Nova Scotia urges speedy end to flag flap

Gary Park

Petroleum News Calgary correspondent

An organization representing 500 Eastern Canadian oil and gas companies is urging a federal agency to solve a flag-of-convenience dispute that could scuttle an offshore exploration well. The Offshore/Onshore Technologies Association of Nova Scotia told the Canadian Transport Agency that unless it comes to a quick decision there could be lasting damage to the province’s petroleum industry.

Association Managing Director Paul McEachern said a viable energy industry requires a decision long before the end of March deadline.

“Taking the full 120-day period allowed under (law) to decide would be unacceptable,” he wrote. “In fact, if a resolution to this dispute is not rendered quickly, the entire exercise may prove theoretical as no actual work may take place.”

Beyond that, McEachern warned that unless the transport agency fast-tracks its work “the delay could prove extremely costly for the operator and consequently for the entire Nova Scotia supply and service community as well.”

Marathon Oil wants to use the drillship Deepwater Pathfinder, owned by Houston-based Transocean, to drill a follow-up deepwater well near its 2002 Annapolis gas discovery, Nova Scotia’s first deepwater breakthrough.

Transocean asked the transportation agency in November for approval to import the drillship in Canada. Three weeks later Norway’s Ocean Rig said its semi-submersible Eirik Raude would be available and should get preference because it was crewed by Canadians and was retrofitted in Halifax for about C$250 million.

Ocean Rig also said it had applied to switch the Eirik Raude’s registration from the Bahamas to Canada. The transport agency agreed on grounds of procedural fairness to hear Ocean Rig, despite Marathon’s claims that the Eirik Raude would add almost C$10 million to its costs, is technically unsuitable and would force Marathon to abandon its drilling plans.