Deepwater oil exploration too risky: NDP

The regulator supervising Newfoundland and Labrador's offshore oil industry has approved new exploration in deep waters, sparking mixed political opinions.

The Canada-Newfoundland and Labrador Offshore Petroleum Board called for bids for two parcels located in an area known as the Flemish Pass, which is north of the basin on the Grand Banks where four commercial fields have already been discovered. Three of them are in production.

The new exploration areas, though, have depths ranging from 1,000 metres to 2,000 metres. The Hibernia platform, by contrast, is just 80 metres above the ocean floor.

Lorraine Michael, leader of Newfoundland and Labrador's New Democratic Party, said those depths make the exploration work too risky for now, especially as the massive oil spill in the Gulf of Mexico continues to worsen.

"I find it very disturbing in the light of what we are dealing with in the Gulf of Mexico, and the fact we still don't know, one, why things happened in the Gulf of Mexico or two, where things are going to end up," Michael told CBC News.

"It's a terrible situation."

The Deepwater Horizon blowout in the Gulf of Mexico brought new scrutiny to Newfoundland and Labrador's oil industry, which has emerged as the prime driver in the province's economy.

Even with the disaster, Chevron Canada started work in June on an exploration well in the Orphan Basin, north of the Grand Banks and about 430 kilometres northeast of St. John's.

International oil industry interest in the Flemish Pass area was spiked last year when StatoilHydro Canada announced it had found hydrocarbons in a property called Mizzen 0-16. While executives with the Norwegian company said they were excited, they cautioned it would take years to develop Mizzen as a commercial field.

Kathy Dunderdale, Newfoundland and Labrador's minister of natural resources, welcomed the new exploration and tackled critics who have called for a moratorium on deepwater drilling.

"Newfoundland and Labrador's offshore region is open for exploration to those companies with resources and competencies to comply with our progressive regulatory regime which holds companies to the highest standards in the areas of safety, environmental protection and resource management," Dunderdale said in a statement.

"Exploration is key to new discoveries .... With safety and environmental protection leading our efforts, ongoing exploration will help fuel continued economic growth for the province, and ensure the responsible development of the oil and gas industry."