Indian Oil and Gas Regulations
P.C. 2019-755 2019-06-09
Her Excellency the Governor General in Council, on the recommendation of the Minister of Indian Affairs and Northern Development, pursuant to section 4.1Footnote a and subsection 21(1)Footnote b of the Indian Oil and Gas ActFootnote c, makes the annexed Indian Oil and Gas Regulations.
1 (1) The following definitions apply in these Regulations.
Act means the Indian Oil and Gas Act. (Loi)
- actual selling price
actual selling price means
(a) in respect of oil, the price at which the oil is sold; and
(b) in respect of gas, the price or consideration payable that is specified in the gas sales contract, free of any fees or deductions other than transmission charges beyond the facility outlet. (prix de vente réel)
adjoining, in relation to two spacing units, means touching at a common point, without regard to any road allowances between the spacing units. (adjacentes)
bitumen means oil that does not flow to a well unless it is heated or diluted. (bitume)
- exploration work
exploration work includes mapping, surveying, examining geological, geophysical or geochemical data, test drilling and any other activities that are carried out by air, land or water and are related to the exploration for oil or gas. (travaux d’exploration)
- external spacing unit
external spacing unit, in relation to a First Nation, means any spacing unit that is not a First Nation spacing unit of that First Nation. (unité d’espacement externe)
- First Nation spacing unit
First Nation spacing unit means a spacing unit in which 50% or more of the lands are First Nation lands of the same First Nation. (unité d’espacement d’une première nation)
- horizontal section
horizontal section means the portion of a wellbore that has
(a) an angle of at least 80°, measured between the line extending from the initial point of penetration into the target zone to the end point of the wellbore in that zone and the line extending vertically downward from the initial point of penetration into that zone; and
(b) a minimum length of 100 m, measured from the initial point of penetration into the target zone to the end point of the wellbore in that zone. (tronçon horizontal)
- horizontal well
horizontal well means a well that has been approved as a horizontal well by the provincial authority or a well with a horizontal section that has been approved by the provincial authority. (puits horizontal)
- offset period
offset period means the period established in accordance with subsection 93(4). (délai de compensation)
- offset well
offset well means a well that is located in a First Nation spacing unit adjoining an external spacing unit in which a triggering well is located and that is producing from the same zone as the triggering well. (puits de limite)
- offset zone
offset zone means the zone from which a triggering well is producing. (couche de compensation)
pool means a natural underground reservoir that contains or appears to contain an accumulation of oil or gas that is separate or appears to be separate from any other such accumulation. (bassin)
prescribed means prescribed by the Minister under subsection 5(1) of the Act. (Version anglaise seulement)
productive means producing or capable of producing oil or gas in a quantity that would warrant incurring
(a) the costs of completion, in the case of a well that has been drilled but not completed; or
(b) the costs of production, in the case of a well that has been completed. (productif)
- provincial authority
provincial authority means the office, department or body that is authorized by law to make decisions, grant approvals, receive information or keep records respecting the exploration for, or the exploitation or conservation of, oil and gas in the province in which the relevant First Nation lands are located. (autorité provinciale)
- service well
service well means a well that is operated for observation or for the injection, storage or disposal of fluids. (puits de service)
- spacing unit
spacing unit means an area in a zone that is designated as a spacing unit, a spacing area, a drainage unit or other similar unit by the provincial authority. (unité d’espacement)
- subsurface contract
subsurface contract means a permit or subsurface lease granted under the Act. (contrat relatif au sous-sol)
- surface contract
surface contract means a surface lease or right-of-way granted under the Act. (contrat relatif au sol)
- surface rates
surface rates means the amounts, referred to in subsections 73(2) and (3), that are to be paid by a surface contract holder. (droits de surface)
- triggering well
triggering well means a well that is producing from one or more external spacing units adjoining a First Nation spacing unit. (puits déclencheur)
- unit agreement
unit agreement means an agreement that combines the rights or interests of all the holders of oil and gas rights or interests in all or part of a pool and that provides for the joint exploitation of the oil and gas and the payment of royalties based on an attribution of production rather than actual production, but does not include an agreement that attributes production from a well referred to in subsection 107(1). (accord de mise en commun)
well means a well that is used for the exploitation of oil or gas and includes a vertical well, a deviated well and a horizontal well. (puits)
zone means a stratum of lands identified as a zone in accordance with the log data set out in Schedule 3 or 4, as the case may be. (couche)
Marginal note:Incorporation by reference
(2) A reference to a document that is incorporated by reference into these Regulations is a reference to the document as amended from time to time or, if the document no longer exists, to any successor to it that provides the same information.
Marginal note:Notice, document or information
2 (1) Any notice, document or information that is sent or submitted under these Regulations must be in paper or electronic form or published on the website of Petrinex or any successor to Petrinex.
Marginal note:Address for service
(2) A contract holder must, in the prescribed form, provide the Minister with their address for service and send him or her a notice of any change to that address.
Marginal note:Deemed receipt — paper form
(3) Any notice, document or information that the Minister sends to a holder in paper form at their address for service is deemed to have been received by the holder four days after the day on which it is sent.
Marginal note:Deemed receipt — electronic form
(4) Any notice, document or information that the Minister sends to a holder in electronic form at their latest address for service or publishes on the website of Petrinex or any successor to Petrinex is deemed to have been received by the holder on the day on which it is sent or published.
Marginal note:Record search
(5) A person may apply to the Minister for a record search of non-confidential, contractual documentation that is in the Minister’s possession and stored in electronic form if the application is in the prescribed form and accompanied by the record search fee set out in Schedule 1.
3 Despite any provision of these Regulations, a person is not obliged to submit information to the Minister that the Minister has stated is in his or her possession or is available to him or her from another source such as Petrinex.
Marginal note:Form not prescribed
4 When an application or other information is required by these Regulations to be submitted in a prescribed form but no form has been prescribed, the application or information may be submitted in any form.
Marginal note:Alternative format
5 When a notice, a document or information is required by these Regulations to be submitted in a specified format, the person required to submit it may use an alternative format if the Minister states that he or she has the capacity to read and use the information in that alternative format.
6 A person is eligible to be granted a contract if
(a) they are a corporation that is authorized by the laws of the relevant province to carry on business in that province or an individual who has reached the age of majority in that province;
(b) they are not in default under subsection 111(5); and
(c) in the case of a corporation, neither it nor any of its directors, officers or agents or mandataries has been convicted of an offence under subsection 18(2) of the Act within two years before the date of the bid, in the case of a grant by public tender, or the date of the application, in the case of a negotiated contract.
Marginal note:Holder’s responsibility
7 A contract holder must ensure that any requirement that is related to their contract and is imposed by these Regulations on a person other than the holder is satisfied.
Marginal note:Liability — holders and persons with working interest
8 (1) Every contract holder and person with a working interest in a contract is absolutely liable for any damage to the environment that is caused by operations carried out under the contract.
Marginal note:Liability — operators and licensees
(2) Every operator, well licensee, pipeline licensee and facility licensee is absolutely liable for any damage to the environment that is caused by operations they carry out under the contract.
Marginal note:Insurance required
9 (1) A contract holder must obtain, and maintain during the term of the contract, an insurance policy that is adequate to cover all risks resulting from the operations to be carried out under the contract.
Marginal note:Minimum coverage
(2) The insurance policy must provide the following minimum coverage:
(a) comprehensive general liability insurance that covers the risks of damage caused by operations carried out under the contract with an inclusive bodily injury, death and property damage limit of at least $5,000,000 per occurrence, including occupier’s liability or liability for damage caused by immovables, employer’s liability, employer’s contingent liability, contractual liability, contractor’s protective liability, products liability, completed operations liability and contractor’s liability insurance;
(b) automobile liability insurance that covers all vehicles used in operations carried out under the contract with an inclusive bodily injury, death and property damage limit of at least $5,000,000 per occurrence; and
(c) if aircraft are to be used in operations carried out under the contract, aircraft liability insurance with an inclusive bodily injury, death and property damage limit of at least $10,000,000 per occurrence.
(3) Every insurance policy obtained by the holder must provide that the insurer’s right of subrogation is waived in favour of the Minister.
Marginal note:Notice of cancellation
(4) The holder must send the Minister notice without delay if any coverage under their insurance policy is terminated and at least 30 days before the last day of coverage if the holder intends to cancel any of their coverage.
Marginal note:Maximum deductible
(5) The deductible of every insurance policy must not exceed 5% of the amount of insurance.
10 A holder may satisfy the requirement imposed by subsection 9(1) by providing the Minister with a letter of self-insurance in the prescribed form in which the holder
(a) acknowledges liability for any damage caused by operations carried out under the contract; and
(b) declares that their financial resources are adequate to cover that liability.
Marginal note:Contractor’s insurance
11 A contract holder must ensure that any person that carries out operations under the contract, other than an employee, obtains and maintains an insurance policy that is adequate to cover all risks resulting from those operations.
Marginal note:Contract area boundaries
12 (1) The boundaries of a contract area must correspond to the boundaries of the legal land divisions of the relevant province if the lands in the contract area have been surveyed, or to the anticipated boundaries of those divisions if the lands have not been surveyed.
Marginal note:Unsurveyed lands
(2) If the lands in a contract area are surveyed during the term of the contract, the Minister must, after consulting with the holder and the council, amend the contract so that the description of the contract area complies with subsection (1).
(3) Subsections (1) and (2) do not apply if the lands in the contract area are First Nation lands whose configuration prevents compliance with those subsections.
Marginal note:Survey plan
13 (1) Every survey plan that is required under these Regulations must be
(a) plotted in accordance with the Canada Lands Surveys Act;
(b) approved by the Surveyor General of Canada; and
(c) recorded in the Canada Lands Survey Records.
(2) Subsection (1) does not apply to
(a) an exploration work survey plan; or
(b) a survey of lands under a treaty land entitlement agreement or a specific claim settlement agreement.
14 If a dispute arises regarding the location of a well, facility or boundary referred to in a contract, the Minister may order the contract holder to have a survey carried out as soon as the circumstances permit.
Marginal note:Annual meeting request
15 (1) A council whose First Nation lands are subject to a contract may, no more than once a year, submit a request to the Minister in the prescribed form for a meeting with the contract holder for the purpose of discussing the operations that have been carried out, or are planned to be carried out, in the contract area.
Marginal note:Minister’s notice
(2) The Minister must send the holder notice of a meeting request.
Marginal note:Arrangement of meeting
(3) The holder must organize the meeting and ensure that it takes place within 90 days after the day on which the Minister’s notice is received. In the case of multiple holders, they may designate one of their number to attend as their representative.
Marginal note:Multiple contracts
(4) If the holder has more than one contract in the First Nation lands, operations carried out under all the contracts may be discussed at the same meeting.
(5) Any expense relating to the request for, preparation for or attendance at a meeting must be borne by the party that incurs the expense.
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