Chevron drills first deepwater well since BP disaster

Christopher Helman
Monday, October 4, 2010

With no fanfare, no press release, and no incidents, Chevron has drilled the first deepwater well in North America since the Deepwater Horizon disaster. How did the oil giant get around the Obama administration’s deepwater drilling moratorium? It drilled in Canada.

In the mile-deep waters off Newfoundland, 260 miles northeast of St. John’s, Chevron started the Lona O-55 well May 10 and finished it about a month ago. Chevron says this will set a record for the deepest water every drilled off Canada.

The work was done by a drillship called Stena Carron, owned by Swedish company Stena. In the wake of the Deepwater Horizon disaster, the government of Newfoundland and Labrador refused to give in to the drilling paranoia that wracked Washington, D.C. Premier Danny William dismissed a proposal that would have required oil drillers to keep a second backup rig on site to drill a relief well in the event of a blowout. Such a requirement would likely halt any new drilling in the region.

A deepwater drillship costs some $500,000 a day to rent. Williams had other incentive to want drilling to proceed. The provincial government would get bountiful royalties from any eventual oil and gas development in its waters. The well is in what’s called the Orphan Basin, which lies north of Hibernia (producing roughly 125,000 bpd), and Hebron, a field set to be developed with some 700 million barrels of recoverable heavy oil reserves.

A Chevron spokesperson explained that the company decided not to herald the drilling project because it didn’t want to attract attention to what’s a sensitive issue. Throughout the drilling Chevron took extra precautions to make sure all safety mechanisms (such as blowout preventers) were in reliable working order and that all pressures were carefully monitored.

Still, it’s a good thing that drilling was completed before Hurricane Earl blasted the maritimes Sept. 1. Chevron hasn’t revealed yet what it found at Lona O-55 or whether the well will be part of a future development. As is standard procedure, the drillship plugged and abandoned the well once drilling was complete. Chevron owns 50% of the prospect, with ExxonMobil holding 15%, Exxon affiliate Imperial Oil 15% and Shell 20%.


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