Board: Three Calls for Bids in Newfoundland and Labrador

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) said that there will be three separate calls for bids this year in the Newfoundland and Labrador Offshore Area.

The first call (NL06-1) will consist of three parcels in the Jeanne d’Arc Basin. The second call (NL06-2) will offer three parcels in the Sydney Basin. The third and final call (NL06-3) will include five parcels in the Western Newfoundland and Labrador Offshore Region). The parcels comprise a total of 1,712,758 hectares.

Interested parties can submit sealed bids for NL06-1 and NL06-3 until 4 p.m. on November 15, 2006.

Interested parties will have until 4 p.m. on November 30, 2006, to submit sealed bids for the three Sydney Basin parcels in NL06-2. The NLOPB will conduct a strategic environmental assessment (SEA) of the basin. The board noted that its advisory agencies in government, fisheries interests, and public stakeholders will be consulted during the process. A draft of the SEA report will be published on the board’s Web site for public comment when it becomes available.

The sole criterion for selecting winning bids will be the total amount of money the bidder commits to spend on exploration of the respective parcel during the first five years (Period I). The minimum bid for all parcels is C$1 million (US$857,706) for parcels in the Jeanne d’Arc Basin and Sydney Basin and C$250,000 (US$214,427) for parcels in the Western Newfoundland and Labrador Offshore Region.

All three calls for bids contain provisions for rentals during the term of an exploration license and during the term of any resulting significant discovery license. Each call contains a sample exploration license and a sample significant discovery license.

Subject to ministerial approval, successful bidders will be issued an exploration license for a term of nine years; however, during Period I, a well must be spudded to validate the license for the full 9-year term.

Period I may be extended from five years to six years by posting an additional deposit of C$1 million as security for drilling a well on a parcel in the Jeanne d’Arc Basin or Sydney Basin and by posting an additional C$250,000 as security for drilling a well on a parcel in the Western Newfoundland and Labrador Offshore Region.

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