Rights sale takes a dive

Gary Park

Offshore Newfoundland’s latest sale of oil and gas exploration rights attracted only C$7.1 million in spending commitments, barely one-tenth of last year’s C$673 million.

The Canada-Newfoundland Offshore Petroleum Board reported Nov. 23 that Husky Energy, Petro-Canada and Norsk Hydro were the major bidders for five parcels in the Jeanne d’Arc Basin close to the Hibernia, Terra Nova and White Rose fields.

A joint venture by Husky and Petro-Canada paid C$28 million for 225,000 acres; Husky committed C$18 million to 129,000 acres and C$1 million to 208,000 acres; a Petro-Canada and Norsk Hydro partnership bid C$16 million for 88,000 acres and a parcel covering 17,500 acres was secured for C$8.1 million by a partnership of ExxonMobil Canada, Chevron Canada, Petro-Canada, Canada Hibernia Holding, Murphy and Norsk.

A year ago, ExxonMobil, Imperial Oil and ChevronTexaco startled the industry by agreeing to spend C$673 million for 5.25 million acres of the largely unexplored deepwater Orphan Basin.

But drilling setbacks over recent years have seen an increasing number of major rights-holders look for partners or buyers.

However, Paul Barnes, Atlantic Canada manager of the Canadian Association of Petroleum Producers, said this year’s sale results give the companies a chance to make finds that could be tied into existing infrastructure.Once White Rose comes on stream in early 2006, Newfoundland will have three producing fields and hopes have been raised that Chevron Canada and Petro-Canada will move ahead with the stalled Hebron-Ben Nevis field.