Northwest Territories — A new study in Canada’s Northwest Territories has resulted in the finding of a massive shale oil reserve in two separate fields.
The Bluefish and Canol shale fields between Norman Wells and Tulita underwent a joint study. The publically released study announced a reserve, which has been discovered in the Sahtu region of the territory.
According to the National Energy Board and the Northwest Territories Geological Survey, the reserve is said to have about 200 billion barrels of oil, but warn that not all of the oil will be recoverable. They say that additional drilling and testing is needed to determine if the deposits are commercially viable.
Even if a few percent of the oil is economically viable, it confirms previous thoughts that these areas hold several billion barrels of recoverable oil.
N.W.T. Energy Minister Dave Ramsay says, “These are large numbers.
“This should increase the level of investor confidence and revitalize interest in the Northwest Territories. This really does put wind in our sails.”
It’s estimated that Canol holds about 146 billion barrels while Bluefish has about 46 billion.
Oil and gas analyst, Doug Matthews, said the results seem promising.
The board did not provide an estimate of how much oil may be recoverable because well test results have not yet been released.
“If they can extract three per cent [of 200 billion barrels], they are roughly the equivalent of the Bakken play in North Dakota, which is a world-class play. So these are potentially very significant resources. Three per cent is quite reasonable,” says Matthews.
Matthews says the biggest challenge will be figuring out how to get the oil to market. He says that high operating costs combined with poor infrastructure makes the area unattractive to potential investors.
Over the past few years, several companies have been active in the area with 14 exploration licenses being granted and $628 million in work commitments since 2010.
The low price of oil is also affecting exploration as none of the companies with licenses to explore the Shatu region has plans to work there over the next few years. This includes large exploration companies such as Husky, Shell and ConocoPhillipos who have all been involved in the region but have recently announced they are stepping back from their Canol projects.