) Canadian subsidiary,
Imperial Oil Ltd.
) is at present considering the drilling of the deepest offshore
well in the Arctic.
A project description of the same was submitted by Imperial Oil to
Canadian regulators, seeking to go ahead with the proposed
exploratory well. The well, projected to take two to four
years for completion, could extend about 6 miles below the floor of
the Beaufort Sea. If approved, it would be the most expensive well
to be drilled.
Imperial Oil did not disclose the depth of the well, which could
vary and will be revealed only after a formal application is made.
However, the geological target is expected to be a maximum depth of
about 4.7 miles. To deal with the technical complexities of these
deep high pressure wells, which may be drilled over 6 miles,
complex well casing, cementing and drilling plans are required.
The proposed well is likely to be drilled in the Canadian Arctic,
about 110 miles off the coast of the Northwest Territories town of
Tuktoyaktuk. The particular area is owned by Imperial, ExxonMobil
Canada updated its Arctic drilling policy following the disastrous
2010 Deepwater Horizon blowout spill in the Gulf of Mexico. It laid
down the need to have two rigs on site, including a backup
competent of drilling a separate emergency relief well to stop the
flow of oil in case of an accident.
However, Canada's main energy regulator, the National Energy Board
(NEB), left a potential escape clause by permitting exceptions in
cases where operators can "meet or exceed" a same-season relief
well's ability to stop a spill. An average High Arctic drilling
season lasts for around 120 days from around May to November.
Imperial Oil and its partners intend to drill an exploratory well
in the summer of 2020, which would be the first offshore drilling
in Canada's Arctic waters since 2005, subject to approvals.
As the company stated that it cannot meet a longstanding
requirement to stop an accidental blowout within the short Arctic
summer drilling season by drilling a so-called relief well,
environmentalists have voiced their concern. The latter asked
Canada's NEB last month to clarify whether it was ready to
preemptively grant a policy exception in this case.
At present, ExxonMobil carries a Zacks Rank #3 (Hold). Another
stock in the oil and gas sector worth considering is
), which sports a Zacks Rank #1 (Strong Buy).
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