Dropping oil prices to have little impact on offshore

The drop in oil prices may be draining Newfoundland and Labrador's treasury but industry watchers say it has little impact on long-term offshore projects.

Robert Cadigan of the Newfoundland and Labrador Oil and Gas Industries Association says those developments rely on average prices over decades.

He says the latest slump would have to continue indefinitely for it to affect the economic potential of oilfields off Newfoundland and elsewhere.

Ed Martin of Crown corporation Nalcor Energy says lower prices may delay or sideline some projects throughout the industry.

But he says he's optimistic about Newfoundland's untapped offshore potential.

He believes prices will rebound and that the future is in development of slope and deepwater fields such as the Bay du Nord find.

Statoil announced the discovery in the Flemish Pass Basin last year with its partner Husky Energy.

Exploration continues and any development is still years away.

Bay du Nord is believed to contain up to about 600 million barrels of light, sweet crude.

If developed, it would open a vast new offshore region for the province as production from existing sites diminishes.