State-owned giant QatarEnergy has signed a deal with US supermajor ExxonMobil to come on board a key exploration licence offshore the Newfoundland & Labrador in Canada.

QatarEnergy said that, under the terms of the agreement, it will hold a 40% participating interest in Block EL 1165A, where operator ExxonMobil plans to drill the Hampden exploration well.

“The transaction has received all necessary consents from the Canada-Newfoundland & Labrador Offshore Petroleum Board (C-NLOPB),” QatarEnergy said.

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The remaining 60% stake in the block will be held by ExxonMobil's Canada unit.

QatarEnergy chief executive Saad Sherida al Kaabi said the agreement represents the company’s first entry into offshore Canada, "in an established producing basin with the leading producer in the area”.

“This builds on our strong partnership with ExxonMobil and is an important addition to our growing international exploration portfolio,” al Kaabi said.

Promising basin

The Hampden exploration well lies in the prolific Flemish Pass basin, which is regarded as one of the world's most attractive offshore plays in terms of potential for large scale and commercially attractive discoveries.

ExxonMobil's decision to revive drilling offshore Newfoundland & Labrador will be a further fillip the province, following questions over the future of its upstream sector.

The effects of Covid-19 and the energy transition saw exploration expenditure slashed and three major projects — Bay du Nord, West White Rose and Terra Nova Expansion —stalled.

However, the province has turned a corner, with Equinor’s Bay du Nord scheme in the Flemish Pass being revived after major new oil discoveries and Suncor Energy lifting the threat to abandon Terra Nova, while cancelled exploration campaigns are being reviewed.

In May last year, Seadrill’s semi-submersible rig West Aquarius started drilling the Hampden probe for ExxonMobil, but after just one week the rig was pulled off location for reasons that were not made clear.

Upstream understands the rig completed conductor and surface casing operations at the well site, located in the south of EL 1165A.

New rig arrangements

ExxonMobil is said to be “close to finalising an offshore rig” that is required for the upcoming drilling campaign at Hampden.

Upstream has reported that ExxonMobil was looking out for a semisub to complete the drilling of the Hampden K-41 deep-water wildcat offshore eastern Canada that was originally spudded last year.

Originally, the Hampden probe was planned to be drilled to a depth between 3445 and 4663 metres.

However, the well is now likely to have a target depth of 3470 metres and will likely take between 50 and 60 days to complete.

Drilling next year

The US supermajor wants the well to spud between May and August 2022 in a water depth of 1175 metres, some 245 nautical miles (454 kilometres) from St John’s, Newfoundland's provincial capital.

Hampden is described as a Cretaceous sandstone prospect and lies about 50 kilometres east of ExxonMobil’s North Dana gas discovery from 1986.

EL 1165A — lies immediately south of EL 1165B, where ExxonMobil is partnered by Equinor and Suncor.

Block EL 1165 was created in 2019 by amalgamating parts of EL 1134 with the entire EL 1135 tract.

The EL 1135 partners — ExxonMobil, Equinor and Suncor — secured the block in 2015 by offering a huge C$559 million (US$453 million) bid.

ExxonMobil drilled the Harp L-42A wildcat in EL 1165A last year, with the probe being suspended after a six-month drilling operation.