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Canada province eyes closing date for bid round as Covid-19 hits future acreage offerings

Bids for 10 blocks offshore gas-rich Labrador to be submitted by year-end, but other rounds set for 2021 are cancelled

Bidders for acreage offshore gas-rich Labrador on Canada’s east coast will be able to submit their offers by the end of this year, five years after the licensing exercise kicked off.

In November 2016, the Canada‐Newfoundland & Labrador Offshore Petroleum Board (CNLOPB) issued a debut call for bids covering 10 blocks in what is called the Labrador South region.

However, nine months later it advised that the closing date of this licensing exercise would be 120 days after completion of an updated strategic environmental assessment (SEA) of the area.

This update is now on track to be completed this summer, said the board, which is working on the SEA with the self-governing Nunatsiavut authorities that represents Inuit peoples in Newfoundland & Labrador.

The CNLOPB said the call for bids will close “before the end of the 2021 calendar year”, adding that a precise closing date will only be known when the SEA report has been wrapped up.

The SEA will examine potential environmental effects that may be associated with oil and gas activities in the area, and considers the larger ecological setting, having engaged with a wide array of stakeholders.

Any site specific future activities will be subject to a dedicated environmental assessment report.

The acreage available lies east of a plethora of major shallow-water gas discoveries from the 1970s that are estimated to house resources of about 4.2 trillion cubic feet of gas plus 123 million barrels of liquids.

Meanwhile, the CNLOPB has decided not to proceed with a call for bids in the Jeanne d’Arc or South Eastern regions that had been slated for this year.

It did not cite any reasons but it is very likely to have been impacted by the Covid-19 pandemic and moribund oil and gas market.

Nevertheless, the board did stress that acreage offerings in the Jeanne d’Arc area “will be assessed on an annual basis” because this is the province’s key producing area.

Separately, the CNLOPB said it has established a new schedule for future acreage offerings, mainly driven by delays due to Covid-19.

As a result, the board said a South Eastern Newfoundland bid process will close in 2023, rather than this year.

In addition, a second call for bids in the Labrador South region will now close two years later than planned in 2025, while a Southern Newfoundland exercise will wrap up in 2027 — a five-year delay.

Finally, a North Eastern Newfoundland offering has also been pushed back five years to 2029.

The board defines these areas as lower profile than many other regions.

Source: Upstream | This text was excerpted from the media outlet cited on April 9, 2021 and is provided to Noia members for information purposes only. Any opinion expressed therein is neither attributable to nor endorsed by Noia.