Ottawa Rejects $1.5 Million Offshore Oil Exploration Bid in Nova Scotia

Federal Natural Resources Minister Jonathan Wilkinson clarified that the rejection of a $1.5 million bid to restart oil and gas exploration in Nova Scotia’s offshore waters does not mean there are no prospective projects for the future.

In a Tuesday interview, the minister highlighted that the joint decision with Nova Scotia to reject an exploration license approved by the Canada-Nova Scotia Offshore Petroleum Board sets a high bar for substantial oil and gas advancements, acknowledging the intensified global efforts fighting climate change.

“It doesn’t mean that there will never be approvals, but it is incumbent on us to be assessing these projects and ensuring that they are good from a broad public policy perspective,” said Wilkinson.

He further mentioned that there are presently no considerations regarding the implementation of a complete prohibition on all offshore oil and gas development.

“I think the market will actually decide those issues” he added. “At this stage we have no intention of moving ahead with any kind of moratorium.”

The approval granted by the board to Inceptio Limited in October was for a shallow-water area located on the Sable Bank of the Scotian Shelf. Nevertheless, the bid was contingent upon the endorsement of the federal and provincial ministers of natural resources, who ultimately rejected it in a decision made public late Monday.

If approved, Inceptio’s bid would have brought back oil and gas exploration activities off the coast of Nova Scotia. The only active offshore natural gas projects in the province, the Deep Panuke project by Encana and the Sable Offshore Energy Project by ExxonMobil, both permanently stopped producing in 2018.

Wilkinson stopped the license on November 2 to review additional facts, which led to the ministerial decision. He highlighted that factors such as the aspiration to promote renewable alternatives, environmental considerations, and the financial magnitude of the bid contributed to the ultimate decision-making process.

“The bid that came in was a very small bid,” added Wilkinson. “That raises questions about the level of risk and the level of complexity you are willing to introduce… for what is a very small amount of money.”

As part of Monday’s agreement, Wilkinson and his Nova Scotian counterpart, Tory Rushton, declared that they would be establishing a collaborative regulatory framework for offshore renewable energy. This involves broadening the mandate of the Canada-Nova Scotia Offshore Petroleum Board.

In September 2022, the board solicited bids for eight offshore parcels but only received two submissions; subsequently, it approved one. Inceptio’s bid, valued at $1.5 million, was relatively modest in comparison to industry norms and indicated the intended spending for the first six of the nine-year exploration license period.

On Tuesday, the board confirmed that the company’s bid deposit would be refunded, and the offshore parcel would remain under Crown land ownership. In an email statement, the board mentioned that it “continues to function as the overseer for oil and gas operations in the Canada-Nova Scotia offshore region and is actively gearing up for the extension of our responsibilities to become the Canada-Nova Scotia Offshore Energy Regulator.”