Offshore Projects and Exploration in NL
Four oil projects produce offshore Newfoundland and Labrador:
- Hibernia, operated by Hibernia Management and Development Company Ltd.
- Terra Nova, operated by Suncor Energy
- White Rose, operated by Husky Energy
- Hebron, operated by ExxonMobil
- $5.4 billion – in industry spending on exploration and development in 2016
- $920 million – estimated payments to the province from offshore oil production in 2017/18
- $20 billion – estimated royalty payments to the province from offshore oil production between 2000-2016
- 16% – share of total provincial revenues from oil royalties in 2018/19
- 221,000 – barrels per day of oil produced in 2017
Growth Potential and Exploration Activity
The government of Newfoundland and Labrador estimates Newfoundland and Labrador’s offshore resource potential at more than six billion barrels of oil and 60 trillion cubic feet of natural gas.
The key to unlocking this potential is exploration activity, which could lead to new discoveries and future developments. The Newfoundland and Labrador offshore has seen significant exploration activity in recent years, and there is evidence to support its continuation and expansion. For example, exploratory work in Newfoundland and Labrador’s Flemish Pass basin resulted in one of the largest discoveries in the world at that time by Statoil and Husky Energy. Exploration continues in the Flemish Pass basin and exploration programs are also ongoing in the Jeanne d’Arc Basin, the basin where all three currently producing projects are located.
Extending the Life of Existing Fields
Producing operators are focusing on extending the life of existing fields by producing smaller discoveries through extensions and tie-backs to existing infrastructure.
For example, Husky Energy is moving forward with its West White Rose Project. The Company and its partners will use a fixed wellhead platform tied back to the SeaRose floating production, storage and offloading (FPSO) vessel. The platform, which has received regulatory approval, will enable the Company to maximize resource recovery. The total project cost is estimated at $5.2 billion over project life.
Similarly, in June 2011, Hibernia Management and Development Company Limited announced that the Hibernia Southern Extension (HSE) achieved first oil. HSE will produce in excess of 170 million barrels. The estimated cost of the project is $1.7 billion.
Other operators are continuing with exploration and delineation programs with a goal of extending the life of existing projects.