Development Context Newfoundland
Oil production in Newfoundland and Labrador (NL) occurs approximately three hundred kilometers off the south east coast of the island of Newfoundland in the north Grand Banks region (maps are available from the C-NLOPB). Four fields are currently producing conventional oil: Hibernia (the oldest field, producing since 1997), Terra Nova, White Rose, and North Amethyst. Another major field, Hebron, is expected to draw first oil in 2017. Hibernia uses a fixed concrete pedestal as a gravity-based structure to extract oil, the newer projects like Terra Nova and White Rose use floating production, storage and off-loading (FPSOs) vessels (mobile extraction tankers). Following a major discovery made by Statoil and Husky Energy in the Flemish Pass basin on the Grand Banks in 2013, other developments are expected to follow the ongoing exploration activities in western Newfoundland (both offshore and onshore), throughout the Grand Banks region (off the south east coast of the island), and directly south of the island. with. Additionally, significant discovery licences (the licence required just prior to oil extraction) have been issued for natural gas offshore on the Labrador Shelf and oil fields in the Grand Banks.
Five companies dominate oil exploration and development on the Grand Banks and off Labrador: Chevron, ExxonMobil, Husky, Statoil, and Suncor. Shell also secured exploration licences in 2012 off the south coast of the island. West coast activity involves relatively smaller players: Shoal Point Energy, Corridor Resources, Black Spruce Exploration, and Ptarmigan Energy. These companies have made substantial investments in NL’s offshore regions. According to Canadian Association of Petroleum Producer’s data, oil industry expenditures in exploration, development, and operations from 1995 to 2013 amounted to just under $34 billion. Yearly spending data indicates that operators’s spending has steeply climbed, particularly since 2010, to over $4.7 billion in 2013 (the last year of available data) (CAPP 2015).
Since oil production began in 1997 up until February 2015, over 1.5 billion barrels of oil were produced in the north Grand Banks region. From 2002 until 2008, annual production was fairly steady, ranging between 104 million to 125 million barrels per year (CNLOPB 2015). Since the province’s historical peak production in 2007, however, total annual production has declined.
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The content for this province was peer-reviewed in December Oct 2013. We’d like to acknowledge the assistance of the external reviewers.
