An outdated land tenure system often forces companies to decide on offshore bids within seven months, she told an oil and gas industry conference in St. John's. She said that puts new players at a disadvantage with little time to review seismic data and other details.
As the province's offshore oil production wanes, the government wants to overhaul the system to attract more companies to bid for exploration licences.
"That will give players who are being shut out of the process now a greater opportunity to participate," Dunderdale said outside the conference. Smaller tracts of land could potentially be explored, creating more jobs and cash for the provincial treasury, she added.
"It will be a far more modern process than the one we have at the moment."
The province is working with provincial and federal regulators, Dunderdale said. She hopes to have new rules in place to allow for an expanded land tenure bidding process within two years.
Crown corporation Nalcor Energy announced earlier this year three potential new oil basins off Labrador.
Dunderdale said the province invested $30 million on the kind of seismic data collection and analysis that led to those finds. She was heading Tuesday to China as part of an 18-person delegation seeking energy and mining investments.
"These are companies with capital to invest, and a very real interest in exploring and bringing new finds to market."
Robert Cadigan, president and CEO of the Newfoundland and Labrador Oil and Gas Industries Association, said the group has long pushed for updated regulations.
"It doesn't make sense anymore," he said of the current land tenure system. "The fundamental problem is it's an international industry. It's international companies that decide on how they're going to employ their capital, where they're going to drill. And in order to do that, they need time."
It realistically takes about three years for a new company to commit to an exploration investment, Cadigan said.
Changing the system to lengthen the process and create more competition is essential, he added.
"It's extremely important and it really is a game changer."
The province relies on oil earnings for about one-third of its budget. Lower than expected oil prices and lagging global demand put a huge dent in its finances last year, as a $564-million deficit led to about 1,200 public sector job cuts.
George Murphy, the provincial NDP's deputy trade critic, questions whether the China trip, which ends June 28, is necessary.
"I don't think the province can really afford it," he said in an interview. "It's all happening under a time of restraint and we already know there's considerable Chinese interest here."
Tracey Boland, a spokeswoman for Dunderdale, said costs of the mission aren't yet known. The delegation includes staff from the premier's office along with the departments of Natural Resources, Finance, Business, and the Intergovernmental and Aboriginal Affairs Secretariat, she said.