Thanks to former Premier Danny Williams, Newfoundland & Labrador has a state owned oil company. Williams wanted his province not only to benefit from the royalties from offshore oil but to have the benefit of ownership as well. This led to the creation of  the Oil & Gas Corporation of Newfoundland & Labrador (OilCoNL), the crown corporation that holds equity in three major oil fields, Hebron, White Rose  and Hibernia. The company originally began as a division of Nalcor before becoming a crown corporation in 2019. 

Our podcast this week features a very interesting conversation with Jim Keating, the CEO and employee number one with OilCo who provided a comprehensive overview of the financial return associated with a state owned oil company and the enormous opportunity of the province's offshore oil & gas sector.  The province earned $1.5 billion in royalties from the offshore in the last month alone. The offshore oil sector provides about 20% of the province's annual GDP. OilCo now has accumulated $1.3 billion in assets as a result of its investments to date and earned nearly $800 million in dividends since 2010. Keating indicated that Oilco has a legislated right to purchase up to 10% equity in any new discovery that leads to a producing well. The company is expected to take equity in the Bay du Nord project which is expected to be confirmed in early 2027. Bay du Nord's initial phase is expected to generate 500-600 barrels of oil over its lifetime and is the first of several phases. There are interesting lessons for Nova Scotia in the success of OilCo as it attempts to restart its offshore oil & gas sector.