Nova Scotia Says Boundary Decision Paves Way for Oil and Gas Activity

PETROLEUM DIRECTORATE--Nova Scotia Says Boundary Decision Paves Way for Oil and Gas Activity

A ruling by a federal arbitration panel gives the clarity and certainty industry needs to search for oil and gas in the eastern area offshore Nova Scotia, said Economic Development Minister Gordon Balser today, April 2.

"The settlement of this boundary dispute should pave the way for more economic development offshore Nova Scotia and offshore Newfoundland and Labrador," Mr. Balser said. "This decision provides clarity to industry and thaws the exploration chill that was affecting activity in a huge portion of our offshore area, not just in the Laurentian Sub-basin."

Mr. Balser was commenting after an arbitration panel drew a line dividing the respective offshore areas of Nova Scotia and Newfoundland and Labrador. The new boundary divides a formerly disputed area that includes the Laurentian Sub-basin, a prospective oil and gas area. Exploration activity in the surrounding area has been curtailed by the protracted dispute.

"Premier Hamm and Roger Grimes, Premier of Newfoundland and Labrador, have already agreed in a telephone conversation that now is a time to move forward, not a time to look backward," Mr. Balser said. "Our provinces share common interests in the development of oil and gas reserves and in our struggle with Ottawa to get a fair share of benefits from those resources."

The federal tribunal ruled in May 2001 that there was no offshore boundary dividing the two provinces. In the ruling issued today, it rejected the conflicting claims made by both provinces. Instead, it drew its own boundary, splitting the formerly disputed territory in two.

Mr. Balser noted that the new line will affect only a small portion of one active licence offshore Nova Scotia.

"The work commitment on that block is about $13 million -- the total work commitments in our offshore area are more than $1.5 billion," said Mr. Balser. "It's important to keep this in perspective. Nova Scotia has retained the overwhelming majority of exploration activity on its side of the new boundary line."

The award of the arbitration tribunal was the culmination of about three years' work by Nova Scotia government officials, legal experts, historians, cartographers, hydrographers and others. Yves Fortier, of the law firm Ogilvy Renault, was the top legal counsel for Nova Scotia in this dispute. Two Dalhousie University law professors -- law school dean Dawn Russell and acting dean Phillip Sanders -- were also on the Nova Scotia team. Cartographer David Raymond and historian Brian Cuthbertson, both Nova Scotians, were also on the team.

A copy of the tribunal's decision is available on the Internet at www.boundary-dispute.ca/