Call for Bids NS14-1

Complete Call for Bids NS14-1 Document

The Canada-Nova Scotia Offshore Petroleum Board (the "Board") hereby calls for bids for four (4) Exploration Licences covering those lands in the Nova Scotia offshore area described in Appendix I (the "Lands").

Applicable Legislation

This Call for Bids is made pursuant to the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act, S.C. 1988, c. 28, as amended, and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation (Nova Scotia) Act, S.N.S. 1987, c. 3, as amended (the "Legislation").

Terms and Conditions of Exploration Licences & Significant Discovery Licences

The Exploration Licence for each parcel will be substantially in the form attached hereto as Appendix III. Any succeeding Significant Discovery Licence issued with respect to the Lands will be substantially in the form attached hereto as Appendix IV. The submission of bids in response to this Call for Bids shall constitute agreement to the terms and conditions set out in Appendix III and IV.

Submission of Bids

(a) Bids must be received by the Board before 4:00 p.m. Atlantic Daylight Time (ADT), October 30, 2014, at the following address:

CALL FOR BIDS NS14-1
Christine Bonnell-Eisnor
Director, Regulatory Affairs & Finance
Secretary of the Board
Canada-Nova Scotia Offshore Petroleum Board
8th Floor, T.D. Centre
1791 Barrington Street
Halifax, Nova Scotia
B3J 3K9

(b) To be considered, a bid must satisfy the following conditions.

(i) Bids must be accompanied by a confirmation of operating experience that satisfies the Board that the Bidder, its parent company or an affiliated company has operated, or has been a joint operator, in the drilling of exploration wells in water depths greater than 800 meters in the past ten (10) years.

(ii) Confirmation of operating experience must be submitted in a sealed envelope marked “CONFIRMATION OF OPERATING EXPERIENCE FOR CALL FOR BIDS NS14-1 - DEEPWATER PARCELS”, to be opened prior to considering the Bid.

(iii) Bids must be in the form attached as Appendix II and must be submitted in a separate sealed envelope marked “CALL FOR BIDS No. NS14-1 (Parcel # _ )”, to be opened if the confirmation of operating experience satisfies the Board.

(iv) The Bid will not be considered if the confirmation of operating experience does not satisfy the Board. The Bid will remain sealed and will be returned to the bidder.

Amendments to Call for Bids

The Board may amend this Call for Bids at any time up to ten (10) days prior to the Closing Date. Any amendment made to the Call for Bids shall be published on the Call’s website (www.callforbids.ca). Bidders are advised to refer to the Call’s website prior to submitting their bids.

Submission of Written Comments

The public is invited to submit written comments to the Board on the Lands included in the Call for Bids. Such submissions will be considered by the Board before the issuance of Exploration Licences. The deadline for the submission of written comments is 60 days after the announcement of the Call for Bids on the CNSOPB website. Any comments received by the deadline will be made publicly available on the Call for Bids website at www.callforbids.ca.

Written Comments should be sent to:

Christine Bonnell-Eisnor
Director, Rights Management & Finance
Secretary of the Board
Canada-Nova Scotia Offshore Petroleum Board
8th Floor, TD Centre
1791 Barrington Street
Halifax, Nova Scotia
B3J 3K9
Tel. (902) 422-5588
Fax (902) 422-1799
callforbids@cnsopb.ns.ca

Bid Assessment Criterion

(a) Work Expenditure Bid

(i) Bidding on each parcel will be based solely on the amount of money proposed to be expended on the exploration of the parcel within Period 1 of the term of the Exploration Licence (“Work Expenditure Bid”), determined in accordance with the Schedule of Allowable Expenditures as defined in Schedule B of the Exploration Licence attached as Appendix III.

(ii) A maximum of 5% of the Work Expenditure Bid may be applied as education & training (E&T) and research & development (R&D) Allowable Expenditures as defined in Schedule B of the Exploration Licence attached as Appendix III.

(iii) The Schedule of Allowable Expenditures will be used in determining the amount of money expended pursuant to the Work Expenditure Bid, and is defined in Schedule B of the Exploration Licence attached as Appendix III.

(b) Minimum Bid

(i) The minimum bid that will be considered is $1,000,000 of work expenditure.

(ii) The submission of a Work Expenditure Bid does not obligate the successful bidder to perform the full dollar value of work. However, if work is not performed in the full amount of the Work Expenditure Bid, the unrefunded balance of the Work Deposit will be forfeited to the Receiver General for Canada upon expiry, surrender or cancellation of Period 1, as more particularly described in the form of Exploration Licence attached as Appendix III.

(c) Acceptance and Rejection

The Board is not obliged to accept any bid nor is the Board required to issue an interest as the result of this Call for Bids.

(d) Notification to Bidders

The Board will advise bidders of the outcome of the bids as soon as possible after the closing date of the Call for Bids.

(e) Tied Bids

In the event of two or more bids being tied, each bidder involved will be notified of the tie and will have the opportunity to submit a new bid in its proper form within a time frame specified by the Board, which will not be more than 24 hours after being notified.

Deposits

(a) Bid Deposit

(i) Each bid must be accompanied by a Bid Deposit in the amount of $10,000, in the form of a certified cheque or bank draft payable to the Receiver General for Canada.

(ii) The successful bidder will receive a refund of the Bid Deposit, without interest, if the Work Deposit is posted within the time specified and any outstanding Environmental Studies Research Fund (ESRF) levies are paid as described below.

(iii) The failure of the successful bidder to post the Work Deposit within the specified time will result in forfeiture of the Bid Deposit and disqualification of the bid, and in that event the Board may, if it sees fit, award the Exploration Licence to the second highest bidder without making another Call for Bids.

(iv) Bid Deposits will be returned to unsuccessful bidders, without interest, following announcement of the winning bid and receipt of the Work Deposit by the successful bidder.

(v) Bid deposits will be returned by courier service unless the bidder requests in writing, at the time of bid submission for the Board to hold the Bid Deposit at its office until it is picked up by the bidder, or designated representative, or agent of the bidder.

(b) Work Deposit

(i) The successful bidder will be required to post security for the performance of work. The amount of the required security will be 25% of its Work Expenditure Bid. The successful bidder must post this Work Deposit within 30 days of being notified that its bid was successful, as a condition of issuance of the Exploration Licence.

(ii) This Work Deposit is refundable to the extent of 25% of approved Allowable Expenditures, as more particularly described in the form of Exploration Licence attached as Appendix III.

(iii) Work Deposits must be in the form of a bank draft, money order, certified cheque, promissory note or an irrevocable standby letter of credit payable on demand to the Receiver General for Canada or in the form of cash (Canadian Funds). A promissory note must be accompanied by a bank letter of guarantee issued by a Canadian chartered bank which states their agreement to honour on presentment for payment. A bank draft, money order, certified cheque or irrevocable standby letter of credit must be issued by a bank found in Schedule I or II of the Bank Act (S.C. 1991, c. 46). The form of the promissory note and bank guarantee, or the irrevocable standby letter of credit, must be acceptable to the Board. An acceptable form of a promissory note and bank guarantee and of an irrevocable standby letter of credit, are attached as Appendix V.

(iv) Parties submitting a joint bid may post separate securities representing each party's proportionate share of the required Work Deposit. However, the Board will only deal with the representative designated in the bid. The failure of any party to submit its share of the Work Deposit will be considered the failure of all parties participating in the joint bid.

Identification of Bidders

(a) Bids must identify the parties making the bid and their participating shares. Under the Legislation, an Exploration Licence must be issued to the person who submits the winning bid. Therefore, agents should identify the principals for whom they act and their participating shares. The Board will publicly announce the identity of the successful bidder and the amount of the winning bid.

(b) The identities of unsuccessful bidders and the amounts of their bids will not be disclosed.

Environmental Studies

(a) In accordance with the Legislation, prior to the authorization of any petroleum related activities on the Lands the operator must demonstrate to the satisfaction of the Board that such activities can be conducted in an environmentally safe manner. Special precautions, such as enhanced environmental assessments, more stringent mitigation measures and environmental effects monitoring may be required in some cases.

(b) Upon issuance of the Exploration Licence, the successful bidder must pay Environmental Studies Research Fund (ESRF) levies under Part VII of the Canada Petroleum Resources Act, R.S.C. 1985, c. 36 (2nd Supp.), for the year in which the licence is issued and retroactive levies for the two preceding years. Thereafter, ESRF levies as fixed from time to time by the federal Minister of Natural Resources will be payable unless the Interest Owner surrenders the licence prior to the payment due date.

Parcels 1, 3 and 4 are completely in Region #14, Scotian Slope. Parcel 2 is in both ESRF Region #12 Scotian Shelf East, and Region #14, Scotian Slope.

Parcel #	Hectares in Region #14	Hectares in Region #12
1	~489,996	0
2	~602,586	0
3	~331,187	~9,225
4	~482,013	0

(c) ESRF matters are not administered by the Board and are the responsibility of the federal Minister of Natural Resources. ESRF levies are determined by multiplying the number of hectares of land included in the licence by the ESRF rate for the applicable region. Rates are provided on the ESRF website: www.esrfunds.org

(d) Please note an additional provision will apply with respect to EL for Parcel 1 Call for Bids NS14-1:

The Lands include a portion of Shortland Canyon, which has been designated as critical habitat area under the Species at Risk Act respecting the endangered northern bottlenose whale, Scotian Shelf population. Any approved activity within or near this area may require enhanced mitigation and may require certain limitations for the protection of this species and the prevention of the destruction of critical habitat.

(e) Please note an additional provision will apply with respect to EL for Parcel 2 Call for Bids NS14-1:

The Lands include a portion of Haldimand Canyon, which has been designated as critical habitat area under the Species at Risk Act respecting the endangered northern bottlenose whale, Scotian Shelf population. Any approved activity within or near this area may require enhanced mitigation and may require certain limitations for the protection of this species and the prevention of the destruction of critical habitat.

Canada-Nova Scotia Benefits Plan

The Legislation requires that a Canada-Nova Scotia Benefits Plan must be submitted to, and approved by, the Board prior to the approval of any development plan, or the authorization of any other work or activity in the Nova Scotia Offshore Area. Canada-Nova Scotia Benefits Plan Guidelines can be found on the Board’s website www.cnsopb.ns.ca.

Activity Authorization

(a) Before carrying out any work or activity in the offshore area, an operator must first obtain an Operating Licence.

(b) No activities related to the exploration for, development of, or transportation of petroleum on the Lands can be conducted without a specific authorization issued by the Board. Operators are required to meet certain regulatory requirements before the Board can approve offshore petroleum related activities. The regulatory framework which governs offshore petroleum operations consists of the Legislation, its regulations, and Board guidelines and policies.

Information

(a) Geological, geophysical and well information is available with respect to the Lands and the surrounding area on the Call’s website at www.callforbids.ca. Requests for information may also be directed to:

Mary Jean Verrall
Supervisor, Geoscience Research Centre
201 Brownlow Avenue
Dartmouth, Nova Scotia
B3B 1W2
Tel. (902) 468-3994
Fax (902) 468-4584
mverrall@cnsopb.ns.ca

(b) Inquiries regarding this Call for Bids may be directed to:

Non-Compliance

Failure to comply with the Call for Bids or any term or condition of the Exploration Licence or resulting Significant Discovery Licence or Production Licence may result in cancellation of the respective Licence.

DATED at Halifax, Nova Scotia this 20th day of March, 2014.

CANADA-NOVA SCOTIA OFFSHORE PETROLEUM BOARD
Stuart Pinks, P.Eng.
Chief Executive Officer

You are here