History of The Petroleum Industry in Canada (frontier Exploration and Development)

History Of The Petroleum Industry In Canada (frontier Exploration And Development)

Canada's early petroleum discoveries took place near population centres or along lines of penetration into the frontier.

The first oil play, for example, was in southern Ontario. The first western natural gas discovery occurred on a Canadian Pacific Railway right-of-way. The site of the first discovery in the far north, the 1920 Norman Wells, Northwest Territories wildcat, was along the Mackenzie River, at that time the great transportation corridor into Canada's Arctic.

From those haphazard beginnings the search for petroleum spread to the fringes of continental Canada - and beyond those fringes onto the ocean-covered continental shelves.

Exploration in those areas involves huge machines, complex logistical support systems, and large volumes of capital. Offshore wells in the Canadian sector of the Beaufort Sea have cost more than $100 million. Across the International border, a well drilled in the US sector of the Beaufort - Mukluk by name - cost $1.5 billion, and came up dry.

For the petroleum sector, Canada's geographical frontiers are the petroleum basins in northern Canada, in the Canadian Arctic Archipelago, and off the coast of Atlantic Canada. These areas are difficult and expensive to explore and develop, but successful projects can be profitable using known production technology.

As the world's onshore oil reserves deplete, offshore resources - in Canada, also known as frontier resources - become increasingly important. Those resources in turn complete the full cycle of exploration, development, production and depletion.

Some frontier crude oil production - for example, Bent Horn in the Arctic and the Panuke discovery offshore Nova Scotia - have already been shut down after completing their productive lives. Similarly, some natural gas fields in the frontiers are now in later stages of decline.

In part, this history illustrates how important changes take place in the economies of newly producing regions, as frontier exploration shifts from wildcat drilling through oil and gas development into production. It also explores the ingenuity needed to drill in those inhospitable areas, and the deadly challenges explorers sometimes face.