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BP, Shell Canada Ltd. get Nova Scotia deepwater rights

BP to spend $1 billion; Shell to spend $35 million in 'significant' geology

Guest Post

November 16, 2012

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Suddenly Nova Scotia is the place to be for deepwater exploration. Oil giants BP and Shell Canada Ltd. have committed to spend in excess of $1 billion poking holes in eight offshore parcels, the Canada-Nova Scotia Offshore Petroleum Board said today.

BP, fresh from paying $4.5 billion in penalties related to the Deepwater Horizon explosion and spill, agreed to spend $1 billion after successfully bidding on four parcels.

“This award gives us access to a significant piece of geology, one of the most promising new deepwater areas to be licensed in recent years,” said Mike Daly, BP’s executive vice-president of exploration, in a statement.

Shell committed to spend $31 million on four parcels. The company committed earlier this year to spend $970 million to explore prospective parcels in the region.

The new commitments “represent the largest total bid amounts in response to a call for bids in Nova Scotia’s offshore area and for Atlantic Canada,” board chief executive officer Stuart Pinks said in a statement.

A recent analysis conducted by the agency estimated six offshore zones contained 122 trillion cubic feet of natural gas and 8.1 billion barrels of oil in place.

“It is important for our community to know that before any exploration activity can take place on these licenses, operators must demonstrate to the board’s satisfaction that such activities will be conducted in a manner which holds the health and safety of offshore workers and the protection of the offshore environment paramount,” Pinks said.

The announcement comes as a rig operated by Houston-based Black Elk Energy caught fire in the Gulf of Mexico.

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