Page 4 - NorthAmOil Week 38 2022

NorthAmOil COMMENTARY NorthAmOil

Woodside’s exit a blow

to Newfoundland and

Labrador exploration

Woodside Energy is reported to be relinquishing

its exploration licences offshore Newfoundland
and Labrador, in a blow to the province’s hopes

for further oil and gas development

NEWFOUNDLAND AUSTRALIA’S Woodside Energy is reported to of the offshore oil industry’s potential to bounce
AND LABRADOR be abandoning its exploration prospects in the back from the oil price downturn of the mid-
Orphan Basin offshore Newfoundland and Lab- 2010s, which had dramatically reduced explo-
WHAT: rador. The company inherited the licences from ration activity. BHP described the acreage at the
Woodside is reportedly BHP, whose oil and gas business it merged with time as a frontier opportunity with a large oil
relinquishing its in June, and they represent the largest offshore resource potential, which also benefited from
exploration licences exploration bid in the province’s history. being located in a low-risk country with com-
in Newfoundland and However, the properties do not appear to petitive fiscal terms. The company added that
Labrador’s Orphan Basin. align with Woodside’s priorities, to the point the successful bids represented an opportunity
that it is willing to pay a penalty for relinquish- to be an early mover in a prospective region.
WHY: ing them. This comes as a blow to Newfound- BHP said the aggregate bid amount covered
The company inherited land and Labrador’s exploration hopes, though the drilling and seismic work that would be
the licences via its the provincial government will continue its required by the exploration work programmes
acquisition of BHP’s oil efforts to attract new offshore operators to its under the licence agreements over the six-year
and gas business this waters. term. Its minimum commitment under the
summer. licence agreements was for $157mn.
Big bidder A decision on whether to direct further
WHAT NEXT: BHP was awarded a 100% operating interest in capital expenditure towards the drilling of
Newfoundland and the exploration licences for Blocks 8 and 12 in an appraisal well on the acreage was initially
Labrador’s government the Orphan Basin in 2018. The company bid a anticipated in the 2022 fiscal year. However,
will continue its efforts combined CAD822mn ($599mn) for the par- this was derailed by Woodside’s acquisition
to attract new offshore cels, including a record single bid of CAD621mn of BHP’s oil and gas business, which was first
exploration. ($452mn). agreed on in late 2021, before being finalised
At the time, the bids were touted as evidence in mid-2022.

P4 www. NEWSBASE .com Week 38 22•September•2022