The link between the ocean and the livelihood of Newfoundlanders goes back to the first days of settlement, when John Cabot discovered the Grand Banks, where cod appeared so thick that one could “walk across their backs.” The fishery in Newfoundland has a long and storied history, with chapters of mismanagement.
The ocean continues to be the genesis of prosperity in Newfoundland and Labrador, but in recent decades, with the discovery of sweet crude oil on the offshore banks, the oil and gas industry has risen to be one of the province’s biggest economic drivers.
To protect and promote this emerging new trade, the Newfoundland & Labrador Oil & Gas Industries Association (NOIA) was created in 1977. NOIA is the country’s largest offshore petroleum association, with over 500 members both in Atlantic Canada and globally, and serves as the information hub for East Coast Canada’s oil and gas industry.
From June 20 to 23, NOIA hosted its annual conference in downtown St. John’s, N.L., welcoming representatives from local, national and international businesses, promoting and developing the east coast’s hydro carbon resources.
Robert Cadigan, President & CEO of NOIA, tells CBJ that the association has seen the number of local & international companies looking for partners and opportunities at the conference increase year in and year out with 1,100 attendees this year and a lot of excitement about the possibilities and the upcoming projects.
“We are the largest oil and gas association in Canada,” says Cadigan. Our membership basically comprised of companies that do business in the supply chain for the oil and gas industry both locally and internationally.”
“One of NOIA’s core mandates is to facilitate information and networking opportunities for our 500 plus members, and this year’s conference will be no exception,” said Jack Lawlor, NOIA 2011 Conference Chair. “Newfoundland & Labrador’s oil & gas industry continues moving forward and our harsh environment expertise persists in garnering worldwide recognition. Hebron, the Lower Churchill Falls Development, activity in the Arctic and new exploration wells locally means we have much to keep our eye on. This year’s conference features a thought-provoking program featuring the experts and leaders in all aspects of our industry.
There are no slow days for NOIA recently. There are three new off shore installations right now, and a number of satellite, smaller fields tied to existing infrastructure. There is an increase in exploration activity, satellite development, and construction on the Hebron field starting in 2012. Cadigan says this increase is activity is due to the “exceptionally high demand” that fuels the search for more reserves.
Cadigan sees his primary goal at NOIA during this flurry of activity is to ensure that companies are aware of activity occurring in their particular so that every opportunity is capitalized upon. “One of the things that has helped kick start the industry, has been the availability of procurement information,” he says. “In a big offshore project there multiple categories of contracts. We work with the oil companies, regulatory bodies and government departments to make sure this procurement forecasts and information on procurement and contract awards are out in the public domain within the industry.”
With a $1.5 billion Hibernia offshore loading system project, the Hibernia south satellite field development. The $8.3 billion Hebron project and the hundreds of subcontracts for each, information dissemination is paramount for contractors.
NOIA is also spearheading an effort to maintain a high level of exploration activity to ensure future work for the industry via legislation implementation that is clear and easy to comply with. “[Legislation] is another area that we see we need to see some changes in,” says Cadigan. Regulations written in the late 1980s can cause a hindrance for specialized vessels entering Canadian waters, thus taking up precious time in the Atlantic summer. “We have a case where we can eliminate ate these challenges for vessels coming from other jurisdictions. On that side we work with regulators and government of Newfoundland and Labrador and Canada.
NOIA is also making headway in advocating for exploration attraction. If we look at a chart of exploration wells drilled in Newfoundland, you see a cluster of wells occurring in the mid-1970s to mid-1980s and that was under a government program called Petroleum Incentives Program which helped encourage exploration by helping companies’ exploration costs through tax system so we have seen a lot of ex. We look at other jurisdictions during the more recent booms of 10 to 12 years.
Cadigan notes the North Sea, a sector that is roughly equivalent to our offshore basin, where there are 4,000 exploration wells compared to 140 off Canada’s east coast, an example that demonstrates the exploration potential of the east coast. “We are seeing a significant difference in amount of exploration activity occurring here, all of which relates to government policy in a lot of ways.”