Nova Scotians Must Fully Benefit From Offshore Licence Forfeitures

ENERGY--Nova Scotians Must Fully Benefit From Offshore Licence Forfeitures

Nova Scotians, not Ottawa, should benefit from work deposits forfeited by offshore energy exploration companies, Energy Minister Cecil Clarke said today, July 5.

"The prime minister and federal government have stated publicly that Nova Scotia should receive 100 per cent of offshore revenues," said Mr. Clarke. "Keeping 100 per cent of the dollars from these forfeitures in Nova Scotia would be an excellent first step for Ottawa to show its good faith on this important matter."

On June 30, 13 offshore Nova Scotia parcels were returned to the Crown. This will result in licence holders forfeiting 25 per cent of unexpended work commitments. The 13 offshore parcels carried a total work commitment of $284 million.

The Canada-Nova Scotia Offshore Petroleum Board will determine the total value of work conducted by the licence holders, which represent such major energy companies as Exxon Mobil, Shell, Kerr-McGee and Imperial. With current fiscal arrangements, the federal government would claw back 70 per cent of the forfeited fees.

"While it would have been my greatest preference to see the work commitments spent fully on offshore exploration, forfeitures do have the potential to increase Nova Scotia's revenue from the offshore this year," said Mr. Clarke. "These are dollars we can direct toward expanding our training opportunities, improving our infrastructure and reducing our debt."

The Nova Scotia government has been in discussions with Natural Resources Canada on offshore revenues arrangements for more than two years. In 2001, Premier John Hamm launched the Campaign for Fairness, to ensure the federal government honours the intent of the Canada-Nova Scotia Offshore Accord to guarantee that Nova Scotians are the principal beneficiaries of their offshore resources.