Members of Noia, the Newfoundland & Labrador Oil & Gas Industries Association, were pleased to see the permanent removal of customs duties on offshore drill rigs in the federal budget brought down Tuesday, February 11th. Economic Action Plan 2014 proposes to permanently eliminate tariffs on mobile offshore drilling units (MODUs) used in offshore oil & gas exploration and development.
“For the past 10 years, a temporary duty remission has been in place and we believe this permanent duty remission is an important step towards increasing offshore exploration on the East Coast of Canada,” said Robert Cadigan, President & CEO of Noia. “More exploration will lead to new discoveries, replenish declining reserves and enable the offshore petroleum industry to continue to fuel the Newfoundland & Labrador economy.”
MODUs include drilling platforms, drill ships, jack-ups and semi-submersibles that are used for petroleum exploration, delineation and field development in Canadian waters. The duty-free status of these units, which was scheduled to expire in May 2014, lowers business costs by $13 million annually, improving the global competitiveness of Canadian offshore energy projects. This step will help increase the potential for valuable resource discoveries in Canada’s Atlantic and Arctic offshore areas, and will also provide important maintenance and repair opportunities for Canadian shipyards.