BP has committed a whopping $1.05 billion of work expenditure after netting four offshore blocks in Nova Scotia's latest bid round.
The monster spend comes the day after the UK supermajor reached settlements with both the US Department of Justice and the Securities & Exchange Commission which totalled over $4.5 billion.
Shell has also landed a quartet of blocks in the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) bidding round for exploration licences.
The two oil giants were the only companies to be awarded blocks in the round which also saw no bids received for three of 11 blocks offered.
BP has landed Blocks 5, 6, 7 and 8 off Nova Scotia, all of which are deep-water, but has committed to paying a staggering $637.98 million in work expenditure on Block 7 alone. The company has even slapped down an $80 million deposit on that block.
For Block 6 the UK player has fronted $322.41 million while Block 8 will see it fork out $84.33 million and Block 5 $5.28 million.
Cumulatively BP is committing $1.05 billion on the quartet.
Shell has landed Blocks 1, 2, 3 and 4 but is not paying anything near the amount of its rival in terms of work expenditure. Block 3 is a deep-water block.
The Anglo-Dutch supermajor is fronting $25.88 million for Block 3 which dwarfs the amounts it will spend on the other trio of parcels: $2.36 million for Block 1, $1.97 million for Block 4 and $1.64 million for Block 2.
The wins add to the supermajor's already impressive lease holdings in Nova Scotia. In January, the company won the rights to four blocks for C$970 million.
The latest bid results mark the biggest-ever round in Nova Scotia’s offshore, with BP’s bid the largest in the province's history.
Speaking of its successful bids, BP vice president of exploration, Mike Daly, said: “This award gives us access to a significant piece of geology, one of the most promising new deep-water areas to be licensed in recent years.
"Exploration is a key driver of future growth for BP, and access to prospective new acreage such as this is essential. This entry to Nova Scotia’s offshore plays to our strengths in the deep-water and sub-salt.”
The BP blocks covers an area of almost 14,000 square kilometres aboout 300 km off Nova Scotia in water depths ranging from 100 to 3000 metres.
"As a condition of the issuance of an exploration licence, BP must post within 30 days a security with the Petroleum Board in the form of a work deposit. The CNSOPB would then award the exploration licences to BP with an effective date of 15 January 2013. BP then must submit an exploration plan to the Petroleum Board within ninety days of that effective date."
Daly said BP's drilling programme is expected to test 15 completely new plays between this year and 2015.