Statoil sole winner in offshore Canadian auction

HALIFAX, Nova Scotia, Nov. 13 (UPI) -- Only two of the nine parcels on the auction block for energy explorers were doled out for eastern Canadian offshore acreage, a regional body said.

A subsidiary of Norwegian energy company Statoil was the successful bidder on two of the nine parcels up for grabs, offering $61.7 million. Parcels three through nine received no offers.

Nova Scotia's government estimates there may be up to 120 trillion cubic feet of natural gas and 8 billion barrels of oil offshore. All of the parcels up for grabs are located near licenses held by major energy companies like Shell and BP.

Start Pinks, chief executive officer of the governing Canada-Nova Scotia Offshore Petroleum Board, said winning the license doesn't necessarily equate to authorization for offshore operations.

"The CNSOPB will require a project-specific environmental assessment to be conducted for any proposed offshore work, and must be satisfied that it is unlikely to cause significant adverse environmental effects before issuing any authorization," he said in an emailed statement.

Each bidder must also demonstrate their have experience in deepwater basins like those off the eastern Canadian coast. Last year, British energy services company Petrofac secured a contract to examine the prospects of oil trapped in the deep waters off the eastern Canadian coast. Petrofac said the region is geologically similar to oil basins off the northwest coast of Africa, though reserves offshore Nova Scotia are thought to lie nearly 2 miles below the sea bed in mile-deep waters.

Tim Dodson, Statoil's exploration director, said the successful bid contributed to a growing portfolio of frontier territory by "securing access at scale" offshore Canada.

Statoil already holds licenses in the region, boasting of oil and gas discoveries in 2009 and again in 2013. In October, the CNSOPB gave Dutch supermajor Shell consent to start an exploratory drilling program in the region's deep waters.