The Newfoundland And Labrador Petroleum Directorate
Authors: Fitzgerald John G. 
Published: March 2010

PETROLEUM exploration off the coast of Newfoundland began in the mid19605. While results were encouraging with shows of oil, the Grand Banks yielded no success. However, within a few years, a quiet optimism had developed in oil circles based on subsurface data. It was not a question of "if" but of "when" oil would be discovered. The Newfoundland Government lost no time in translating that optimism into activity, Work was begun on formulating policies for management of offshore petroleum resources. By 1977 these policies had been articulated publicly and legislation enacted. When the giant Hibernia oil field was discovered in September 1979, the provincial government was ready and moved quickly to establish the Newfoundland and Labrador Petroleum Directorate.

In the four years that it has been in existence, the Directorate has been the lead agency in the management of the Newfoundland offshore. It has displayed initiative and expertise in establishing the province's resource management policies on a wide range of issues such as safety standards, certification and standards for offshore equipment, contingency planning, drilling and production regulations and resource conservation. Other jurisdictions have adapted much of the Directorate's development work and the enabling legislation.

Throughout this period, the province continued to press its case for ownership and substantial control of offshore petroleum resources, and the establishment of its right to an equitable share of the benefits arising from the development of these resources.

In March of this year (1984), the Supreme Court of Canada ruled on the question put to it by the federal government and determined that ownership and jurisdiction resided, in law, with Ottawa. This ruling implies a changing role for the Petroleum Directorate regarding offshore management.

What is the Newfoundland Petroleum Directorates continuing role in the light of the Supreme Court decision?

The provincial government remains acutely aware that multi-billion dollar offshore development projects will have a wide range of social, economic and environmental impacts. Based on bitter experience elsewhere in the world, some of these could have major adverse consequences for this small province.

Canadians residing in provinces far removed from the Newfoundland play will not be adversely affected by the social and environmental consequences of these massive developments. On the contrary, they will gain significant economic benefits from tax revenues and the manufacture and supply of materials and equipment.

Therefore, the government of Newfoundland and Labrador bears a heavy responsibility to ensure that questions and issues concerning exploration and exploitation of petroleum resources on its continental shelf are assessed in a comprehensive way and that net benefits accruing to the province are maximized.

The Supreme Court decision in March of this year did not change Newfoundland's policy objectives, but it removed many of the province's legal instruments to achieve them. The provincial government must, nevertheless, seek to protect the social and economic aspirations of its citizens.

To oversee this endeavour, the Newfoundland government has given the Petroleum Directorate a clear mandate.