While the entire US Atlantic remains off-limits to oil and gas leasing, Canada-Newfoundland offshore areas are open for business. This month marks the 29th anniversary of production offshore Newfoundland.
The latest bidding round was highly successful, with Shell leading the way. The total of 10 successful bids is the largest number for the province since 2000. All of the acquired parcels are in the Eastern Newfoundland Area identified above.
Note that the 2 new Equinor licenses are close to their Bay du Nord “significant discovery licenses.” Also note the size of the the parcels as compared to Gulf of America lease blocks which are only 5760 acres or 2331 hectares.
| Successful Bid Results for Call for Bids NL26-CFB01 (Eastern Newfoundland Region) | |||
|---|---|---|---|
| Parcel | Hectares | Successful Bidders | Successful Bid Amount (work commitments) |
| 1 | 268,608 | Shell Canada Limited (100%) | $50,101,000.00 |
| 3 | 270,830 | Shell Canada Limited (100%) | $20,101,000.00 |
| 4 | 266,671 | Shell Canada Limited (100%) | $20,101,000.00 |
| 5 | 271,992 | Oil and Gas Corporation of NL (100%) | $10,000,000.00 |
| 6 | 272,566 | Shell Canada Limited (100%) | $50,101,000.00 |
| 7 | 273,029 | Oil and Gas Corporation of NL (100%) | $10,000,000.00 |
| 8 | 273,579 | Shell Canada Limited (100%) | $50,101,000.00 |
| 9 | 187,675 | Shell Canada Limited (100%) | $20,101,000.00 |
| 11 | 41,933 | Equinor Canada Ltd. (70%)Shell Canada Limited (30%) | $15,000,000.00 |
| 12 | 81,094 | Equinor Canada Ltd. (70%)Shell Canada Limited (30%) | $15,000,000.00 |
| Total | 2,207,977 | $260,606,000.00 | |
If like me, you are curious about the “Oil and Gas Corp. of NL,” the successful bidder on 2 parcels, OilCo (as they are known) is a State owned company. Their news release explains the OilCo strategy:
OilCo will invite companies to partner on these licences through negotiated farm-down arrangements. The model allows companies to engage throughout the year rather than wait for a scheduled land sale, creating a clearer path from technical evaluation to acreage access. OilCo’s commercial objective is to negotiate a 10 per cent back-in at project sanction, with no OilCo funding of exploration drilling. Through direct negotiations, OilCo will seek the best value for Newfoundlanders and Labradorians while encouraging investment and advancing exploration activity.
If you can drill and produce safely in Newfoundland’s hyper challenging offshore environment, as has been demonstrated (100% safety management commitment required), you can safely drill and produce anywhere.
