Record year for offshore oil exploration bids
Record amounts for offshore oil exploration in latest round of licence bidding
It’s a record year of offshore oil exploration bids for the province.
The 2018 calls for bids by the Canada-newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) brought in the highest-ever dollar amount in successful bids — totalling over $1.3 billion in work commitments.
There was also a record single successful bid amount of more than $621 million – a bid for an exploration parcel of 269, 799 hectares in the eastern Newfoundland region by BHP Billiton Petroleum (New Ventures) Corporation.
BHP had another successful exploration bid of over $201 million for a 273, 579-hectare parcel, also in the eastern Newfoundland region.
Other successful bidders included Equinor, Suncor Energy, and Husky Oil. The three partnered together for the Suncor Energy-led exploration of a 142, 448-hectare parcel in the Jeanne d’arc basin with a bid amount of just under $52 million.
Suncor has a 40 per cent stake, Husky and Equinor each have a 30 per cent stake.
Equinor partnered with Husky in another successful bid of about $32 million for a 159,036-hectare parcel in the eastern region, with a 70 per cent stake for Equinor and 30 per cent for Husky.
Equinor and Suncor also partnered up on a $480 million bid for a 253,608-hectare parcel in the eastern Newfoundland region, with Equinor at 60 per cent and Suncor at 40 per cent.
Equinor issued a news release about its successful bids.
“We are pleased to have secured significant acreage and new exploration opportunities offshore Canada,” executive vice president for exploration Tim Dodson was quoted saying in the release, adding the bids align with Equinor’s strategy of developing its position in the prolific basins.
The bidders will need to satisfy requirements specified in the calls for bids and receive ministerial approval before the board will issue the licences in January 2019.
A spokesperson for the CNLOPB said the exploration licences are good for nine years, but the bidders are committed to spending their successful bid amount within the first six years.
If they don’t spend all of the bid amount within that sixyear timeframe, they can lose a portion of their security deposit. Bidders were required to provide a security deposit valued at 25 per cent of their bid amount.
The C-NLOPB also put out a call for bids for a production licence in the Jeanne d’arc region but received no bids.
Meanwhile, the provincial government issued a news release stating the record bids are evidence that Advance 2030 - The Way Forward on Oil and Gas – a key part of government’s action plan for a stronger economy – is attracting investment.
“We are seeing success in our plan to drive exploration and grow the province’s offshore through Advance 2030,” Minister of Natural Resources Siobhan Coady was quoted saying in the release.
“This success confirms us as a global centre of interest for the world’s oil and gas exploration companies.”