Oil companies’ withdrawal from Eastern Canada?: Assessing trends in offshore oil development, Newfoundland and Labrador

Governments dependent on oil extraction face socio-economic risk given growing uncertainty about global oil demand and, therefore, shifts in private investment in the sector. This paper examines long-term trends in firm activity in Newfoundland and Labrador (NL), one of Canada’s largest oil producing provinces, and a jurisdiction that continues to depend on and actively promote sector expansion, placed in the context of new literature on firms’ response to shifting global oil market dynamics and the consequences for oil-producing jurisdictions. Using publicly available data, we examine trends in oil companies’ offshore activity in NL across the upstream oil development life cycle, from licensing and exploration through to production. The analysis indicates oil sector engagement in NL's offshore is declining across all stages. Despite continued government support and expectations for significant growth, corporate activities suggest waning interest in this high cost, mature basin, especially at this moment of increasing oil demand uncertainty. In response, the paper provides policy recommendations to plan proactively for the ongoing oil sector decline to mitigate fiscal vulnerability and support economic transition.