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Nova Scotia Drawing Significant Exploration Dollars

Nova Scotia Drawing Significant Exploration Dollars

The Canadian-Nova Scotia Offshore Petroleum Board and the Nova Scotia Petroleum Directorate awarded 19 offshore Nova Scotia exploration licenses and three onshore licenses yesterday for a total of C$592 million, the largest investment in petroleum exploration ever made in Nova Scotia.

The Sable Island Offshore Energy Project producers, Mobil Corp., Shell Canada and Imperial Oil, contributed the bulk of the investments, C$192 million for six parcels. The largest bid for one license was valued at C$93 million and was made by a group consisting of PanCanadian Petroleum, Marathon Canada, Murphy Oil and Norsk Hydro.

"This is the start of a new era," Nova Scotia Premier Russell MacLellan said in a speech at the Offshore Technology Conference in Houston. "It shows that the petroleum sector has confidence that Sable is just the beginning of Nova Scotia's vast oil and gas potential."

The offshore leases were put up for exploration bids in December. Offshore leases are good for five years, and up to nine years under certain conditions. The three onshore tracts awarded totaled $9.8 million. Onshore leases are valid for three years.

Exploration will spread beyond the Sable Island area to include lands south of the island as well as in the Gulf of St. Lawrence. Offshore activity will also be stepped up with the awarding of three-year exploration rights to Hunt Oil and Northstar Energy.

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