegian continental shelf by establishing a system for pre-qualifying licensees and operators, before they invest in pursuit of specific business opportunities.  The key requirement for new licensees is that they are able to contribute to the creation of value on the continental shelf.  The pre-qualification is an evaluation of the competence and capacity of the company with respect to subsurface, production and development technologies and HSE.  

Canada – west and east
Western Canada, as a mature onshore region, provides incentives for development rather than exploration.  Onshore exploration is relatively cheap and easy compared to the offshore, but development costs can be quite high. 

Alberta’s Energy Innovation Strategy is designed to respond to that province’s future energy needs by investing in research, technology and innovation that create commercial value and achieve the highest standards of environmental performance.  The Innovative Energy Technologies Program (IETP) is the major component of this strategy.

The IETP represents a $200 million commitment over five years by Alberta Energy to provide royalty adjustments (up to 30% of approved project costs) to a number of specific pilot and demonstration projects that use innovative technologies to increase recoveries from existing reserves and encourage responsible, development of oil , natural gas and in-situ oil sands reserves.  

The objective is to generate royalties from the increased recovery of oil, gas and oil sands resources that might not otherwise be recovered under current technology.  It is expected that successful technologies supported by this program will enhance resource recovery and increase royalties to fully recover, over time, the program’s costs.  

On Canada’s East Coast, Nova Scotia has recently implemented initiatives to encourage exploration: a new Call for Bids process, new exploration licence structures to expedite exploration and a world-class digital data management centre to ensure safe data preservation and to make geological and geophysical data acquired off Nova Scotia accessible on the worldwide web.  

It is in this context that the Government of Newfoundland and Labrador is developing its Energy Plan, a long-term policy document intended to foster long-term sustainability of the province’s energy industries, including oil and gas.  Exploration attraction will surely be a cornerstone of the plan, which is due for release in the fall of 2007.
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