Offshore Newfoundland: Clean Energy Security for the World

The hunt is on all over the world for clean, reliable, oil and gas that will ensure global energy security. That puts offshore Newfoundland as one of the top offshore regions in the world with a well-established oil industry that is stable, secure, and reliable. This coupled with Newfoundland’s light crude oil puts the region at the top of the list for exploration and production worldwide.

At the recent EnergyNL conference in St. John’s, Newfoundland was a buzz, as the project plays rolled out at the same time that European governments called out for domestic exploration and production to reduce reliance on Russian oil.

This coupled with the rising price of fossil fuels is triggering a significant spike in the production costs of renewables, thereby putting numerous projects and green investments at risk. The riskier green plays become the more attractive oil and gas remains. Fossil fuels are used extensively throughout the value chains of solar, wind, and electric vehicles. Supply chains are very much fossil fuel dominated. It’s safe to say that the smartest thing we can do with oil and gas is to bring in renewables.

Jim Keating, CEO of OilCo, spoke at the EnergyNL conference with more optimism than we’ve seen from industry leaders in thirty years. Keating summed up the smorgasbord of lucrative offshore opportunities like this, “Here at home, it has mostly been good news. We experienced the release of Bay du Nord from an environmental review. We have the 2022 call for bids in November. We see more 3D seismic being acquired in the deepwater areas with pre-funding from multiple investors. We see the commencement of two exploration programs – one by Equinor and the other by Exxon who brought along new entrant Qatar Energy. More plans are being made for more exploration in 2023 by BP, BHP, and possibly Exxon. And now to top it off, the Well Head Platform Project will be restarted for West White Rose. Everything is beginning to get back to plan just like we knew it would!”

CLEAN ENERGY FUTURE

Jim Keating predicts an exciting time for license rounds this November, suggesting an enormous prospect will be revealed. He elaborated to the EnergyNL audience, “OilCo has identified more than 20 prospects offshore Newfoundland, with oil reserves close to one billion barrels or more. Roughly half of those prospects are in existing licenses yet to be drilled while the balance remains in Crown lands waiting for upcoming license rounds. I would be very happy to see our deepwater opportunities mentioned in the same breath as the leading oil countries and there are a dozen investor companies with plans to drill here. You may have heard me speak a few years ago about another enormous prospect called Cape Freels, which should be drilled next summer by BP. The scale of these fields, together with clean energy technologies and the advantages of deepwater developments, means that we have what the world wants – very competitive costs and lower-carbon emissions; and, a good place to do business in free markets where the investor takes the risk on their investment decision.”

It is predicted that we will see another four to six exploration wells in the next two years offshore Newfoundland and drilling timeframes should be faster and more efficient. The next five years of offshore activity could equal that of the last thirty years. As we transition to a new energy future, Offshore Newfoundland has exciting times ahead.

C02 STORAGE

The oil industry is not only committed to lower emissions operations, but they also have the discretionary funds to advance oil and gas production in cleaner and greener ways. With new innovations and technology coming toward us like a tidal wave, we have only just begun to see the innumerable applications that are keenly focused on lowering emissions and storing carbon.

Offshore Newfoundland oil plays also have immense potential for CO2 storage within the permeable aquifers and depleted reservoirs. Jim Keating said, “OilCo is planning to put out an RFP requesting vendors work with us to begin to quantify the CO2 storage potential the offshore. Through the Net Zero Project, we are having a Carbon Capture Utilization and Storage (CCUS) forum on September 28th in St. John’s at the Genesis Center where we will share some results from such a study. Newfoundland and Labrador have an important role to play in the transition to a lower-carbon economy.”

With $billions of opportunity, exploration, production, and contracts the next five years offshore Newfoundland is a hotbed of activity. The potential for secure, clean oil and gas in the region, is globally unprecedented. This coupled with new oil plays, new gas coming on stream and new oil finds, makes Newfoundland’s offshore look like the next North Sea.