Nova Scotia is a region of opportunities and challenges. Linda Cook, president and CEO of Shell Canada Ltd., told attendees of the Canadian Offshore Resources Exhibition and conference in Halifax that Nova Scotia needs to be competitive if it is going to draw exploration dollars from other prospective areas of the world.
Early drilling results look promising offshore Nova Scotia, Cook said. "We look to the frontier areas for growth," she continued, noting that Shell's frontier areas also include Sakhalin Island, where the company has committed to spending $10 billion.
Shell holds licenses on the Scotian shelf and in deepwater. Exploration drilling off Canada's Maritime provinces will be contingent upon how Nova Scotia measures up against competing regions around the world, particularly areas with large gas reserves, Cook said.
Cook explained that Shell employs a specific process to determine where to invest. That process evaluates technical, economic, commercial, organizational/social, and political elements, Cook said.
In the case of the Nova Scotia offshore, "we remain cautiously optimistic of the technical aspect," Cook said. Limited local infrastructure and high cost negatively impact project economies. But the competitive fiscal regime, positive gas market outlook, and proximity to the US market tip the scales in a positive direction for commerciality. The province is developing competencies and critical mass, in Cook's estimation, and the political environment is fair.
Though Nova Scotia offers a fairly favorable environment for investment, there have been no major recent discoveries. This part of the offshore is in need of a commercial discovery, Cook said. With any luck, the Marcoh well being drilled by Shell and its partners near Nova Scotia's Deep Panuke will be the discovery that brings the exploration focus back to Atlantic Canada.
10/10/03
