In hearings begun Monday concerning the inter-provincial boundary dispute between Nova Scotia and Newfoundland and Labrador — which could ultimately decide how oil and gas reserves offshore should be divided — Nova Scotia’s legal team told the arbitration tribunal that the current line is an “equitable offshore boundary,” and — “all other considerations are subordinate.”

The Laurentian sub-basin’s offshore area is thought to contain significant oil and gas reserves. Although Nova Scotia has historically controlled the region, Newfoundland’s proposed boundary line would put almost the entire sub-basin in its territory. The arbitration tribunal is scheduled to rule by the end of March 2002 on how the boundary will be drawn to divide the offshore areas for petroleum exploration and development.

Yves Fortier, lead counsel for Nova Scotia, said, “the existing line is the most accurate possible expression of what the parties considered to be a reasonable, fair and equitable boundary of the areas. Nova Scotia has always understood that the line dividing its offshore area from that of Newfoundland and Labrador was settled long ago, in fact if not law.”

Nova Scotia’s legal case was publicly disclosed on the opening day of the second round of hearings in the dispute. Following the first round, the arbitration panel ruled that Nova Scotia and Newfoundland had no legally binding agreement on the boundary. However, the panel also ruled that it would consider the conduct of the parties when setting out to draw a boundary line in the second hearing phase.

Fortier said Newfoundland and Labrador now want to disown the boundary line that has been respected since the eastern provinces struck an agreement 37 years ago. “This is the same line that Newfoundland and Labrador negotiated in good faith in 1964 — the same line that it has respected in practice ever since,” he said. “Newfoundland’s attempt to seize more territory is not consistent with the agreement it struck not only with Nova Scotia, but also with New Brunswick, Prince Edward Island and Quebec.”

Gordon Balser, the minister responsible for the Nova Scotia Petroleum Directorate, said resolving the boundary dispute will be positive for both his province and the province of Newfoundland and Labrador. “Both provinces need clarity so that oil and gas activities can go forward in the area,” Balser said. “Our two provinces share a common interest in many other East Coast energy issues. Settling the boundary will help us focus on advancing these interests.”

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