HALIFAX - Shell Canada (TSX:SHC) has completed 3D seismic imaging off Nova Scotia's southwestern shore, but the energy giant said Wednesday it will be at least two years before exploratory oil drilling begins as part of its $970-million deepwater venture.
Randy Hiscock, manager of business development and new ventures, said the earliest drilling could take place in the Shelburne Basin is in late 2015, and that depends on the results of the seismic research, rig scheduling and getting the proper equipment in place.
"We feel pretty positive about the early results of the seismic program," Hiscock told the Maritimes Energy Association's annual conference in Halifax.
"As we get through the interpretation of that seismic (data), it will determine how and if and when we move forward. But I'm fairly confident that it's looking good."
In January 2012, Shell announced a six-year agreement to explore four deepwater areas about 200 kilometres from the province's southwest coast. At the time, its winning bid was the highest for exploration rights ever awarded in Atlantic Canada, until the company was topped by a record-setting bid from energy firm BP last November.
Hiscock said seismic work off Nova Scotia began in June and was completed last month, but there's no guarantee of oil until drilling begins.
But he was clear: oil is what Shell is banking on.
"The sun is rising hopefully on a new day in offshore Nova Scotia," Hiscock said. "We look forward to getting some wells out, having some exploration success and being here for at least another 70, 80 or 90 years."
Last year, Shell said it would be difficult for the Calgary-based company to profit off a natural gas find in Nova Scotia, though Hiscock told reporters Wednesday it's not necessarily a deal-breaker.
"Natural gas for Shell is not a negative thing," he said. "We have the technology ... to monetize this if the volumes are economic and if it ranks in terms of Shell's global portfolio."
Shell is a partner in the $3-billion Sable offshore natural gas project, located about 225 kilometres off Nova Scotia's east coast. Output from the project has been in decline for a decade, but Hiscock said the company has no plans to divest. He said it's believed there's enough natural gas to last until 2018-19.
Nova Scotia has struggled to develop its offshore energy industry, but the cash-strapped province is hopeful recent interest from Shell and BP are signs of a brighter future ahead.
The Canada-Nova Scotia Offshore Petroleum Board granted BP exploration rights last November to four deepwater blocks about 300 kilometres southeast of Halifax after it submitted a $1-billion bid. Shell was also given exploration rights at the same time to four parcels — two in the Sable Island area and two in deepwater — for a $32-million bid.
Hiscock said Shell has been happy with its relationship with Nova Scotia and the possibilities that lie offshore.
"The regime here is world-class," he said. "That's one of the reasons we entered here."