Newfoundland and Labrador gov’t considers selling stakes in offshore assets

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The government of Newfoundland and Labrador has announced its consideration of selling stakes in the province’s offshore oil industry, revealing plans to move forward with phase three of the comprehensive review of current oil and gas interests.

The government is specifically eyeing its 4.9% equity position in Hebron, 8.7% equity in the Hibernia Southern Extension, 5% equity in the White Rose Extension project, and the assets, exploration teams, and intellectual property within the Oil and Gas Corporation of Newfoundland and Labrador.

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Rothschild & Co. will play a role in this phase by presenting the province’s oil and gas portfolio to potential buyers. In a Jan. 9 announcement, the government emphasized that this exercise does not commit it to any subsequent actions but serves as an essential step in making informed decisions about potential negotiations and asset sales. 

Notably, it said no new contract with Rothschild & Co. is required for this phase.

Minister of Industry, Energy, and Technology, Andrew Parsons, expressed the government’s commitment to long-term benefits for residents. He added, “We remain focused on maximizing the opportunities from our non-renewable and renewable energy sectors.” 

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The government said it received the initial report from Rothschild & Co. in April 2022, which marked the first comprehensive review of assets in the province’s history (phase one). Subsequently, phase two of the review, focusing on oil and gas assets, commenced in March 2023. It clarified that no decisions have been made concerning other assets included in the initial Rothschild & Co. review.

Siobhan Coady, Deputy Premier and Minister of Finance, highlighted the global market value of the province’s oil and gas assets. 

“During this phase of the review, we will be presenting our portfolio to a broad range of potential buyers and then deciding on next steps which may include negotiating with the most credible groups,” she stated.

The government continues to weigh options on structuring the asset portfolio for fiscal stewardship, high-quality service delivery, and respect for public sector employees.

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