Oil and gas prospects grow as latest assessment drives interest in N.L. offshore

Newfoundland and Labrador's self-proclaimed designation as one of the world's most promising oil and gas areas received another boost Friday with the release of a study pointing to the even greater potential for future development.

The latest independent resource assessment carried out by the French firm Beicip-Franlab was released publicly during an event at Memorial University, and the results were eye-opening.

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It identifies the potential for11.7 billion barrels of oil and 60 trillion cubic feet of gas in six parcels in the Orphan Basin and another three parcels in the East Jeanned'ArcBasin, all of which are up for bidto exploration companies in November.

Numbers, potential adding up

Combinethose figures with previous resource assessments in 2015 and 2016andthe combined potential in the offshore has now reached nearly 50 billion barrels of oil and nearly 200 trillion cubic feet of gas, said Natural Resources MinisterSiobhanCoady.

All this from an area covering just seven per cent of the province's offshore basins, she added.

"As a result of this data collection, and government's investments, multi-billion-barrel opportunities have been identified and are available for bid in this upcoming licence round," Coadysaid.

Multi-billion-barrel opportunities have been identified and are available for bid in this upcoming licence round.- Siobhan Coady

The latest information comes from one of the largest seismic programs in the world, along with other geoscience activities, all funded by the provincial government through its energy corporation, Nalcor.

Coadysaid the investment has paid off by attracting nearly $3 billion in exploration commitments and seven new oil companies to the area in the last several years, with five separate exploration drilling campaigns to begin as early as next year.

All this occurred during a time when oil prices were slumping and oil companies were slashingexploration budgets.

The true test for this latest assessment, meanwhile,will come on Nov. 7, when the bids close on these parcels. Officials say there is a high level of interest.

"We certainly are looking for interest from a number of offshore players that are currently there, and also what other people we can attract to the offshore," Coady added.

All the data for the newest assessment wasanalyzed byBeicip-Franlab, and "both areas present favourable geological conditions regarding to oil and gas accumulations," said chief technical officer Pierre-YvesChenet.

Whether prospects will turn into discoveries, however,will only occur if oil companies decide to drill and find large quantities of recoverable oil.

That's obviously what the government and Nalcorare hoping for, with the goal of driving exploration over the next decade, and adding to the four oil fields currently producing in the province's offshore.

Nalcorvice-president Jim Keatingis confident that will happen, saying "the offshore is back."

He said 100 offshore projects are expected to be sanctioned worldwide this year, up from 60 last year and 40 the year before that.

"So the offshore is a great place to be. It's a great place to spread and diversify your investments, particularly if you're in the oil sands or shale, and Newfoundland and Labrador is ideally positioned with this resource assessment."