Home page

Text size

E-mail this page

SAHTU
As major petroleum player Husky Energy Inc. wraps up its winter drilling program in the Sahtu region, the communities are already bracing for an even greater influx of oil and gas exploration activity next winter.

Husky Energy Inc., whose 2006 drilling and testing program in the Sahtu Summit Creek region is pictured, has just wrapped up its 2011-12 exploration program in the Sahtu region. - photo courtesy of Husky Energy Inc.

Calgary-based Husky -- among the five oil and gas companies who last year bid a total of $534 million to explore land parcels in the central Mackenzie Valley area -- has drilled and cased two vertical pilot wells to evaluate the region's canol shale formation, and last week, finished a 3D seismic program over a 220-square-kilometre area, spokesperson Kim Guttormson told News/North.

"We'll use those results to formulate the next stage of our evaluation program," she said.

With barges full of drill rig components, bulldozers, dump trucks, and more equipment for the company's 2011-12 winter drilling program on its two parcels between Norman Wells and Tulita, the activity brought excitement, and most importantly, jobs, to the communities.

"We're seeing quite a few jobs within the region," said Chris Buist, president of the Norman Wells and District Chamber of Commerce, estimating about 140 people within the Sahtu region were employed directly for seismic work, and between 50 and 90 jobs with Husky. "We've definitely seen a huge increase in employment within the region."

The spinoff employment from the activity includes medical staff, logistical support, transport, airlines, grocery stores, and hotels, Buist added.

"Everybody's getting a little bit of spinoff from the increase in activity," he said.

Pending environmental approvals, other companies who also won bids on land parcels in the region including MGM Energy Corp., Shell Canada Ltd., Imperial Oil Resources Ventures Ltd., and ConocoPhillips Canada Resources Corp., will add to the exploration activity next winter.

In addition, Aboriginal Affairs and Northern Development Canada has put two more parcels in the Sahtu region up for exploration bids this year, almost adjacent to the parcels that were successfully bid on last year.

"Next year, we're going to see, they speculate, possibly up to five companies drilling," Buist said.

"It was very busy this year, we were able to keep up with the demand, and with the increase next year, it might even overtax our ability to provide what (labour) they would require.

"We're definitely expecting a huge increase in our involvement next year so we're definitely excited about that."

Husky would not disclose how much was spent on the program this year, but the company won bids on its two parcels for a total work commitment of $376 million.

Despite conditions such as declining gas prices, labour shortages, and world economic conditions like the European debt crisis, drilling activity across the country is on the uptick, said Mark Salkeld, president and CEO of the Petroleum Services Association of Canada.

The increased activity is being driven by improvements to well drilling and extraction technology, making it possible for companies to access oil and gas once thought too difficult to extract due to tight rock formations, Salkeld said, such as hydraulic fracturing -- which involves high pressure pumping of sand, water, and chemical into cracks in the formation, allowing the gas and oil to flow through into the well bore once the pressure is released.

"We're getting far more access to formations that we've known about, that just weren't economical to drill," Salkeld said. "And then you tie that in with liquids-rich gas up there -- hydrocarbons -- the oil companies can do well."

Husky has not disclosed what types of extraction methods they might use on their Sahtu exploration areas.

Shares of Calgary-based Husky Energy Inc. closed at $24.77 on Thursday, on the Toronto Stock Exchange.

We welcome your opinions. Click here to e-mail a letter to the editor.