Company says provincial dispute not about an end of federal protections
The GSI Admiral was once the go-to ship for Geophysical Service Inc.’s offshore work. The seismic testing company claims the CNLOPB is giving away its information for free, hurting its business.
— File photo
Paul Einarsson, president of seismic testing company Geophysical Service Inc. (GSI), says his company’s products are being plundered by the province’s offshore regulator, with the spoils enjoyed by governments and oil companies alike.
Through both policy and action, he said in an interview Sunday, he feels the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) and the provincial government are trying to put him out of business.
His response has been to take his arguments to the courts.
GSI’s business is information — specifically, the sale of data collected in costly offshore seismic surveys.
Einarsson says data GSI collected over decades offshore has been unlawfully provided, through the CNLOPB, to companies who might otherwise have paid GSI for the information.
Regulation dictates data collected offshore must be provided to the regulator. The CNLOPB protects it for five years, as stipulated by the Atlantic Accord Acts. Another five years is provided under board policy.
What happens after that period is another issue.
“There’s a confidentiality under the Accord Act, but it doesn’t say anything that they have a right
to release it after that,” Einarsson said.
“What they’re reading into it, improperly, is that they have a right to basically expropriate the product, which is just not right.”
In claims filed in August 2011 and January 2012 with the Supreme Court of Newfoundland and Labrador, GSI claims the regulator and provincial government unlawfully provided access to seismic data.
The cases have yet to be settled.
GSI currently has no vessels available for new seismic testing.
The company’s former flagship, the Canadian-flagged GSI Admiral, was once a go-to for work offshore.
The fact the ship flew a Canadian flag was important, since it meant GSI’s operations were provided protection under Canada’s Coasting Trade Act.
That law was designed to encourage a Canadian-first approach to the transportation of people and goods in Canadian waters. If a company tried to bring in an outside ship to do seismic work, an objection could be filed under the act.
In the mid-2000s, representatives from oil companies and Nalcor Energy Oil and Gas began lobbying Ottawa to have the law changed.
“We believe that in the case of the importation of foreign seismic vessels, the (permitting) process is inadvertently working against Canadian interests by reducing our global competitiveness in exploration,” stated Nalcor Oil and Gas lead Jim Keating in a 2011 blog post.
The same year, under a partnership between Nalcor Energy and Norwegian companies TGS and PGS, the MV Sanco Spirit was to be brought in for seismic work.
An objection was filed to the Gibraltar-flagged vessel being used and the ship could not complete the proposed seismic program — at least until it was re-flagged.
The federal government announced a change in the Coasting Trade Act in 2012. The new act allows foreign-flagged seismic vessels to be readily permitted, as long as they are part of a search for oil and gas resources.
When announced, the change in the act was applauded by both the Newfoundland and Labrador Oil and Gas Industries Association and the Canadian Association of Petroleum Producers, whose reps said with more companies having easy access to the area, more data could be collected and swiftly brought to market.
Einarsson viewed it differently. “We were the low-cost producer and our foreign competitors were interested in putting us out of business,” he said.
In 2010, GSI cancelled a planned $10-million seismic survey, stating it was in response to Premier Kathy Dunderdale committing to making more seismic data available through the CNLOPB in an easily accessible, digital format.
The company has subsequently taken up legal battles with the Nova Scotia-Canada Offshore Petroleum Board and the National Energy Board over data access and exclusivity rights, in addition to provincial actions.
“We have over, I think, 20 lawsuits now and it’s because I’m forced to play by the rules and I get my hand slapped if I don’t, but they’re breaking the rules and they’re getting away with it,” Einarsson claimed.
To date, the provincial government and the CNLOPB have not commented on the legal wranglings with GSI in this province.