Drilling for oil in the Far North’s great unknown – by Nathan Vanderklippe (Globe and Mail – May 25, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

CALGARY— In the midst of the largest auction of Western Arctic oil and gas rights in Canadian history, two giant rectangles of land up for grabs in the northeastern stretches of the Beaufort Sea are particularly mysterious.

No oil and gas company has ever drilled there, and why any company would want rights to the area is difficult to understand – unless it had access to a new trove of data quietly compiled by a Texas company over the past half-decade.

Though the economic and technical hurdles to plucking oil from the Arctic remain high, that data is altering the energy industry’s view of the potential in Canada’s Far North, pointing to a resource that now looks larger than formerly believed. It is, in the words of data collector ION Geophysical Corp., “a world-class play.”

Six years ago, the Houston-based company launched a multiyear program to peer into the subsurface below the Beaufort Sea, using sophisticated seismic and gravity equipment to identify structures that could contain oil and gas. ION, which conducts such missions in difficult-to-access places around the globe, went North four times between 2006 and 2010, assembling a grid of data that spans most of the Beaufort, including some areas of heavy ice where no one has ever looked.

Altogether, ION spent more than $150-million (U.S.), much of which it recouped – although it won’t say how much – by selling the data to companies with interests in the Arctic. There has been “global” interest, said Joe Gagliardi, director of Arctic solutions and technology for ION.

What the data point to “appear to be very large prospects,” he said. “The Beaufort-Mackenzie is a world-class play. It has the possibility to change the game when it comes to the world balance of oil and gas reserves.”

ION has shown that sedimentary rocks that look prospective for oil extend into much deeper areas of the Beaufort than previously believed.

“The new data that ION shot was revolutionary,” said John Hogg, the vice-president for exploration and operations for MGM Energy Corp., who has a long background in offshore exploration. “There’s much more sand [sedimentary rock] that goes out farther than what we would have thought.”

For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/drilling-for-oil-in-the-far-norths-great-unknown/article2442986/

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