Oil exploration bids received for controversial Grand Banks area off Newfoundland

Oil exploration bids received for controversial Grand Banks area off Newfoundland

Newfoundland and Labrador’s offshore oil regulator says it received three successful bids for exploration off the southeast coast of Newfoundland. Two are in an area fishermen say is key to their livelihoods.

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) issued a call for bids this spring for parcels off the southeast coast. On Wednesday, the C-NLOPB announced it received three successful bids: one in what’s called the South Eastern Newfoundland Region, and two in the Jeanne d’Arc Region, in the Grand Banks. Any exploration licenses granted as a result of the bids are subject to approval from the federal and provincial governments, the C-NLOPB says.

The Fish Food and Allied Workers union says the parcels in the Jeanne D’arc Basin area are home to lucrative crab fishing grounds. On Thursday, the union sent a release asking the Newfoundland and Labrador government to refuse the bids.

In the release, the union says it will do “whatever it takes” to protect the area from oil and gas development.

ExxonMobil is behind one of the contested bids: a 111,317-hectare parcel for which they pledged $10,449,996. A partnership betweenHusky Oil Operations and Suncor Energy led the other: $18,022,500 for a 76,737-hectare parcel.

“The C-NLOPB fully appreciates the importance of both the fisheries and petroleum sectors and will continue to engage with fisheries stakeholders,” the C-NLOPB said in a release. “Any companies acquiring Exploration Licences pursuant to these Calls for Bids will be required to engage with fishing interests before any oil and gas activities are authorized.”

Outside of the sensitive area, in the South Eastern Newfoundland Region, ExxonMobil successfully bid $10,135,948 for a 239,921-hectare parcel. 

“The sole criterion for selecting a winning bid is the total amount the bidder commits to spend on exploration of the parcel” in the first six years of the nine-year exploration licenses, says the C-NLOPB release. The minimum allowable bid on any parcel was $10,000,000 in work commitments.

This year’s bid tally is much smaller than in 2018.

Last year’s numbers broke two records. BHP’s $621,021,200 bid for 269,799 hectares in the eastern Newfoundland region is the province’s highest-ever bid for a single parcel. Overall, 2018 brought in $1.38 billion worth of bids, also a new record.

In comparison, this year’s bids totalled about $38.6 million.

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