Natural Resources
March 5, 2007

Province Disappointed in Appeal by Oil Companies

The province is disappointed that Hibernia Management Development Company (HMDC) and Petro-Canada have decided to appeal a court ruling that upholds the Canada-Newfoundland and Labrador Offshore Petroleum Board�s (C-NLOPB) ability to set research and development spending guidelines on companies operating in our offshore.

�These projects are very profitable and as good corporate citizens the operators should be prepared to put some of the wealth generated from these projects back into the community in terms of research and development and education and training, which not only benefits the province but the operators as well,� said the Honourable Kathy Dunderdale, Minister of Natural Resources. �The board is only requiring these operators to spend in this province in accordance with what has been the average and accepted norms in the industry elsewhere.�

Effective April 1, 2004, the C-NLOPB implemented guidelines requiring oil companies to spend more of their offshore revenues on research and development and education and training in this province. The board stated that it had the authority under the Atlantic Accord to set spending requirements based on a percentage of operators� offshore revenues. HMDC and Petro-Canada applied to the Supreme Court for judicial review of the board�s decision to impose the guidelines, with the court ruling in favour of the board earlier this year.

�Our petroleum resources are non-renewable and we must ensure that they are developed in a way that creates the greatest benefit for the people of the province, now and in the future,� Minister Dunderdale said. �Investing in research and development in areas of strategic importance to the province builds on the intellectual capital and human resources of this province and this is vitally important as we move forward in the development of this industry.�

Research and development is an important component of the Canada-Newfoundland and Labrador Benefits Plan and can make a significant contribution to the sustainable development of the province�s resources. Over the past few years, the province has established significant infrastructure and developed leading-edge capabilities related to oil and gas development. New spending can add to that capacity and position the province as a world leader in offshore oil and gas related research and development.

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Media contact:
Tracy Barron
Director of Communications
Department of Natural Resources
709-729-5282, 690-1703
tracybarron@gov.nl.ca

2007 03 05                               3:00 p.m.
 


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