IT’S THE KIND OF RESULT THAT SAYS it all. The Canada-Nova Scotia Petroleum Board’s most recent call for bids on six new offshore parcels off the coast of Nova Scotia elicited exactly this many bids: none.

But the new Liberal government isn’t worried about the lack of interest. Energy Minister Andrew Younger contends the apathy is temporary, a reflection of where the parcels are located. His view may have merit. Both the Maritimes Energy Association and the Petroleum Board, the industry regulator, agree.

That’s because these parcels lie in relatively shallow water to the north and east of Sable Island. At present, according to Younger, large oil and gas companies are concentrating their exploration efforts in deeper water off Nova Scotia. Smaller companies, he said, typically would be more interested in the parcels put up for bid. Still, none of those firms emerged with an offer.

The lack of bidding was a far cry from last year, when Shell Canada Ltd. and BP Exploration Co. Ltd. – two of the world’s biggest oil and gas players – came up with more than $1 billion each for the rights to explore specific offshore tracts. Over the next six years, Shell has the exploration rights to eight parcels (two in the Sable Island area and six in deep water) and BP has been awarded four deepwater parcels.

Nova Scotia has been focused on trying to overcome private-sector reluctance when it comes to oil exploration nearby. In 2011, the province released the results of a study designed to convince bigger players that offshore Nova Scotia was worth exploring by the oil and gas sector. Entitled The Play Fairway Analysis, the report was a $14-million snapshot of the province’s offshore geology. The report concluded there is more wealth off the coast of Nova Scotia than previously estimated – three times more. According to the report, as much as 120 trillion cubic feet of natural gas and eight billion barrels of oil are sitting in Nova Scotia’s offshore waiting to be tapped.

The report was welcome news. Despite the success of the Sable Offshore Energy Project, now pumping as much as 500 million cubic feet of natural gas and 20,000 barrels of natural gas liquids every day, interest in Nova Scotia’s offshore has dried up significantly after several explorations over the past five years came up dry. Since then, oil and gas companies have been reluctant to move forward, so the province stepped in to commission this study to map the province’s underwater geology.

Now, the newly elected Liberal government has to step up efforts to keep offshore companies interested and engaged. There’s a lot riding on the success of those efforts. In fiscal year 2012-13, the province received almost $23 million in royalties from offshore oil and gas; since the first exploration efforts in 1996, total petroleum expenditures have hit $8 billion, of which almost one-third was spent in Nova Scotia.

Younger is optimistic that the latest six parcels will be of interest to companies in the not too distant future. He points out that some of the parcels that BP successfully bid on had been up for auction earlier but garnered no response. The next tracts will be offered in April. It is anticipated they will include a deepwater area along the Scotian Slope, southwest of Nova Scotia. Much may depend on the result.

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