Nfld. & Labrador

'Record-breaking' land sale for oil exploration off Newfoundland coast

NOIA is calling the recent land sale for oil exploration off the coast of Newfoundland "record-breaking" and says the results show the potential for oil extraction in deepwater regions.

Oil companies pledge $757M in total work commitments for 8 parcels of land

Noia chair Raymond Collins says successful land sale shows the potential for oil exploration and development in areas off the coast of Newfoundland. (CBC)

At $757,989,794 in total work commitments from oil companies, Newfoundland and Labrador's offshore petroleum association is calling the results of the latest exploration bids "record-breaking."

"This is one of the most successful land sales in Newfoundland and Labrador's history," said Raymond Collins, chair of the Newfoundland and Labrador Oil and Gas Industries Association.

NOIA — the country's largest offshore petroleum association — said the deepwater basins off the coast of the island hold significant potential for growth in oil and gas exploration, development and production.

Collins called it "a highly sought after investment area" for global companies, "despite current low oil prices."

"This is especially significant given a year of very disappointing sales globally," Collins said in a press release Thursday morning.

Collins noted Husky Energy's commitment to the mature Jeanne d'Arc region in particular.

"There is no doubt that this basin has served this province very well, but as evidenced by Husky's interest, there is still opportunity to maximize the area's remaining resources," he said.

The results for the latest call for bids for exploration rights in the Newfoundland offshore have been released by the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB). Those six parcels are shown in yellow and orange in the Jeanne d'Arc Basin, the Carson Basin and the Flemish Pass. (Government of Newfoundland and Labrador)

Second sale, second public report

NOIA also noted this land sale for parcels in the eastern Newfoundland — which includes the Flemish Pass — and Jeanne d'Arc regions is just the second land sale under the scheduled land tenure system in the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) offshore area.

And the second time there's been a public report outlining the oil and gas resource potential for the area before bids closed.

The offshore petroleum association reiterated its support of Nalcor Energy's ongoing geoscience program, and its importance to developing the oil industry.

"The positive outcome of today's bids clearly demonstrates the additional value that this type of data and resource evaluation provides and the potential of our oil and gas resources to transform our province," said NOIA president and CEO Robert Cadigan.

Bob Cadigan is president and CEO of the Newfoundland and Labrador Oil and Gas Industries Association, better known as NOIA. (Cal Tobin/CBC)

The C-NLOPB announced Wednesday that six out of 13 available parcels of land in the eastern Newfoundland region were awarded to different oil companies, that committed to undertake exploration valued at $513,972,018.

In the Jeanne d'Arc region, two of three available parcels were awarded to Huskey Energy with a total value of $244,017,776 in work commitments.