#1Offshore Newfoundland and Labrador Gas Flaring Reduction Canada-Newfoundland and Labrador Offshore Petroleum Board September 2007#2Offshore Newfoundland and Labrador Gas Flaring Reduction ☐ Region and Production Overview Legislation ■ Gas Conservation ■ Gas Flaring Reduction Achievements ☐ ☐ Improvement Opportunities#3• Newfoundland and Labrador Offshore Area Relatively New Oil Producing region ● Potentially prospective area >200,000 sq. miles • Wells Drilled (July 2007): 288 - Exploration - Delineation 138 0 200m 200 1000m 1000m - 2000m + Labrador Shelf 2000m Orphan Basin 44 - Development 106 Laurentian Subbasin • 49 Significant Discoveries 6 Commercial Discoveries Grand Banks Flemish Pass Basin Jeanne d'Arc Basin#4Offshore Newfoundland and Labrador Production Review Currently concentrated on Oil production For Year 2006 JEANNE D'ARC BASIN ☐ Oil 47° = 17,622 103 m³ Gas HIBERNIA = 3,568 106 m³ Over 800 million barrels of oil produced in 10 years. Hebron Field MARA NAUTILUS SOUTH TEMPEST TRAVE NORTH DANA WHITE ROSE SOUTH MARA NORTH BEN NEVIS WEST BEN NEVIS BEN NEVIS HEBRON EAST. RANKIN TERRA NOVA о 49 KINGS COVE FORTUNE GAS OIL WEST BONNE BAY SPRINGDALE 25 50 km 48°#5Hibernia Hebron Terra Nova White Rose Ben Nevis West Ben Nevis Newfoundland and Labrador Offshore Area Oil Reserves and Resources 2006 114 36 88 West Bonne Bay 36 Mara 23 North Ben Nevis 18 Springdale 14 Nautilus 13 843 King's Cove 10 South Tempest 8 East Rankin 7 Fortune 6 South Mara 4 Trave 0 North Dana 0 283 581 354 1244 0 200 400 600 800 1000 1200 1400 Million BBIs Source: CNLOPB Annual Report 2005#6Whiterose North Bjarni Hibernia Gudrid Bjarni North Dana Newfoundland and Labrador Offshore Area Gas Resources 2006 472 429 863 2247 1794 924 2722 Ben Nevis Springdale 238 South Mara 144 North Ben Nevis 116 Hopedale 105 Snorri 105 Terra Nova 45 Trave 30 0 500 1000 1500 2000 2500 3000 Billion cu. Ft.#7Gas Conservation Legislation Accord Act Section 154 addresses "Waste" and Paragraph (f) deals with gas flaring specifically: the escape or flaring of gas that could be economically recovered and processed or economically injected into an underground reservoir ■ Production and Conservation Regulations: The Chiefs may approve the flaring or venting of gas during a production operation at a rate and volume and for the period set out in the approval where the flaring or venting does not constitute waste or an undue safety hazard. Development Plan Approvals#8GAS DISPOSITION: OIL FIELDS Gas Utilization in the Field Gas Utilization in other Fields Market Gas Gas Storage Source: Petro-Canada#9Gas Flaring Offshore Newfoundland and Labrador During production an operator is issued an approval During Start-up larger gas flaring volumes are permitted as oil production is stabilized During Production Once gas compression is initiated, gas flaring is monitored Gas Flare Volumes are reduced based on expected operating efficiency of gas compression system and facilities#10Gas Flaring Offshore Newfoundland and Labrador Gas Flaring Approval is issued for six month period (1 year later) Prior to issuing an approval Examination of performance and meet with operators to discuss opportunities to reduce gas flaring If Gas compression is down for a period of time, the operator is expected to reduce oil production ➤Each operator has put in place a gas flaring management system and is considered by operational personal ➤ As production from the field increases, Gas flaring has not increased the Board seeks further reduction#11Volume of Gas Flared (106 m³) CANADA-NEWFOLINDLAND and LABRADOR OFFSHORE PETROLEUM BOARD Offshore Newfoundland and Labrador Gas Flaring Reduction and Achievement Flared Gas Yearly Cumulative Totals And Daily Average Oil Produced 900,000 810,000 720,000 630,000 540,000 450,000 360,000 270,000 180,000 70,000 63,000 56,000 49,000 42,000 35,000 28,000 21,000 14,000 90,000 7,000 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Hibernia Terra Nova White Rose Daily Average Oil Produced Daily Average Oil Production (m 3/d)#12CANADA-NEWFOUNDLAND and LABRADOR OFFSHORE PETROLEUM BOARD Percentage of Gas Usage % 100 90 80 70 60 50 40 30 20 Offshore Newfoundland and Labrador Gas Flaring Reduction and Achievement Total Gas Usage Breakdown 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year Fuel Gas ☐ Flared Gas Gas Injected#13Improvement Opportunities for Gas Flaring Reduction Commissioning lessons learned ■ Operations ✓ Maintenance/Spare Parts Operating Procedures Elimination of Background Flare ■ Working with Operators Tracking the gas flare amounts on a monthly basis#14Gas Flaring Reduction Source: Government Newfoundland and Labrador