Shell has successfully bid on six exploration licenses off the coast of Newfoundland, contributing to the largest number of successful bids in the province since 2000.
Shell has driven a surge in oil exploration interest off the coast of Newfoundland following several years of stagnation, according to the Canada-Newfoundland and Labrador Offshore Energy Regulator.
The Canada-Newfoundland and Labrador Offshore Energy Regulator reported receiving 10 successful bids in total, which marks the first time since 2022 that companies have purchased exploration licenses in the province. Alicia Curran, a spokesperson for the regulator, stated it was the "largest number of successful bids since 2000."
Shell, headquartered in London, successfully bid on six exploration licenses for six parcels of offshore area encompassing more than 15,000 square kilometres. For these licenses, Shell pledged more than $210 million in exploration work. Additionally, Shell partnered with Equinor on two other licenses totaling 1,230 square kilometres, with a total work commitment of $30 million.
OilCo, the province’s oil and gas corporation, successfully bid on two licenses, each for an offshore parcel of more than 2,700 square kilometres. Jim Keating, OilCo’s chief executive officer, said the goal is to partner with interested oil companies to "create alternative commercial entry points for these investors."
Shell recently announced it is buying a 30 per cent stake in Equinor’s proposed Bay du Nord oil development off the coast of St. John’s, N.L. This project would be the first deepwater oil project in the country.
Equinor is expected to make a final decision early next year regarding whether to proceed with the Bay du Nord development, which is located approximately 500 kilometres off the coast of St. John’s in the Flemish Pass Basin. Torgrim Reitan, Equinor’s chief financial officer, told investors that the $14 billion development, as currently proposed, involves only some of Equinor’s discoveries in the area and that "there are opportunities for expansion."
As it stands, Bay du Nord is expected to extract more than 400 million barrels of oil. The Newfoundland and Labrador government has stated it is considering buying a stake in the project of up to 10 per cent. The province’s offshore area currently has four oil installations; Bay du Nord would be the fifth.
The recent bidding activity represents a significant shift for the province's offshore energy sector, ending a period of stagnation and marking the highest level of licensing activity in over two decades.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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