Newfoundland and Labrador is a proven petroleum province with discovered offshore resources of 1.6 billion barrels of oil, 8.2 trillion cubic feel of gas and 360 million barrels of natural gas liquids. Discoveries to dale include sixteen oil and gas fields on the Grand Banks and five gas fields on the Labrador Shelf The majority of the oil resources are contained in four fields, Hibernia, Terra Nova, Whiterose and Hebron.. The Hibernia field is nearing its production phase and the Terra Nova field is moving towards development. The results of recent offshore land sales and exploratory drilling in western Newfoundland point towards increasing exploration activities over the next several years both on the Grand Banks and off the west coast of the Province.

This paper discusses the prospects for development of Newfoundland's large hydrocarbon base and examines the new areas being explored offshore Newfoundland. It is not unreasonable to predict production of over 200,000 barrels of oil per day toward the end of the decade from the Newfoundland offshore area. Furthermore, these developments will contribute substantially to Canada's security of supply objectives, while at the same time providing a much needed boost to the Province in terms of employment and industrial development.

Exploration History

The offshore region of Newfoundland and Labrador covers an area of approximately 185 million hectares. Geological and geophysical surveys conducted by research institutes and government in the 1950's indicated that the region has potential to be a major petroleum province. As a result, the petroleum industry started exploration in the region.

The first well was drilled by Amoco and Imperial Oil in 1966. Since that time, companies drilling off the coast of Newfoundland and Labrador have made twenty One significant oil and gas discoveries. Sixteen discoveries on the northeast Grand Banks contain an estimated 1.6 billion barrels of oil. Recoverable resources off the Labrador coast are estimated at 4.2 trillion cubic feet of gas and 123 million barrels of natural gas liquids. To date, 142 wells have been spudded, with companies spending approximately ﹩4 billion on drilling, seismic, and other work. The peak year for exploration off Newfoundland was 1985 when approximately ﹩600 million was spent drilling 12 wells. A large part of the positive projections in Newfoundland's petroleum sector is based on these overall estimates of potential reserves.

In February 1995 the Atlantic Accord, a memorandum of agreement between the Government of Canada and the Government of Newfoundland and Labrador on offshore oil and gas management and revenue sharing, was signed. This agreement ended years of dispute between the two governments on the subject of control of offshore petroleum resources.

The two governments now equally share the responsibility for the management of the resource which is undertaken through a joint agency, the Canada Newfoundland Offshore Petroleum Board (C-NOPB). The Board's responsibilities include: issuance and administration of petroleum exploration and development rights and administration of statutory requirements regulating offshore exploration, development and production activities. The Board is mandated to operate independently and is required to keep both governments informed of developments (Figure 1).

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