Corridor Resources Proposes Offshore Drilling Between NB and PEI

16 04 2014
Exploration Corridor Resources CeO applauds development of accord as path to development

SAINT JOHN • A resource company leading the development of onshore natural gas in New Brunswick says there’s “significant interest” in what is beneath the province’s coastal waters as well.


“The Gulf of St. Lawrence, including areas in between Prince Edward Island and New Brunswick and off of northern New Brunswick, it has very good prospective geology,” said Corridor Resources president and CEO Phillip Knoll in an editorial meeting with Brunswick News on Tuesday.


“It has the potential to have hydrocarbons, but there has been very little exploration offshore New Brunswick.”


The Tory government announced earlier this year that it has taken the first steps at securing an agreement with Ottawa that would make New Brunswick the principal beneficiary of any offshore petroleum found beneath its coastal waters.


The lack of an accord is partly why the province’s waters remain unexplored, Knoll said.


“You can’t get approval to drill,” Knoll said of the province’s current offshore resources.


The offshore accord will set exploration and development rules and aim to ensure that New Brunswick benefits from any commercially viable resources found.


The Energy Department has since announced that it will hire a research analyst this fiscal year to focus on the offshore oil and natural gas file to review offshore accords already in place in Nova Scotia and Newfoundland and aid in ongoing research and analysis of offshore reserves.


Corridor already has licences to explore for oil and gas in an undersea area called Old Harry in the Gulf of St. Lawrence that straddles the offshore borders of Nova Scotia and Newfoundland. In 2011, an accord between the federal government and Quebec was also signed to allow for the development of petroleum resources within the Quebec region of the Gulf of St. Lawrence.    Earlier this year, the Quebec government announced a partnership with Corridor and a second firm to exploit the oil resources of Anticosti Island in the St. Lawrence, estimated at 46 billion barrels.


The Quebec government will invest a total of $115 million in the project.


Under that deal, Resources Quebec will have a 35 per cent share in the joint venture to carry out the exploration. The provincial government estimates there will be $45 million in economic benefits during the next 30 years if the project is a success.


“I think there will be significant interest in drilling in the entire Gulf of St. Lawrence,” Knoll said, specifically speaking about the potential in New Brunswick waters.


“It’s going to take a discovery or two.


“Corridor is the leading candidate to drill in the Gulf of St. Lawrence with our Old Harry prospect.”


He added: “We have also identified some other prospects in Newfoundland and Quebec waters and if we’re successful with one of those exploration projects there will be lots more interest to drill in other areas of the Gulf because the geology is there that supports it.”


“There are hydrocarbons there, it just depends on where they are and whether they are prolific enough to be economic.”


Unlike other jurisdictions, New Brunswick doesn’t have an offshore agreement with the federal government that outlines terms for the exploration and development of potential offshore petroleum resources.


The federal government and Newfoundland signed the Atlantic Accord, an agreement reached in 1985 to manage offshore oil and gas resources in the waters next to that province.


That name was also used to describe a 2005 cash transfer agreement between Ottawa and both Newfoundland and Nova Scotia.


The agreement allows the two provinces to keep energy revenues that would otherwise be subtracted from its equalization payments from the federal government.


Nova Scotia has received $867 million – the value of exempted energy revenues from equalization – over eight years under the agreement. The accord has meant roughly $5 billion to Newfoundland.


Quebec also has its own separate, lucrative deal.


“Quebec just finished doing that about a year and a half ago for the Quebec waters in the Gulf of St. Lawrence,” Knoll said.“So absolutely, New Brunswick would have to have one also so that they could properly regulate the activity.


“For a province to go ahead with exploration offshore they need to have formed some kind of body to regulate it.”


He added: “What this is all about is working with the federal government to create a regulatory body that would oversee how the exploration is undertaken and under what rules and conditions they can do it. That’s essential.”


Phillip Knoll, president and CEO of Corridor Resources, talks about the firm’s projects. Photo: Kâté Braydon/telegraPh-Journal




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