Remote North Atlantic drilling offshore Newfoundland has lost out in competition against LNG and lower-cost Gulf of Mexico wells for investment by top Australian producer Woodside Energy Group Ltd.

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The Perth-based firm dropped Grand Banks exploration licenses, acquired in its June merger with BHP Petroleum, that fetched work bids of C$822 million ($616 million) in 2018. A cancellation penalty of C$205 million ($154 million) is forecast.

While Woodside did not immediately give an explanation for shelving the Canadian oil prospects, CEO Meg O’Neill foreshadowed the decision while releasing the firm’s first-half 2022 stockholder report earlier this month.

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