Nalcor can’t back premier’s comments

Ashley
Ashley Fitzpatrick
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Crown corporation cites commercial sensitivity when asked about speech

Kathy Dunderdale — File photo

Premier Kathy Dunderdale re­vealed dramatic news regarding Nalcor Energy during her speech before the St. John’s Board of Trade last week — or she simply misspoke.

To date, no one at Nalcor has been willing to confirm comments  made by the premier about Nalcor’s oil and gas division.

In her speech, before airing some dirty laundry on negotiations with the Prime Minister’s Office over the federal loan guarantee for the Lower Churchill hydro project, Dunderdale talked about government spending on early oil and gas exploration work offshore.

The work is led by Nalcor’s oil and gas division and has resulted in the identification of three new offshore basins for exploration off Labrador.

 

Data for dollars

“And you know what, the $30 million we invested, we’ve already recouped in licensing the data — selling it to companies to have a peek at,” Dunderdale said, to little reaction at the time.

Yet the millions in data sales would be a quick turnaround by any measure and a remarkable achievement for all involved.

As recently as Jan. 31, at the annual general meeting of the Newfoundland and Labrador Oil and Gas Industries Association in St. John’s, Nalcor Energy CEO Ed Martin suggested the data sales had not yet begun, although some potential buyers had been identified.

“So far, we’ve had discussions with numerous oil companies regarding this data, many of whom are not yet active in Newfoundland and Labrador, and they have all expressed strong interest in our findings,” he said.

The recovery of $30 million in about four months would reflect that “strong interest.”

But the premier’s statement was not immediately confirmed when a spokeswoman for Nalcor was contacted the day after the premier’s speech.

The Crown corporation has since said it can’t be, citing commercial sensitivities.

“Nalcor Energy is earning a return on our initial $30-million geoscience investment. We can’t provide commercial details on the licensing as this is commercially sensitive,” vice-president Jim Keating, lead for the oil and gas division, said in an emailed statement Monday.

“Once this information is no longer deemed commercially sensitive, we may then be in a position where we can release that information publicly,” he said.

Information about where the province is on cost recovery cannot be retrieved through access to information requests.

An inquiry on the issue was made to a spokeswoman at the premier’s office Monday afternoon, but no response was received as of press time.

Cost recovery on the $30 million aside, the premier identified the sale of offshore data as “just the crumbs,” when compared to the level of investment that data may prompt.

Martin and Keating have both made similar statements in the past, in terms of the value of the information in drawing attention to key “land sales” offshore.

A land sale involves bidding on select exploration licences, as issued by the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB). When a land sale closes and a licence is awarded by the CNLOPB, the oil company’s bid becomes a commitment for a certain level of spending on advanced exploration, usually drilling, within a set time frame.

The commitment is enforced through financial and regulatory penalty.

Land sales are where the talk of interest in exploration transitions into real dollars.

A package of early exploration data in Nova Scotia, not unlike the work underway here, has renewed land sales in that jurisdiction — prompting more interest and higher bids, with new entrants like BP now in the area.

For Newfoundland and Labra­dor, the early exploration work is set to go farther and cover more area.

“Exploration drilling off Labra­dor is poised to soar to levels not seen in over 20 years,” the premier said in her speech.

“And we will earn twice, three times the amount we invested (in early exploration) through those licensing rounds.”

Licence areas off Labrador have not come up for bid since Nalcor’s basin announcement and the collection of new seismic data in 2011.

Prior to the early exploration work, in November 2011, four areas put up in an offshore land sale received no bids.

 

afitzpatrick@thetelegram.com

 

Organizations: Board of Trade, Canada-Newfoundland and Labrador Offshore Petroleum Board, OIL COMPANIES Newfoundland and Labrador Oil and Gas Industries Association BP

Geographic location: Newfoundland and Labrador, Nova Scotia

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Comments

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Recent comments

  • Corporate Psycho
    June 04, 2013 - 16:43

    Just like no one could confirm Penashue's bizarre statement he made during his campaign.

  • Premier ed martin
    June 04, 2013 - 16:30

    There you have it. Proof that Ed Martin runs the province and not poor old Kathy.

  • Bob's Your Uncle
    June 04, 2013 - 16:20

    Then you should ask Brad Cabana what he thinks! There is a conspiracy theory going on here somewhere. Brad, do you need a drink of water from Muskrat Falls? Do you think it's wise to ship water from the Churchill river to the island....LMAO. What a gong show!

  • Oil and Hillbillies
    June 04, 2013 - 15:14

    The Clampetts were hillbillies with money but they were still hillbillies. Dunderdale is our hillbilly. She should not be taken seriously either.

  • Buddy l'uh
    June 04, 2013 - 14:13

    hahahahaha...........................Wooooooooooops!

  • Let us ask former Premier Danny Williams some questions on why he thinks the Muskrat Falls Contract is viable at any cost, given the hydro consumers are targeted to keep it afloat.
    June 04, 2013 - 14:08

    I, and I am sure most other Newfoundlanders and Labradorians, would be happy if some News Agency asked Danny Williams to give us his accounting on how he arrived at the point where he thinks that committing the province and the hydro-consumers of the province to the development of Muskrat Falls can float, given the fact that up to $12 Billion dollars is being touted as the final cost of the Project. If I were given the privilege of interviewing Mr. Williams, I would ask him a question on what kind of protections are built into the Muskrat Falls Contract that protects the province from losing the project to some other entity if it goes South. Mr. Williams should NOT be let off the hook on such questioning. It is a great job for The Telegram and long overdue. If the worse happens he will go down in history as making the most God forsaken deal anywhere in the history of the World.

  • Phil E
    June 04, 2013 - 13:45

    Dunderdale misspoke???? You don't say. That's only happened a million times before. Her foot is permanently wedged in her mouth.