Today, the Provincial Government released Newfoundland and Labrador Competitiveness in Oil & Gas Investment – a jurisdictional review by Wood Mackenzie to assess the international competitiveness of the province’s offshore oil and gas industry.
Wood Mackenzie identified several areas where Newfoundland and Labrador is attractive from an investor perspective, including:
- Recent discoveries and the provision of geological data on prospectivity have resulted in almost $3 billion of exploration work commitments, despite low oil price environment;
- The potential for future commercial developments is enhanced due to yet-to find pool size discoveries that are towards the larger end of field sizes considered;
- The fiscal attractiveness of the new generic oil royalty regime;
- Low geopolitical and other above ground risks relative to many other jurisdictions;
- A skilled and available workforce and existing supply and service capabilities to support offshore exploration, development and operations; and
- The process for industry to access exploration acreage is frequent, transparent and clearly understood.
Wood Mackenzie also identified where Newfoundland and Labrador has challenges. For example, the high costs in a challenging offshore environment are compounded by the long duration lead-times from discovery to development and production. Other challenges include the number of steps and consultations required to have a development plan approved and the lack of infrastructure required to commercialize discovered natural gas resources.
The report by Wood Mackenzie will support the delivery of Advance 2030 – A Plan for Growth in the Newfoundland and Labrador Oil and Gas Industry, as well as the work of the Atlantic Canada Offshore Competitiveness Roundtable.
The report is available at www.nr.gov.nl.ca/nr/publications/energy.
“Positioning Newfoundland and Labrador globally as a preferred location for oil and gas development is a key commitment in The Way Forward, and this jurisdictional review will help our government deliver on that commitment by providing a better understanding of our current global competitiveness. We were pleased to see that the review recognized many areas for which the province is attractive, and we are mindful of challenges identified, some of which were also identified in Advance 2030. Government is working collaboratively with stakeholders to address current challenges and maximize future opportunities in the province’s oil and gas industry.”
Honourable Siobhan Coady
Minister of Natural Resources
“The Canada-Newfoundland and Labrador offshore area remains one of the most attractive jurisdictions globally for oil and gas development. I look forward to continued collaboration with our joint management partners to realize the full potential of our offshore resources and to ensure they can be developed safely and responsibly.”
Honourable Jim Carr
Minister of Natural Resources, Government of Canada
“From the study it was apparent that there are a great many areas where Newfoundland and Labrador compares favorably with competing international jurisdictions, and this is borne out by the continued investment and commitments companies are making in the province. However, as in any jurisdiction, a number of areas have been highlighted where Newfoundland and Labrador can focus efforts to ensure it remains as competitive as possible. Newfoundland and Labrador needs to do everything it can to ensure regulatory requirements from exploration to production do not add unnecessary costs and delays. Newfoundland and Labrador needs to work alongside companies to not only promote the potential within the province, but also share a joint view on the strategy for the oil and gas industry in the province.”
Vice President, Upstream Consulting
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Advance 2030: www.nr.gov.nl.ca/nr/advance30
The Way Forward: thewayforward.gov.nl.ca
Newfoundland and Labrador Competitiveness in Oil & Gas Investment – www.nr.gov.nl.ca/nr/publications/energy
Natural Resources Canada
Dr. David Parkinson
Vice President, Upstream Consulting