Next month's exploration of the Orphan Basin could mean the beginning of a new and potentially lucrative phase of Newfoundland and Labrador's offshore oil industry.

The basin is in an area that has not been explored before, where the weather is harsh and the water is deep. However, the potential is massive — the Orphan Basin could hold more oil than the Jeanne D'Arc Basin on the Grand Banks, which is home to the Hibernia field, the Terra Nova field, as well as the White Rose and Hebron projects.

However, Tim Murphy of Chevron Canada said it's too soon to know exactly what the Orphan Basin may hold.

"We're at the very early stages of exploration," Murphy said. "We have not yet drilled a well. There hasn't been a well drilled in this depth of water in the Orphan Basin."

In mid-August, Chevron Canada will drill the first exploratory well in the Orphan Basin.

'It's a very deep well'

The work will be different from anything the company has done before.

The Orphan Basin, which is just north of the Jeanne D'Arc Basin, sits on the edge of the continental self and in water 30 times deeper than on the Grand Banks.

"It's a very deep well," Murphy said. "Perhaps one of the deepest, if not the deepest, wells ever drilled in Canada.

"It's in a water depth of around 2,400 metres, which is a significant depth. By comparison, Hibernia is in 85 metres of water."

The Orphan Basin, however, poses more challenges that just deep water. The area's severe environmental conditions — marked by high winds and cold water — have prompted Chevron to bring in a drilling rig built for extremely harsh conditions.

The massive Eirik Raude rig is one of the largest, toughest and most modern in the world. It will sail to the Orphan Basin in a few weeks to drill the well.

Newfoundland Ocean Industries Association president Ted Howell said all eyes in the oil industry will be watching to see how the Eirik Raude fares.

A $50 million gamble

"All of our exploration activity and development activity offshore has been in this region here, the Jeanne D'Arc Basin," Howell said. 

"The new exploration activity is occurring out here in the Orphan Basin, which is a brand new basin, in much deeper water."

It will cost upwards of $50 million to drill just one well and, although no one even knows for sure if oil is there, scientific studies say the payoff could be huge.

"There are indications there may be four additional elephant fields, which would be fields up to a billion barrels," Howell said.

It will take Chevron and its partners four months to know if they find oil in the Orphan Basin, and whether it is commercial.

The Orphan Basin first made news three years ago when a consortium of oil companies — Exxon Mobil, Imperial Oil and Chevron — bid a record $672 million for the right to explore it.