Improved Exploration Licensing For Nova Scotia Offshore

Offshore petroleum exploration could get a boost from a more flexible approach to licensing rules. The province is proposing to allow exploration license holders to consolidate exploration commitments from their own licenses and other licensees.

Energy Minister Cecil Clarke says the consolidation provisions
will encourage drilling.

"We're more interested in collecting royalties from successful wells than collecting penalties from expired licenses," Mr. Clarke told the annual Offshore Technologies Conference in Houston, Texas. "And making sure that companies have the flexibility to adapt their exploration licenses to changing conditions will help make sure that wells are drilled."

Under the licensing rules, companies have to pay a penalty if they do not meet the work commitments they made when bidding on exploration leases.

Encouraging companies to bring forward consolidation proposals recognizes that knowledge of the geology may change, making drilling on a lease less attractive. Consolidating the commitments allows companies to focus their commitments in lease areas that have the best chances for success. Consolidation proposals must be accompanied by firm commitments to drill.

"This is one of a number of changes the department is making to achieve our objective of encouraging more offshore exploration," Mr. Clarke explained.

The minister told the conference that department staff have been leading discussions with industry to see if the approach would be helpful. "The answer was a resounding 'Yes"," he said.

The Department of Energy is leading a group of 31 companies and organizations at the Houston conference, the world's largest offshore development conference.