Oil major Royal Dutch Shell has failed to find commercial hydrocarbons at its first exploration well in the Shelburne Basin offshore Canada.
The Shelburne Basin deepwater exploration project is located approximately 250 kilometers offshore, south of Halifax, Nova Scotia.
Shell submitted a successful bid for the area in 2012, and the Shelburne Basin Venture Exploration Drilling Project got an approval in June 2015. The initial phase of Shell’s exploration campaign involves the drilling of two exploratory wells.
Joint venture participants are operator Shell Canada (50 percent), ConocoPhillips Canada East Coast Partnership (30 percent), and Suncor Energy (20 percent).
According to Suncor’s statement on Wednesday, the drilling of the first exploration well has been completed and the well is non-commercial.
As a result, in the third quarter of 2016, Suncor said it will write off its share of the cost of the well which, under the commercial terms of Suncor’s farm-in agreement, is expected to be approximately $105 million (after-tax).
In order to undertake its $1 billion exploration program in the Shelburne Basin, Shell hired Stena Drilling’s Stena IceMAX drillship and the vessel arrived at its location in October last year.
In March 2016, while working on the first exploration well named Chesire, Shell experienced an operational issue as a piece of equipment connecting the rig to the well fell to the seabed due to severe weather. The incident caused a delay in drilling operations and the company was permitted to resume drilling several months later but with restrictions.
Offshore Energy Today Staff