Nova Scotia

Bids for Nova Scotia offshore exploration on hold till 2021 due to COVID-19

For the second time in three years, there will be no call for oil companies to explore for energy in offshore Nova Scotia. The annual call for exploration bids was jointly vetoed last week by the federal and Nova Scotia governments.

The province and Ottawa vetoed this year's call for offshore oil bids

Nova Scotia's only current offshore activity is ExxonMobil's Sable gas project, which is being decommissioned. (Canada-Nova Scotia Offshore Petroleum Board)

For the second time in three years, there will be no call for oil companies to explore for energy in offshore Nova Scotia.

The annual call for exploration bids was jointly vetoed last week by the federal and Nova Scotia governments. Both levels of government must agree to set aside exploration bids.

"COVID-19 is having a significant impact on the sector overall. We know that some companies are delaying investment decisions and for us a call right now likely wouldn't result in the best value for Nova Scotians," said Nova Scotia Energy Minister Derek Mombourquette.

"When the conditions are right we're going to go forward, but we made the decision that we would hold off for now."

The Nova Scotia Offshore Petroleum Board issued the call — known as a fundamental decision — on March 10, inviting oil companies to submit bids to explore parcels in Nova Scotia's offshore.

In a May 11 letter to the board, Federal Natural Resources Minister Seamus O'Regan said the additional time will allow Nova Scotia to do a marketing campaign to attract bids.

Disappointing results in recent years

In 2018, bids were also set aside to give Nova Scotia more time to promote its offshore to oil companies.

The call for bids in 2019 resulted in no bidders.

The province's offshore has been a disappointment in recent years.

The two most recent exploration drilling programs — one led by Shell and the other by BP — have been busts.

Little offshore activity

Nova Scotia's two natural gas producing fields shut down in 2018 and are being decommissioned and abandoned.

The only current offshore activity is at ExxonMobil's Sable project. The deepwater crane ship Thialf will be used to dismantle facilities, starting with the Thebaud platform near Sable Island.

The vessel — owned by Heerema Marine Contractors — is expected to complete removing platform components in 2020.

The Thialf, the second-largest crane vessel in the world, is being used to dismantle facilities as part of the Sable gas project. (Paul Palmeter/CBC)

ExxonMobil spokesperson Merle MacIsaac said the final phase of decommissioning was delayed to reduce exposure to the coronavirus.

"In light of various travel restrictions and other guidance from relevant authorities, Heerema and ExxonMobil have reviewed, revised and implemented this plan and procedures to ensure the work is carried out safely," MacIsaac said in a statement to CBC News.

"Among many precautions, domestic and international crew members must complete a strict 14-day quarantine in Nova Scotia prior to boarding Thialf."

East Coast slowdown

The pandemic has depressed world oil prices and led to a dramatic drop in offshore activity on Canada's East Coast.

Exxon has suspended exploration drilling at the flagship Hibernia oil field off Newfoundland.

Other oil companies have also pressed pause on construction and drilling programs in the province.

About the Author

Paul Withers

Reporter

Paul Withers is an award-winning journalist whose career started in the 1970s as a cartoonist. He has been covering Nova Scotia politics for more than 20 years.

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