Offshore Oil and Gas

The first exploration well was drilled in Canada’s offshore between 1943 and 1945 in eight metres of water 13 kilometres off Prince Edward Island. Hillsborough No. 1 was drilled from an artificial island made of wood cribbing, rock and concrete, and reached a depth of 4,479 metres before it was abandoned without encountering oil or natural gas. A half-century of effort was invested before the first commercial quantities of crude oil were produced off Nova Scotia in 1992 from the Cohasset-Panuke project.

In 1979 two finds marked the beginning of a string of crude oil and natural gas discoveries:

• The Venture natural gas discovery near Sable Island was the first of six natural gas fields that now make up the Sable Offshore Energy Project, which began production in 1999.

• The Hibernia crude oil and gas discovery began a new chapter on the Grand Banks. Development approval for Hibernia was received in 1986, but a drop in world oil prices shelved the project until the 1990s.

Recent exploration work on the East Coast has focused primarily off Newfoundland.

There are approximately $353.7 million in exploration commitments for offshore Nova Scotia. The Nova Scotia government established the Offshore Energy Technical Research association to support research into the province’s offshore petroleum geology. The aim is to develop additional knowledge in these areas in the hopes of reducing future exploration risk and costs in the search for offshore oil and gas.

Recent exploration has also been focused on targets in the Gulf of St. Lawrence notably off of western Newfoundland and Cape Breton. The most notable area of interest is the Old Harry oil field located as shown in the map below.

old_harry

The Newfoundland and Labrador Oil and Gas Industries Association (NOIA) has developed an interactive map which shows all of the petroleum licenses in Newfoundland and Labrador and shows the name of the company that holds the license, the type of license, the date of expiry, etc.

http://maps.noiamap.ca

The example map below shows the location and information on the Mizzen exploratory well drilled in deep water on Orphan Knoll.

mizzen

Relevant links

“Canada’s Evolving Offshore Oil and Gas Industry” 2007 Canadian Centre for Energy Information has information pertaining to the history of the offshore industry, Canada’s offshore projects, and other relevant information. http://www.centreforenergy.com/Shopping/uploads/111.pdf

Natural Resources Canada's BASIN website contains a wealth of geological, geophysical and engineering information related to many years of petroleum exploration, primarily offshore northern and eastern Canada. BASIN includes both basic and interpreted information for most petroleum industry exploration wells and locational data for a large number of seismic surveys.

http://gdr.nrcan.gc.ca/basin/index_e.php

Regulatory Framework

Legislation and Regulations

Canada has a set of four principle Acts which govern oil and gas activities in the offshore:

Canada Petroleum Resources Act

Canada Oil and Gas Operations Act

Canada-Newfoundland Atlantic Accord Implementation Act

Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act

For information on these Acts visit

http://nrcan.gc.ca/eneene/sources/offext/legleg-eng.php

Offshore oil and gas exploration and development is regulated in Atlantic Canada principally by two organizations that are arms-length from governments and reports to both federal and provincial Ministers of Natural Resources.

Canada Newfoundland and Labrador Offshore Petroleum Board http://www.cnlopb.nl.ca/

CanadaNova Scotia Offshore Petroleum Board http://www.cnsopb.ns.ca/

For those areas not under the jurisdiction of either of the Boards mentioned above the National Energy Board is the federal organization responsible for regulation.

http://www.neb-one.gc.ca/clf-nsi/rthnb/nrthffshr/nrthffshr-eng.html

On March 24, 2011, the Honourable Christian Paradis, Minister of Natural Resources, and Nathalie Normandeau, Quebec Deputy Premier, Minister of Natural Resources and Wildlife and Minister responsible for the Northern Plan, announced that the Governments of Canada and Quebec have reached an important accord on the development of oil and gas resources in the Gulf of St. Lawrence (the "Accord"). The Accord envisions the development of a shared management structure which would avoid administrative overlap (the "Joint Canada-Quebec Secretariat"). In addition, regulatory functions would be jointly governed by the National Energy Board and the Régie de l'énergie (through the "Canada-Quebec Joint Regulatory Office").

http://www.regie-energie.qc.ca/en/index.html

The Frontier Lands Management Division of Natural Resources Canada manages the national interest in joint management regimes (e.g. CNSOPB) that have been established, or will be established, on Canada's frontier lands which includes Atlantic Canada’s offshore.

Detailed guides on the regulatory process for Newfoundland and Labrador’s and Nova Scotia’s offshore are available at http://www.oilandgasguides.com/aguides.htm

Environmental issues

Spills

The National Oil Spill Preparedness and Response Regime was established in 1995 and is built on a partnership between government and industry. Transport Canada is the lead federal regulatory agency responsible for the regime. Transport Canada sets the guidelines and regulatory structure for the preparedness and response to marine oil spills.

http://www.tc.gc.ca/eng/marinesafety/oep-ers-regime-menu-1780.htm

Fisheries and Oceans Canada / The Canadian Coast Guard

The Canadian Coast Guard (CCG) is responsible for conducting spill management under section 180 of the Canada Shipping Act, 2001. Specifically, it:

provides a national preparedness capacity and manages the National Response Team;
ensures an appropriate response to marine pollution incidents as the Federal Monitoring Officer or On-scene Commander

Transport Canada has a National Preparedness Plan that lays out the overall framework for the national preparedness capacity to combat marine oil pollution incidents in Canada. Similarly, the CCG has a National Response Plan that identifies how CCG will manage the response to a marine oil spill, including the deployment of personnel and response resources.

Companies involved in the development of oil and natural gas offshore Newfoundland and Labrador and Nova Scotia have many measures in place to prevent spills. See

http://www.capp.ca/GetDoc.aspx?DocID=105603

Environment Canada has published Oil, Water and Chocolate Mousse about oil, water, and oil spills. Chocolate mousse is a name given to a particular combination of oil and water that sometimes forms when oil is spilled.

http://www.ec.gc.ca/ee-ue/default.asp?lang=En&n=7C882684-1

Seismic noise

The International Association of Petroleum Producers funds the E&P Sound and Marine Life Joint Industry Program (JIP). E&P refers to the sound produced during Exploration and Production activities of the offshore oil and gas industries.

Results of JIP research projects are available at

http://www.soundandmarinelife.org/Site/index.html

The results of the studies funded through the JIP will provide objective, material scientific information that will:

afford a more comprehensive understanding of the potential environmental risks from oil and gas operations;
inform and update policy decision makers and regulatory development processes that affect our operations globally;
determine the basis for mitigation measures that are protective of marine life, cost effective and credible with outside stakeholders; and
feed into planning for efficient E & P project development that is environmentally protective.

For information on the environmental programs of the regulatory agencies visit their websites.