Oil companies have passed on exploration parcels put out for bid by Nova Scotia’s offshore regulator for the third time in four years, a trend the province’s energy minister says is symptomatic of a market downturn affecting the industry.
The Canada Nova Scotia Offshore Petroleum Board said Thursday that the 2016 parcels are located in shallow water on the Scotian Shelf adjacent to the Sable offshore natural gas project.
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The call for bids was issued on May 2 and the bidding closed on Oct. 27.
Energy Minister Michel Samson said while he was disappointed by the latest results, he wasn’t caught off guard. There were also no bids in 2013 and in 2014.
“It’s disappointing but not overly surprising considering the status of the industry and the fact that many of the largest players have cancelled projects throughout the world in light of the downturn in oil prices,” said Samson.
He said the positive aspect is that the major companies who have already committed to exploration off the province haven’t left.
“Companies have made a significant amount of research and investment … and they have maintained their commitments here in Nova Scotia, which I think speaks volumes to their confidence in our offshore,” he said.
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In 2012, Shell Canada Ltd. and BP Exploration Operating Company Ltd. committed more than $2 billion combined to search for oil and gas off the province’s coast.
Statoil Canada Ltd. bid $82 million in 2015 to explore two parcels.
Shell announced in September that it had abandoned the first of its deepwater exploration wells about 250 kilometres off Halifax, saying it didn’t find enough oil for commercial production.
The oil giant said it had turned its attention to a second exploration well, Monterey Jack, which is located about 120 kilometres away.
BP announced in March it had delayed the start of its exploration until 2018.
The regulator said the next call for bids would be issued next spring.