NEWFOUNDLAND
Zero bids on land for oil exploration disappointing, but not surprising, says minister

CBC
Fri, November 3, 2023

Energy Minister Andrew Parsons said he wasn't particularly surprised by a lack of interest in a call for bids on offshore land, but that it's a disappointment for the industry. (Sarah Blackmore/CBC - image credit)

The Canada-Newfoundland and Labrador Offshore Petroleum Board's call for exploration bids for 47 parcels resulted in zero interest, leading one industry veteran to question the sector's future.

The 47 parcels of land span some 12 million hectares off eastern and southeastern Newfoundland. The call for bids closed Wednesday with zero bids.

On Friday, Energy Minister Andrew Parsons said he was disappointed by the lack of bids but not entirely surprised.

"It's not often we see that. It might be, obviously, a trend of the times we're in, and that's why I guess I can't say that I'm that surprised," he said.

Rob Strong, an offshore consultant who has been part of the industry since 1979, was also disappointed.

"The fact that we put up, I don't know, 40 blocks of acreage in two separate basins and didn't get a bid, it's got to be disappointing," Strong said Friday.

Strong said he believes the lack of interest could be fuelled a couple of factors: corporations beginning to move in a different direction as more countries move toward a greener economy, and an intensive regulatory regime that comes with exploration in Newfoundland.

Newfoundland offshore oil industry veteran Rob Strong says he wasn't overly surprised by a lack of interest in a call for bids on offshore land, but that it's a disappointment for the industry. Strong says corporations are likely passing on exploration off Newfoundland in favour of 'low-hanging fruit.' (Sarah Blackmore/CBC)

Many corporations realize there is likely only 30 to 40 years of oil exploration left, he said, and most are going for "low-hanging fruit." — places where large quantities of oil can be produced quickly.

"I think the horse is already out of the barn. I don't know if there's anything we can do at this stage," Strong said.

"We have a fairly high regulatory regime, a bureaucratic regime. And … from discovery to first oil it's a long period of time. And I think the world is going to look at that and say, 'Well, why should I drill?'"

Strong said he has faith that projects that are currently underway or in development — like the Bay du Nord project and potential exploration of the Jeanne D'Arc basin — will yield positives for the industry.

"We need that next development if we're going to maintain a high level of employment," he said. "You can't produce it if you can't find it. And if you can't drill it, you can't find it."

Parsons said the future is promising, citing more than $2 billion in exploration scheduled for next summer.

But he also knows the oil is limited, he said. And while the provincial government will continue to "be in that oil space" as long as there's demand, he said, the provincial government is excited about diversifying its energy portfolio into other areas of production.

"We've always had all of our eggs in one basket, completely reliant on one industry. And I truly feel that we are at the time now when we can look multiple different ways," he said.