Oil Markets Atlantic Canada's offshore oil potential
Jun 13, 2024
In this insightful discussion, Ashok Dutta, a Calgary-based journalist specializing in Canadian energy, delves into Newfoundland and Labrador's sprawling offshore oil reserves estimated at 124 billion barrels. He highlights investment hurdles against other lucrative options in the Americas, particularly with the delayed Bay du Nord project and ExxonMobil’s promising Persephone prospect. Ashok also touches on regulatory challenges, the imperative for new capital, and the potential for green hydrogen projects, painting a complex picture of the region’s energy future.
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Huge Reserves But Low Investor Appetite
- Newfoundland and Labrador claim ~124 billion barrels in offshore crude and access to export markets, but face weak investor interest.
- The 47-block 2023 bidding round drew zero offers, highlighting global competition for capital.
Carbon Policy Uncertainty Is A Drag
- Uncertainty around federal carbon pricing and emissions rules is a key barrier for offshore FIDs.
- The province sees regulatory clarity as essential to attract investment for projects like Bay du Nord.
Province Offered Equity To Seal Bay du Nord
- Newfoundland signed a project term sheet and even offered equity to entice Equinor and BP on Bay du Nord.
- Despite these incentives the FID remains elusive due to cost and policy concerns.