Thank you very much for this opportunity. I'm going to try to skip through this presentation to meet my seven-minute time schedule, but you have copies that you can read, as required.
For those of you who are unfamiliar, ExxonMobil Canada is a leading developer of petroleum resources off Canada’s east coast, with offices in Halifax and St. John’s. ExxonMobil also has a presence in Canada through our majority ownership of Imperial Oil, with whom we share many process systems and technologies.
In Nova Scotia we operate the Sable offshore energy project, which is located more than 200 kilometres off the coast. There we produce natural gas from several platforms located in shallow waters and spread across several hundred square kilometres in the vicinity of Sable Island. Our co-venturers are Shell, Imperial Oil, Pengrowth Energy, and Mosbacher Operating Ltd.
The Sable project introduced a new source of clean energy to Nova Scotia and New Brunswick and enabled the development of pipeline infrastructure that now connects these provinces to the North American natural gas market. The pipeline infrastructure has also allowed the development of subsequent fields, such as in Encana's Deep Panuke project, which is scheduled to start up production soon.
Total Sable project spending by year-end 2012 was $6.5 billion, including approximately $2.5 billion in Nova Scotia. Benefits from the Sable project include direct and indirect employment, spending on goods and services, funding of research and development, as well as education and training, contributions to local community organizations, and the payment of municipal, provincial, and federal taxes. In addition, the Sable project’s co-venturers pay offshore royalties. To date, the province reports that it has received more than $1.7 billion in royalties from the Sable project.
Sable Island has been extremely important to our work in Nova Scotia and to our ability to safely deliver these benefits. For us, with our production facilities nearby, the island is a valuable safe refuge. It gives our standby vessels shelter from storms, and we know our helicopters can land there in case of an emergency.
Going back to the start-up of natural gas production in 1999 and exploration work that dates back 40 years, we feel privileged to have had the opportunity to work with stakeholders, including experts like Zoe Lucas, to help protect the island. We are proud that the Sable project is an example of how the oil and gas industry can coexist with a sensitive ecosystem and even enhance its protection.
We've provided funding for scientific research about seabirds and marine mammals and about the flora and fauna that call Sable Island their home, including the island's famous wild horses. This research includes a nesting bird census and a long-term survey of beached birds; a study of plants and invertebrate communities on the island; research on lichens, which are extremely sensitive to environmental changes and very good indicators of the island's health; and atmospheric research, including airshed monitoring and the study of tropospheric ozone. We've also helped with beach cleanups and other projects to restore terrain and dunes that have been disturbed in the past.
In 2011 we were pleased to collaborate when asked by our regulator on behalf of the provincial and federal governments to make amendments to our licences that would further codify a protected one nautical mile buffer around the island. We worked with the other industry interest holders to amend the relevant licences and provide the island with this additional protection.
For us the proposed park designation not only ensures that Sable Island will be protected for future generations, but also recognizes the importance of oil and gas activity in the area near the island.
Much has been made of the provisions in the bill that allow directional drilling below the island and also low-impact seismic activity on the island. Please allow me to clarify that ExxonMobil has no plans for additional drilling on licences near to Sable Island. In 2010 we said publicly that we would market our licences in the area to other parties that may have interest in their development. To date this has not been successful.
That being said, we firmly believe these activities can be carried out in ways that do not negatively affect the environment. While we do not have plans for these activities, we cannot speak for other interest holders and their view of the future.
We believe that in designating Sable Island as a park the public interest in potential future development of petroleum resources need not be compromised. The same is true for the private sector's interest in this development.
We believe that our record is proof that the industry can work in harmony with this special ecosystem, and that it would be short-sighted to foreclose potential future economic development with prohibitions which, in the end, add no meaningful added protection to this island.
We believe both the provincial and federal governments recognized this balance by approaching us with the idea of amending the licences to prevent drilling on the island surface, which were already part of our code of practice.
We are pleased to support this extra measure of protection, and we are delighted to be part of the practical plan to ensure that Sable Island will be protected for future generations of Nova Scotians and Canadians.
Thank you.