Licensing

Exploration Licences 

Exploration Licences may be issued for Crown lands through our Call for Bids process. Our decisions to make a Call for Bids, and to then issue any resulting exploration licences, are considered fundamental decisions, which are subject to review by the federal Minister of Natural Resources and provincial Minister of Energy and Mines. An exploration licence provides licence owners with the right to explore, the exclusive right to develop, drill and test for petroleum, and the right to obtain a production licence. It’s important to note that an exploration licence does not grant the licence owner the ability to conduct offshore activity. Such activity requires a separate authorization. 

The maximum term for an exploration licence is nine years. Any planned activity to be conducted within the licence area, such as a seismic survey or the drilling of an exploration well, requires an authorization. An operator’s application for such an authorization must include an environmental assessment. You can learn more about our authorization process in our Activity Authorization section.

A successful bidder for an exploration licence must post a work deposit in the amount of 25 per cent of its Work Expenditure Bid that was submitted in response to a Call for Bids. The licence owner may over time recover its work deposit, in whole or in part, by filing Allowable Expenditure claims. The full amount of the work deposit will be refunded if the total approved allowable expenditure amount equals or exceeds the Work Expenditure Bid amount. Otherwise, the amount of the work deposit that is refunded would be calculated on a proportional basis, and the remainder would be forfeited.

View exploration licence financial summaries, along with any associated forfeitures, in the following summary table.

In accordance with the legislation, licence owners can make an application to consolidate two or more exploration licences into one single exploration licence. If approved, the consolidated exploration licence would be subject to any terms and conditions we determine through our review process. Our decision to allow for a consolidated exploration licence is considered a fundamental decision, which is subject to review by the federal Minister of Natural Resources and provincial Minister of Energy and Mines.

While applications to consolidate an exploration licence are considered on an individual basis, we typically consider the following in our decision-making:

• Licence owners must demonstrate that they have completed new and significant exploration activity on their exploration licence, such as commencing and/or completing the drilling of an exploration well
   
• A reasonable geological explanation for the consolidation is provided to demonstrate how the consolidation will optimize future exploration

Significant Discovery Licences  

Significant Discovery Licences may be issued for lands where a significant discovery has been found and declared. In order to apply for a significant discovery licence, the exploration licence owner must first apply for a declaration of significant discovery. What this means is that a licence owner exploring an area has drilled an offshore well and has completed a flow test to verify that petroleum exists and there is enough to potentially develop the resource for future production.  

The term of a significant discovery licence is indefinite, meaning the licence does not have an end date. Significant discovery licences are designed to maintain an explorer's rights during the period between first discovery and eventual production. It’s important to note that a significant discovery licence does not grant the licence holder the ability to conduct activities. To complete further work on the lands, an Activity Authorization application would need to be submitted to us for our review and approval prior to the commencement of planned activity.

There are currently 32 significant discovery licences in the Canada-Nova Scotia offshore area.

Production Licences 

A production licence provides the holder with the right to produce petroleum for commercial use. In order to apply for a production licence, the licence owner must first apply for a declaration of commercial discovery. What this means is that an exploration or significant discovery licence owner is able to demonstrate that an explored offshore area and associated well(s) have a discovery that contains enough petroleum resources that will justify the investment of capital and effort to produce the resources available. Simply put, the petroleum resources found in that area can support the desire of a licence holder to produce the petroleum resources that can be sold on the market.

A production licence has a term of 25 years, but may be extended if commercial production is continuing, or is likely to recommence. Commercial production can only occur if we approve the activity through our Activity Authorization process. In order to receive an authorization to produce resources in the Canada-Nova Scotia offshore area, we would need to review and approve a variety of operational, environmental, resource management, benefits and financial documents to ensure the activity will be conducted in a safe and responsible manner.