Don't read into offshore exploration bid delay, says federal natural resources minister
Energy N.L. says delay could spell uncertainty for investors
Canada's natural resources minister says a delay in bids for offshore exploration in Newfoundland and Labrador does not foreshadow federal abandonment of the province's offshore industry.
Jonathan Wilkinson said Thursday that people shouldn't read anything into the delay for bids.
"We certainly recognize the importance of the offshore to Newfoundland and Labrador," he said.
Some of the areas up for bid overlap with or include marine-protected areas. Since areas subject to oil exploration can no longer be counted as marine-protected areas, he said, the federal government has asked for the delay to work through the potential implications.
Under the Atlantic Accord, the ultimate decision on the bids process is up to provincial Industry, Energy and Technology Minister Andrew Parsons, who said in a statement on Thursday he expects the process to proceed. Wilkinson said the federal government is in discussions with Premier Andrew Furey, which could last as long as 90 days.
In a statement to CBC News earlier this week, the Canada-Newfoundland and Labrador Offshore Petroleum Board, which issues the call for exploration bids, noted the call for nominations closed Mar. 9 but made no reference to the federal delay. The group said a call for bids will happen in the coming weeks, with nominations for parcels scheduled to begin in August 2023.
The C-NLOPB's plans were approved by the province, but that approval was suspended by the federal government for 90 days to allow the additional review time, according to the Department of Industry, Energy and Technology.
Wilkinson said short delays in this kind of process are not unusual, but in a statement on Thursday, a C-NLOPB spokesperson said it's the first time the federal government has suspended an approved call for bids.
Delay could deter investors: Energy N.L.
Energy N.L. CEO Charlene Johnson said the delay will create uncertainty and deter potential investors and industry participants.
"Offshore exploration is the foundation of our industry and we request the government of Canada to expeditiously complete their review," said Johnson.
Former Noia CEO Bob Cadigan agreed with Johnson's assessment.
"It sends that message to potential investors that Canada isn't really sure if we're open for oil and gas production or not," he said.
The delay is the latest in a series of developments that has sowed uncertainty in the province's oil sector. About three weeks ago, Federal Environment Minister Steven Guilbeault asked for an additional 40 days to make a decision on the proposed Bay du Nord offshore oil project, which Energy N.L. has strongly advocated for.
"It's a generational project," said Johnson while speaking with reporters about Bay du Nord on Tuesday. "This project is going to be one of the lowest carbon per barrel projects in Canada."
Energy N.L., formerly known as Noia, rebranded this week as part of a push to broaden its mandate to include energy sectors beyond the oil industry.
With files from Mark Quinn and Peter Cowan