Making the Most of Our Energy Resources, Part II – Oil and Gas in the Future

Without new oil and gas discoveries, the Newfoundland and Labrador petroleum industry will dry up within a couple of decades.  There hasn’t been a significant discovery in the offshore since the 1980s, with the exception of one find in the Orphan Basin.

The problem isn’t a lack of oil or gas.  The geological estimates back up the notion there is plenty more to find. The problem is no one is looking for it hard enough to find it. 

To give you a sense of how low exploration levels are now compared to a couple of decades ago, take a look at this slide.  It’s taken from Wade Locke’s recent presentation for the Harris Centre. 

Low exploration levels is one of the most important problems facing the oil and gas industry.  It’s not a new problem.  It’s not the only problem.  There are others, all of which centre on the basic challenge of how we can make the most of our oil and gas resources now and in the future.

Here are some basic ideas that can help us to get there.

For starters, Newfoundland and Labrador has to be an attractive place for investment, exploration and development. Oil and gas is a highly competitive industry, especially in the exploration sector.  There are only so many exploration dollars to go around.  There are only so many rigs to go around and there are plenty of places in the world where companies can find oil and gas, develop it, get it to market and make a lot of money.

Sending delegation after delegation to oil shows in places like Houston doesn’t produce a single new exploration well. What the local oil and gas industry needs is a stable, predictable environment.  That is something they haven’t had for a while.

One of the easiest things for the provincial government to do is set an offshore oil royalty regime and a gas royalty regime.  The provincial government had an oil royalty regime but the 2007 energy “plan”  to replace it with something else.  Not surprisingly for the current administration, there is no sign of a new oil royalty regime four years after they promised it.

Ditto a natural gas royalty regime. The current administration promised one in 2007 but they still haven’t delivered.  In fact, the provincial government has been working on development of a gas royalty regime for the past 14 years and still they haven’t managed to produce anything but a discussion that went nowhere.

With the royalty regime set, there’s no need for the provincial government to hold up any developments while it “negotiates” with a developer.  That’s the sort of thing one might expect in a banana republic.  It isn’t what happens in mature economies.

In the same way, the provincial government should set – or allow the offshore regulatory board to set – basic rules for local benefits.

The current administration held up the Hebron development and in the end settled for a royalty regime only marginally better than the generic regime. But any gains on so-called super royalties were offset by give-aways on the front end of the royalty structure and on local benefits in the form of research and development spending commitments.

Standard royalty and benefits regimes that work across a variety of price ranges and that work fairly for the resource owner  - i.e. taxpayers - and the developer will promote stable economic development.

The provincial and federal government should also implement a policy of merit-based appointments to the offshore regulatory board.  The Canada-Newfoundland and Labrador Offshore Regulatory Board is one of the most important agencies in the province. The most recent fiasco with efforts to stuff a former political staffer into a job she was unqualified for highlight the potential damage that politicians can do to an important official body.  At the very least, the provincial government should advertise for applicants for board appointments based on well publicized criteria. Board appointees should serve for fixed terms and each appointment should come with a publicly available expiry date. The offshore board is no place for political hacks and cronies.

While the offshore oil and gas industry is well developed, the oil and gas industry that lies exclusively within provincial jurisdiction is not.  As a way of encouraging development of a well-managed industry within the borders of the province, the Government of Newfoundland and Labrador should develop a regulatory board to administer lands, manage reservoirs, serve as a repository for information on oil and gas and generally serve as the focus of industry regulation from the three mile limit inward. 

The new oil and gas regulator should complement the work of the offshore board.  Naturally, the new board will assume some of the roles assigned to the old provincial petroleum directorate as well as ones that have grown up within the oil and gas division of the natural resources department. The new onshore regulatory board should also administer new, standard royalty and benefit regimes for any future developments.

Other elements of the 15 ideas (and more) also will apply to the oil industry.  For example, breaking up the energy company and either privatizing it or forcing it to function like other companies would break its strangle-hold on the local business environment.  This would inevitably allow for new life and energy in a sector that is rapidly becoming stagnant.

Without new life in the province’s energy industry,  the future looks bleak.  Staying on the current path is not a practical option. 

These are a few ideas to stimulate life and growth and to create a future for the province and its people that works.

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No more give-aways indeed: Big Oil’s L’il Buddy considering cash breaks for major oil companies

According to the cover story in the latest issue of Natural Resources magazine, the provincial government and representatives of the major oil companies are reviewing ways to increase exploration offshore.

Operators are presenting the government with a “suite” of proposals, according to [industry representative Paul] Barnes — many of them involving fiscal incentives, such as tax credits or royalty relief, that could spur increased exploration. 

Barnes is quoted as saying that the talks are “high-level” likely meaning they involve the Premier and other senior cabinet ministers. The 2007 energy plan included a recommendation to establish a working group involving industry and the provincial government to develop “regulatory and fiscal measures” to promote exploration as well as what the document refers to as “other industry needs.”

One idea reportedly under consideration is a royalty break for dry exploration wells.

For example, companies already producing in the area may favour some type of incentive that’s royalty based. If they drill a well and come up dry, they could get royalty relief on current production. “If there’s some risk offset, that may encourage some additional exploration activity,” Barnes noted. He said there are similar royalty-relief holidays for deepwater exploration in the Gulf of Mexico, to help mitigate the cost of unsuccessful wells.

That’s a significant switch from earlier Conservative positions but it is consistent with what the Conservatives have done since they took office.

For example, before 2003, when oil prices were below US$30 a barrel, Danny Williams attacked any suggestion that the Hebron partners might need a flat one percent oil royalty in the early years of any Hebron project.  Once in office, when oil prices tripled, he agreed to just just a windfall for the oil companies. The provincial government will lose hundreds of millions of dollars as a result, if oil prices remain above US$35 a barrel. 

Other issues for the industry include continued uncertainty about the province’s oil royalty regime.  The 2007 energy plan committed to scrap the existing one and replace it with a new approach.  Four years later there’s no sign of work being done, let alone any progress.

In natural gas, the provincial government still doesn’t have a royalty regime.  That’s despite the fact work on the rules started in 1997 and the 2007 energy plan outlined a draft royalty policy.

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Drilling in Gulf is dangerous and unmanageable

Marilyn Clark, a Magdalen Islander studying at Memorial University, argues that oil and gas exploration in the Gulf of St. Lawrence is unmanageable and dangerous in the current regulatory context.

She writes in the Montreal Gazette:

What will governance look like with four offshore regulators in less than 500 kilometres of water? If we believe that Quebec and Newfoundland will cooperate to prioritize citizens, we are kidding ourselves. They have already sliced moving water down the middle to conduct their environmental assessments.

The lack of a harmonized approach for a single body of water will permit pollution without political accountability; the citizens of one province will have no way of holding the governments of other provinces responsible.

Why is the government gambling with the assets of my region, while the renewable resources of southwest Nova Scotia and British Columbia are protected? The Gulf only fully flushes itself out once a year. If drill cuttings, waste water and chronic spills are the new ingredients of our Gulf, we will be importing our lobster from the Caribbean and our crab from Asia. How can I be expected to invest in my region when I know that the offshore regulatory framework is so flawed that oil companies monitor themselves?

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White Rose field may get GBS

According to the Telegram, the White Rose partners are looking at using a concrete gravity base structure or GBS.

The concrete well-head unit would support a drilling rig.  Oil from the wellhead would be pumped to the existing SeaRose floating production, storage and offloading vessel and from there to tankers to take it to market.

“We’re looking at a whole range of different concepts,” said Paul McCloskey, Husky’s East Coast vice-president

“One of the opportunities that we are considering is the installation of a very skinny GBS.

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Game on! Feds and Quebec start talks on Gulf Accord

The Government of Quebec and the federal government started talks recently aimed at achieving an agreement on revenue sharing for any oil and gas in the Gulf of St. Lawrence, Canadian Press reported.

Details about what the deal would entail, and when it would be implemented, remain vague. But [federal natural resources minister Christian] Paradis described the broad outlines while standing next to [Quebec natural resources minister Nathalie] Normandeau at an event earlier this week.

"We're talking about an administrative deal," he said.

"The goal is to create an office of hydrocarbons, as is the case in Nova Scotia and Newfoundland."

At the heart of the move is a potentially lucrative field known as Old Harry.  Believed to contain significant natural gas or oil reserves, the field lies across a boundary between Quebec and Newfoundland and Labrador proposed in 1964 but never accepted. 

Both Quebec and the Canada-Newfoundland and Labrador Offshore Petroleum Board have issued permits to Corridor Resources to explore Old Harry.

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Related:

• Jurisdiction dispute holding up oil exploration (January 2009)
• Corridor hits big gas (May 2010)
• There are gulfs and then there are oilspill gulfs (June 2010)
• Drill baby, drill: Dunderdale rebuffs Quebec concerns about border, offshore oil spills (July 2010)

DFO doesn’t do research: the video proof

Here is proof from CTV that the Department of Fisheries and Oceans does not do fisheries research.

It is not like this story doesn’t have a number of angles that connect it to stories that are running locally like fisheries research, custodial management and deepwater oil drilling.

And that’s without even mentioning that – as CTV teases it up – this is about one of the most important marine biological discoveries in recent years  never mind that it happened offshore Newfoundland.

Have any local news outlets covered this story at all?  Maybe they have and your humble e-scribbler just missed the reports.

But if they haven’t covered it, you kinda wonder why not.

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9:35 AM Sunday Morning Update:  cbc.ca/nl has a story on the expedition  - finally - but the focus is on Memorial University.  There is no reference to any other participants in the scientific expedition even though it included participation from the Bedford Institute of Oceanography, the Spanish Institute of Oceanography, one other unidentified Canadian university and the Department of Fisheries and Oceans

The only reference to fisheries and oceans is the photo credit for one rather drab photo of a species of coral that the cutline identifies as being already known.

Here’s an example of the other photographs that DFO released [link to Montreal Gazette photo gallery] from the expedition.

Bond Papers brought you more detail on July 21.

Awesomeness Update:  CBC’s online story now includes Glenn Deir’s video report (last week’s Here and Now)  right at the start, embedded in the piece instead of off to one side.  The addition includes large colour photos from DFO’s handout set

This shows a few things, not the least of which is that your humble e-scribbler needs to find a better way to keep track of what is being broadcast locally.  The most important lesson though is that CBC’s website presence can really transform its coverage using both print (the web story text) and video (Glenn’s report) to something that is stunning to watch.  A rather bland still went up first but by Sunday evening, CBC had the piece in all its colourful glory.

Awesome!

Scientists find new sea creatures near deep water oil exploration sites

Scientists from the Department of Fisheries and Oceans, three Canadian universities and the Spanish Institute of Oceanography have discovered marine life previously unknown to science in international waters offshore Newfoundland.

The team has turned up two species of coral and six types of sponge living thousands of feet below the ocean surface.

The researchers are investigating 11 specific areas offshore that collectively cover  a portion of seabed  one and a half times the size of Prince Edward Island. The areas examined include Sable Gully, the Flemish Cap and the Orphan Knoll.

The Flemish Cap is a relatively shallow area and a well-known fishing ground. The Orphan Knoll is in much deeper water about 500 kilometres east of St. John’s.

Almost a dozen areas around the Flemish Cap and the Orphan Knoll received protections by the Northwest Atlantic Fisheries Organization after the United Nations passed a resolution on vulnerable marine ecosystems. Research from this trip will be used to determine if those protected areas need to be refined or expanded when they are reviewed next year, and could determine future fishing policy.

The Flemish Cap, marked in the picture below with a red “X”, and the Orphan Knoll, outlined with a red dashed line, are also prominent features adjacent to areas currently open to oil exploration.

The team is using remotely piloted vehicles as part of a 20 day expedition.  Some of the dives have been to depths of 3,000 metres.

Information collected during the expedition may help to understand temperature and chemical changes in the ocean over the course of the last 1,000 years.  Some of the corals found may live that long.

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Related: “Agency withholds key elements in plans for spills” Postmedia News, July 21, 2010

Gulf #oilspill economic impact not what it seems

Crude is currently trading eight percent below where it was the day the BP rig in the Gulf of Mexico blew up.

CBC quotes a TD economist as saying that:

“It probably won't have a huge impact [on global oil production]. Deepwater drilling accounts for about seven per cent of global output right now.”

But the same online piece notes that Gulf of Mexico production accounts for 30% of American domestic output.

Now if there should happen to be a complete moratorium on new drilling and exploration in deep water as a result of the BP disaster, that could have interesting repercussions.  All those rigs currently being used in the southern US will be available for renewed exploration efforts in other parts of the world.  Like say offshore Brazil or offshore Newfoundland.

And hey, notice that the CBC article refers to tougher regulation.  That doesn’t mean something like a ban;  it just means Americans will start applying the same sorts of regulation that other countries take for granted and where exploration and production is going on as always.

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Old Harry: Gulf prospect bigger than Hibernia

Old Harry is an oil and natural gas deposit in the Gulf of St. Lawrence that could be twice the size of Hibernia. As it is the current estimated size is about the same as the current proven, probable and possible oil at Hibernia.
The field is back in the news because one of the companies involved – Corridor Resources – is planning to do some exploration work on the portion of the field that is within the Newfoundland Offshore Area. Corridor has licenses for the field from Quebec and Newfoundland and Labrador.
There are two major problems.  Firstly, the border in the Gulf has not been defined clearly enough in that area.  Secondly, and more importantly, nothing is likely to happen on the Quebec side of the border unless and until Quebec City and Ottawa resolve a royalty/jurisdiction dispute.
The Quebec government is looking for a deal:

"This represents a good opportunity and lot of money for Quebec, especially at a time where we are trying to limit our dependence on oil imports," said Natural Resources Minister Nathalie Normandeau. "We want to settle this issue for good. Quebec has been very patient and we're taking a firmer line today. We've been waiting for 12 years and now we want to reach a deal."

And there’s a unanimous resolution in the Assemblee Nationale to back it up.
All things considered, oil and gas development in Newfoundland and Labrador is likely to shift to the western portion of the province sooner rather than later. 

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h/t to labradore.

Fallow field?

nottawa raises an interesting point about NALCO’s bailout of the Parson’s Pond oil licenses.

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NALCO buys pot from Leprechaun, has one year to find black gold

The provincial government’s energy corporation will spend at least $20 million over the next year to drill exploration wells on three licenses near Parsons Pond.  The wells must be drilled within the next 12 months or so or the licenses will revert to the Crown.

NALCOR Energy acquired a 67% interest in the venture for slightly more than CDN$500,000; that represents about 85% of the interest previously held by Calgary-based Leprechaun Resources. The remainder is split among a group of small private sector companies:  Leprechaun Resources, Deer Lake Oil and Gas, InvestCan and Vulcan Minerals.  The only changes in the interests held by each company appears to be with the Leprechaun portion.

Leprechaun tried to raise capital for the venture last year through a public share offering.  Evidently that offering didn’t attract as much attention as expected. It appears that the provincial government’s energy corporation stepped in to salvage the project. 

Vulcan and InvestCan are also partnered on a separate venture in the Bay St. George region.  The drilling program on the Robinsons No. 1 is planned to finish this year at at depth of 3600 metres.  Earlier this year, Vulcan drilled two wells in the shallow Flat Bay deposit, both of which showed oil.

In mid July 2009, the provincial environment department notified Leprechaun that its application for an access road at Parsons Pond would require an Environmental Preview Report.

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Devil in the details Update: From Moira Baird’s excellent Telegram story:

1. Expiry date on the existing licenses:  February 1, 2010. That’s two tight a time frame to get three holes spudded and assessed.

2.  Drilling as early as September:  Using what rig?  If NALCO doesn’t have one already lined up and on site, they will have to bring one in from as far away as Alberta or the Gulf Of Mexico.  Good luck with that.  The best prospect would be to use the rig Vulcasn currently is using on Robinsons No. 1.  Availability late fall or early winter.

3.  Friends in high places:  NALCO’s Jim Keating on the possibility of getting an extension on the licenses:  “I believe, if required, we'll be able to seek an extension for the licences to make sure that ... we optimize the best results for the people of the province and our partners.”

Can you say “unfair advantage”, boys and girls?

4. Which other companies:  “[NALCO boss Ed] Martin said Nalcor has been assessing the west coast for the past two years and had also been approached by some of the exploration companies.”

Okay.  Which ones and for what properties?

We know about Leprechaun, which has former cabinet minister Paul Shelley in key positions.  How about Deer Lake Oil and Gas with former Peckford aide Cabot Martin at the helm?

Those would be the most likely choices and they might also explain why Leprechaun effectively got what looks more like a government bailout than a farm-in. 

After all, if Leprechaun had the cash to do the drilling program, it wouldn’t have sold out to NALCO or anyone else.  And if all Leprechaun had needed was an easy extension of the license to get the job done, they also wouldn’t have sold out such a large stake to NALCO.

Nope, license extensions are only easy if you’ve got connections and NALCO is connected all the way to the top.

5.  Pull the other one:  $14 million out of a total of $20 million?  The drilling program was estimated to cost $26 million, not 14.  Where’d the rest of the cost go?

Lack of royalty regime hampers further oil development

Not surprisingly, some people attending the NOIA conference in St. John’s are wondering what is next on the horizon.

As CBC reports, there is much talk of developing smaller fields in the Jeanne d’Arc basin.

There is also the recent announcement by StatoilHydro of a significant oil find at its Mizzen property, farther offshore than the three existing projects and Hibernia South and Hebron both under development.

Regardless of its size, Mizzen poses a number of challenges, not the least of which is the cost and technical issues of developing a field – even one of upwards of three billion barrels of oil – in deep water.

There are at least two others.

One is the impact of the United Nations Convention on the Law of the Sea (UNCLOS). Mizzen is well outside the 200 mile exclusive economic zone but may not lie outside the definition of the continental shelf.   If this is the case, the coastal state – namely Canada – would be required to set aside a portion of the revenue (maximum seven percent) from any development for distribution to the other states which are party to the convention.

Article 82

…

2. The payments and contributions shall be made annually with respect to all production at a site after the first five years of production at that site. For the sixth year, the rate of payment or contribution shall be 1 per cent of the value or volume of production at the site. The rate shall increase by 1 per cent for each subsequent year until the twelfth year and shall remain at 7 per cent thereafter. Production does not include resources used in connection with exploitation.

That’s potentially a significant cost to both Newfoundland and Labrador and to the companies.

That links to the other problem, namely the absence of an oil or gas royalty regime in the province.  Hibernia, Terra Nova, White Rose and Hebron all have royalty regimes.

The 2007 energy plan wiped out the existing generic oil regime. While the plan promised to replace it and issue a new gas regime, neither has emerged in the intervening years. There is no sign of either coming in the near future.

Even the development of smaller fields on the Jeanne d’Arc basin not associated with the existing projects is affected by the lack of a royalty regime.  The Hibernia South agreement is proposed using the Hibernia royalty regime developed in 1990 and amended in 2000, with some minor amendments.  Other projects would not have that as a basis, nor would it have the Terra Nova, the generic regime used at White Rose or the amended generic regime used for Hebron.

As Danny Williams said in 2005, oil companies don’t like risk.  Really though it isn’t that they dislike risk as much as they prefer predictability.  Even a volatile political climate is manageable, but when it comes to money, the companies like to have a good picture of what their costs will look like over time. That’s where an established royalty regime comes in handy.

In the meantime, some exploration will continue.  Seismic is pretty straightforward.  But when it comes to drilling holes and maybe looking at production, the lack of a predictable financial regime tends to make oil companies skittish.

The situation today is much the same as it was three or four years ago.  There are more exploration and development prospects for Big Oil than there is available capital.  They will put their money where they can figure out the financials.  Anything they can’t calculate  at all will go to the bottom of the pile in favour something somewhere else, even in a part of the world where the politicians in charge change with the sound of gunfire.

Now that Hebron and Hibernia South are pretty much done, the provincial government should turn its attention to restoring stability in the offshore financial regimes.

Above all else, that is what will determine the location of the next project or if there is a project at all.

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Old Harry: Jurisdiction dispute holding up oil exploration

According to Deer Lake Oil and Gas, a small oil company headed by former Peckford and Moores era advisor Cabot Martin, exploration of promising oil prospects in the Gulf of St. Lawrence is being held up by a dispute between Ottawa and Quebec City over jurisdiction of the underwater resources.

Halifax-based Corridor Resources holds exploration licenses for one of the most promising structures, called Old Harry.  The Canada-Newfoundland and Labrador Offshore Petroleum Board website shows Corridor holds Exploration License 1105 which covers the area.  The company website states that Corridor also holds exploration licenses from Quebec for the portion of the Old Harry structure in the disputed area.  The company has conducted 2D seismic investigation but to date no drilling has taken place despite strong signs of oil presence including a number of seeps.

In 2003, Hydro Quebec Oil and Gas farmed in on the Quebec licenses on Old Harry.

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Conoco hints all not well in local oil patch

ConocoPhillips is working to counteract the impression left in a National Post story Friday that it was unhappy with the provincial government's equity demand for offshore oil and gas projects.

The Post reported that the company was having a hard time justifying an exploration program in the Laurentian sub-basin off the south coast of Newfoundland, based on the equity demand:

Kevin Meyers, president of ConocoPhillips' Canadian subsidiary, said yesterday one of the well's challenges is that the new regime involves the province taking an equity stake if the well produces a discovery, but not sharing in the cost of exploration, which could add up to hundreds of millions of dollars.

"That makes it a much more tolerable risk scenario for them - if you find something and it's economic, then they participate," Mr. Meyers said in an interview.

"But it does add an extra burden on the people who have to carry the exploration cost, so they are essentially carrying that ownership, and so that is one of the challenges in the regime."

As the Telegram reports on Saturday, the company issued a terse statement late Friday afternoon. The statement - issued by the vice-president of corporate communication said, in full:

"ConocoPhillips Canada continues to be interested in its deep water exploration project off the southern coast of Newfoundland and Labrador.

"This is a high-risk, high-cost project located in a harsh environment, and thus has considerable technical and economic challenges.

"We have been working with the province to progress the project and to gain better understanding of the recently released energy plan, and we appreciate the government's willingness in doing so.

"The implication portrayed in (Friday's) National Post article is that ConocoPhillips is challenging the province and the premier and that is simply not the case.

"ConocoPhillips looks forward to continuing to work with the province in order to test this unexplored region."

Go read the Post story again.

There's no implication that the company is challenging the provincial government. The operations vice president pointed to the obvious concern the company shares with others interested in further exploration. Sure there are projects underway and the province has acquired small shares of projects that have been already developed or where the so-called "equity" stake can be calculated and the financial implications controlled.

It's very different for exploration where there is more risk than guaranteed return. Exploration is the key to the long-term future of the province's oil and gas industry.

Drilling in deep water is costly. The provincial government's position is that it will assume no risk for the cost of exploration. If the wells are dry, the company or companies eat the cost fully. If the wells produce, the provincial government wants a slice of the gold medal, but no share of the pain incurred to get to the podium.

Kevin Meyers also made public what has been known in the oil patch for some time: the companies still don't have clarity on the financial implications of the province's energy plan and that is affecting decisions on exploration. Uncertainty or shifting provincial demands may also be affecting conclusion of the Hebron deal.

The energy plan - announced as part of last fall's election campaign after a decade of development by the provincial government - eliminated the existing generic oil royalty regime entirely promising that a new one would be developed at some undefined point in the future. Meanwhile, a draft gas royalty regime was unveiled, but it is still at the draft stage. A version shared with the oil companies before the plan was released was reportedly criticised sharply, in private. That's why the energy plan contained a "draft" and not a final royalty regime.

As such, companies interested in exploration suddenly found themselves with less certainty about the future than greater certainty. Meyer's comments contradicted the political spin from the provincial government that the energy plan was completed and had restored "clarity" to the ofshore's fiscal issues.

Companies like ConocoPhilips - which has potential for natural gas in it's south coast licenses - have to justify exploration costs without knowing what the overall financial implications might be resulting from a discovery. That's a difficult exercise where exploration costs are escalating anyway, outside the added costs of working in deep water.

A well drilled in the Orphan Basin last year cost a reported US$200 million, double the cost of a typical well offshore Newfoundland. Changes in the strength of the Canadian dollar also effectively increased the cost of drilling offshore by removing the dollar's discount bonus.

The companies appear to have been trying to keep their dissatisfaction quiet in the hopes that the problems could be solved more effectively behind closed doors. Meyer's remarks undermined the media blackout, hence the quick reaction by the corporate communicators to slap a happy face seal on further comment.

If the Premier responds at all and does so calmly, then the whole thing will blow over and the problems can be sorted out.

If he's having an off day and vents a little spleen, the whole offshore mess - currently contained - could spill on the streets of St. John's like a political Exxon Valdez.

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Exxon signs rig for Indonesian drill program

ExxonMobil has signed a deal with Seadrill to use its West Aquarius ultra-deep water semisubmersible rig for exploration offshore Indonesia.

The three year lease is estimated to cost US$570 million.

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NS improves offshore competitiveness

The Canada-Nova Scotia Offshore Petroleum Board has introduced a new exploration license at a lower cost but with a shorter term.