Offshore Newfoundland Exploration Bids Open

Summary#

The Canada–Newfoundland and Labrador Offshore Petroleum Board has opened two formal offers for companies to bid for oil-and-gas exploration rights off Newfoundland. The calls (, Call for Bids No. NL22-CFB01 — 28 parcels, and Call for Bids No. NL22-CFB02 — 10 parcels) set minimum spending and deposit rules and close on November 2, 2022 at 12:00 p.m. Newfoundland Standard Time.

What it does#

• Offers up to 28 parcels (Eastern Newfoundland) and 10 parcels (South Eastern Newfoundland) where companies can win an Exploration Licence to look for oil or gas.
• Makes the winning criterion simply the size of a bidder’s promised spending for exploration, research and training (called the Work Expenditure Bid). The minimum bid per parcel is $10 million.
• Requires a bid hold-down payment of $10,000 (the Bid Deposit) with each bid.
• Requires the successful bidder, within 15 days of being told they won, to provide a security equal to 25% of their Work Expenditure Bid (a promissory note plus bank guarantee or letter of credit).
• Sets licence timing: Period I is 6 years (start of exploration and must begin one well), followed by Period II that completes the original 9‑year licence term.
• Lets holders extend Period I by up to three one‑year extensions if they post drilling deposits: $5 million, $10 million, and $15 million respectively (refundable if the drilling commitment is met).
• Says one well must be started during Period I and then pursued diligently.
• Applies rentals only in Period II at rates of $5.00, $10.00, and $15.00 per hectare across the three years of that period, with rules for refunds based on approved exploration costs.
• Allows some pre-licence expenses to be credited toward the Work Expenditure Bid (details in the full Call for Bids).
• Requires compliance with the Board’s procurement, employment and reporting rules (the Exploration Benefits Plan Guidelines).
• Notes parcels will be subject to issuance fees and Environmental Studies Research Fund levies.
• Flags that parcels lying entirely or partly beyond Canada’s 200 nautical mile zone may face extra terms or conditions to meet international law obligations (article 82 of the United Nations Convention on the Law of the Sea).
• States the Board is not obliged to accept any bid.

Full technical maps and coordinates for each parcel and the full text of Call for Bids No. NL22-CFB01 and Call for Bids No. NL22-CFB02 are available from the Board’s website or by request to the Registrar.

Who's affected#

• Oil and gas companies and exploration joint ventures thinking of working offshore Newfoundland and Labrador.
• Banks and surety providers who would supply guarantees, letters of credit or financing for bids and security deposits.
• Local and regional businesses and workers in Newfoundland and Labrador who could supply services, equipment and labour under exploration and drilling contracts.
• Indigenous communities and coastal stakeholders near the offered areas (the notice does not list specific consultations or impacts).
• The public and environmental groups monitoring offshore drilling and marine impacts.
• It is unclear from the notice which specific communities or Indigenous groups will be directly affected; the full bid packages and provincial and Board processes will have more detail.

Why it matters#

• These calls could lead to new offshore exploration and drilling activity. That can create jobs, local contracts and government revenues — but also raise environmental and fisheries concerns in coastal Newfoundland and Labrador.
• The rules set clear financial thresholds and guarantees (for example $10 million minimum spending and a 25% security), so only firms with substantial capital or financing are likely to bid.
• Parcels beyond 200 nautical miles may carry extra legal or operational conditions, which could affect whether and how companies develop any discovery.
• For communities and businesses in the province, this is a step that could mean local work and investment if bids succeed — or continued inactivity if no suitable bids are accepted.