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ConocoPhillips clears Atlantic exploration hurdle

VANCOUVER, British Columbia, May 4 (Reuters) - ConocoPhillips' (nyse: COP - news - people) Canadian unit cleared a hurdle on Tuesday in its bid to explore an oil and natural gas field on Canada's Atlantic Coast that has been tied up for years by boundary disputes.

ConocoPhillips Canada said it struck a deal with the Canada-Newfoundland Offshore Petroleum Board to convert the company's federal permits to nine-year exploration licenses in a 2.25 million hectare area of the Laurentian sub-basin between Newfoundland and Nova Scotia.

"This agreement paves the way for wildcat exploration in this frontier basin," ConocoPhillips Canada president Henry Sykes said in a statement.

ConocoPhillips, the No. 3 U.S. oil company, is the operator of the Laurentian block and holds an average 70 percent working interest in the seven licenses.

"Given the regulatory lead times and the weather windows in Atlantic Canada, we are reviewing our options to begin seismic work on the block," Bob Spring, the Calgary firm's vice-president for exploration said.

The firm's predecessor, Gulf Canada, acquired the exploration rights in 1967, but work was snagged by regional boundary fights between Canada and France and between Nova Scotia and its fellow province of Newfoundland and Labrador.

France's claim to a portion of the area came from its sovereignty over the small islands of St. Pierre and Miquelon off the Newfoundland coast. An international tribunal settled that boundary fight in 1992.

A Canadian tribunal settled the fight between the provinces two years ago, but the exploration permits had to be updated because of the redrawing of the border.

"We look forward to further discussions with the government of Newfoundland and Labrador to provide more certainty on the economics of this high risk basin relative to other opportunities," Sykes said.

According to published reports, early mapping by the Geological Survey of Canada estimated that the Laurentian sub-basin could contain up to 700 million barrels of oil and up to nine trillion cubic feet of gas.

This projects in a private initiative and is not supported by any political group or institution.

Ce projet est une initiative privée et n'est soutenu par aucune institution ni groupement politique.

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