Dunderdale touts exploration at oil industry conference
N.L. industry past peak production, premier stresses, needs new finds
Premier Kathy Dunderdale stressed the importance of more exploration at an oil industry conference Tuesday, touting the government’s investments in seismic work and saying licensing rules will be changed to help spur activity.
"Newfoundland and Labrador is past peak production from existing fields," Dunderdale told delegates in a keynote speech leading off Noia’s three-day conference.
She pointed to the "finite pool of investment dollars" available globally for exploration.
"We need to be attractive, accessible and competitive," Dunderdale said.
"We have a message for companies in the industry — we are not just open for business, but we are aggressively pursuing it."
Dunderdale pointed to the $30 million the government has invested in seismic surveys — work that has resulted in the discovery of new basins off the Labrador coast, and leveraged tens of millions more from industry.
The premier said the government would change licensing rules, to generate more interest from smaller companies.
The current regime "doesn’t get us sometimes the kind of activity we’d like to see," Dunderdale told reporters after her speech.
The pending rule changes will broaden the time frames associated with the bidding process, and make information available to prospective explorers earlier.
"It will be a far more modern process than the one we have at the moment," Dunderdale said.
The premier is also taking the show on the road, leaving for a trip to China to generate interest in Newfoundland and Labrador’s oil and mining potential.
She told reporters it is "very likely" Chinese companies could come here to explore for oil.
"One of the reasons we’re making this trip to China is because we’ve been encouraged by Chinese companies to do that," she said.
Further incentives not on table now
But the premier said there is no need to offer further incentives to drive exploration — at least at this point.
"There’s always a dialogue going on with the oil companies, and we’re certainly not at a place yet where we have talked about new incentives," she said.
Two years ago, the province was on the verge of launching some type of incentive plan. But it never happened.
Last year, Dunderdale said it was not necessary to sweeten the pot, but left open the possibility of discussions. "We haven’t been at a place yet that we’ve felt we’ve had to incentivize companies to drill," the premier said last July.
Drilling is expensive in the Newfoundland offshore — roughly $1 million a day.There were just 23 exploration wells drilled in the Newfoundland offshore between 2000 and 2011 — an average of about two per year, according to figures provided by the offshore regulator.