B.C. close to unlocking oil riches:

Premier confident decades-old moratorium on energy development will soon be lifted

Alan Toulin and Paul Vieira, National Post, Monday, April 8, 2002

OTTAWA - A deal which would allow oil and gas companies to tap into British
Columbia's offshore riches could be only weeks away, ending a long-standing
moratorium on exploration off the province's Pacific coastline.

Gordon Campbell, the B.C. Premier, is meeting with Herb Dhaliwal, the
Minister of Natural Resources, in Ottawa today and Tuesday and he is
optimistic he will strike an agreement with the federal government.

"Hopefully, we'll be able to announce a decision within the next two to
three weeks," Mr. Campbell said.

"We have a scientific report, as well as a caucus report [on the offshore
question]. We are trying to work with the federal government so we can
outline a long-term process or a process that will get us through to the
scientific requirements we need.

"We have also given that report to some aboriginal leaders in B.C."

Mr. Dhaliwal has said he is receptive to lifting the moratorium that has
stymied offshore development in B.C. for the past 30 years.

"I've always said, if we can develop our resources and do it in an
environmentally sustainable way, then I would be open to looking at
exploration offshore British Columbia," Mr. Dhaliwal said.

The Charlotte Basin has drawn the most interest from the oil and gas
industry. It could contain 10 billion barrels of oil and 26 trillion cubic
feet of natural gas -- about 2 1/2 times the Hibernia reserves off Canada's
east coast -- according to preliminary Geological Survey of Canada data.

Chevron Canada Ltd. and Petro-Canada are the only oil companies with leases
to the estimated $100-billion worth of reserves.

The moratorium has been in place since 1959. It was temporarily lifted in
1966 to permit the drilling of 14 exploratory wells. In 1972, the government
of Canada, which has jurisdictional precedence in the development of
offshore resources, re-invoked the moratorium.

With B.C. in need of economic activity and the province looking for
additional revenue, Mr. Campbell said lifting the moratorium is a major
priority.

"If we can move to a decision relatively quickly with the federal
government, I think you will see far more interest come and examine the
potential of B.C., but they are not going to give anything but passing
interest until we get through this phase [of talks with Ottawa]."

There are other developments in the province that will position B.C. to
become a major energy player, Mr. Campbell said.

"We have an energy industry that is on the verge of breaking out and being
recognized as a contributor to the national economy," Mr. Campbell said.

He expects that over the next five years there will be $20-billion of
private-sector investment in B.C.'s energy sector, creating an estimated
8,000 new jobs.

He cited the Ladyfern discovery in northeastern British Columbia. "The
Ladyfern alone is what they call an elephant find in the natural gas
business," he said. "It has enormous potential and has generated enormous
enthusiasm for the northeast part of province."

Oil companies are keen on Ladyfern because its reservoir contains an
estimated 500 billion cubic feet to a trillion cubic feet of natural gas and
is on the same scale as the big natural gas finds in offshore Nova Scotia.
But unlike such offshore fields as Sable Island, which took years and
billions of dollars in investment to exploit, Ladyfern has been relatively
easy to bring on stream.

"It's not just that find but many other finds throughout the basin of B.C.
and we are trying to do everything we can to generate the kind of regulatory
regime that allows for exploration to take place."

Mr. Campbell also said the province has "trillions of cubic feet" of
coal-bed methane, a technology that meets the energy needs of 7% of the
United States.

"There's not a region ... that does not have coal-bed methane available for
exploitation. We think that's an enormous economic opportunity."

Coal-bed methane is a relatively pure natural gas that resides in coal seams
at fairly shallow depths, and the reserve estimates for Alberta and B.C.
surpass conventional gas reserves in the western Canadian sedimentary basin.