NOVA SCOTIA CANADA: THE NEXT PLAY

Regulation advances expected to save industry millions

Reviews drop from 30 to 11 months

Regulatory improvements meant to cut the amount of time and red tape necessary to get approvals for drilling is just one major item on the list of advances for offshore Nova Scotia.

As changes are made to attract even more business to Nova Scotia’s offshore, regulatory improvements are essential. Changes already underway are more goal-oriented than prescriptive, say officials with the Department of Energy and the federal government. This shift makes it easier to address new technologies and environmental concerns.

The results of that shift in thinking are already being realized. The Canada-Nova Scotia Offshore Advisory Board (CNSOPB) and other federal authorities carried out joint hearing processes for the approval of the Deep Panuke project. The 2007 regulatory review of Deep Panuke took 11 months compared with the last review of a project, i.e. SOEP, which lasted 30 months.

Another regulatory improvement is designed to save exploration companies millions of dollars: Nova Scotia has removed the requirement to flow-test wildcat wells. The Nova Scotia Offshore Area Petroleum Drilling Regulations were amended August 17, 2006. These amendments removed the mandatory requirement for a flow test on all wildcat wells drilled. The old regulations mandated a test rather than giving the regulator the option of requiring one.

Nova Scotia also believes that the opening of the online Data Management Centre (DMC), with free 24/7 access to geoscience information, will bring offshore Nova Scotia in line with other countries like Australia and New Zealand, who have decided that inexpensive access to data is a priority in seeing their offshore developed.

Regulatory improvements will continue as the Frontier Offshore Regulatory Review Initiative (FORRI) intends to increasingly modernize offshore Nova Scotia’s regulatory framework. The partnership of federal, provincial and territorial governments will result in a more modern, flexible regulatory regime. “The goal is offering regulations that can respond to rapid technological changes and innovation,” says Bruce Cameron, Nova Scotia Department Director of Strategic Policy, Planning & Services.

He adds that governments have agreed to apply the principles of “Goal-Oriented Regulation” in the offshore and frontier. The model provides flexibility for operators and, at the same time, fosters innovation and offers a competitive regime. This approach is consistent with other major offshore jurisdictions like the UK, Norway and Australia.

The first regulatory project, now underway, is the goal-oriented Drilling and Production Regulations. Stakeholder consultations on the new regulations ended in August 2007 and are targeted to come into force in late 2008. The Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act and the Canadian Oil and Gas Operations Act will be revised in coming years to accomodate these changes.