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Industry fury as Premier Furey breaks promise to continue funding seismic work offshore Canada

Andrew Furey, Premier of Newfoundland & Labrador, reneges on pledge to continue funding seismic programme

The Newfoundland & Labrador (NL) government in Canada has provoked the anger of the province’s upstream sector by refusing to allocate funds towards offshore seismic campaigns for 2022, backtracking on a pledge made in writing last year.

Over the last decade, seismic players PGS and TGS have worked with the provincial authorities to gather new data across existing and new basins offshore N&L.

Big benefits
The resulting data has underpinned acreage offerings that have led to international companies committing to invest over C$4 billion (US$3.14 billion) in offshore activities, according to NL Oil & Gas Industries Association (NOIA), the provincial lobby group.

NOIA said it had “recently learned” the St John’s-based government is not allocating funding for the 2022 offshore seismic programme.

The lobby group expressed disappointment and urged the government to reconsider its decision.

“Disheartening news”
NOIA chief executive Charlene Johnson said: “This is disheartening news as just under a year ago, Premier (Andrew) Furey committed to NOIA that the seismic programme would continue. For that commitment to be broken already is significantly disappointing to our members and industry.”

Backing its position, NOIA cited Furey’s answer to a NOIA question on continued support for the programme during last year’s provincial general election in which the politician said: “We are committed to continuing this programme and working together to advance our resource industries.”

Johnson called on Furey “to reconsider this decision, restart the offshore seismic programme, continue the immediate benefits it provides, and continue with its commitment to develop our abundant offshore natural resources. It is not too late to reverse this decision.”

Provides jobs
According to NOIA, a benefits study required by the seismic programme proponents showed that in 2020 over 125 Newfoundlanders and Labradorians were employed through the operation plus 45 other Canadians, while four students at the local Memorial University also received internships during the programme.

The seismic programme generated C$17 million in spending in the province, said NOIA, and C$1.4 million in the rest of Canada.

Furey’s decision came days after the NL authorities announced on 22 December last year that no bids were received for acreage offered in the Labrador South area, centred on the frontier Chidley basin.

Failed bid round
Commenting on the failure of this licensing round, veteran industry consultant Rob Strong – who is based in St John’s – said it should have been no surprise “because the location of the acreage that was up for bid is distant from the nearest support facility and is located in deep water …right in the middle of iceberg alley which might hamper drilling.”

He remarked that most activity in the province looks set to be focused around the Flemish Pass basin where Equinor is working on its Bay du Nord development and where ExxonMobil are planning an exploration well in 2022, while BP is also in the market for a rig to drill a wildcat in the Orphan basin.

Source: Upstream | This text was excerpted from the media outlet cited on January 7, 2022 and is provided to Noia members for information purposes only. Any opinion expressed therein is neither attributable to nor endorsed by Noia.