The New Brunswick government is hoping to tap into a new financial reserve by opening up six areas for oil and gas exploration.
The Department of Natural Resources issued the tender call earlier this week, creating the possibility of exploration in approximately 155,000 hectares, the largest single release since 1999. Natural Resources Minister Donald Arseneault said this development is just another component of his governments aggressive economic strategy.
"There has been interest shown by various investors from throughout the world. There is an opportunity there that they want to explore, so that is great news for northern New Brunswick and there is other areas in the province that they are looking at," Arseneault.
Of the six open tenders, two are in the Campbellton-Dalhousie region, as well as parcels in Sussex, St. Stephen, Fredericton and Minto-Chipman.
Some of the property contained in the 155,000 hectares is on Crown land, although the majority rests on freehold. Until the tender call closes on Nov. 12, there is no way to tell how many companies will be placing bids on the parcels of land.
Already there are 39 agreements for oil and gas rights spread over 330,000 hectares. The most activity is near Sussex where there are 21 wells in production in the McCully natural gas field.
The oil and gas sector has been a growing contributor to the New Brunswick governments coffers in recent years and in 2007 the industry invested roughly $38 million in exploration activities.
There is no estimate yet on the value of oil or gas that could be under the ground in the six areas up for bids. After a company is awarded the rights to a particular property, there is a minimum amount of exploration work that must be performed, such as seismic testing and drilling.
The real economic injection comes once oil or gas is found and it starts being pumped out, according to David Plante, the vice-president of the Canadian Manufacturers and Exporters New Brunswick division.
Plante said this move may help New Brunswick recover from the black eye it received within the industry for its handling of the uranium mining controversy where it instituted a tough new set of regulations that made mining in the province less attractive.
"This is definitely a positive sign for the province particularly given all the negative coverage that the broader mineral industry has had over the last year," Plante said.
Source: New Brunswick Business Journal
