February 7, 2005

Conditions attached to offshore oil project decommissioning plan amendment

A decision report by the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) attaches specific conditions to EnCana's application to amend the Cohasset development plan for the abandonment of the project. Subject to the specific work authorizations, EnCana will be allowed to abandon its interfield pipeline on the seafloor, but it must remove parts of other subsea equipment that may pose a snagging hazard to the commercial fisheries.

Approved in 1990, Cohasset was Canada's first offshore oil project when production began in 1992. It was operated by EnCana and yielded 7.1 million cubic metres (44.5 million barrels) of oil before production ceased in December 1999. The Cohasset development plan, which governed operation of the project, underwent a number of amendments over the seven-year life of the project.

The conditions attached to the approval of the plan's latest amendment are as follows.

1. EnCana must comply with all requirements, mitigation and follow-up measures detailed in the environmental screening report for the Cohasset Phase II decommissioning.

2. EnCana is required to remove the topsides from the pipeline end manifolds (PLEMs), including lifting shackles, sacrificial anodes and any other material that extends beyond the PLEM base.

3. Before the Board grants authorization for Phase II decommissioning work, EnCana must submit to the Board a plan it deems satisfactory addressing post-abandonment continuing liability.

The Board reached this decision after a thorough regulatory process, which included a review of safety matters, best international practices, the environmental assessment, regulatory responsibilities, and comments from interested parties. The Decision Report provides details of the issues that the Board reviewed and analyzed to reach its decision.

An environmental assessment, conducted in accordance with the Canadian Environmental Assessment Act, showed that neither the partial nor total removal options are likely to cause significant adverse environmental effects. A risk assessment of both options indicated that the total removal of all subsea material posed more risk to the health and safety of workers than the partial removal option.

The amendment of a development plan is subject to the Accord Acts, one of whose provisions requires the Board to give the federal and provincial ministers responsible for the Accord Acts 30 days notice before implementing such a decision. The ministers can approve the decision, set it aside, or extend their review period for an additional 30 days. In this case, the notice was provided and the ministers have extended the time limit on their review another 30 days. Therefore this decision will not be implemented until this time period expires on February 23rd, 2005, or the Board has been notified of the ministers' decision, whichever comes first.

The Board's Decision Report may be viewed on-line on its Web site, www.cnsopb.ns.ca, or requested from its office at CNSOPB, 6th Floor - TD Centre, 1791 Barrington St, Halifax, B3J 3K9, 902/422-5588. More information is available from Barbara Pike, the Board's public information co-ordinator, 902/496-0744.

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