HALIFAX – BP Canada is scaling again its oil and gasoline exploration plans off Nova Scotia, giving up half the offshore space included in its exploration licence.

The Canada-Nova Scotia Offshore Petroleum Board mentioned Tuesday the power large is surrendering 50 per cent of the realm included in its licence — a consolidation of 4 offshore parcels roughly 300 kilometres southeast of Halifax.

The Seadrill West Aquarius drilling platform is shown in this undated handout photo. BP Canada is scaling back its oil and gas exploration plans off the coast of Nova Scotia, giving up half the offshore area included in its exploration licence.
The Seadrill West Aquarius drilling platform is proven on this undated handout photograph. BP Canada is scaling again its oil and gasoline exploration plans off the coast of Nova Scotia, giving up half the offshore space included in its exploration licence.  (HO – BP Canada MANDATORY CREDIT / THE CANADIAN PRESS)
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The transfer comes after Hess Corp., BP’s accomplice within the Scotian Basin exploration drilling undertaking, introduced in November its first effectively didn’t encounter industrial portions of hydrocarbons — simply over a 12 months after Shell Canada mentioned it could seal the second of two exploration wells for a similar cause.

Although the state of affairs seems to problem the province’s offshore potential, an power analyst mentioned the choice is largely about market forces.

“Shell backing out and BP firming it down says extra concerning the market circumstances and the favourability of the market in the direction of this kind of manufacturing than it does concerning the precise viability and industrial exploration of this potential useful resource,” Edgar van der Meer, a senior analyst with NRG Knowledgeable, mentioned in an interview from Toronto.

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In late 2012, petroleum large BP gained the appropriate to discover in Nova Scotia’s offshore after it submitted a $1-billion bid, the best ever accepted for deepwater exploration rights in Atlantic Canada.

However the offshore petroleum board mentioned Tuesday BP has didn’t drill 4 wells throughout the first part of its exploration licence, required for the second part to be permitted.

The corporate has opted to pay a $1-million deposit to increase the primary part of its exploration licence, which ended Monday, by one 12 months, the board mentioned. BP would nonetheless want to use for authorization if it decides to drill a effectively through the extension interval.

Maureen Herchak, a spokeswoman for BP Canada, mentioned the corporate’s choice to surrender half its “very massive acreage” comes because of routine licence administration exercise.

She mentioned BP is continuous to judge knowledge from its first exploration effectively within the space — the Aspy D-11 effectively, which reached a complete depth of seven,400 metres — earlier than growing a plan going ahead.

“The corporate seems to be at this from a long-term perspective,” Herchak mentioned in an interview from Calgary.

In the meantime, the board mentioned if BP doesn’t drill a effectively throughout its extension interval, the corporate would forfeit the deposit and both give up the remaining space underneath its exploration licence, or be required to make a $2-million deposit for an additional one-year extension.

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The Nova Scotia authorities has closely promoted the province’s offshore oil and gasoline sector in recent times, estimating a possible useful resource of 121 trillion cubic ft of gasoline and eight billion barrels of oil.

Power Minister Derek Mombourquette mentioned the way forward for oil and gasoline exploration within the province stays optimistic.

“We now have curiosity from main international corporations,” he mentioned in an emailed assertion. “BP continues to carry parcels, as does Equinor (previously Statoil).”

Mombourquette mentioned an industry-nominated name for bids can be presently open, and ongoing geoscience work continues to probe the offshore.

The Nova Scotia authorities mentioned final 12 months it plans to take a position $11.eight million in geoscience analysis over the following 4 years to encourage offshore oil exploration within the area.

The exploration program collects core samples and makes maps of the ocean backside and sub-bottom.

“It is a long-term course of, and we should be affected person,” Mombourquette mentioned. “When the time and market circumstances are proper, there shall be extra exercise.”

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Van der Meer mentioned the province’s funding within the offshore has helped appeal to massive gamers to the area.

“Oil and gasoline and pure assets are a major profit to each the provinces and the Canadian financial system as a complete,” he mentioned. “However in fact there are the environmental points that aren’t to be discounted.”

Final June, BP leaked 136 cubic metres of artificial drilling mud from its West Aquarius drilling unit, sparking widespread concern about offshore exploration in Nova Scotia.

Mi’kmaq leaders mentioned the incident raises questions concerning the safety of the lands and waters, whereas others expressed concern concerning the potential affect on the province’s profitable fishing {industry}.

Whereas van der Meer mentioned offshore oil and gasoline improvement is a “very massive financial driver,” he mentioned there are a number of stakeholders that may be immediately impacted if one thing have been to go improper.

In the meantime, he mentioned the following 12 months shall be necessary to figuring out BP’s future within the area.

“The season during which a lot of the work could be finished is approaching, so at this stage within the sport it does appear to be BP will make one other try (at exploration).”

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