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The government of Newfoundland and Labrador says there is as much as 30 billion barrels of oil equivalent that is expected to be found in an unexplored area of its deep-water offshore, as the province looks for billion-dollar drilling commitments from international oil companies to expand its production.
In an telephone interview from St. John’s, Ed Martin, chief executive officer of provincially owned Nalcor Energy, said the province’s Flemish Pass area ranks as one of the top undeveloped areas in the world, particularly as companies such as Royal Dutch Shell PLC turn away from risky ventures in the Arctic.
The province’s premier, Paul Davis, released an assessment by French geophysical firm, Beicip-Franlab, that estimates that an 11-parcel block currently being auctioned in the Flemish Pass has the potential to contain 12 billion barrels of crude and 113 trillion cubic feet of natural gas. Beicip-Franlab based that estimate on seismic and satellite data collected by Nalcor and private sector partners that conducted a four-year, $240-million exploration program.
“Those [resource estimate] numbers would indicate that there is a strong probability that you could have several Hibernias in that one sector,” said Mr. Martin.
He was referring to the project that established the province’s offshore industry some 30 years ago. “It’s big – they’re big numbers and it’s pretty exciting,” he said.
The province is now conducting its first scheduled sale of the offshore leases, the results of which will be announced in mid-November. Previously, oil companies would do their own seismic work and then ask the offshore regulator to hold a land sale so they could bid on the property. With the province now controlling the data, it plans to hold a series of auctions over the next several years.
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