Bob Cadigan is president of the association that represents the province’s offshore supply and service companies.
He thinks that there’s more interest in exploring offshore Nova Scotia than Newfoundland and Labrador because of the way the Nova Scotia offshore regulator handles exploration data.
As the Telegram reported on Tuesday,
Cadigan said the data — like geochemistry and seismic testing results — is more difficult for curious companies to access in this province. For example, much of the seismic data here is only available on paper and not digitally, he said.
In other cases, individual oil companies completed the testing and keep the results to themselves for as long as they are allowed.
Difficulty in obtaining information about an area can limit interest in making a bid and committing to exploration work in the area, Cadigan suggested.
Okay. That could be the problem.
And then again, maybe not.
Maybe there are other reasons.
Think about it for a second. If you want lucrative plays, you are not going to Nova Scotia, the land of abundant natural gas at a time when natural gas prices are in the crapper.
If you want lucrative plays, you’d be looking for oil.
If you want offshore oil, you would come to Newfoundland and Labrador.
And yet, as the Telly notes, the latest offshore sale here netted $117 million in exploration commitments while the most recent Nova Scotian offshore sale led to more than $1.0 billion in commitments.
Offering exploration data and a three-year lead on land parcels doesn’t seem like enough to make up the difference. And, as a Chronicle Herald story noted last winter, the Nova Scotian governments $15 million database alone can’t explain the success.
Maybe some of it has to do with this sort of thing:
[Paul] Ziff, whose company has industry clients around the world, said the supermajors are increasingly being shut out of exploration by national oil companies, which now control three-quarters of the world’s reserves.
Newfoundland and Labrador has a state-owned oil corporation that has to get a piece of offshore development, as a matter of government policy. That’s just part of the highly politicized nature of the local offshore.
Another part of that highly politicized nature of the local market are advocacy organizations like the Board of Trade and NOIA itself. Both are notoriously fond of advocating for government instead of their members. Both have endorsed Muskrat Falls and Cadigan, for example, did so by talking against offshore natural gas development in the process.
Then there’s the offshore regulatory board itself. Neither the federal nor provincial governments lately can hold their heads up when it comes to appointing board members who are longer on their partisan hack credentials than their professional knowledge of the offshore industry.
Toss in the expropriation fiasco or the recent racket over a Hebron module the government already signed away in 2008 and you have the sort of regime that Ziff noted the big players are looking to get away from.
If $15 million was all that stood between the current state of offshore exploration in Newfoundland and Labrador and having an explosion of interest, someone would have spent the money by now. Odds are that the cause of the local problem is a lot bigger.
And if NOIA actually advocated for the offshore industry when it mattered, things might start changing for the better.