The Grand Banks are one of the world's largest and richest resource areas, renowned for both its valuable fish stocks and petroleum reserves. Situated off the southeast coast of the Island, the Grand Banks are actually a series of raised submarine plateaus with a water depth ranging between 36.5 and 185 metres. The relative shallowness of the water allows extensive marine animal and plant life to flourish on the bottom. As well, the warm waters of the Gulf Stream pass over the southern portion of the Banks in winter but cover almost all of the Grand Banks in summer.
The most prolific fish species on the Grand Banks has traditionally been cod but there are also flounder, haddock, ocean perch and hundreds of other species. Portuguese and Basques fishermen fished the Grand Banks as early as the 1400s but it was not until after John Cabot's voyage to the New World in 1497 that knowledge of the Banks and their valuable fishing resources spread throughout Europe. The Banks have been continuously fished since that time by fleets from England, France, Spain, Portugal and later Newfoundland, Canada and the United States.
The number of nations participating in the Grand Banks fishery continued to rise through the 1950s and 1960s, and it soon became evident that more stringent fisheries conservation measures were necessary. By 1977, Canada had declared a 200-mile exclusive economic zone and imposed strict controls on fishing inside this zone. About 10 percent of the Grand Banks, known as the Nose and Tail, are beyond Canada's 200-mile limit. In 1979 the conservation of the northwest Atlantic fish stocks outside the 200-mile limit became the responsibility of The Northwest Atlantic Fisheries Organization (NAFO).
Despite the conservation measures in place for fisheries on the Grand Banks, several species have declined drastically in recent years. By 1995, all major cod and flounder fisheries on the Grand Banks were closed and many other fish species such as turbot and ocean perch have had their catch levels sharply restricted. These fisheries are slowly recovering due to a concerted effort by both Canada and other nations to enforce existing conservation regulations on Grand Banks fish stocks. As well, an increased abundance of species such as crab, clams and scallops has led to the development of these fisheries on the Grand Banks in the past five years.
Since 1966 there has also been extensive exploration of the petroleum reserves which are located beneath the Grand Banks. The Hibernia discovery in 1979 was the first significant oil find, followed by Hebron in 1981 and Terra Nova and Whiterose in 1984. Work to develop the Hibernia oil site began in 1990 and oil production is expected to commence in late 1997 or early 1998.