Oil companies promise $758M in work for right to explore off Newfoundland

Oil companies have promised to spend $757,989,794for the right to explore off the east coast of Newfoundland.

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) said Wednesday that seven bids were submitted on 13 parcels in the Eastern Newfoundland Region, and three bids were submitted on three parcels in the Jeanne d'Arc Region when they were offered for exploration in April.

• Bids called for offshore exploration rights in Flemish Pass,Jeanned'Arcregions

Six out of the sevenbids in the Eastern Region were accepted, with BP Canada Energy Group and Noble Energy Canada gaining an interest in four areas in the West Orphan and Flemish Pass basins.

Hess Canada Oil and Gas will partner on work in three of the parcels. Other companies promising to do work include Navitas Petroleum, DKLInvestments and Nexen Energy.

In all, those companies will spend $513,972,108, according to the petroleum board.

In theJeanned'Arcregion, about 340 kilometres east-southeast of St. John's, two of three bids on the three parcels were accepted. Husky Oil Operations Ltd. won both parcels, and will spend $244,017,776 for the right to determine oil prospects there.

The explorationlicencesare the first to be granted in some of the parcels offered up for bids in this latest round.

Natural Resources MinisterSiobhanCoady said the results shows optimism in the province's offshore, with three of the companies new to exploration in the region.

"Thecallfor bids is impressive in the current global environment and we look forward to continued exploration and development in our offshore for decades to come,"shesaidin a news release.

The C-NLOPBsaid the minimum bid for each parcel is $10,000,000 in work commitments, and bids are chosen based on the total amount of money the bidder commits to spend on exploration during the first period of a nine-year licence.