The Board is responsible for the management and administration of offshore petroleum licences and associated land rights. Each rights activity is subject to a review and approval process. Pursuant to the Canada-Nova Scotia Offshore Petroleum Cost Recovery Regulations, Cost Recovery fees may be charged. For additional information on Cost Recovery, please click here. There are three types of licences: exploration, significant discovery and production.
Exploration Licences (EL) may be issued for Crown lands through an established Call for Bids process that is open and transparent. An EL has a maximum term of 9 years and provides licence owner(s) with the right to explore, the exclusive right to develop, drill and test for petroleum, and to obtain a production licence.
Section 71(3) of the Canada-Nova Scotia Offshore Petroleum Accord Implementation Act, and section 74 of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation (Nova Scotia) Act (Legislation), states: “… Board may, on the application of the interest owners of two or more exploration licences, consolidate those exploration licences into a single exploration licence, subject to any terms and conditions that may be agreed on by the Board and those interest owners.” The Board making the decision to consolidate two or more ELs is a "fundamental decision" within the Legislation, and is subject to review by the Minister of Natural Resources for Canada and the Minister of Energy for Nova Scotia.
Decisions by the Board respecting applications for consolidation will be made on an individual basis. Currently, the Board has identified two considerations that are taken into account when it reviews a request to consolidate ELs.
- Prior to submitting an application for consolidation, the Interest Owner(s) must demonstrate that they have completed new and significant exploration activities on the Exploration Licences Lands (“Lands”). Examples of new exploration activities could include: acquisition of new geophysical data over a significant portion of the Lands, licencing and/or reprocessing of existing geophysical data over a significant portion of the Lands, or drilling an exploration well.
- The Interest Owner must provide a reasonable geological basis for consolidation explaining how future exploration will be optimized by Consolidation. In doing so, the Interest Owner(s) must describe how the new exploration data (above) has been used to support the geological basis for consolidation.
Significant Discovery Licences (SDL) may be issued for lands within a declared significant discovery area. The term of an SDL is indefinite and was designed to maintain an explorer's rights during the period between first discovery and eventual production.
Production Licence (PL) confers the right to produce petroleum in any area which is subject to a commercial discovery. In order to be deemed a commercial discovery, an operator must demonstrate that the discovery contains reserves that will justify the investment of capital and effort to bring the discovery to production. A PL has a term of 25 years but may be extended if commercial production is continuing or is likely to recommence.
Rights Management in the Nova Scotia offshore area is based on the Canadian Petroleum Resources Act model, as illustrated below.