Shell wins $970 million Nova Scotia acreage bid

Fri Jan 20, 2012 1:32pm EST
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Royal Dutch Shell (RDSa.L: Quote) has won bids for four parcels of acreage off Nova Scotia by offering to spend C$970 million ($961 million) on exploration, in the first major show of industry interest in the Eastern Canadian province in several years, regulators said on Friday.

Shell's winning bids are the richest-ever for oil and gas acreage on the country's East Coast, the Canada-Nova Scotia Offshore Petroleum Board said.

The oil major said it plans to conduct 3-D seismic tests next year and start drilling the following year, assuming it can get crews and rigs.

"Shell views this as an important entry into an attractive new, deepwater basin offshore Nova Scotia," it said in a statement.

Unlike the last Nova Scotia exploration boom a decade ago, when companies sank hundreds of millions of dollars in an ultimately fruitless search for major natural gas reserves, Shell's parcels have oil potential.

Peter MacKay, Canada's Minister of Defence and the regional minister for Nova Scotia, said the province's offshore reserves could hold as many as 8 billion barrels.

That potential, in waters 200 km (124 miles) off Nova Scotia's southwest coast, has been shown through recent studies by a provincial offshore energy technical agency and Shell's own analysis, Stuart Pinks, the board's chief executive, told Reuters.

Industry buzz appears to be building again as the province ramps up marketing efforts to the oil industry, Pinks said. The last grants of acreage were in 2009 following bids totaling just C$12.6 million.   Continued...