Business

Photo: The Canadian Press. All rights reserved.

A sign at a BP petrol station is seen in London, on Oct. 28, 2008. THE CANADIAN PRESS/AP, Kirsty Wigglesworth

BP has been granted the right to explore in Nova Scotia's offshore after the energy giant submitted a $1 billion bid, the highest ever accepted for deepwater exploration rights in Atlantic Canada.

The announcement by the Canada-Nova Scotia Offshore Petroleum Board raises hopes that the cash-strapped province can strike oil and grow its offshore energy industry, which has experienced setbacks in recent years.

"This is a strong endorsement of the valuable work our province has done to provide the industry with a clearer picture of Nova Scotia's offshore geology and potential," Premier Darrell Dexter told a news conference Friday in Halifax.

The board awarded BP, which has committed to spend more than $1 billion over the next six years, the right to explore four deepwater blocks about 300 kilometres southeast of Halifax. The area covers almost 14,000 square kilometres and is in water depths ranging from 100 to more than 3,000 metres.

Mike Daly, BP's executive vice-president of exploration, said the company's entry into Nova Scotia's offshore is in line with its growing focus on future exploration.

"This award gives us access to a significant piece of geology, one of the most promising new deepwater areas to be licensed in recent years," Daly said in a statement.

The announcement came a day after the company agreed to pay a record $4.5 billion fine in the U.S. for the explosion and oil spill that killed 11 drill rig workers and devastated the Gulf of Mexico in 2010.

Dexter said he does not ignore what happened in the Gulf, but he is confident in the province's offshore regulatory regime, which he said was "one of the strongest in the world."