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Premier Kathy Dunderdale
NOIA Conference 2013 Keynote Opening
Tuesday, June 18, 2013

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Government Investment in Nalcor Oil and Gas

Bright and early this morning, I am delighted to kick off the 2013 conference of the Newfoundland and Labrador Oil and Gas Industries Association.

We are experiencing a great momentum right now in Newfoundland and Labrador’s oil and gas industry. We have hit our stride, and we are moving continually forward, marking one milestone after another as we set our sights on the milestones to come.

This is a time of tremendous excitement, growth and transition in Newfoundland and Labrador’s oil and gas industry.

Just five months ago, on the 4th of January, we welcomed the announcement by ExxonMobil that they have sanctioned the development of the Hebron Project.

Two months later (on March 11), I attended the cutting of the first steel for the Hebron topsides at Metal World.

Two months after that (on May 14), at the Cow Head fabrication facility in Marystown, it was the cutting of the first steel for the Hebron drilling support module.

Then, just weeks ago (on June 5), the Canada-Newfoundland and Labrador Offshore Petroleum Board announced approval of the development plan amendment for the South White Rose Extension tie-back project.

The White Rose project is an example of how growth is occurring in our offshore. White Rose produced first oil in 2005. Its satellite field, North Amethyst – indeed, the very first satellite field development in the Canadian offshore – pumped first oil in 2010. Three years later, we have the green light for the White Rose Extension tie-back project – a clear sign that Newfoundland and Labrador’s oil and gas industry is continuing to grow by leaps and bounds.

Husky and its partners are also evaluating options for further development in the West White Rose.

These are exciting times in our industry; indeed in Newfoundland and Labrador. We are at the table as partners in these projects and we are reaping dividends.  We have equity shares in White Rose, in the Hibernia Southern Extension, in the Hebron project. And through our publicly owned energy company, Nalcor, the people of Newfoundland and Labrador will reap billions of dollars as a result.

Have no doubt: our direct investments as a province in the growth of our oil and gas industry are proving to be, not just sound choices, but truly inspired choices.

Is it any wonder people are excited about new growth in this industry!

When I was at the Offshore Technology Conference in Houston just weeks ago, eyes were focused on us. There is a buzz about what is happening here in Newfoundland and Labrador.

Opportunities abound.  Projects are moving full-steam ahead.  Skilled workers are knuckling down. Thanks to our ground-breaking agreements on gender equity, more of those workers than ever before are women. New graduates are gaining the qualifications and certifications they need to join the labour pool and meet the rising demand. The dividends from our investments are returning. Communities are thriving. All of us are benefiting.

Let no one be misguided into thinking the momentum we are experiencing in our oil and gas industry was inevitable or easy to achieve.

You know the difference.

You know that every achievement we celebrate today was hard-fought and is a testament to the power of confidence, courage and commitment.

This room and this industry are full of people who are not afraid of a challenge but prepared to do whatever is required to get from point A to point B. The contributions of those gathered in this room today and companies throughout our industry are immense. You have a drive, a determination and an innovative spirit that is not only admired, but shared and celebrated by your government. I am excited to continue to work together with you to continue to advance our industry. The time has never been better to fortify our partnership and move forward together.

Here is why: Newfoundland and Labrador is past peak production from existing fields. To sustain growth, we need to find new fields.

Globally, engineering and production companies have a finite pool of investment dollars. To lure those exploration dollars to Newfoundland and Labrador, we need to be attractive, accessible and competitive. We have a message for companies in the industry – we are not just open for business, but we are aggressively pursuing it.

We do need to be mindful, however, that not just here, but everywhere, the search for new discoveries is a risky undertaking.

We can minimize risks by maximizing certainty.

But just how do we do this?

The leading petroleum jurisdictions in the world are minimizing risks by maximizing knowledge. They ensure they have the best available information at their fingertips before making any decisions.

For governments, publicly traded companies and smart investors, good information is the foundation for sound decision-making – in the oil and gas industry, just as in other industries. Intelligence makes all the difference in the world.

You can never eliminate risks, but you can rein in the variables by doing your homework.

That powerful insight is leading us to change our approach.

We needed to demonstrate that Newfoundland and Labrador offers something worth exploring, identifying the regions where exploration offers the greatest prospects of success.

And, we needed to give companies an adequate window of opportunity to get in on the action.


Let me deal first with the need to identify the most-promising plays.

This is crucial. The prospectivity of a region is central to its ability to attract investment in its offshore.

Prospectivity is assessed through a rigorous scientific process based on high-quality, globally-competitive datasets. 

The world’s leader in promoting prospectivity – Norway – has discovered the real secret to maximizing its industry’s competitiveness. Norway operates on the principle ‘know where to look’ and as a result they can move forward with greater confidence in their success. Norway understands that exploration takes a long-term view and requires significant planning by engineering and production companies. As a result the Norwegian Government spends a significant amount on data acquisition and management to ensure the data is available early and is accessible by these companies well ahead of licensing rounds.

For the last couple of years, we as a government have been applying Norway’s strategic approach by taking an active role in acquiring high-quality geoscience data in areas and play types that interest the world’s exploration companies. This data is available to the broadest set of explorers in a way that will let them see the potential prospectivity without having to take the initial risk all by themselves – in other words, levelling out the playing field for all companies.

Our government since 2010 has funded $30 million towards Nalcor Energy’s geoscience programs to gather more seismic data. We invested over half of that funding in a three-year 2D seismic program that extended from the Labrador Sea in the north to the Flemish Pass in the south – quite a swath.

Our investment has leveraged nearly $65 million in investment from leading global seismic companies TGS and PGS for exploration in Newfoundland and Labrador.

Not only is this acquisition of 2D seismic data the largest program by area in the history of Newfoundland and Labrador. It is actually one of the largest multi-client programs ongoing in the world today.

By the end of 2013, Nalcor will have access to 50,000 line-kilometres of data, spanning an area larger than the U.S. Gulf of Mexico.

Approximately 70 per cent of the area covered by these surveys had no previous seismic data. The new data are revealing structures never before seen.

With the data in hand, we have been determining “in house” where the potential likely resides.

This investment is the most strategic we have ever made in our oil industry. It changes fundamentally the way we sell ourselves to explorers and serves as a catalyst in identifying the next big finds that can propel our industry beyond the limits of current projects. 

We are already seeing early results from our exploration strategy. Earlier this year, Nalcor announced the discovery of three new large basins in offshore Labrador, doubling Labrador’s basin potential.

We are marking a new era in the oil and gas industry in this province - we are proactive rather than responsive. We are securing new investments for the people of Newfoundland and Labrador. We are not waiting for these opportunities to find us, we are seeking them out. We are driving exploration instead of waiting in hope that something will happen. 

It is because of these strategic decisions, Nalcor is projected to be fully self-sufficient in oil and gas investments as early as 2015. That’s two years before Hebron has first oil.


Getting the seismic data to prospective exploration companies is just half the challenge. The other challenge is finding a fair and competitive way to handle the licensing of parcels to them.

That challenge is compounded when the process is nomination-driven.  When new companies have as little as seven months to decide, not only if they should enter a region, but what their bids should be, they feel like they are doing business blindfolded and under the gun.

Newfoundland and Labrador’s land tenure system is 30 years old. Frankly, in terms of competitiveness, the system has fallen behind. As a consequence, global exploration investment has been flowing elsewhere.

It is crucial to provide ample time for companies to access and assess the data, make plans for exploration, and then submit competitive bids according to those plans.

By revising the way we schedule licence rounds, we can widen the window, promote exploration and ultimately spur drilling of the new wells we definitely need.

That is precisely what we are doing. With knowledge of our Labrador slope and deep-water basins in hand, our government is now working with the C-NLOPB and Natural Resources Canada to design a new process to award exploration licences.

Nurturing a predictable and structured market for our prospective offshore lands will benefit all participants – governments, oil companies, seismic companies, regulators and ultimately the people of Newfoundland and Labrador 

Because of our timely investment and strategic work to move towards scheduled licensing rounds in our offshore, exploration drilling off Labrador is poised to increase dramatically, to levels not seen in over 20 years.

These are exciting times!

We are confident that we have the resource potential for significant expansion beyond the life of our existing projects.

As we seek new fields, we are also continuing to seek new players, testing new ways to attract more participants to our offshore. 

But we are not going to stop there.  This is just the start.

We are not just being proactive and driving opportunities here at home either.  We are leaders on the national and international stage as well.

Along with the premiers of Alberta and Manitoba, I – as this province’s Premier – lead the Council of the Federation’s process to develop Canada’s national energy strategy – a strategy that encompasses all forms of energy and all points along the path from prospecting to delineation to development to delivery.

Our province is directly involved in shaping the course of these discussions, and I as Premier will ensure the strategy we design will enable our province to reach its fullest potential as an energy leader in Canada.

This afternoon, I will lead a delegation representing our province to China where we will meet with the major players in China’s offshore oil sector.

These are companies with capital to invest and a very real interest in exploring and bringing new finds to market.

I am very excited about bringing them this news and inviting them to join us in expanding this province’s offshore oil industry 

We have an amazing story to tell.

How far we have come! Where once we were the laggard of Confederation, we are now a leader.

Oil development is transforming Newfoundland and Labrador, and it shows no sign of waning. We are on the cusp of a whole new era of exploration and development, and confidence is strong.

Thanks to the approach we have taken and the decisions we have made, we are on the right track, sharing enormous benefits and on our way to even more.

When the course we chart is sound, all of us can be winners.

Thanks to careful strategic planning, our “new energy” economy is surging forward, stride after stride, taking us to milestones that few imagined we would ever reach.

Future generations will look back and see this era in our history for what it truly is – pivotal – and they will appreciate our commitment to making the best decisions in our long-term best interests.

The morning is still young. The sun is still low in the sky and rising. 

Let us get out there and make the most of every opportunity.

Let’s hit the ground running and not look back!

Thank you.


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