The two parcels offered by C-NLOPB for the 2008 bid round are near prolific heavy oil deposits including White Rose, Terra Nova, Hibernia, and the upcoming Hebron developments. (Image courtesy of C-NLOPB)

A call for bids was announced on June 6 for 10 parcels in the Newfoundland and Labrador Offshore Area. The announcement came from the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB), which specified the acreage that will be offered in four separate bids.

The call for bids include NLO8-1 (Central Ridge/Flemish Pass), which consists of three parcels — one parcel is in 6,562 ft (2,000 m) of water. The NLO8-2 (Jeanne d’Arc Basin) will consist of two parcels. Interested parties will have until Nov. 14, 2008 to submit sealed bids for these two leases.

The NL08-03 (Sydney Basin) call for bids contains three parcels, and the NL08-04 (Western Newfoundland and Labrador Offshore Region) consists of two parcels. Deadline for sealed bids is on Nov. 28, 2008. All combined, the offerings comprise a total of 1,727,610 hectares of land.

The minimum bid for each parcel offered is US $986,680. The sole criterion for selecting the winning bid will be determined by the amount of money pledged by the bidder for exploration during Period I of the 9-year term assigned to each parcel. For the NL08-04 (Western Newfoundland and Labrador Offshore Region) the minimum bid is $246,665.

The 2008 Calls for Bids contain provisions for rentals during the terms of an exploration license and any resulting significant discovery licenses. Subject to Ministerial approval, successful bidders will receive an exploration license for a 9-year term. During Period I (the first five years with six years for Labrador parcels only) the operator must spud a well to validate the claim for its full term. Period I can be extended by a year provided the lease holder deposits another $986,680 as security for drilling a well ($246,665 for Western Newfoundland and Labrador Offshore Region).

The big news for Newfoundland and Labrador these days is the near completion of the Hebron and Hibernia South developments located in the Jeanne d’Arc Basin approximately 196 miles (315 km) east of St. John’s, Newfoundland in about 262 ft (80 m) of water. “We fully expect Hibernia South to be concluded by the end of this calendar year,” Premier Danny Williams said to the 700 attendees at the Newfoundland and Labrador Oil and Gas Industries Association (NOIA) Conference in June.

The Hibernia partners are expected to file a new plan application to develop 223 million bbl of oil in the southern portion of the field. Williams told reporters that he “would like to see that come in, hopefully, the third quarter of this year.” Williams admitted that the priority was set on wrapping up the Hebron talks before moving onto Hibernia South.

Chevron, who is operator (28%) for the Hebron project, estimates the field to contain between 400 million and 700 million bbl of recoverable heavy oil. The project is expected to bring significant employment, including engineering, construction, drilling and producing operations activity, and royalty revenue to the province of Newfoundland and Labrador.

More importantly, recent developments on Hebron and other fields (White Rose, Terra Nova, and Hibernia) have ramped up the availability of infrastructure for new discoveries. More than $463.75 million of capital cost went into the construction of the Hibernia platform at Bull Arm, which is now being used for the Terra Nova FPSO development.

For the Hebron project, Chevron Canada Resource’s partners include ExxonMobil Canada (37.9%), Petro-Canada (23.9%), and Norsk Hydro (10.2%). The C-NLOPB estimates Hebron (including West Ben Nevis and Ben Nevis fields) to contain 761 million bbl of oil. And, the hopes are high that new finds in the region
will increase the massive reserves already discovered. For a complete copy of the text of the 2008 Calls for Bids, visit the C-NLOPB Web site at www.cnlopb.nl.ca.