Chevron begins drilling CanadaÔÇÖs deepest well

Chevron Canada has begun drilling the countryÔÇÖs deepest offshore oil well in the North Atlantic offshore Newfoundland.  The exploratory well, known as Lona 0-55, is expected to establish a new record in Canada with a water depth of 2,600 meters. Located in the largely unexplored Orphan Basin, an area spanning 100,000 square kilometers, it lies around 430 kilometers north-east of Newfoundland's capital St. John's. Chevron Canada has a 50 percent stake in Lona 0-55. Other companies with stakes include Shell Canada Energy, ExxonMobil Canada and Imperial Oil Resources Ventures. The well will be drilled and evaluated over several months, with the Stena Carron drill ship sinking the well. Built in 2008, the ship has three ways to activate its blowout preventer, a wellhead valve that effectively shuts down the well if required: an acoustic signal sent to the seabed; an underwater robot sent to the seabed; and an automatic hydraulic system. The Stena Carron is also said to be well-suited to the harsh and remote environment of the North Atlantic. The company also has two drill ships that could drill relief wells to slow any spills by relieving pressure, in the event of the well suffering a blowout. South of the border, Barack Obama and the governor of California Arnold Schwarzenegger have suspended future offshore drilling pending investigations into the Gulf of Mexico disaster. However, Canadian officials have insisted that no such action is required in Newfoundland. Chevron Canada holds 50 percent stakes in two exploration licenses in the Orphan Basin, across an area totaling 21,044 square kilometers. Drilling on the first exploration well was concluded in 2007. Three oil fields off Newfoundland's east coast are now in production. Work has also begun on a fourth, Hebron, operated by ExxonMobil, which has a 36 percent interest in the project having taken it over from Chevron in October 2008. Headquartered in Calgary, Alberta, Chevron Canada's upstream arm has 318 full-time employees. The companyÔÇÖs main exploration and production focus is in Atlantic Canada, the western Arctic and the Athabasca oil sands. In 2009, Chevron CanadaÔÇÖs net daily production was 27,485 barrels of liquids and 25,688 barrels of bitumen from oil sands, with land holdings totaling almost six million net hectares.