Latest Newfoundland land sale leads to over $700 million in work commitments

$757,989,794.

That’s the amount of money oil and gas companies committed to spend to secure the rights to eight parcels in the Canada-Newfoundland and Labrador Offshore Petroleum Board’s latest call for bids.

The spending commitments aren’t as great as last year’s results, but considering the entire industry – from Newfoundland and Labrador to Saudi Arabia – has been in a funk for roughly two years due to consistently low oil prices, the dollar total and amount of land snapped up is encouraging for the province.

That’s especially true after layoffs were announced at the Come by Chance refinery on Wednesday. It would have been a dreary day indeed for The Rock’s oil and gas industry if the C-NLOPB’s call for bids had resulted in little spending commitments and only a parcel or two picked up by oil companies.

Instead, we see BP Canada is still very interested in offshore Newfoundland. It took a 50 per cent interest in four parcels – Hess Canada Oil and Gas partnered with BP on three of them and Noble Energy Canada partnered with BP on all four.

Those lands are located in the Flemish Pass and Orphan basins, an offshore region Crown corporation Nalcor Energy has been touting since June.

The other parcel in this region that was successfully bid on was grabbed by two lesser known names.

DKL Investments Ltd. (70 per cent interest) and Navitas Petroleum Ltd. (30 per cent interest) committed approximately $48 million to secure the rights to explore on that parcel.

Never heard of DKL Investments? Me neither – until yesterday. It’s the United Kingdom-based subsidiary of Delek Group, an Israeli energy company.

Delek is not a household name in the Canadian oil and gas industry, but Newfoundland isn’t about to complain.

The other two parcels of land are located in the Jeanne d’Arc Basin near the province’s Hibernia, Terra Nova and White Rose oil fields. Calgary-based Husky Energy, the operator of the White Rose field, picked up those parcels.

So despite significant sector turmoil that has companies everywhere watching their budgets and cutting spending, yesterday’s call for bids results shows the global oil and gas industry still sees potential in Newfoundland and Labrador’s offshore.

That’s in contrast to Nova Scotia, where the Canada-Nova Scotia’s Offshore Petroleum Board announced on Nov. 3 that it received no successful bids in its latest call for bids.

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