Sable Offshore Energy Project Contracts Awarded

The following is a statement by Premier John Hamm regarding Sable Offshore Energy Project contracts.

Sable Offshore Energy Project announced the results of four important tender calls on the second phase of the project today, Feb. 11. In each case, there was at least one bid to do the work in Nova Scotia.

Three of four contracts were awarded to Nova Scotia companies and the successful bidders will do the work here. These companies are working hard to make the most of their opportunities and I congratulate them. They are helping to build Nova Scotia's future.

However, in the case of the fourth contract, the Nova Scotia firm's bid was not accepted.

I'm not happy about that. Nova Scotians deserve to get the maximum possible benefits from offshore oil and gas development. This is a clear indication that the development and associated benefit plan signed in 1997 are seriously flawed.

It's a statement of good intention and nothing more. The previous government's sign-off was an "I'll take your word for it" approach to ensuring Nova Scotia benefits.

Condition 12 of the development/benefit plan requires the operator, Exxon-Mobil, to justify any shortfall of estimated benefits to the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) and to identify measures to enhance Canada-Nova Scotia content in the future.

The potential for Exxon-Mobil to fall below its estimate of 34 per cent Canada-Nova Scotia content now clearly exists. Exxon- Mobil should immediately begin addressing the shortfall by presenting a plan to meet their commitment to the CNSOPB.

Today, I asked Gordon Balser, Minister responsible for the Petroleum Directorate, to immediately draft a letter to the Canada-Nova Scotia Offshore Petroleum Board urging that this commitment under Condition 12 be met immediately.

As well, Mr. Balser has requested that a full explanation of reasons for selecting a company outside of Nova Scotia be provided to the unsuccessful bidder. This is a requirement under Condition 8 of the development/benefit plan.

Unfortunately, there is no assurance that this won't happen again with respect to work in connection with the Sable Project. There is no contract or agreement with teeth, nothing that's enforceable to make sure what was promised is actually delivered.

That's just not good enough and it simply isn't fair to Nova Scotians.

The government has worked very hard to deliver a message to the industry -- we expect that everything that can reasonably be done in Nova Scotia will be done in Nova Scotia. All the parties involved know the government expects them to work together so that opportunities for Nova Scotians are maximized.

This is one of the primary reasons we have included offshore strategic energy agreements in the province's new energy strategy. It is a tool designed to ensure that Nova Scotians get every reasonable benefit from our non-renewable natural resources as future developments get under way.

We also expect offshore developers to demonstrate a tangible measure of responsibility for supplier development -- and to help create a long-term viable industry.

Again, offshore strategic energy agreements will be our lever in securing these benefits for Nova Scotians.

The minister of Economic Development will be pushing Exxon-Mobil and local suppliers to identify any gaps in our competitive position.

We will also accelerate our plans to assess this position. Nova Scotia's workers and suppliers deserve to know whether this is one lost contract -- or a permanent flaw in our system.

If the system is flawed we will address that. When we do, the best interests of Nova Scotians will be first and foremost.

Our industry is just starting to grow.

Today's announcement of work designing the fourth field, and the promise of more valuable construction work in the future, shows there is much work still open to us. This will mean little if we don't make the most of it.