An offshore support vessel tied up at the marine base in St. John's on Tuesday. The province is launching calls for bids on 16 offshore oil and gas parcels.Greg Locke/The Globe and Mail
Newfoundland and Labrador is launching calls for bids on 16 offshore oil and gas parcels, with the province set to provide up to $30-million to support the drilling of exploration wells, Premier Tony Wakeham announced Tuesday.
The province hopes that the financial incentive for companies – along with the recent benefit agreement signed for the deep-water Bay du Nord project – will help boost exploration for new wells, kick-starting a new wave of offshore development.
“These are not wells in your existing discoveries. They are true frontier wells aimed at unlocking new stand-alone projects and creating new opportunities like Bay du Nord,“ Mr. Wakeham said.
Newfoundland eyes development of significant offshore natural gas reserves
In March, Newfoundland and Labrador signed an agreement on how to divvy up the development’s anticipated rewards with the project’s major proponent, Norway’s Equinor ASA.
Under the agreement, the Bay du Nord project would provide up to $6.4-billion in direct revenue to the province over its first 25-year phase, through royalties, taxes and a possible equity stake. Equinor will also provide the government with a $200-million “fabrication fund” to build a floating dry dock capable of serving ships weighing more than 18,000 tonnes.
“Since we signed the benefit agreement with Equinor, the interest in Newfoundland and Labrador has certainly been re-energized,” Mr. Wakeham told media on the sidelines of the Energy NL conference in St. John’s, where he made the announcement.
“So, I’m confident – as confident as you can be – that we will see activity.”
Newfoundland and Labrador Premier Tony Wakeham speaking at the 2026 Energy NL conference in St. John's on Tuesday.Greg Locke/The Globe and Mail
Along with a new financial incentive, the province has rejigged the conditions for bidding on offshore parcels to help “de-risk investment, secure bids and accelerate timelines for exploration,” Mr. Wakeham said.
The changes will allow the province to have direct, confidential engagement with interested companies before the formal process. And Newfoundland and Labrador will have the option of an increased stake in a development in the event of a commercial discovery.
The idea is for the province to better understand what oil companies are chasing and what they’re offering.
“If I’m going to invest $30-million with a company, then I want to see exactly where that could lead, what it actually looks like,” he said.
Commercial interest in offshore parcels off the coast of St. John’s has nosedived in recent years, with the Canada-Newfoundland and Labrador Offshore Energy Regulator routinely receiving zero bids on parcels up for grabs.
Charlene Johnson, chief executive of Energy NL, an industry group, attributed the slide to Canada’s regulatory regime and anti-oil signals from the previous federal government under prime minister Justin Trudeau.
Charlene Johnson, CEO of Energy NL and François-Philippe Champagne, federal Minister of Finance speak at the conference.Greg Locke/The Globe and Mail
Ms. Johnson said in an interview Tuesday that she is “cautiously optimistic” about this year’s bid round, which opens in November, but she said it will take time for investors to see that regulations have changed and are stable.
“The first thing they read is the headlines, and in the past 10 years, it’s been Canada’s not open for investment in the oil industry. That’s changing,” she said.
“I do know that there are companies interested. Whether or not it will be this November or next, it’s really hard to say.”
Canada’s second chance in the global LNG race
Off the back of a $4.5-million energy announcement at the Energy NL conference, federal Finance Minister François-Philippe Champagne said the province will play a key role in Canada’s new energy ecosystem.
“We have everything to succeed, from critical minerals, to hydroelectricity, to offshore wind, to oil and gas, and Bay du Nord is a great example,” he told media after his announcement.
The cash announced Tuesday includes $2.6-million for Newfoundland and Labrador Hydro to identify and implement energy-saving opportunities for industrial facilities in communities served by diesel generating plants.
Two companies will also get funding for carbon capture technology.
Aker Solutions Canada Inc. is receiving $1.2-million to assess the technical, economic and regulatory feasibility of marine-based carbon dioxide transport and offshore storage, and Angler Solutions Inc. gets $497,200 to assess the potential for developing a regional carbon capture and storage hub in the province’s offshore.
With a report from The Canadian Press