President Obama has stated the intent to open up US Atlantic, plus further Gulf of Mexico and Alaskan, waters to oil&gas exploration, but it will be at least seven years before any commercial production is achieved, according to analysts IHS Cera.
The plan to bust a decades-long moratorium is being various branded as pointless in the grand scheme of US energy needs and environmentally irresponsible.
However, the Atlantic sector could contain 3.8billion barrels of oil and 137trillion cu ft of gas, though this is a “very preliminary” estimate.
The gas aspect could be especially important as supplies of conventionals are drying up, although indigenous non-conventionals such as shale gas are helping to plug the gap. Hydrocarbon potential of the Offshore Atlantic Continental Shelf has been established by significant gas production offshore Nova Scotia and from flowing gas tests in five wells that were drilled some 30 years ago in the Baltimore Canyon Trough about 100 miles south-east of Atlantic City.
The IHS database reports that 35 wells were drilled in the Baltimore Canyon Trough from 1977 through 1984.
Five of these wells in the Hudson Canyon and Wilmington Canyon offshore areas of the Baltimore Canyon Trough reported tests of natural gas ranging from 5,500 to 16,000million cu ft per day from Upper Jurassic and Lower Cretaceous sandstones at depths ranging 3,657-4,572m (12,000-15,000ft).
One well also tested about 630 barrels of oil per day from Upper Cretaceous sandstone.
IHS Cera says that these early hydrocarbon tests established the presence of oil&gas, but the wells were determined to be non-commercial during a period of low natural-gas prices and were abandoned.
During the same period, 10 exploratory wells were drilled in the Georges Bank area offshore New England, and seven were drilled offshore Georgia and north-east Florida.
The areas that have been designated by the Obama administration for oil&gas exploration are south of the Hudson Canyon and Wilmington Canyon blocks where the gas tests were reported.
It should not be forgotten that there have been successes (albeit limited) further north in Canadian waters. Indeed, Nova Scotians have been keen for years to see US Atlantic waters open up.
The technology for exploration and production has advanced dramatically in the years since those early exploratory wells were drilled, greatly expanding capabilities, but no assessment of the resource potential has been made in the Atlantic margin in the decades since.
According to IHS Cera, the Baltimore Canyon Trough was formed during the rifting between North America and Africa that started during the Middle to Late Triassic period.
“This kind of geologic setting has yielded substantial – and increasing – volumes of hydrocarbons in the US Gulf of Mexico, and also in the south Atlantic offshore Brazil,” said Pete Stark, a VP at the firm of analysts.
“The evidence from three decades ago indicates that the offshore US Atlantic Continental Shelf is primarily gas prone, but it is certainly possible that deeper drilling may confirm the presence of untested sub-salt formations that could boost the oil&gas potential substantially – as it is now doing off the coast of Brazil.”
As indicated earlier, based on historic data, the US Minerals Management Service has estimated that the Offshore Atlantic Continental Shelf contains 37TCF of gas and 3.8billion barrels of oil.
Stark said: “In view of the upside potential of other Atlantic margin rift basins, this estimate may be conservative. At this point, though, any resource estimate for the intriguing US Atlantic Continental Shelf is very preliminary. A firmer estimate will not be available until the critical modern geophysical analyses and test results from new exploratory wells are known. These new open areas should be regarded as frontier oil&gas provinces that will require substantial investment in modern geophysical and exploration analyses to identify hydrocarbon play drillable prospects.
“Thus, with favourable results, it could take seven years to realise first production of oil or gas. If the leasing were in the blocks where there had already been exploration, the lead time would be closer to five years.”