Development and Technology Minister Mike Currie has issued the province's first ever call for bids under the Oil and Natural Gas Act. The call for bids will allow interested companies to bid for oil and natural gas exploration rights on a 35,664 hectare parcel of land. The land is located in the eastern part of the province, roughly between St. Peter's Bay and Cardigan Bay, adjacent to a permit area currently being drilled by Meteor Creek Resources Inc.
The call for bids represents a change in the way the provincial government deals with oil and gas exploration. In the past, companies were granted permits on a "first come first served" basis. A renewed interest in the geology of the east coast by the oil and natural gas industry has created a more competitive environment for perspective oil and gas deposits. The new bid system will encourage companies to more actively explore and develop permit areas.
The new system will now be required procedure, following the recent proclamation of the 1999 Act to Amend to the Oil and Natural Gas Act. In keeping with the need for environmental caution, government will limit calls for bids to inland areas for the time being.
"There has been significant interest in natural gas exploration in the province,"said Mike Currie, Minister of Development and Technology. "This change reflects a more business like approach to dealing with this industry and its potential for PEI."
The new system brings the province into line with the way other jurisdictions handle permits. Companies wishing to obtain a permit to explore for oil and/or natural gas will be required to submit a workplan explaining what they plan to do.
The companies will also be required to post a performance bond that equals one quarter of the value of the work they intend to do. The latter requirement provides an incentive for the successful bidders to follow through on their commitments.
The granting of a permit does not grant property access rights. It is and will continue to be the responsibility of the permit holder to negotiate with landholders for access onto or over privately held property.
The first call for bids will be advertised in the Guardian, the Eastern Graphic, the Journal Pioneer, the Halifax Chronicle Herald and the Calgary Herald. Companies will have until February 28,2001 to submit their bids to the Department's Energy and Mineral's section.