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Canada Oil and Gas Drilling and Production Regulations (C.R.C., c. 1517)

Regulations are current to 2022-08-08

Canada Oil and Gas Drilling and Production Regulations

C.R.C., c. 1517

TERRITORIAL LANDS ACT

Regulations Respecting the Drilling and Production of Oil and Gas Belonging to Her Majesty in Right of Canada under all Lands Forming Part of Canada but not Within any Province

Short Title

 These Regulations may be cited as the Canada Oil and Gas Drilling and Production Regulations.

Interpretation

  •  (1) In these Regulations,

    barrel

    barrel means 35 gallons; (baril)

    blowout

    blowout means the unintentional and uncontrolled escape of oil or gas, as from a drilling well when high formation pressure is encountered; (éruption)

    blowout preventer

    blowout preventer means a casing-head control fitted with special gates or rams that can be closed around the drill pipe and completely close the top of the casing if the pipe is withdrawn; (dispositif anti-éruption)

    field

    field means

    • (a) the general surface area or areas underlain or appearing to be underlain by one or more pools, or

    • (b) the subsurface regions vertically beneath the surface area or areas; (champ)

    gas-oil ratio

    gas-oil ratio means the number of cubic feet of gas produced per barrel of oil; (rapport gaz-pétrole)

    gas well

    gas well means a well

    • (a) that produces natural gas not associated or blended with oil at the time of production,

    • (b) that produces more than 30,000 cubic feet of natural gas to each barrel of oil from the same producing horizon,

    • (c) wherein the gas producing stratum has been successfully segregated from the oil and the gas is produced separately, or

    • (d) that is classified as a gas well by the Minister for any reason; (puits de gaz)

    oil well

    oil well means any well capable of producing oil and not being a gas well; (puits de pétrole)

    pipeline

    pipeline means any pipe or any system or arrangement of pipes wholly within Canada lands whereby oil or gas is conveyed from any wellhead or other place at which it is produced, to any other place, or from any place where it is stored, processed or treated, to any other place, and includes all property of any kind used for the purpose of, or in connection with, or incidental to, the operation of a pipeline in the gathering, transporting, handling and delivery of oil or gas, and without restricting the generality of the foregoing, includes tanks, surface reservoirs, pumps, racks, storage and loading facilities, compressors, compressor stations, pressure measuring and controlling equipment and fixtures, flow controlling and measuring equipment and fixtures, metering equipment and fixtures, and heating, cooling and dehydrating equipment and fixtures, but does not include any pipe or any system or arrangement of pipes which constitutes a distribution system for the distribution of gas to ultimate consumers; (pipe-line)

    pool

    pool means a natural underground reservoir containing or appearing to contain an accumulation of oil or gas or both separated or appearing to be separated from any other such accumulations; (nappe)

    waste

    waste includes

    • (a) the inefficient, excessive or improper use or dissipation of reservoir energy,

    • (b) the locating, spacing, drilling, equipping, operating or producing of any well or wells in a manner that results or could result in reducing the quantity of oil or gas ultimately recoverable from any pool,

    • (c) the inefficient storing of oil or gas, whether on the surface or underground,

    • (d) the producing of oil or gas in excess of transportation or marketing facilities or of reasonable market demand, and

    • (e) the locating, drilling, equipping, operating or producing of a well or wells in a manner that causes or could cause unnecessary or excessive surface loss or destruction of oil or gas; (déperdition)

    zone

    zone means any stratum or strata designated by the Minister as a zone, either generally or in respect of any designated area, or any specified well or wells. (zone)

  • (2) All other words have the same meaning as in the Canada Oil and Gas Land Regulations.

Application

  •  (1) These Regulations apply to all wells and all operations carried out for the purpose of searching for, producing or transporting oil or gas on Canada lands that are under the control, management and administration of the Minister.

  • (2) These Regulations apply to all operations carried out under the authority of a licence, permit or lease granted or issued pursuant to the Territorial Oil and Gas RegulationsFootnote 1

Notice of Drilling

  •  (1) No person shall drill a well or undertake a program of structure test hole drilling unless he has given notice of his intention to begin such operations to the Oil Conservation Engineer and has obtained the approval of the Oil Conservation Engineer.

  • (2) The notice mentioned in subsection (1) shall be made in triplicate in a form approved by the Department.

  •  (1) Subject to subsection (2), no person shall depart from the program of operations that has been approved by the Oil Conservation Engineer without the further approval of the Oil Conservation Engineer.

  • (2) Where an immediate change in the approved program of operations is necessary, such changes may be made without the approval of the Oil Conservation Engineer, but notice in writing of the change shall be sent to the Oil Conservation Engineer as soon as possible.

Rotary Drilling Procedure

  •  (1) Surface casing satisfactory to the Oil Conservation Engineer shall be used in wells and shall be placed to the depth required by him.

  • (2) Surface casing shall be cemented by the pump and plug or displacement method from the bottom to top and cement shall be allowed to set for not less than 12 hours under pressure before drilling the plug.

  • (3) Production casing or intermediate strings of casing when run shall be of a design to meet safety factors of 1.60 in tension, 1.125 in collapse and 1.0 in burst.

  • (4) The casing design shall be submitted in triplicate to the Oil Conservation Engineer on a form approved by the Chief.

  • (5) Production casing shall be cemented to a height sufficient to ensure isolation of the productive zones.

  • (6) The pump and plug method of cementing shall be used and the cement shall be allowed to set for not less than 24 hours and shall be pressure tested in accordance with good oil field practice before the cement plug is drilled.

Blowout Preventers and Casing Heads

  •  (1) In proven areas, the use of blowout preventers is obligatory and they shall be used in accordance with established good practice.

  • (2) In unproven areas, all drilling wells shall be equipped with minimum blowout-control equipment consisting of

    • (a) equipment that will completely close off the open hole;

    • (b) equipment that will completely close off around the drill pipe, casing and tubing that are being employed in the drilling operations; and

    • (c) a bleed-off line and valve of the proper size and working pressure.

  • (3) Controls for the blowout preventers shall be located at a point not less than two feet outside the substructure.

Cable Drilling Procedure

  •  (1) Before commencing to drill, proper and adequate slush pits shall be constructed for the reception of mud of sufficient quality and quantity so that such mud may be available if and when the hole is plugged, and where cable tools are used, sufficient surface casing shall be set to a depth specified in the notice of intention to drill and cemented from bottom to top and no natural gas that may be encountered in any section of a cable tool drilled hole above the ultimate objective may be permitted to blow while drilling proceeds, but shall be shut off either by mudding or by the running of a string of casing, and, if the latter method is used, such string of casing shall be tested by bailing to insure shut-off before drilling proceeds.

  • (2) The casing program adopted for cable tool drilled wells shall be planned to protect any potential oil or gas bearing horizons penetrated during drilling from infiltration of injurious waters from other horizons and to prevent the migration of oil or gas from one horizon to another.

Coring and Testing

 The licensee, permittee or lessee shall, when a well being drilled is approaching a formation from which production of oil or gas may be expected, if required to do so by the Oil Conservation Engineer, core and adequately test such formation, but such coring and testing must be reasonable and proper and not detrimental to the operations being performed and such test shall not be required unless the hole is in proper condition.

Samples and Cores

  •  (1) Unless otherwise directed by the Oil Conservation Engineer, each licensee, permittee or lessee shall cause to be taken, preserved and maintained a series of samples at interval depths of 10 feet of the various formations that non-coring drilling penetrates in drilling a well or structure test hole, and the samples shall be washed, dried, preserved in bags accurately labelled with the name of the well, interval, depth, date of sample and shall be forwarded prepaid in accordance with instructions issued by the Oil Conservation Engineer.

  • (2) All cores taken from the core barrel shall be stored in book fashion in core boxes and accurately labelled on the body, not the lid, of each box as to the number and interval of the core, top, bottom and footage recovery of the core and the name of the well from which the core is taken.

  • (3) Boxes shall be of stout wooden or metal construction the sides of which shall project above the level of the contained cores and lids shall be securely fixed to ensure safe transit, and such boxes shall not exceed three feet in length.

  • (4) Reasonable steps shall be taken to protect boxes containing the cores from theft, misplacement or exposure to the weather and after reasonable time has been afforded the licensee, permittee or lessee to carry out examinations and obtain core analyses of them, they shall be forwarded prepaid to the Oil Conservation Engineer when directed by him to do so.

  • (5) Without the consent of the Oil Conservation Engineer, no cores shall be destroyed or taken out of Canada except such portions thereof as are reasonably necessary for analytical purposes.

Deviation Test

 The licensee, permittee or lessee, when directed by the Oil Conservation Engineer, shall make or cause to be made tests at intervals not exceeding 500 feet from the top to the bottom of the well or such lesser intervals as the Oil Conservation Engineer may require for the purpose of ascertaining to what extent, if any, the well deviates from the vertical and shall submit a report of the tests with the daily drilling reports at the end of each week.

Logs

  •  (1) Unless otherwise directed by the Oil Conservation Engineer, the permittee or lessee shall cause to be taken one electric log and one other type of electric log, radio-activity log, sonic log or other log approved by the Chief so that the information provided by the two logs shall be sufficient for determining the contacts between horizons or zones penetrated and the porosity and fluid saturation of all potential reservoir horizons.

  • (2) The title to each log shall contain all information necessary to identify that log and to allow the quantitative and qualitative analysis referred to in subsection (1) to be made.

  • (3) Three copies of each log shall be sent to the Oil Conservation Engineer within 30 days of the date on which the log was taken.

Daily Reports

  •  (1) While drilling is in progress on wells, the licensee, permittee or lessee or their agents shall maintain on a form approved by the Chief a daily report of drilling operations and such report shall be made in duplicate, one copy being at all times retained at the well and open to inspection by the Oil Conservation Engineer.

  • (2) A copy of the original report shall be forwarded to the Oil Conservation Engineer at the end of each and every week during the course of such drilling operations.

  • (3) Such daily report shall set out complete data on all operations carried on during the day and, without restricting the generality of the foregoing, shall include

    • (a) depth at the beginning of the day or tour;

    • (b) depth at the end of the day;

    • (c) formation penetrated;

    • (d) any change in casing;

    • (e) if casing set, all data regarding setting with size, type, grade and weight of casing whether new or used and depth at which it is set;

    • (f) particulars of cementing;

    • (g) any water, oil or gas encountered, even if only small showings;

    • (h) a report on any deviation surveys, formation tests or other tests carried on; and

    • (i) information on any other operations carried on such as fishing, shooting, perforating, acidizing, surveying, whipstocking or abandonment.

Encounters of Oil or Gas

  •  (1) Where the licensee, permittee or lessee encounters in significant quantities oil or gas in a well outside a designated pool or field, he shall notify the Oil Conservation Engineer, by the most expeditious method, of the character, extent and quantity thereof.

  • (2) In such instances mentioned in subsection (1) and where practicable, the licensee, permittee or lessee shall take and preserve samples for a reasonable time in an amount of not less than one quart of oil or water and in the case of gas, sufficient to fill a container satisfactory to the Oil Conservation Engineer.

  • (3) When requested to do so by the Oil Conservation Engineer, the licensee, permittee or lessee shall forward the samples referred to in subsection (2) to him.

Abandonment of Wells

  •  (1) Before abandoning a well drilled under these Regulations and before removing any part of the casing therefrom, the licensee, permittee or lessee shall notify the Oil Conservation Engineer in writing of his intention to so do on a form approved by the Chief in triplicate and shall obtain written approval of such abandonment and removal of casing from the Oil Conservation Engineer but such approval may first be given orally.

  • (2) In abandoning wells, cement plugs shall be used to protect porous formations and unless otherwise directed by the Oil Conservation Engineer, the plugs shall be felt for in accordance with good oil field practice and new plugs shall be placed when necessary.

  • (3) The interval between plugs shall be filled with an approved mudladen fluid of proper density unless otherwise directed by the Oil Conservation Engineer.

  • (4) Seismic shot holes and structure test holes shall be abandoned by a method approved by the Oil Conservation Engineer and in accordance with good oil field practice.

  • (5) Upon abandonment of the well, all excavations shall be filled and exact locations of such well or hole shall be marked by a pipe not less than two inches in diameter set solidly into a concrete block or other approved material and projecting at least four feet above ground level.

  • (6) The name of the well shall be plainly and permanently marked on the pipe in a manner approved by the Oil Conservation Engineer.

Restoration of Surface

 The licensee, permittee or lessee shall, as soon as weather or ground conditions permit, upon the final abandonment and completion of the plugging of any well or structure test hole, clear the area around the location of all refuse material, burn waste oil, drain and fill all excavations, remove concrete bases, machinery and materials other than the marker provided for in subsection 15(5) and level the surface to leave the site as nearly as possible in the condition encountered when operations were commenced.

Reports to Oil Conservation Engineer

  •  (1) A report in triplicate on a form approved by the Chief shall be forwarded to the Oil Conservation Engineer within 30 days of

    • (a) the abandonment of a well; or

    • (b) the suspension of drilling of a well.

  • (2) The licensee, permittee or lessee shall, within 30 days of receiving core, oil, gas or water analyses by him or caused to be made by him, submit copies in duplicate to the Oil Conservation Engineer.

  • (3) Upon completion of a structure test hole program the licensee, permittee or lessee shall submit to the Oil Conservation Engineer a report on a form approved by the Chief in triplicate on each hole drilled.

 
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