Results from the most recent round of licence bids reveal that ExxonMobil, one of the world's largest oil companies, continues to see a future in Newfoundland and Labrador's offshore industry.
ExxonMobil and its partner, QPI Energy Canada, a subsidiary of Qatar Energy, committed to spend $181.6 million in exploration over the next six years on a parcel in the Orphan Basin — a deepwater frontier region well outside Canada's 200-nautical-mile exclusive economic zone — containing a prospect known as Heart's Content.
"This new opportunity builds on our 25 years of success as lead owner of Hibernia and more recently as operator of the Hebron project," ExxonMobil spokesperson Margot Bruce-O'Connell wrote in an statement to CBC News. "We look forward to exploring this new area with our co-venturer, Qatar Energy."
Heart's Content is one of the top prospects in the offshore, according to findings of government-funded seismic exploration, and has the potential to kick-start a natural gas industry in the province, said Jim Keating, CEO of the Oil and Gas Corporation of Newfoundland and Labrador, known as OilCo.
"In that licence we have a real classic structure, one of the top 10 that we have. It is a multibillion-barrel potential. And also in that area we have the potential for natural gas development as well," said Keating.
Results of the latest bid round were announced Wednesday by the Canada-Newfoundland and Labrador Offshore Petroleum Board, which regulates the offshore oil industry.
Five bids totalling $238 million were received on a record 38 parcels on offer.
There were no bids on the 10 parcels available in what's called the southeastern Newfoundland region, which includes the Salar Basin and a prospect called Blue Jacket.
Keating said he was disappointed in the lack of bids but believes future land sales may have a more positive result.
Three of the successful bids were made by partners Equinor and BP Canada, and are adjacent to the massive Bay du Nord discoveries in the Flemish Pass.
Equinor, as Bay du Nord's lead operator, has said a final sanction on the project could occur within two years, with first oil by the end of this decade.
"They reached out and grabbed three licences that surround their production area, which is great strategic thinking," said Keating. "They're going to be there for many decades."
BP Canada also acquired 100 per cent ownership of a single licence in the Orphan Basin that borders a parcel on which it plans to carry out exploration activities next year.
"That's great because that's going to be a licence area that will figure prominently once they drill an exploration well next summer in their prospect called Ephesus," said Keating.
Energy Minister Andrews Parsons described it as a positive sign for an industry that has endured extreme volatility in recent years and is now under increasing scrutiny as society attempts to shift away from fossil fuels in order to lower greenhouse gas emissions in the fight against climate change.
"Seeing players like ExxonMobil, who have been the backbone here, continuing to think there is a future here, I thought overall … I was impressed and I was quite happy," said Parsons.
Parsons defended the provincial government's eagerness to build the offshore oil sector, saying there remains a strong demand for oil products and Newfoundland and Labrador offers the ideal balance of low-emission oil production, affordability and secure access.
"I think we have a responsibility to provide a commodity that we think has better standards and better quality than what we're seeing from the Middle East, from Russia," said Parsons.