The Honourable Siobhan Coady, Minister of Natural Resources
Government of Newfoundland and Labrador
Speaking Notes for Canadian Press Conference at Offshore Technology Conference, NRG Centre, Houston, Texas
Monday, May 2, 2016, 3:00 p.m.

Introduction

Good afternoon.

Thank you for the invitation to speak with you here today. It certainly is a pleasure to have the opportunity to tell you about what Newfoundland and Labrador has to offer in terms of the oil and gas industry.

Newfoundland and Labrador is a province that is rich in resources, and we have copious prospects (and plans) for the future development of our oil and gas industry.

We are uniquely located on the far east coast of the continent. With the massive offshore potential to the south of the island, to the north and the east of the island, and on the long coast of Labrador, we are actively positioning our province for the extensive future development of the oil and gas stores that are so plentiful in our waters.

With our incredible prospects, we look forward to the many opportunities for exploration and development that are on the horizon for Newfoundland and Labrador.

Newfoundland and Labrador’s plans for oil and gas

We recognize that throughout the world the price of a barrel of oil is considerably lower than where we would all like to see it – or that we expected even a year ago – but in Newfoundland and Labrador, we have acknowledged that the market will fluctuate from year to year.

Regardless of day-to-day prospects, the ultimate value of these resources endures and will continue to reciprocate investments.

The world requires oil and gas: to address energy needs, to build and maintain infrastructure, to drive industry, and to support the needs of over seven billion people across the world. The abundant resources under the waters around our province will contribute to meeting these needs for the future.

The long-term view for oil and gas exploration and development in Newfoundland and Labrador remains strong, despite short-term fluctuations in oil prices.

This offers us all an opportunity to take stock, to fine tune and to ensure everything is aligned, from prospect to discovery to production.

Oil and gas in Newfoundland and Labrador

With decades of exploring for oil in Newfoundland and Labrador, we have gained knowledge and understanding of the industry, what we have to offer and where we are headed.

Newfoundland and Labrador has had much success with our three producing projects – Hibernia, Terra Nova, and White Rose – which have produced over 1.5 billion barrels of oil.

Hebron is next and is expected to produce 700 million barrels of oil, and the Bay du Nord discovery in the Flemish Pass is estimated to contain 300-600 million barrels of oil.

And that’s just the beginning.

Through extensive geoscience that includes seismic acquisition, we have quality data on our offshore prospects which is attracting global attention.

We now have acquired more than 110,000 line kilometres of modern 2D seismic data acquired. Newfoundland and Labrador’s seismic program is one of the largest ongoing offshore 2D seismic programs in the world today.

Through this extensive surveying, we have found significant new basin areas; and to date, we have defined over 350 new leads and prospects in our offshore.

Our scientifically driven strategy is reducing the exploration uncertainty from chance factors of 1 in 20, to now having globally competitive chance factors of 1 in 10 or lower.

A large portion of the new seismic survey has been acquired over our slope and deepwater frontiers, marking the first time many of these regions of our offshore have been imaged.

Newfoundland and Labrador's slope and deepwater areas represent one of the world's last great frontiers.

All of our seismic work coupled with satellite surveys and other analysis has revealed that there is a different play trend in some areas of our offshore – the same type which is found in other successful global basins.

For example, in the Orphan basin area, a new Tertiary play trend has recently been imaged and confirmed in the province's new seismic surveys.

While early in the evaluation, this newly revealed play trend is attracting global industry attention, as it is similar to other successful analogues found in offshore Brazil and in other global basins.

In the Jeanne D’Arc basin for example we have conventional structures or traps. In the Orphan basin we are seeing a different style, more stratigraphic or fan like analogues. This is exciting as we see a different play trend.

The sheer size of these prospects in the Orphan Basin is also interesting as some exceed 500 sq km in area (for comparison, the Hibernia field is approximately 150 sq km in size).

The area of this new play trend exceeds the size of the entire Jeanne d'Arc Basin.

We now understand the massive potential in Slope and Deepwater - historically, our offshore has largely been focused on a single area and a limited number of play types.

The new surveys are showing the presence of multiple emerging play types in our significant slope and deepwater areas. The global industry has had success with a wide variety of play types in other regions. As a result we are now showing to the industry the existence of similar newly defined plays in our offshore, many of these companies are now establishing teams to use their global experience to explore in our emerging basins.

Speaking of future development, the previous call for bids in our province resulted in a total value of $1.2 billion in work commitments for seven of the 11 parcels offshore – which we understand may have been one of the largest work commitment bids in the world in 2015.

In addition to existing companies in the Newfoundland and Labrador offshore, there were three new companies that made successful bids: BG International, BP and Nexen.

Gaining these new partners is an indicator of the confidence developers have in the Newfoundland and Labrador offshore.

The latest Calls for Bids were issued in early April under the scheduled land tenure regime in the Canada-Newfoundland and Labrador Offshore Area.

The 2016 Call for Bids in the Eastern Newfoundland Region consists of 13 parcels and a total of 2,949,252 hectares; and the Call for Bids in the Jeanne d’Arc Region consists of three parcels and a total of 354,552 hectares.

We are well underway with an independent resource assessment for new blocks in the Eastern Newfoundland Region. The results of this resource assessment will be issued publicly ahead of the closing of the licence round, with a range of potential resources in place. While we are early in the evaluation of the area, the scale and characteristics of these features are being received favorably by the global exploration industry.

Conclusion

This fall, our province will be hosting the annual Arctic Technology Conference. I hope you will be there to join us in St. John’s.

Newfoundland and Labrador is a leader in subsea development. Working in a harsh, sub-arctic environment, we have built a solid foundation with incredible prospects and offshore opportunities.

The oil and gas industry is thriving in our province, and we look forward to the many more opportunities for exploration and development that are on the horizon for Newfoundland and Labrador.

Thank you.