Canada Petroleum Resources Act (R.S.C., 1985, c. 36 (2nd Supp.))

Marginal note:Compensation — surrender

• 12.2 (1) If the interest owner surrenders an interest referred to in subsection 12.1(1), Her Majesty in right of Canada may grant any compensation that is determined by negotiations with the Minister.

• Marginal note:Compensation — cancellation

  (2) If the Minister cancels an interest referred to in subsection 12.1(1), Her Majesty in right of Canada may grant to the interest owner the compensation that is specified in an order made by the Minister under subsection 12.1(3), subject to section 106 in respect of the amount of that compensation.

• Marginal note:No compensation

  (3) A person shall not have any right to claim or receive any compensation, damages, indemnity or other form of relief from Her Majesty in right of Canada or from any servant or agent or mandatary of Her Majesty in right of Canada for any acquired, vested, future or potential right or entitlement that is affected by a surrender or cancellation of an interest referred to in subsection 12.1(1), other than compensation that may be granted to an interest owner under this section.

PART IIGeneral Rules Relating to Issuance of Interests

Authority to Issue Interests

Marginal note:Authority to issue interests

• 13 (1) The Minister may issue interests in respect of any frontier lands in accordance with this Act and the regulations.

• Marginal note:Application of interest may be limited

  (2) Subject to subsection (3), the application of any interest may be restricted to such geological formations and to such substances as may be specified in the interest.

• Marginal note:Non-retrospective effect of subsection (2)

  (3) Subsection (2) does not apply to any interest

  • (a) that is in force or in respect of which negotiations were completed before or on the coming into force of this section in relation to any frontier lands; or

  • (b) that immediately succeeds an interest referred to in paragraph (a) in relation to those lands where those lands were not Crown reserve lands on the expiration of the interest referred to in paragraph (a).

Issuance of Interests in Relation to Crown Reserve Lands

Marginal note:Calls for bids

• 14 (1) Subject to section 17, the Minister shall not issue an interest in relation to Crown reserve lands unless

  • (a) prior thereto, the Minister has made a call for bids in relation to those Crown reserve lands by publishing a notice in accordance with this section and section 19; and

  • (b) the interest is issued to the person who submitted, in response to the call, the bid selected by the Minister in accordance with subsection 15(1).

• Marginal note:Requests for postings of frontier lands

  (2) Any request received by the Minister to make a call for bids in relation to particular frontier lands shall be considered by the Minister in selecting the frontier lands to be specified in a call for bids.

• Marginal note:Contents of call

  (3) A call for bids shall specify

  • (a) the interest to be issued and the frontier lands to which the interest is to apply;

  • (b) where applicable, the geological formations and substances to which the interest is to apply;

  • (c) the other terms and conditions subject to which the interest is to be issued;

  • (d) any terms and conditions that a bid must satisfy to be considered by the Minister;

  • (e) the form and manner in which a bid is to be submitted;

  • (f) subject to subsection (4), the closing date for the submission of bids; and

  • (g) the sole criterion that the Minister will apply in assessing bids submitted in response to the call.

• Marginal note:Time of publishing call

  (4) Unless otherwise prescribed, a call for bids shall be published at least one hundred and twenty days before the closing date for the submission of bids specified in the call.

Marginal note:Selection of bid

• 15 (1) A bid submitted in response to a call for bids shall not be selected unless

  • (a) the bid satisfies the terms and conditions and is submitted in the form and manner specified in the call; and

  • (b) the selection is made on the basis of the criterion specified in the call.

• Marginal note:Publication of bid selected

  (2) Where the Minister selects a bid submitted in response to a call for bids, the Minister shall publish a notice in accordance with section 19 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 Minister shall publish a notice in accordance with section 19 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

• 16 (1) The Minister is not required to issue an interest as a result of a call for bids.

• Marginal note:New call required

  (2) Subject to section 17, where the Minister has not issued an interest with respect to a particular portion of the frontier lands specified in a call for bids within six months after the closing date specified in the call for the submission of bids, the Minister shall, before issuing an interest in relation to that portion of the frontier lands, make a new call for bids.

Marginal note:Exception to call for bids

• 17 (1) The Minister may issue an interest, in relation to any Crown reserve lands, without making a call for bids where

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

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

• Marginal note:Notice

  (2) Where the Minister proposes to issue an interest under subsection (1), he shall, not later than ninety days before issuing the interest, publish a notice in accordance with section 19 setting out the terms and conditions of the proposed interest.

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

18 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 14 to 17 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

19 Any notice required to be published by the Minister pursuant to subsection 14(1), 15(2) or (4), 17(2) or 25(2) shall be published in the Canada Gazette and in any other publication the Minister 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 Minister.

Marginal note:Regulations

20 The Governor in Council may, for the purposes of section 14, make regulations of general application in relation to all frontier lands 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.

Benefits Plan

Marginal note:Benefits plan

21 No work or activity on any frontier lands that are subject to an interest shall be commenced until the Minister has approved, or waived the requirement of approval of, a benefits plan in respect of the work or activity pursuant to subsection 5.2(2) of the Canada Oil and Gas Operations Act.

PART IIIExploration

Exploration Licences

Marginal note:Rights under exploration licences

22 An exploration licence confers, with respect to the frontier lands 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 frontier lands in order to produce petroleum; and

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

Marginal note:Shares

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

Marginal note:Terms and conditions

• 24 (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 Act or the regulations, as may be agreed on by the Minister and the interest owner of the licence.

• Marginal note:Regulations

  (2) The Governor in Council may make regulations prescribing terms and conditions required to be included in exploration licences issued in relation to all frontier lands or any portion thereof.

Marginal note:Amendment of exploration licence

• 25 (1) The Minister 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 Act or the regulations and, without limiting the generality of the foregoing, may, subject to subsection (2), amend the licence to include any other frontier lands.

• Marginal note:Exception

  (2) The Minister shall not amend an exploration licence to include frontier lands that, immediately prior to the inclusion, were Crown reserve lands unless the Minister would be able to issue an interest to that interest owner in relation to those lands under subsection 17(1) and a notice has been published in accordance with section 19 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) The Minister 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 Minister and those interest owners.

Marginal note:Effective date of exploration licence

• 26 (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 27, 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 subsection (5) and section 27, 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:Regulations prescribing areas

  (4) The Governor in Council may make regulations prescribing areas in respect of which the Minister may make an order pursuant to subsection (5).

• Marginal note:Extension of exploration licences in prescribed areas

  (5) The Minister may, subject to such terms and conditions as the Minister deems appropriate, extend the term of an exploration licence in relation to any frontier lands within a prescribed area that has been renegotiated under subsection (3).

• Marginal note:Crown reserve lands on expiration of licence

  (6) On the expiration of an exploration licence, any frontier lands to which the exploration licence related and that are not subject to a production licence or a significant discovery licence become Crown reserve lands.

Marginal note:Continuation of exploration licence where drilling commenced

• 27 (1) Where, prior to the expiration of the term of an exploration licence, the drilling of any well has been commenced on any frontier lands 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 by reason of 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 Minister determines, the drilling of another well is commenced on any frontier lands that were 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

• 28 (1) Where a significant discovery has been made on any frontier lands that are subject to an interest or a share therein held in accordance with section 23, the Commission of the Canadian Energy Regulator shall, on the application of the interest holder of the interest or the share 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 frontier lands in respect of which there are reasonable grounds to believe that the significant discovery may extend.

• Marginal note:Declaration on initiative of Commission of the Canadian Energy Regulator

  (2) Where a significant discovery has been made on any frontier lands, the Commission of the Canadian Energy Regulator may, by order, make a declaration of significant discovery in relation to those frontier lands in respect of which there are reasonable grounds to believe the significant discovery may extend.

• Marginal note:Description of frontier lands subject to declaration

  (3) A declaration made pursuant to subsection (1) or (2) shall describe the frontier lands 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 frontier lands to which the significant discovery extends differ from the significant discovery area, the Commission of the Canadian Energy Regulator may, 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 30(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 30(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 frontier lands subject to an interest shall be sent by registered mail to the interest owner of that interest.

• Marginal note:Procedures

  (7) The procedures described in section 382 of the Canadian Energy Regulator Act apply to the making, amendment and revocation of a declaration under this section.

• Marginal note:Delegation

  (8) The Commission of the Canadian Energy Regulator may delegate any of its powers under this section to a member, officer or employee of the Commission, who shall exercise the powers in accordance with the terms of the delegation.