‘Unprecedented’ Interest Could Pour $4B into Oil and Gas Drilling Off Newfoundland and Labrador Coast
Oil and gas exploration off the coast of Newfoundland and Labrador is expected to boom in the next few years, with fossils poised to spend up to C$4 billion on what they hope will be the province’s next big production project, the Financial Post reports.
“There’s an unprecedented level of interest for offshore East Coast Canada,” said Jim Keating, executive vice president of offshore development at Nalcor Energy, a provincial Crown corporation that is a minority owner of three of the projects.
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“From 2014 to present, we’ve amassed over $4 billion worth of offshore work commitments, which is about 60% of the total ever in offshore Newfoundland and Labrador in its history. And that goes back to the mid-80s,” Keating he told the Post. “That’s pretty significant.”
Keating attributed the surge in investment to new geoscientific data and a revamped bidding process that have “really made it a must-be place for some of the world’s best explorers”.
The Post lists the four offshore projects already in production off Newfoundland and Labrador—Hebron, Hibernia, Terra Nova, and White Rose—with one more under construction and a sixth under consideration by Norwegian fossil Equinor. The four existing sites averaged 257,000 barrels of oil per day this year, down from a peak of 426,680 barrels per day in 2007. The Canadian Association of Petroleum Producers (CAPP) projects Atlantic Canada hitting peak production at 354,000 barrels per day in 2026, driven largely by output from Newfoundland, but Keating says new and expanded developments could shift those numbers.
“Our peak day is yet to come even with the projects that we know about, let alone the ones that we have yet to discover,” he said.
“It’s not inconceivable to me that with modern technology and modern capabilities, that there are not another four projects out there just waiting to be discovered,” he added. “In actual fact, I think it’s almost a geologic certainty that there’s going to be other major projects discovered. I guess the question is when and where.”
The Post lists China National Offshore Oil Corporation (CNOOC, formerly Nexen), BP, Australia’s HP Group, and Houston-based Navitas Petroleum as holders of new offshore exploration permits. “That’s a fair amount of exploration activity, and the reason we’re really excited is that there’s hope there will be some more discoveries,” said CAPP Director, Atlantic Canada and Arctic Paul Barnes. “Because beyond what’s really discovered to date, there is no next large discovery that will go into production.”
The Post cites growing uncertainty over the future of new oil and gas projects, but quotes Barnes disputing that the current round of investment is a last chance for Newfoundland’s offshore deposits. “I don’t really get a sense of that,” he said. “I think most people in our industry—and government as well—still view this as a long-term endeavour.”
“I think it’s incumbent on us, as long as there’s a hydrocarbon window open, that we drive this, drive this economy,” Keating added. “As long as the world needs hydrocarbons, Newfoundland and Labrador should continue to be a place where we look for those barrels.”
At the same time, “this is not what you call a walk in the park,” said Equinor Canada Vice President Unni Fjaer. “We definitely need to do more work on the project to be more definitive on (our) answer” on whether to proceed with Bay du Nord, a 300-million-barrel deposit discovered in 2013 that is located 500 kilometres offshore, at a depth of 1,200 metres. By comparison, the Post says Newfoundland’s four existing projects are located 350 kilometres off the coast, at depths of roughly 100 metres.