Canadian authorities are considering whether or not to charge multimillion-dollar fees to companies that drill hundreds of miles offshore on the extended continental shelf (ECS), according to Reuters.
The fee would be a way for the federal government to make back costs they must pay to an organization called the International Seabed Authority (ISA).
Canada became a signatory in 2003 to a UN convention requiring it to make payments to the ISA in the event that companies drill in those ECS areas.
The continental shelf is the extension underwater of a coastal nation’s land and the ECS is a part of that shelf beyond 200 nautical miles from shore.
Whereas Canadian provinces make royalties from oil and gas activities in their offshore waters, the federal government does not, which is why it is contemplating these fees to help cover the ISA charge.
In precarious times for the oil business it is likely to be an unwelcome burden for oil production firms.
The ISA, based in Kingston, Jamaica, was founded in 1994 as part of the Law of the Sea Convention. It was established to organize, regulate and control mineral-related activities in areas of the seabed beyond national jurisdictions.