The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) has announced the results for its call for bids in eastern Newfoundland and the Jeanne d’Arc region, which drew a combined $758 million in work commitments for offshore oil and gas developments. C-NLOPB offered 16 parcels totaling 3.3 million hectares in its latest round, which was announced in April. Successful bids were submitted on eight parcels.
The total value of the recent round is down from the $1.2 billion in commitments the province received in last year’s auction in the same region several hundred kilometers off Newfoundland’s east coast (OGJ Online, Nov. 13, 2015).
Call for bids NL16-CFB01 in the Eastern Newfoundland region offered 13 parcels (2.9 million hectares). Seven bids were submitted and six parcels awarded with a value totaling $513.9 million.
Call for bids in the Jeanne d’Arc region, NL16-CFB02, offered three parcels totaling 353,843 hectares, which received $244 million in work commitments. Husky Oil Operations Ltd. was awarded Parcels 1 and 2 with 100% operatorship.
Delek Group announced that its Block 7 interest was in 1,400 m of water with an exploration target depth of 4,500 m. According to C-NLOPB, the sole criteria for awards was the value of work commitments for each parcel and the round established a minimum of $10 million/parcel.
Block 7 and others are in the West Orphan basin, and a published report from the Provincial Government of Newfoundland and Labrador cites a resource assessment of 25.5 billion bbl of in-place oil resources with 20.6 tcf of gas. The report, cited by Delek in its press release, stipulates this estimate if for the entire basin and not for Block 7 alone.
Successful bidders are required to guarantee 25% of the commitment amount within 15 days of the tender results. As operators invest in seismic work and exploration in the block, they are eligible to release the guarantee for up to 25% of actual investments as defined in the license. Upon receiving Ministerial approval, the C-NLOPB Board will issue exploration licenses in January 2017.
The first work period is 6 years with the possibility of extensions, C-NLOPB said.
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