The Atlantic Accord
The oil & gas industry in Newfoundland and Labrador is governed by the Canada-Newfoundland Atlantic Accord Implementation Act (the Atlantic Accord). Atlantic Accord legislation grants the province of Newfoundland and Labrador as the primary beneficiary of the resources found off its shores, just as if they were on land. Additionally, the joint management of the development of the resources is managed by an independent regulator, the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB).
Changes to the regulatory system
In 2013, the C-NLOPB implemented a scheduled land tenure system for the province’s offshore oil & gas industry. This was a game-changing milestone for the province’s industry and it ushered in a new era in exploration. The new system significantly improved the province’s ability to market its offshore globally and to attract new explorers.
Under this new regime, the Newfoundland and Labrador offshore area has been divided into eight regions, based primarily on known sedimentary boundaries. Each of these regions has been identified as either mature, high activity or low activity. Scheduled calls for bids are held in four-year, two-year and one-year cycles, depending on the region’s activity level. This scheduled system provides E&P companies advance notice of offshore land that will be available for sale and allows sufficient time for the companies to acquire seismic data, evaluate the data and make investment decisions.
Low activity regions follow a four-year land sale cycle. These regions are listed below and cover the majority of offshore Newfoundland and Labrador.
- Labrador North
- Labrador South
- North Eastern Newfoundland
- South Eastern Newfoundland
- Southern Newfoundland
- Western Newfoundland
High activity regions (the Orphan Basin and Flemish Pass in the Eastern Newfoundland Region) follow a two-year land sale cycle.
Mature regions (currently only the Jeanne d’Arc Region) follow a one-year land sale cycle.
Within this scheduled land tenure system, interested parties have the opportunity to nominate lands for the scheduled regions when the C-NLOPB makes a Call for Nominations (Areas of Interest). The offshore board uses these nominations, in conjunction with internal geoscientific assessments, to define sectors (geographic locations) that will be offered in a Call for Bids. These sectors are identified publicly in a sector identification announcement.
The C-NLOPB then holds a Call for Nominations (Parcels) from within the posted sector and interested companies can submit parcel configurations for consideration in the upcoming Call for Bids. Upon internal assessment of the parcel nominations, the C-NLOPB will announce a Call for Bids.
Further information on Newfoundland and Labrador’s regulatory environment can be found on the C-NLOPB website.