Oil industry pins hope on Orphan Basin

A local observer of the oil industry predicts that business will be good this year for supply companies that service the province's offshore.

Rob Strong said two drilling rigs will be exploring the Grand Banks and the Orphan Basin, a largely unexplored area north of the Jeanne d'Arc Basin.

The Orphan Basin could hold more oil than the Grand Banks, which is home to Newfoundland's three existing oil projects.

International oil companies and the local business community are pinning their hopes for the future on the new site.

It is an exciting time for Strong, a local veteran of the oil industry.

"We have not had a new discovery offshore Newfoundland in 20 years," said Strong.

"So if indeed this Orphan Basin well turns out to be a discovery, that could be great news."

The Orphan Basin first made news three years ago when a consortium of oil companies bid a record $670 million for the right to explore it.

• FROM DEC 18, 2003: Record bid for oil exploration rights

Soon, they're going to start, said Paul MacMillan, project manager for Chevron Resources Canada.

"We're getting ready to drill one well," said MacMillan.

"It'll start in July. It's about four months to drill that particular well. Then the rig will leave – it's got some other commitments to meet – and then in late 2007, back to drill two more wells."

The Orphan Basin will be a challenge to drill because the field is farther away than the Grand Banks and the water is colder and deeper.

The consortium has contracted the massive rig Erik Raude, which was drilling in the Barents Sea.

Strong said another drilling rig, the jack-up Rowan Gorilla VI, will return this summer to drill four wells.

"The more rigs out there, the more business opportunities for the supply community," said Strong.

"I think of helicopter trips, and I think of containers and more supply boats, and so on. So there's a significant ripple-down effect every time we get an additional rig on the Grand Banks and here we're going to have two additional rigs this summer."

Strong said the exploration work will bring new money to local businesses. That is good news for the local supply community, which is looking forward to the province's next big discovery.