OilCo lands own bid for exploration rights on two offshore oil parcels

Not long ago, this province's oil and gas corporation, along with some very valuable oil assets, were up for sale. Future direct government involvement in the oil industry seemed very much in doubt. But the recent switch in strategy is enough to give you whiplash. Oilco's mission is to advance and grow the oil industry. And today, it's as powerful and relevant as ever. I think we're in the best position we've ever been in a decade. The latest example involves the offshore land tenure and bidding process. For the first time, Oilco was a successful bidder. 20 million in commitments for two parcels in the Orphan Basin. Blocks that have been well studied through previous Oilco-funded geophysical surveys and thought to contain vast amounts of oil and gas. Oilco plans to shop these parcels to oil companies in hopes of forming a partnership that will lead to exploration and perhaps the next Hibernia or Hebron. The oil companies will shoulder the cost of drilling, and Oilco will have the option of buying an equity stake if a commercial discovery is made. This time we're going to hold the block, but be carried, have the other companies invest their money on our behalf, and if it's a dry hole and we spend no money, if it's a discovery, then we'll pay our share going forward. Having Oilco buy up offshore parcels is a big change in strategy and follows a massive shift in policy as global events force countries to focus more on energy security. The intent is to create a scenario where oil companies can negotiate directly with Oilco instead of going through the land tenure process. It's the way it's done elsewhere. Only 20% of the world's acreage these days is being taken through traditional license rounds. 80% is through forms as... Which I just described, negotiations with host governments. The land tenure process is not going away, but governments seem to support a hybrid approach. We are heavily and quickly looking for ways to get from discovery to production quicker. The federal government is aligned with that process. Now Oilco will make its pitch to potential partners, including the offshore's newest entry, Shell Canada. There is a group of companies that are on our Rolodex. Folks to reach out to now, and hopefully we'll see some action there pretty soon. The massive Bay du Nord oil project is expected to be sanctioned early next year. There are plans to build a floating dry dock at Bull Arm that could kickstart a new industry in the province. And the strategy of attracting future investment is undergoing a shake-up. Oil Co. is back at the center of it all. And after years of stagnation, this CEO is more hopeful than ever. I believe there will be more Newfoundlanders working in the offshore oil and gas sector over the next 30 years than had worked in the previous 30 years. OilCo has a six-year licensing window to find out if it's sitting on the next major oil discovery. Jim Keating says to expect action much sooner than that. Terry Roberts, CBC News, St. John's.