Developers of the Cohasset-Panuke oil field off Nova Scotia have reached a royalty agreement with the provincial government.
Lasmo Nova Scotia Ltd. and Nova Scotia Resources Ltd. will pay royalties of 2% of gross revenues before payout and 30% of net revenues or 2% of gross revenues, whichever is greater, after payout.
The government said its royalty share will be only about $25 million during the anticipated life of the field, but the project is expected to benefit the provincial economy by $500 million in employment and other spinoffs.
Tanker shipments of crude oil are to begin in June from Canada's first commercial scale offshore field.
The $700 million Cohasset-Panuke field development project lies about 25 miles southeast of the Sable Island natural gas area. The venture, known as the Copan project, is scheduled to produce about 30,000 b/d during a 6 year period using a floating production system.
The project will produce from early spring to late fall to avoid severe winter storms in the area.
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