Aboard Explorer IV — The furious pace of activity being set by the flagship of Dome Petroleum Ltd.'s fleet of four drill ships in the Beaufort Sea appears to match the intensity of behind-the-scene dealings to keep Canada's largest oil company afloat.
In fact, the success or failure of the amazingly expensive 1982 exploratory program is likely to decide whether the company will survive as a viable corporate entity. Dome Pete is throwing the last of its scarce financial resources - $680 million (Canadian), $552 million (US) - into a high-stake effort that even its own senior people admit they cannot contemplate losing.
Dome Pete owes nearly $8 billion (Canadian) to banks in Canada and the United States. It has already acknowledged that it cannot meet $1.4 billion in interest and principal payments due this month. Yet the widely scattered operation above the Arctic Circle, at present staffed by 1,400 personnel, is the most ambitious and the most expensive of seven consecutive summer-exploration seasons.
This year the hitherto-seasonal Beaufort Sea exploration program actually will become a year-round affair with at least a pair of permanent, ice-resistant man-made islands serving as drilling platforms.
A drill ship, the Explorer IV, began tests earlier this month on the Kenalooak wildcat well just short of its 4,880 meters target depth. It's sitting above a so-far unprobed subsea structure - one of more than three dozen potential crude oil and natural gas traps identified by Dome Pete - in about 70 meters of water.
The drive toward the suspected pay dirt down below has proceeded day and night since 1979.
Murray Todd, senior vice-president in charge of the day-to-day company operations in the Beaufort Sea, says as soon as the tests have been completed, the drill ship will be rushed to start and possibly finish yet another offshore well by late November.
Given the precarious climatic conditions here, the ship's progress at this delineation well on the Nerlerk structure some 50 miles to the east of the Kenalooak well will be a desperate race against time to beat the icy grip of a fast-approaching polar winter.
According to Mr. Todd, Kenalooak, like Nerlerk, could turn out to be a major oil discovery, an opinion based on seismic evidence gathered prior to the sinking of the wells. Nerlerk, with an estimated reservoir enclosure of about 90 ,000 acres, is the largest subsea structure found in the Beaufort. And the company has no partners with which it might have to share a possible oil bonanza at Nerlerk.
The discovery well at Nerlerk flowed only modest amounts - about 400 barrels a day of oil on tests from only some of the tentatively identified producing horizons.
Mr. Todd says the unfavorable reaction to the Nerlerk discovery last month ''shows that the (stock market) analysts are wrong.'' In echoing the sentiments of senior Dome Pete executives, Mr. Todd claims the professional observers tend to ''overlook the reservoir potentials of our finds by placing too much emphasis on incomplete test results.''
The Explorer IV, able to remain at sea longer that any of the other drill ships here, will attempt to prove that contentious point over the next two months.
In addition, Dome Pete is sending in its brand new SSDC (single steel drilling caisson), one-half of a converted supertanker, to probe further at Nerlerk during the winter. It is hoped the caisson, settled down onto a subsurface gravel pad, will also serve as a production platform.
But it is at the Tarsiut location that Dome Pete and its partners, in this instance Gulf Canada Resources Inc., expect to produce oil commercially, possibly by 1986.
There, a permanent artificial gravel island has already been constructed to facilitate follow-up to the oil discovery of 1979. A series of four production platforms are planned to drain the oil through a cluster of wells from the reservoir, believed to be about 30 kilometers long and contain more than 1 billion barrels of recoverable reserves.
According to Mr. Todd, recoverable reserves of at least 600,000 to 700,000 barrels of oil are the threshold levels for development, given the high costs of working up here.
Minimum production rates from a field comprising as many as 150 wells pumping the crude to a central processing and loading point offshore have been put at 100,000 barrels a day.
Clearly Dome Pete's experts are counting on fewer, but more prolific, wells at most of the five oil finds made to date in the Beaufort. But money remains a pressing issue if the company is to reach the point where it can begin generating cash from its offshore discoveries.
With virtually no hope of raising fresh funds from existing sources, Dome Pete is looking to the Japanese for an infusion of funds.
A delegation of high-level Japanese bankers earlier this month seemed quite impressed, if only by the magnitude of the offshore enterprise and its awesome logistics. They have invested $225 million (Canadian) in the offshore venture in easy loans repayable from eventual production.
They are now understood to be considering additional investments. Thanks to new Canadian tax laws, Dome Pete's frontier expenditures are up to 80 percent refundable. Thus most of Dome Pete's money can be recouped - channeled through its half-owned subsidiary Dome Canada Ltd., also its main client in the Beaufort - provided the Canadian taxpayers stick with the play.