The following statement was issued today by Roger Grimes, Minister of Mines and Energy. It was also read in the House of Assembly:
I am pleased to report today that for the second year in a row the Canada-Newfoundland Offshore Petroleum Board is reporting a new record for land sales as a result of the 1999 Call for Bids in the Newfoundland and Labrador offshore area.
As you are aware, last year's Call for Bids resulted in work expenditure commitments of $175 million dollars, an increase from the previous high of $126 million in 1996.
This year $192.5 million in bids were received including the largest single bid ever recorded in the amount of $110.2 million by Petro Canada and Norsk Hydro for exploration work in the Flemish Pass area of the Grand Banks.
Petro Canada and Norsk Hydro were also successful in two other areas of the Flemish Pass with bids of $60.2 million and $20.3 million.
Pan Canadian bid $1.5 million for a parcel in the Flemish Pass and Corridor Resources was successful with a $275,000 bid for a parcel in the offshore West Coast area of the province.
The previous high exploration bid was back in 1995 when Amoco bid $90.3 million for a parcel of land northeast of the Terra Nova field.
It was less than two week's ago that we heard the great news from Husky Oil regarding this year's delineation program at White Rose which identified substantial amounts of oil, gas and natural gas liquids in that field.
The success of Husky's program tells us that White Rose is the forerunner for our next petroleum development project in the province. The well results also identified our largest recoverable gas resource, two trillion cubic feet or more. White Rose is more than a potential near term oil development, we believe it represents the beginning of a natural gas industry for Newfoundland and Labrador.
Newfoundland and Labrador has significant gas resources, more than eight trillion cubic feet of discovered natural gas and an undiscovered potential estimated at more than 50 trillion cubic feet. We believe White Rose will provide the impetus to unlock this untapped potential.
Grand Banks production will grow substantially within the next few years. HMDC has indicated that Hibernia production could be notched up by more than 180,000 barrels per day. Terra Nova is scheduled for production late next year. With White Rose and Hebron/Ben Nevis developments to follow, production could reach better than 400,000 to 500,000 barrels per day by 2004.
The offshore activity in this province is strengthening and gaining, local, national and international attention. This announcement today confirms the growing confidence in Newfoundland and Labrador's offshore.
This high level of industry confidence has not occurred just as a by-product to successful exploration. It also results from the combination of the development of a competitive generic offshore royalty regime, substantial investments in infrastructure and a competitive, well-trained workforce.
All of these elements combine to support a major expansion of the province's oil and gas industry over the next few years. In closing, we congratulate the successful bidders for 1999 and wish them well in their exploration activities.
1999 11 19 11:15 a.m.