NOVA SCOTIA CANADA: THE NEXT PLAY

Improving regulations, cutting costs top Atlantic agenda

Promoting investment in the offshore oil and gas industry in the region, the Atlantic Energy Roundtable (AER) is a forum (formed in November 2002 by federal and provincial government departments, agencies and regulators, industry leaders and industry organizations) to improve the business climate in the area. The AER is focused on ways to encourage more investment through research and development, including improved seismic regulation.

With its focus on sustainable growth and economic development, roundtable members supported work by governments in streamlining regulatory approvals, reducing drilling costs and modernizing regulations. Regulatory approval times are being brought into line with international experience by ensuring that regulatory process approvals and environmental assessment approvals are addressed concurrently.

Drilling cost savings, which come from the federal government’s suspension of duties on imported Mobile Offshore Drilling Units (MODUs) to September 2009, are estimated to be $1 million per well. Efforts are underway to extend the duty-free holiday. In addition, new flow-testing flexibility means upwards of $30 million has been eliminated in potential drilling costs on new exploration wells. Other cost savings for industry include a more economical approach to local crewing opportunities for supply boat operators, and the implementation of a shared database for regulatory decisions that is now operated by Canadian Association of Petroleum Producers (CAPP).

New goal-oriented drilling, production and conservation regulations are a first step in introducing a more modern regulatory system that is better able to respond to changes in technology and best practices. The regulations are a blend of performance-based and prescriptive in certain areas-hence the term “goal-oriented.” The approach is similar to that taken in the North Sea and will help the Nova Scotia Offshore to become more consistent globally, thereby lowering the costs of compliance when moving from other jurisdictions.

For businesses in the Atlantic region, opportunities to improve communication for procurement opportunities for local supply and service communities have been successful. CAPP recently held procurement workshops for local business interested in the offshore market and generated awareness of the contract opportunities available. OTANS (Offshore Technology Association of Nova Scotia) has also published local opportunities on its website (www.otans.com). Initiatives such as standardizing supply chain management with industry recommended practices have also been carried out.