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Canada–Newfoundland and Labrador Atlantic Accord Implementation Act (S.C. 1987, c. 3)

Act current to 2022-09-11 and last amended on 2022-07-30. Previous Versions

PART IIPetroleum Resources (continued)

DIVISION IIGeneral Rules Relating to Issuance of Interests (continued)

Issuance of Interests in Relation to Crown Reserve Areas (continued)

Marginal note:Exception to call for bids

  •  (1) Subject to sections 31 to 40, the Board may issue an interest, in relation to any Crown reserve area, without making a call for bids where

    • (a) the portion of the offshore area to which the interest is to apply has, through error or inadvertence, become a Crown reserve area and the interest owner who last held an interest in relation to such portion of the offshore area has, within one year after the time they so became a Crown reserve area, requested the Board to issue an interest; or

    • (b) the Board is issuing the interest to an interest owner in exchange for the surrender by the interest owner, at the request of the Board, of any other interest or a share in any other interest, in relation to all or any portion of the offshore area subject to that other interest.

  • Marginal note:Notice

    (2) Where the Board proposes to issue an interest under subsection (1), the Board shall, not later than ninety days before issuing the interest, publish a notice in accordance with section 63 setting out the terms and conditions of the proposed interest.

Marginal note:Interest not vitiated by failure to comply with call procedures

 Where an interest has been issued, it is not vitiated by reason only of a failure to comply with any of the requirements set out in sections 58 to 61 respecting the form and content of, and time and manner of publishing, any notice required by those sections in relation to that interest.

Marginal note:Manner of publication of notices

 Any notice required to be published by the Board pursuant to subsection 58(1), 59(2) or (4), 61(2) or 68(2) shall be published in the Canada Gazette and in any other publication the Board deems appropriate and, notwithstanding those subsections, may contain only a summary of the information required to be published and a statement that the full text thereof is available for inspection by any person on request made to the Board.

Marginal note:Regulations

 Subject to section 7, the Governor in Council may, for the purposes of section 58, make regulations of general application in relation to the offshore area or any portion thereof, or in respect of any particular call for bids, prescribing the terms, conditions and criterion to be specified in a call for bids, the manner in which bids are to be submitted and requiring those terms and conditions and that criterion and manner to be specified in the call.

DIVISION IIIExploration

Exploration Licences

Marginal note:Rights under exploration licences

 An exploration licence confers, with respect to the portions of the offshore area to which the licence applies,

  • (a) the right to explore for, and the exclusive right to drill and test for, petroleum;

  • (b) the exclusive right to develop those portions of the offshore area in order to produce petroleum; and

  • (c) the exclusive right, subject to compliance with the other provisions of this Part to obtain a production licence.

Marginal note:Shares

 A share in an exploration licence may, subject to any requirements that may be prescribed, be held with respect to a portion only of the offshore area subject to the exploration licence.

Marginal note:Terms and conditions

  •  (1) An exploration licence shall contain such terms and conditions as may be prescribed and may contain any other terms and conditions, not inconsistent with this Part or the regulations, as may be agreed on by the Board, subject to sections 31 to 40, and the interest owner of the licence.

  • Marginal note:Regulations

    (2) Subject to section 7, the Governor in Council may make regulations prescribing terms and conditions required to be included in exploration licences issued in relation to the offshore area or any portion thereof.

Marginal note:Amendment of exploration licence

  •  (1) The Board, subject to sections 31 to 40, and the interest owner of an exploration licence may, by agreement, amend any provision of the exploration licence in any manner not inconsistent with this Part or the regulations and, without limiting the generality of the foregoing, may, subject to subsection (2), amend the licence to include any other portion of the offshore area.

  • Marginal note:Exception

    (2) The Board shall not amend an exploration licence to include any portion of the offshore area that, immediately prior to the inclusion, was a Crown reserve area unless the Board would be able to issue an interest to that interest owner in relation to that area under subsection 61(1) and a notice has been published in accordance with section 63 not later than ninety days before making the amendment, setting out the terms and conditions of the amendment.

  • Marginal note:Consolidation of exploration licences

    (3) Subject to sections 31 to 40, the Board may, on the application of the interest owners of two or more exploration licences, consolidate those exploration licences into a single exploration licence, subject to any terms and conditions that may be agreed on by the Board and those interest owners.

Marginal note:Effective date of exploration licence

  •  (1) The effective date of an exploration licence is the date specified in the licence as the effective date thereof.

  • Marginal note:Non-renewable term of nine years

    (2) Subject to subsection (3) and section 70, the term of an exploration licence shall not exceed nine years from the effective date of the licence and shall not be extended or renewed.

  • Marginal note:Exception

    (3) Subject to section 70, the term of an exploration licence entered into or in respect of which negotiations have been completed before December 20, 1985 may be renegotiated once only for a further term not exceeding four years and thereafter the term thereof shall not be renegotiated, extended or renewed.

  • Marginal note:Crown reserve areas on expiration of licence

    (4) On the expiration of an exploration licence, the portions of the offshore area to which the exploration licence related and that are not subject to a production licence or a significant discovery licence become Crown reserve areas.

Marginal note:Continuation of exploration licence where drilling commenced

  •  (1) Where, prior to the expiration of the term of an exploration licence, the drilling of any well has been commenced on any portion of the offshore area to which the exploration licence applies, the exploration licence continues in force while the drilling of that well is being pursued diligently and for so long thereafter as may be necessary to determine the existence of a significant discovery based on the results of that well.

  • Marginal note:Deemed pursued diligently

    (2) Where the drilling of a well referred to in subsection (1) is suspended by reason of dangerous or extreme weather conditions or mechanical or other technical problems encountered in the drilling of the well, the drilling of that well shall, for the purposes of subsection (1), be deemed to be being pursued diligently during the period of suspension.

  • Marginal note:Drilling of second well deemed commenced

    (3) Where the drilling of a well referred to in subsection (1) cannot be completed for mechanical or other technical problems and if, within ninety days after the cessation of drilling operations with respect to that well, or such longer period as the Board determines, the drilling of another well is commenced on any portion of the offshore area that was subject to the exploration licence, the drilling of that other well shall, for the purposes of subsection (1), be deemed to have commenced prior to the expiration of the term of the exploration licence.

Significant Discoveries

Marginal note:Application for declaration of significant discovery

  •  (1) Subject to section 124, where a significant discovery has been made on any portion of the offshore area that is subject to an interest or a share therein held in accordance with section 66, the Board shall, on the application of the interest holder of the interest or the share thereof made in the form and manner and containing such information as may be prescribed, make a written declaration of significant discovery in relation to those portions of the offshore area in respect of which there are reasonable grounds to believe that the significant discovery may extend.

  • Marginal note:Declaration on initiative of Board

    (2) Where a significant discovery has been made on any portion of the offshore area, the Board may, by order subject to section 124, make a declaration of significant discovery in relation to those portions of the offshore area in respect of which there are reasonable grounds to believe the significant discovery may extend.

  • Marginal note:Description of offshore area subject to declaration

    (3) A declaration made pursuant to subsection (1) or (2) shall describe the portions of the offshore area to which the declaration applies.

  • Marginal note:Amendment or revocation of declaration

    (4) Subject to subsection (5), where a declaration of significant discovery is made pursuant to subsection (1) or (2) and, based on the results of further drilling, there are reasonable grounds to believe that a discovery is not a significant discovery or that the portions of the offshore area to which the significant discovery extends differ from the significant discovery area, the Board may, subject to section 124 and as appropriate in the circumstances,

    • (a) amend the declaration of significant discovery by increasing or decreasing the significant discovery area; or

    • (b) revoke the declaration.

  • Marginal note:Idem

    (5) A declaration of significant discovery shall not be amended to decrease the significant discovery area or revoked earlier than

    • (a) in the case of a significant discovery area that is subject to a significant discovery licence issued pursuant to subsection 73(1), the date on which the exploration licence referred to in that subsection expires; and

    • (b) in the case of a significant discovery area that is subject to a significant discovery licence issued pursuant to subsection 73(2), three years after the effective date of the significant discovery licence.

  • Marginal note:Notice

    (6) A copy of a declaration of significant discovery and of any amendment or revocation thereof made under this section in relation to any portion of the offshore area subject to an interest shall be sent by registered mail to the interest owner of that interest.

  • 1987, c. 3, s. 71
  • 2015, c. 4, s. 42(F)

Significant Discovery Licences

Marginal note:Rights under significant discovery licence

 A significant discovery licence confers, with respect to the portions of the offshore area to which the licence applies,

  • (a) the right to explore for, and the exclusive right to drill and test for, petroleum;

  • (b) the exclusive right to develop those portions of the offshore area in order to produce petroleum; and

  • (c) the exclusive right, subject to compliance with the other provisions of this Part, to obtain a production licence.

Marginal note:Significant discovery licence in relation to areas subject to exploration licences

  •  (1) Where a declaration of significant discovery is in force and all or a portion of the significant discovery area is subject to an exploration licence or a share therein held in accordance with section 66, the Board shall, on application of the interest holder of the exploration licence or the share made in the form and manner and containing such information as may be prescribed, issue to the interest holder a significant discovery licence in respect of all portions of the significant discovery area that are subject to the exploration licence or the share.

  • Marginal note:Significant discovery licence in relation to Crown reserve areas

    (2) Where a declaration of significant discovery is in force and the significant discovery area extends to a Crown reserve area the Board may, after making a call for bids in relation to that Crown reserve area or any portion thereof and selecting a bid submitted in response to the call in accordance with subsection 59(1), issue a significant discovery licence to the person who submitted that bid in relation to the Crown reserve area specified in the call.

  • Marginal note:Fundamental decision

    (3) The making of a call for bids and the issuance of a significant discovery licence by the Board pursuant to subsection (2) is subject to sections 31 to 40.

  • Marginal note:Terms and conditions of significant discovery licence

    (4) A significant discovery licence shall be in the form prescribed and may contain any other terms and conditions, not inconsistent with this Part or the regulations, as may be agreed on by the Board, subject to sections 31 to 40, and the interest owner of the significant discovery licence.

Marginal note:Reduction of area subject to significant discovery licence

  •  (1) Where a significant discovery area in relation to a declaration of significant discovery is decreased pursuant to an amendment made under subsection 71(4), any significant discovery licence that was issued on the basis of that declaration shall be amended by decreasing accordingly the portions of the offshore area subject to that licence.

  • Marginal note:Increase in area subject to significant discovery licence

    (2) Where a significant discovery area in relation to a declaration of significant discovery is increased pursuant to an amendment made under subsection 71(4), any significant discovery licence that was issued on the basis of that declaration shall be amended to include all portions of the amended significant discovery area that are subject to any exploration licence held by the interest owner of that significant discovery licence at the time the significant discovery area is so increased.

Marginal note:Exploration licence ceases to have effect

  •  (1) On the issuance of a significant discovery licence pursuant to subsection 73(1) with respect to a significant discovery area, any exploration licence ceases to have effect in relation to that significant discovery area.

  • Marginal note:Effective date of significant discovery licence

    (2) The effective date of a significant discovery licence is the date of application for the licence.

  • Marginal note:Term of significant discovery licence

    (3) Subject to subsection 85(1), a significant discovery licence continues in force, in relation to each portion of the offshore area to which the licence applies, during such period as the declaration of significant discovery on the basis of which the licence was issued remains in force in relation to that portion.

  • Marginal note:Crown reserve area on expiration of licence

    (4) On the expiration of a significant discovery licence, any portion of the offshore area to which the significant discovery licence related and that is not subject to a production licence becomes a Crown reserve area.

Drilling Orders

Marginal note:Drilling orders

  •  (1) Subject to subsections (2) to (4) and sections 31 to 40, the Board may, at any time after making a declaration of significant discovery, by order subject to section 124, require the interest owner of any interest in relation to any portion of the significant discovery area to drill a well on any portion of the significant discovery area that is subject to that interest, in accordance with such directions as may be set out in the order, and to commence the drilling within one year after the making of the order or within such longer period as the Board specifies in the order.

  • Marginal note:Exception

    (2) No order may be made under subsection (1) with respect to any interest owner who has completed a well on the relevant portion of the offshore area within six months after the completion of that well.

  • Marginal note:Condition

    (3) No order may be made under subsection (1) within the three years immediately following the well termination date of the well indicating the relevant significant discovery.

  • Marginal note:Idem

    (4) No order made under subsection (1) may require an interest owner to drill more than one well at a time on the relevant portion of the offshore area.

  • Definition of well termination date

    (5) For the purposes of subsection (3), well termination date means the date on which a well has been abandoned, completed or suspended in accordance with any applicable drilling regulations.

  • 1987, c. 3, s. 76
  • 2015, c. 4, s. 43

Marginal note:Information may be disclosed

  •  (1) The Board may, notwithstanding section 119, provide information or documentation relating to a significant discovery to any interest owner who requires such information or documentation to assist the interest owner in complying with an order made under subsection 76(1).

  • Marginal note:Idem

    (2) An interest owner shall not disclose any information or documentation provided to that interest owner under subsection (1) except to the extent necessary to enable the interest owner to comply with an order made under subsection 76(1).

 
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