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:Selection of bid
Marginal note:Publication of bid selected
(2) Where the Board selects a bid submitted in response to a call for bids, the Board shall publish a notice in accordance with section 66 setting out the terms and conditions of that bid.
Marginal note:Interest to be consistent with bid
(3) Where an interest is to be issued as a result of a call for bids, the terms and conditions of the interest shall be substantially consistent with any terms and conditions in respect of the interest specified in the call.
Marginal note:Publication of terms and conditions of interest
(4) The Board shall publish a notice in accordance with section 66 setting out the terms and conditions of any interest issued as a result of a call for bids as soon as practicable after the issuance thereof.
Marginal note:Issuance of interest not required
Marginal note:New call required
(2) Subject to section 64, where the Board has not issued an interest with respect to a particular portion of the offshore area specified in a call for bids within six months after the closing date specified in the call for the submission of bids, the Board shall, before issuing an interest in relation to that portion of the offshore area, make a new call for bids.
Marginal note:Exception to call for bids
(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 it 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.
(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 66 setting out the terms and conditions of the proposed interest.
Marginal note:Interest not vitiated by failure to comply with call procedures
65 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 61 to 64 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
66 Any notice required to be published by the Board pursuant to subsection 61(1), 62(2) or (4), 64(2) or 71(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.
67 Subject to section 6, the Governor in Council may, for the purposes of section 61, 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.
Marginal note:Rights under exploration licences
68 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.
69 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
70 (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 32 to 37, and the interest owner of the licence.
(2) Subject to section 6, 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
71 (1) The Board, subject to sections 32 to 37, 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.
(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 64(1) and a notice has been published in accordance with section 66 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 32 to 37, 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
Marginal note:Non-renewable term of nine years
(2) Subject to subsection (3) and section 73, 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.
(3) Subject to section 73, 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
73 (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.
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