Newfoundland offshore receives record breaking bids

Bidding for new acreage in Newfoundland's Orphan basin hit an unprecedented C$672,680,000 in the round that closed Dec. 17.

Bidding for new acreage in Newfoundland's Orphan basin hit an unprecedented C$672,680,000 in the round that closed Dec. 17.

The Canada-Newfoundland Offshore Petroleum Board announced the surprising results of the 2003 bidding round on Dec. 18, noting that eight of the 14 parcels on offer received bids.

The bid numbers represent exploration obligations in the initial five-year period of a nine-year exploration license. A new provision in the 2003 call for bids provides the option to spend up to 5% of the bid amount in the areas of research and development and education and training in the Province.

Ed Byrne, Newfoundland's minister of mines and energy, is optimistic about the future of exploration offshore Newfoundland and Labrador based on the results of the recent call for bids.

"The results of this land sale are very encouraging," Byrne said. "The bids received are three times more than our previous highest total bid, which was C$192 million. In fact, a bid for one parcel – at C$250 million – is larger than the previous high total bid. This reflects confidence in and certainly suggests the potential for large discoveries in this basin."

The winning bids on the eight parcels were submitted by a joint venture made up of ExxonMobil, Imperial Oil, and Chevron Canada.

The C-NOPB will issue licenses in January 2004, subject to the bidders satisfying requirements specified in the call for bids.

12/18/03

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