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Shell to drill in deep Canadian waters

Nova Scotia's decision follows U.S. move to pull back from northern reserves.

By Daniel J. Graeber
Shell to drill in deep Canadian waters
Nova Scotia petroleum regulator gives Shell permit to start drilling in deep regional waters. File photo by James Jones Jr./Shutterstock

HALIFAX, Nova Scotia, Oct. 21 (UPI) -- An offshore petroleum regulator in Nova Scotia said Dutch supermajor Shell has consent to start an exploratory drilling program in the region's deep waters.

The Canada-Nova Scotia Offshore Petroleum Board said Shell Canada Ltd. has consent for operations about 150 miles off the provincial coast.

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"After an extensive regulatory review process, Shell Canada has demonstrated to the satisfaction of the CNSOPB that it will be taking all reasonable precautions to protect safety and the environment while carrying out the drilling program," Stuart Pinks, the board's chief executive officer, said in a statement.

Nova Scotia's government estimates there may be up to 120 trillion cubic feet of natural gas and 8 billion barrels of oil offshore.

Shell first acquired six-year exploration licenses to work off the coast of Nova Scotia in 2012. The company submitted applications for a drilling program early this year.

The U.S. federal government last week denied a request for a five-year extension to leases in the arctic waters off the Alaskan coast held by Shell and joint venture partner Statoil and cancelled future lease sales in the region covered under a current five-year program. Given Shell's lack of success in the region, and weak market conditions, U.S. Interior Secretary Sally Jewell said moving forward in the area "does not make sense."

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While costs may be higher for the exploration of Nova Scotian reserves, Pinks said the regional basins do have proven potential for oil and gas based on recent geological studies. Addressing safety concerns, Pinks said Shell has back up and expedited response plans in the unlikely event of a well failure.

"We are confident that all reasonable precautions to protect safety and the environment have been taken," Pinks said.

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