Speaking Points for Max Ruelokke, Chair and CEO, C-NLOPB
NOIA Luncheon, February 21, 2007
[Note: May not be exactly as delivered. Thanks to Max Ruelokke and Sean Kelly for providing these notes.]
[Note: May not be exactly as delivered. Thanks to Max Ruelokke and Sean Kelly for providing these notes.]
• Thanks for the invitation, it feels great to be in this group where we have many shared experiences of helping to grow this industry. I must say, I felt equally at home last month in addressing the offshore workforce on Terra Nova and the Henry Goodrich.
IMPORTANCE OF OIL AND GAS WEEK:
• The C-NLOPB commissioned Corporate Research Associates in autumn 2005 to assess how much people know about the offshore oil and gas industry and about us. Here are some of the things we found out from the survey:
• Actual impact: GDP; 3200 workers directly employed. Perceived impact: Stats from Survey - 61% of people who were surveyed had no idea of the number employed, the majority of those who responded thought it was less than 2,000.
• Actual Impact: Spending since the Hibernia discovery - $ 19 B. Perceived impact: 68% had no idea, of those who did respond, the average estimate was $1.5 B.
• Offshore Industry has many components, all with a role to play:
- NOIA and its impact
- Offshore Workforce
- Operators, individually and via CAPP [Canadian Association of Petroleum Producers.]
- Governments
- Finally, C-NLOPB
WHO WE ARE
• 21% of people surveyed felt we were responsible for regulating the O&G industry, compared to 42% for the Federal Government and 36% for the Provincial Government.
• Established in 1985 to administer the Canada-Newfoundland Atlantic Accord Implementation Acts. [Federal and Provincial]
• Key mandates:
Safety
Resource management
Environmental protection
Industrial benefits
• The Board, in many ways, serves all stakeholders in the industry, sometimes satisfying none! A good example of that is the current situation where Government appears to be upset with us and our recent decision, while at the same time we are still in the appeal period of a recent court decision in a case where we were taken to court by HMDC [Hibernia Management and Development Corporation] and Petro-Canada who claimed we were imposing an unfair requirement to spend within the Province on them.
• A former Board member once mused that “.. it seems as though everyone is upset with us, so we must be doing a good job!”
• But seriously, let’s take a look at the Board:
• Seven members: Federal appointees: Hal Stanley, Lorne Spracklin and Herb Clarke; Provincial Appointees: Fred Way, Dr. Joan Whelan, Andy Wells and myself as Chairman and CEO.
• How the Board works: Decisions are made by Board Members, by the Executive, or by either or both of the Chief Safety Officer and the Chief Conservation Officer. Fundamental Decisions involving: Rights Issuance, Extraordinary Powers, Development Plans are subject to the approval of Ministers,
• All the above are based on sound staff work by the Board’s 60 employees, who are really the heart and soul of the Board. They are highly qualified, with 89% holding formal post-secondary degrees or diplomas, with 86% having been educated in Newfoundland and Labrador. More that half of them have professional designations in engineering, geoscience, finance, human resources and public relations. They are highly skilled, dedicated, and respected by their peers in industry. There is a great blend of experience and youth, and Fred Way and I as the two full-time Board members are truly blessed to work with them.
• The basis of all the Board’s decisions is its mandate to manage our offshore resources to ensure that all purposes of the Accord are taken into consideration and a balanced decision reached. Allow me to read these brief purposes:
• (Purposes are on page 1 of the Atlantic Accord Memorandum, a pdf file on our website under “Publications”)
• You can see that keeping these all in balance can be a challenge. For this reason, the Board does not, can not and will not make political decisions. Board members are appointed by Governments to manage our offshore oil and gas resources, not elected to govern. We (or rather, most of us) wouldn’t have it any other way!
• An example of a Board decision which will have a major positive impact on the province is our R&D/E&T guidelines decision. As you will all know, we are managing the exploitation of a fixed, finite, non-renewable resource. How then do we ensure that the positive impact on our Province and Country will be felt long after the resource is depleted?
• The Board considered this and concluded that it would require those who are extracting this resource should make significant investments into research and development and education and training in our province. It was decided that an annual percentage, equal to that expended in Canada by the oil industry generally, as determined by Statistics Canada from industry sources, would be applied as a levy against production operations here. At current production rates and oil prices, this will result in the expenditure of approximately $20 M annually. Several operators challenged this decision in court, but last month the courts decided in our favour. There is still the possibility of an appeal, but we are cautiously optimistic of the outcome.
• These funds will have a long-lasting positive impact on our society, and I would encourage all those who are interested in further details to contact our office and specifically Frank Smyth, our Manager of Industrial Benefits and Regulatory Coordination, who is here today .
• Thank you for your courtesy and attention, and I hope these few remarks have been helpful in explaining who we are, what we do, and how and why we do it. If there are questions I’d be pleased to answer them.