Oil companies promise $758M in work for right to explore off Newfoundland

Oil companies have promised to spend $757,989,794.00 for the right to explore off the east coast of Newfoundland.

Exploration happening in 8 parcels after petroleum board call for bids on 16 in total

Exploration will be carried out in the Flemish Pass and Jeanne d'Arc regions. (Government of Newfoundland and Labrador)

Oil companies have promised to spend $757,989,794 for the right to explore off the east coast of Newfoundland.

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) said Wednesday that seven bids were submitted on 13 parcels in the Eastern Newfoundland Region, and three bids were submitted on three parcels in the Jeanne d'Arc Region when they were offered for exploration in April. 

Six out of the seven bids in the Eastern Region were accepted, with BP Canada Energy Group and Noble Energy Canada gaining an interest in four areas in the West Orphan and Flemish Pass basins.

Hess Canada Oil and Gas will partner on work in three of the parcels. Other companies promising to do work include Navitas Petroleum, DKL Investments and Nexen Energy.

In all, those companies will spend $513,972,108, according to the petroleum board.

In the Jeanne d'Arc region, about 340 kilometres east-southeast of St. John's, two of three bids on the three parcels were accepted. Husky Oil Operations Ltd. won both parcels, and will spend $244,017,776 for the right to determine oil prospects there.

The exploration licences are the first to be granted in some of the parcels offered up for bids in this latest round.

Natural Resources Minister Siobhan Coady said the results shows optimism in the province's offshore, with three of the companies new to exploration in the region.

"The call for bids is impressive in the current global environment and we look forward to continued exploration and development in our offshore for decades to come," she said in a news release.

The C-NLOPB said the minimum bid for each parcel is $10,000,000 in work commitments, and bids are chosen based on the total amount of money the bidder commits to spend on exploration during the first period of a nine-year licence.

The yellow parcels show the areas where the Offshore petroleum board asked for bids. (CNLOPB)