News Releases 2001

C-NOPB Reports on the Verification of Industrial Benefits for the Terra Nova Project

For Immediate Release
July 10, 2001

In 1999, the Canada-Newfoundland Offshore Petroleum Board engaged Consulting and Audit Canada (CAC) to conduct a process and procedures verification of the content reporting procedures for the Terra Nova Project up to December 31, 1999.

All offshore oil and gas development projects are subject to regular content reporting verification. The verification exercise assesses the adequacy of the policies and procedures of the operator, contractors, and subcontractors for calculating and reporting content, and the accuracy of reported content amounts of project expenditures and employment. The Terra Nova verification exercise was not a process to determine whether or not any given level of content had been achieved as no target levels were set for this project. It was solely an exercise to determine if procedures were being followed.

As a result of its initial work with Petro-Canada prior to the start of the verification work, CAC recommended improvements to reporting processes and worked with the operator to effect these improvements. As a result, content estimates of 15.7% Newfoundland content and 6.8% other Canadian content (22.5% total Canadian content) was adjusted to 11.7% Newfoundland content and 8.7% other Canadian content (20.4% total Canadian content) for total expenditures of $1.5 billion to December 31, 1999.

At the end of 2000 Terra Nova expenditures had reached $2.3 billion; benefits were 20.8% Newfoundland content and 9.3% other Canadian content (30.1% total Canadian content). These content percentages reflect the improvements to reporting procedures as a result of the CAC study.

In its review of the records of the Terra Nova Alliance and 13 subcontractors, CAC had some observations and concerns in some areas of the reporting process, specifically:

  • Inadequate record keeping and reporting by major subcontractors and suppliers of content as required by the procedures manual;
  • Assignment of content with respect to overhead and profit;
  • Assignment of content associated with leasing contracts; and
  • The head-count method of reporting employment.

All matters raised by CAC have been addressed by the Board and the operator.

The verification by CAC ensures that content has been calculated and reported correctly. It does not change the actual level of Newfoundland and Canadian content achieved. The C-NOPB has also determined that the errors in content estimates did not affect any contract awards.

Consulting and Audit Canada reports that on the basis of the adjustments and improvements implemented, the reported content presents fairly in all material respects subject to the submission of final certification at contract completion. The operator has initiated close-out procedures for its contract packages, and these procedures include the acquisition of final Canada-Newfoundland Benefits Content Certificates. Any variation between the original estimates and the final certificates will be reflected in updated reports.

The results of this work will be used by the Board to improve reporting procedures for this and subsequent projects.

REFERENCE:
Hal Stanley,
Chairman &CEO

Media Reference:
Edsel Bonnell,
Public Information Coordinator
(709) 778-1440


News Releases 2001

DateUpdate
2001, Dec 19DECISION 2001.01, White Rose Canada-Newfoundland Benefits Plan and White Rose Development Plan
2001, Nov 212001 LAND SALE RESULTS
2001, Sep 24WHITE ROSE PUBLIC REVIEW REPORT COMPLETED
2001, Jul 10C-NOPB Reports on the Verification of Industrial Benefits for the Terra Nova Project
2001, Jun 26C-NLOPB Releases Revised Discovered Resource Estimates for White Rose
2001, Jun 26CANADA-NEWFOUNDLAND OFFSHORE PETROLEUM BOARD’S REVISED OIL AND GAS RESOURCE ESTIMATES FOR THE WHITE ROSE FIELD
2001, Jun 26L’Office Canada-Terre-Neuve des hydrocarbures extracôtiers annonce des estimations révisées des ressources découvertes à White Rose
2001, May 12001 Call for Bids
2001, Mar 16WHITE ROSE DEVELOPMENT APPLICATION REFERRED TO COMMISSIONER FOR PUBLIC REVIEW
2001, Jan 29White Rose Project Review Process
2001, Jan 29BACKGROUNDER: WHITE ROSE DEVELOPMENT PROJECT REVIEW PROCESS
2001, Jan 29BIOGRAPHY – HERBERT M. CLARKE
2001, Jan 29COMMISSIONER’S TERMS OF REFERENCE FOR THE PROPOSED WHITE ROSE PROJECT PUBLIC REVIEW
2001, Jan 29DOCUMENT D’INFORMATION : PROCESSUS D’EXAMEN DU PROJET DE MISE EN VALEUR DE WHITE ROSE
2001, Jan 29EXAMEN PUBLIC ENVISAGé POUR LE PROJET WHITE ROSE MANDAT DU COMMISSAIRE
2001, Jan 16White Rose Development Application Received