Economic Benefits from Offshore Petroleum Activity
For the period ending March 31, 2008, the Nova Scotia government has received approximately $900 million in royalties from the Sable Offshore Energy Project.
Nova Scotia also expects to benefit from Crown share payments from Ottawa.
Based on Nova Scotia's share of the Cohasset Panuke project, Sable Offshore Energy project and Deep Panuke project, the province expects to receive $860 million. This number is expected to increase with additional future projects.
Most of the money goes to reduce Nova Scotia's debt, with money also set aside for offshore energy R&D, protected lands and education.
This money is used to advance the economic and social well-being of the people of Nova Scotia. It is invested in roads, schools and hospitals.
Looking back, the offshore oil & gas industry has generated billions of dollars in economic activity for the people of Nova Scotia.
For instance, the Sable Offshore Energy Project's direct person hours, cumulative to December 31, 2007, totaled 17.7 million Nova Scotian hours, 3.10 million other Canadian hours and 9.23 million foreign hours, for a total of 30.03 million person hours.
In 2004, the total expenditure in offshore Nova Scotia was $750 million. This directly generated approximately 1100 person-years of employment and $110 million of household income in Nova Scotia.
An additional 590 person-years of employment and $45 million of household income were generated as local suppliers purchased their supplies to fill the offshore contracts and workers spent their income.
Publicly reported expenditures for the Sable Offshore Energy Project (SOEP) for the calendar year 2004 were approximately $510 million.
This suggests a gross value added of approximately $840 million. This, added to the $150 million generated directly from expenditures, brings the oil & gas industry's direct contribution to the Nova Scotia economy up to $990 million.
For the period 2001 to 2004, a total of $2.95 billion was spent in exploring, developing and producing offshore resources.
The Nova Scotia content of these expenditures amounted to $1.09 billion or 36.9%. This resulted in a total direct employment in Nova Scotia of 4420 person-years in the 4-year period or the equivalent of an average of 1150 full-time jobs each year.
For a more detailed analysis of the Years 2001-2004, refer to the following internally-generated reports:
- Nova Scotia Offshore Oil & Gas Activity 2001-2002 - A Progress Report
- Economic Impacts of Offshore Oil & Gas Development on Nova Scotia 2001-2003 - A Progress Report
- Nova Scotia Offshore Oil & Gas Activity - 2004 - A Progress Report
For the period 1990-2000, refer to the Gardner-Pinfold report commissioned by the Nova Scotia Department of Finance:
- Economic Impact of Offshore Oil & Gas Development on Nova Scotia, 1990 - 2000
- Infrastructure & Manufacturing Capabilities Study 2000
Many Nova Scotia companies seeking business opportunities from offshore petroleum activity choose to join the Offshore/Onshore Technologies Association of Nova Scotia (OTANS).
OTANS undertakes a number of activities to promote the capabilities of its members to service the oil & gas industry.
Most companies active in the Nova Scotia offshore region post Expressions of Interest (EOIs) for upcoming contracts on BIDS, an electronic publication.
Under the Nova Scotia Offshore Accord between the Province and the government of Canada, industrial and employment benefits from offshore activity are regulated and monitored by the Canada - Nova Scotia Offshore Petroleum Board (CNSOPB).