Nova Scotia on Monday announced its largest offshore lease sale ever -- 7.6 million acres in 11 blocks off the southeastern coast -- that are to be auctioned to operators in an area thought to contain about 120 Tcf of natural gas and 8 billion bbl of oil.

The announcement by the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) also was promoted at the Offshore Technology Conference, the world's largest such event, which is being held this week in Houston.

Nova Scotia Premier Darrell Dexter said the call for bids shows the "strong growth potential" of the province's offshore industry and coincidentally follows Shell Canada Ltd.'s C$970 million exploration bid for four parcels in Nova Scotia's offshore earlier this year, which was the highest bid ever in Eastern Canada (see Daily GPI, Jan. 23).

"The province's investment in industry-standard geoscience has confirmed Nova Scotia's offshore petroleum potential and is attracting a lot of interest around the world," said Dexter. "With Shell Canada announcing its return to offshore Nova Scotia in January, I'm confident we are on the radar of the world's oil and gas companies."

The CNSOBP issued the call for exploration rights for parcels identified as having potential for oil and gas in an area that includes six parcels nominated by industry, it noted. Nine of the parcels are in deepwater and skirt the shelf area, including areas near the Sable and Deep Panuke gas projects. They also are close to Shell's recently acquired offshore parcels. Deep Panuke, operated by Encana Corp., has been delayed several times but it is scheduled to begin operations this year (see Daily GPI, Feb. 21).

"Parcels 1 and 2 are located offshore Nova Scotia in the Sable Island area where 23 gas discoveries have been made to date," said CNSOBP CEO Stuart Pinks. "Parcels 3, 4, 5 and 6 surround the recently acquired exploration licenses by Shell... in the southwestern part of the Nova Scotia offshore area. Parcels 7 to 11 are located in deeper water seaward of the Sable Island area where only six wells have been drilled to date."

Nova Scotia has invested C$15 million over the last three years to provide the energy industry with a clearer picture of the geology of the offshore, Dexter noted.

"We will continue to invest in important geoscience information and knock on the doors of the world's top oil and gas companies," said Dexter. "The momentum building around our offshore continues to grow and we are going to work hard to keep it that way."

A portion of the offshore lands to be available for exploration already has undergone a strategic environmental assessment (SEA), but the remaining parcels would need to be assessed for potential exploration activities over the next several months, which would include a public comment period, the board noted. The SEA would identify any environmental issues that a successful bidder would need to address when performing a project-specific environmental assessment required before any activity could begin.

Operators interested in making bids in lease sale NS12-1 "will have to demonstrate experience drilling in deepwater to be considered," according to the province. Bids are open until Nov. 7. More information, including geoscientific assessments, may be found at www.cnsopb.ns.ca .

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