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Eastern Canada Stages Unlikely Upstream Revival

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It wasn’t long ago that the fate of eastern Canada’s offshore province was looking grim. Large projects were stalled, investment interest was anemic amid pandemic spending cuts and some feared the basin might never recover. But sharply higher oil and gas prices and calls for new supply since Russia’s invasion of Ukraine have revived its fortunes. At least three major offshore projects are back in play, with more exploration and a fresh bid round also on the agenda. Despite its harsh, frigid environment, the area’s relatively low-carbon production profile is ticking an important box amid corporate decarbonization plans. Relatively low break-even costs and a supportive, flexible regulatory regime are also nudging opportunities into the advantaged column. Newfoundland & Labrador Premier Andrew Furey notes that the project revivals appeal to Canadian energy transition objectives, too, providing “responsible supply” to the world while keeping Canada on track for its 2050 net-zero goal. While volumes under discussion are not massive at just under 300,000 barrels per day — mostly hitting later this decade — they would help to backfill flattening production, and exploration offers further upside.

Topics:
Regional Integrateds, Majors, Corporate Strategy , Upstream Projects, Upstream Licensing, Conventional Oil and Gas, Deepwater, Exploration, Offshore Oil and Gas
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