By Shawn McCarthy
As appeared on page B4

Regulators in Nova Scotia are set to announce some business-friendly changes to the offshore oil and gas licensing regime, in the hopes of encouraging oil companies to explore in the area, where activity has virtually ceased.

Diana Dalton, chairwoman of the Canada-Nova Scotia Offshore Petroleum Board, was scheduled to announce this morning new terms and conditions affecting exploration offshore the province’s East Coast.

Industry spokesmen said they were not expecting a major overhaul of the regulatory regime, but that the board would provide greater flexibility in assessing whether companies had fulfilled their work commitments under the licences.

Paul Barnes, a spokesman for the Canadian Association of Petroleum Producers, said the Nova Scotia offshore has been plagued by poor drilling results, and industry players are questioning the opportunities there.
 “I think the regulatory changes will be positive, but I don’t see rigs coming into the harbour next week as a result of it,” Mr. Barnes said. “But it may mean some companies take a second look, which is positive in its own right.”
Nova Scotia has seen some commercial natural gas developments in its offshore.

These include the initial Sable Island project, which has recently shown some signs of being less productive than expected.

As well, EnCana Corp. is in the midst of regulatory approval to develop its Deep Panuke gas field, which should yield 300-million cubic feet a day when it comes on stream in 2010.

EnCana spokesman Alan Boras said the Calgary-based oil giant had no concerns about the regulatory process, noting that changes had been made to streamline the environmental and engineering reviews.
But there has not been an exploratory well drilled in the waters off the province in a few years.

Charles Cirtwill, president of the Atlantic Institute for Market Studies, was scathing in his criticism of both the regulatory and tax regimes, which Nova Scotia applies to offshore energy projects.

He said both need major overhauls.

“The problem for the East Coast offshore has been the same for the past 50 years: We treat this as the golden opportunity and we try to steal all the gold right up front,” he said.

“We don’t recognize that a mature industry isn’t going be created here tomorrow.

“So we create a regulatory and tax environment that quite honestly is better suited to Alberta or the [U.S.] Gulf Coast.”