CAMERON ISLAND
The federal government has turned oil and gas exploration interest to Nunavut, with a call for land nominations launched in the Arctic Islands last week.
Rights to oil and gas exploration on the Bent Horn lands, inset, located on Cameron Island, Nunavut, is being put up for bid. A call for nominations has also been launched for other parcels of land across the Arctic Islands, by Aboriginal Affairs and Northern Development Canada. - graphic courtesy of Aboriginal Affairs and Northern Development Canada
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The Cameron Island Bent Horn oil field, which was abandoned before depletion after producing 2.8 million barrels between 1985 and 1996, is within the region that is now up for potential oil and gas exploration interest.
"We're potentially issuing an area that's already been subject to exploration and production, that's the Bent Horn field. That's a bit of a novelty associated to the process," said Michel Chenier, Aboriginal Affairs and Northern Development Canada's director for Northern petroleum resources.
"We are actually going out and seeking out the interest from the private sector, so the test will come through this process," he said about whether there has been indications of interest in the area.
There has not been industry oil and gas exploration in Nunavut for several years, although the Arctic Islands region overlies the Sverdrup Basin, one of the country's largest petroliferous basins, according to Aboriginal Affairs. Extensive exploration activity occurred in the region mainly in the 1970s.
The department has offered the region up for potential exploration licence issuance in the past, on a regular basis between 2000 and 2009, to no avail, Chenier said.
The deadline for nominations is April 24, to be followed by the launch of a call for bids for exploration licences in May 2013.
The department will be going forward with a a call for bids for a significant discovery licence for the Bent Horn field regardless of whether nominations are received, Chenier said.
"Because we already have a sense of what the resource potential is in that specific area because it's been subject to exploration and production in the past, we felt it was more appropriate to go forward with a cash bid for that specific proposal," he said.
The cash bid, compared to the work commitment bid where companies promise to undertake work up to the amount contained in the bid, is purely a cash receipt to government, with the highest bidder winning exclusive rights to the area.
The call for nominations launched Feb. 26, is the first in Nunavut since 2009, and has taken so long to plan partly due to consultations with the territorial government, regional and territorial organizations, and other federal departments with scientific knowledge of the area, Chenier said.
Improved understanding of the geology and new industry drilling and reservoir stimulation techniques are among the reasons why the department has prompted re-examination of the Bent Horn oil field, which posed a challenge to original development due to its fractured nature and complex structure.
Community consultations are ongoing with the department, and will also be undertaken by potential proponents, and regulatory agencies the National Energy Board and Nunavut Impact Review Board.
The closest communities to the plays are Resolute and Grise Fiord, located roughly 200 to 300 km and 400 to 500 km away, respectively.
