Here’s Why Global Oil Companies Are Investing In Offshore Newfoundland

While the price of oil dropped it’s not going to stay that way. History has proven time and time again that fluctuations in oil prices happen—it’s just that simple. When the price of oil does go down it’s a great time to clean out the closets, sharpen the pencils, reduce costs and increase efficiencies. It’s also the time when we tend to get more creative and innovative finding solutions that would not normally take place. So price fluctuations are a good thing in the long run.

Developments continue to show great promise offshore Newfoundland, in late 2014, when The Canada-Newfoundland and Labrador Offshore Petroleum Board announced the results of Call for Bids in the Flemish Pass, Carson Basin and Jeanne d’Arc Region, for exploration rights. The Canada-Newfoundland and Labrador Offshore Area, celebrated results that were outstanding—attracting almost $600,000,000 in bids.

Even more outstanding is the result for Call for Bids NL13-01 which made history when partners ExxonMobil, Suncor and ConocoPhillips formed a consortium bid of $559,000,000.00. To date, this is the largest bid on a parcel of land, ever made in the history of The Canada-Newfoundland and Labrador Offshore Area.

Ørjan Birkeland, Statoil’s vice-president of exploration in Canada presented to the NOIA delegation late in 2014. Notably, East Coast of Canada has been named one of Statoils six core areas. A long history with Newfoundland, it’s a natural fit for this Norwegian based company to be a leading force in the region.

With assertive exploration plans, Statoil is now gaining ground with further developments such as oil finds in the Flemish Pass Basin, with prospects Mizzen, Harpoon, and the world class discover—Bay du Nord in 2013. Bay du Nord is Statoil’s largest find outside of Norway. The region, about 500 kilometres northeast of St. John’s, where the Bay du Nord find is located, has an estimated 600 million barrels of light, sweet crude; it was called the largest discovery around the world in 2013.

Birkeland called the finds “a breakthrough,” after several years of exploratory work. Birkeland emphasized, “The important thing here is that the area has a lot of growing room. There are several prospects that have been defined within this area”.

With a price of oil that will rebound and rise, with land sales and exploration commencing in the Newfoundland offshore, and Statoils finds and future commitments, the odds are stacked in favour of this region becoming the next North Sea—only this time because of technological advances and strong partnerships, it will be faster. Get ready!

Results Of The Successful Bidders: Call For Bids Nl13-01 (Flemish Pass)

The following bid, based upon the single work commitment criteria, has been accepted:
Parcel 1 (266 139 ha)
ExxonMobil Canada Ltd. 40%
Suncor Energy Inc. 30%
ConocoPhillips Canada Resources Corp. 30%
Total: $559,000,000.00