Grand Banks sale nets $175 million in bids

Sept. 28, 1998

Offshore Newfoundland Sale Results [129,351 bytes] Canadian operators have submitted winning bids totaling more than $175 million for work commitments on exploration licenses in the sizzling Grand Banks area off Newfoundland. Most of the acreage is north and east of Hibernia oil field, which started up late in 1997 (OGJ, Nov. 24, 1997, p. 42). Almost three-fourths of the total amount bid in the sale was for a pair of large parcels in the relatively unexplored Flemish Pass basin (see map, Mar.

Offshore Newfoundland Sale Results [129,351 bytes]

Canadian operators have submitted winning bids totaling more than $175 million for work commitments on exploration licenses in the sizzling Grand Banks area off Newfoundland.

Most of the acreage is north and east of Hibernia oil field, which started up late in 1997 (OGJ, Nov. 24, 1997, p. 42).

Round results

Almost three-fourths of the total amount bid in the sale was for a pair of large parcels in the relatively unexplored Flemish Pass basin (see map, Mar. 16, 1998, p. 36), about 75 miles north of Terra Nova oil field, which is under development.

These two parcels went to a group of Chevron Canada Resources Ltd., Mobil Oil Canada Properties (Mobil Oil Canada Ltd.), Petro-Canada, and Norsk Hydro Canada Oil & Gas Inc.-a unit of Norway's Norsk Hydro AS (see table).

The license round was administered by the Canada-Newfoundland Offshore Petroleum Board. Newfoundland Ocean Industries Association Pres. Stephen Henley said of the round, "The confidence shown by major players rests on three confirmed strengths: a vast and high-quality resource base, with excellent geophysical characteristics for production; an encouraging generic royalty regime; and a versatile, competitive, well-prepared local industry supported by a skilled and stable work force."

Net work commitments, by individual company, break out as: Mobil Oil Canada, $48.37 million on six blocks; Chevron Canada, $42.28 million on four blocks; Petro-Canada, $37.74 million on six blocks; Norsk Hydro, $31.53 million on four blocks; Husky Oil Ltd., $13.15 million on two blocks; PanCanadian Petroleum Ltd., $1.22 million on one block; and Tatham Offshore Canada Ltd., $1 million on one block.