The Canada–Newfoundland and Labrador Atlantic Accord Implementation Act and the complementary Canada-Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act provide the legal framework governing offshore petroleum activities in the Canada-Newfoundland and Labrador Offshore Area. These statutes mandate the Canada–Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) to regulate exploration, development, and production of offshore oil and gas, ensuring that the activities benefit both the federal government and the province of Newfoundland and Labrador. On June 6, 2025, the C-NLOPB issued two significant Calls for Bids for offshore petroleum exploration licences: Call for Bids No. NL25-CFB01, covering 19 parcels in Eastern Newfoundland, and Call for Bids No. NL25-CFB02, covering 17 parcels in Labrador South. These calls, issued under the Atlantic Accord legislation, invite companies to submit bids for exploring specific offshore parcels.

The Calls for Bids specify detailed conditions to promote responsible exploration while balancing economic and environmental priorities. The parcels offered are offshore Newfoundland and Labrador, with some extending beyond Canada’s 200 nautical mile exclusive economic zone. In such cases, additional terms may apply under the United Nations Convention on the Law of the Sea (UNCLOS), especially Article 82, which addresses payments and benefits related to extended continental shelf areas. Bidders must submit sealed bids by designated deadlines—12:00 p.m. Newfoundland Time on June 6, 2025, for NL25-CFB01, and November 5, 2025, for NL25-CFB02—strictly adhering to the conditions set forth in the Calls. The main criterion for selecting winning bids is the Work Expenditure Bid, reflecting the total monetary commitment toward exploration activities, research and development, education, and training during the licence’s initial term, known as Period I. This approach ensures bids are assessed based on their economic value and proposed exploration effort.

Each parcel requires a minimum Work Expenditure Bid of $10 million, and bidders must include a $10,000 bid deposit with their submission. Successful bidders are required to post a security deposit equal to 25% of their Work Expenditure Bid within 15 days of notification, in the form of a promissory note supported by a bank guarantee or letter of credit; failure to do so leads to forfeiture of the bid deposit and disqualification. Exploration licences have an initial term (Period I) typically lasting six years, with the possibility of extensions through “drilling deposits”—incremental payments of CAD 5 million, 10 million, and 15 million that allow one-year extensions to the exploration period, refundable if drilling commitments are met. After Period I, Period II follows immediately and covers the remainder of the nine-year licence term. Rental fees apply only during Period II, starting at $5.00 per hectare in the first year and increasing annually; however, these rentals can be refunded annually based on allowable expenditures incurred, with provisions to carry forward credits, encouraging ongoing exploration.

Newfoundland & Labrador (43-2025) June 6, 2025
Disclaimer: Insights are for informational purposes only and do not reflect RRI’s official position or constitute legal opinion.