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C.C.S.M. c. O34
The Oil and Gas Act
| Table of Contents | Regulations |
(Assented to July 27, 1993)
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
PART 1
INTERPRETATION OBJECTS AND PURPOSES APPLICATION
1(1) In this Act,
"Abandonment Fund Reserve Account" means the account established under subsection 172(3); (« Fonds de réserve pour l'abandon »)
"assistance" means assistance of a monetary nature and includes a reduction or exemption of royalties levied under this Act; (« aide »)
"battery" means a system or arrangement of tanks or other surface equipment that receives fluid from, or delivers fluid to, one or more wells, and includes an injection plant, a pump station and equipment or a device designed to separate the fluid into oil, gas and water and to measure the amount of oil, gas and water; (« batterie »)
"board" means the Oil and Gas Conservation Board established under subsection 24(1); (« Commission »)
"branch" means the Petroleum Branch established under section 10; (« direction »)
"commercial production" means production from a well of oil and gas of such quantity and quality as to warrant, in the opinion of the director, in commercial terms, the drilling of another well expected to produce oil and gas in the same quantity and quality; (« production commerciale »)
"complete", "completion" or "completing", in respect of a well, means activities carried on after the well is drilled, to prepare the well for the purpose for which it was drilled; (« compléter » ou « complétion »)
"condensate" means a mixture consisting mainly of pentanes and heavier hydrocarbons that is recovered or recoverable through a well from a reservoir and that might be gaseous in its virgin reservoir state but is liquid at the conditions under which its volume is measured or estimated; (« condensat »)
"correlative rights" means the rights of an owner to receive the owner's share of oil and gas produced from a pool; (« droit corrélatif »)
"Crown" means Her Majesty the Queen in right of the province; (« Couronne »)
"Crown oil and gas rights" means oil and gas rights held by the Crown and includes an interest held by the Crown in oil and gas rights; (« droits gaziers et pétroliers domaniaux »)
"department" means the department of the government over which the minister presides and through which this Act is administered; (« ministère »)
"director" means the Director of Petroleum appointed under subsection 11(1) and includes an acting director appointed under subsection 11(2); (« directeur »)
"disposition" means a lease or an exploration reservation in respect of Crown oil and gas rights; (« titre d'aliénation »)
"distribution system" means a distribution system as defined in The Gas Pipe Line Act; (« réseau de distribution »)
"enhanced recovery" means increasing the recovery of oil and gas from a pool by the use of artificial means or the application of energy extrinsic to the pool, including pressuring, cycling, pressure maintenance or injection into the pool of a substance or form of energy, but not including injection into a well of a substance or form of energy for the sole purpose of
(a) aiding in the lifting of fluids in the well, or
(b) stimulating the reservoir at or near the well by mechanical, chemical, thermal or explosive means; (« récupération assistée »)
"exploration reservation" means an exploration reservation issued under Part 4; (« réserve d'exploration »)
"field" means a surface land area that is designated by the director under clause 11(4)(b) as a field, and includes part of a field; (« champ »)
"flow line" means a pipe or system of pipes used to convey oil, gas, water or other fluid between a well and a battery or between batteries, and includes any other pipe or system of pipes that the director designates as a flow line, but does not include a pipeline; (« conduite de collecte »)
"gas" means natural gas that
(a) contains methane and other paraffinic hydrocarbons, and might contain nitrogen, carbon dioxide, hydrogen sulphide, helium or minor impurities,
(b) is recovered or recoverable through a well from a reservoir,
and includes any fluid hydrocarbon, before and after processing, that is not oil or condensate; (« gaz »)
"gas plant" means a system or arrangement of pressure vessels, piping and other equipment designed to process gas from a well or battery or to recover gas products; (« usine à gaz »)
"gas product" means a constituent of gas extracted by processing and includes methane, ethane, propane, butanes, pentanes plus and sulphur; (« dérivé du gaz »)
"geophysical operation" means an operation conducted on or over land to determine geologic or other conditions in the subsurface for the purpose of locating reservoirs, and includes
(a) a seismic program,
(b) a gravity, magnetic, electrical, radioactivity or geochemical survey, and
(c) a hole that is 150 m or less in depth drilled through sedimentary rock to obtain information respecting structure, stratigraphy or lithology; (« opération géophysique »)
"helium" means helium with or without associated gases; (« hélium »)
"highway" means a provincial trunk highway, a provincial road, a highway in unorganized territory, or an industrial road as that term is defined in The Highways and Transportation Act; (« route »)
"holder" means a person or group of persons registered in the records of the registrar as the holder or holders of a disposition, but does not include a person or group of persons holding an interest in a disposition only as security for a debt; (« titulaire »)
"inspector" means the director, the registrar or a person appointed as an inspector under section 17; (« inspecteur »)
"instrument" means a document, other than a transfer, pertaining to a right under a disposition, and includes a trust, deed, debenture, charge or other document that affects an interest in a disposition; (« instrument »)
"land" includes land covered by water; (« bien-fonds »)
"lease" means, other than in Part 6, a lease issued under Part 4; (« bail »)
"lease area" means an area of land to which a lease applies; (« périmètre d'exploitation du bail »)
"maximum production rate" means the amount of oil and gas that a well is permitted to produce under this Act; (« taux de production maximal »)
"mine" means a mine as defined in The Mines and Minerals Act; (« mine »)
"mineral" means a mineral as defined in The Mines and Minerals Act; (« minéral »)
"mining" means mining as defined in The Mines and Minerals Act; (« exploiter une mine » ou « exploitation minière »)
"minister" means the member of the Executive Council charged by the Lieutenant Governor in Council with the administration of this Act; (« ministre »)
"occupant" means, in respect of a parcel of land, a person, other than an owner of the land, who is in actual and lawful possession of the land; (« occupant »)
"oil" means crude oil and other hydrocarbons that are recovered or are recoverable in liquid form through a well from a reservoir, but does not include oil recovered or recoverable from oil shale by mining; (« pétrole »)
"oil and gas" means oil and gas, or oil or gas; (« pétrole et gaz »)
"oil and gas facility" means a battery, flow line, pipeline, drilling or service rig, vehicle, gas plant or other installation or equipment that is used to process, convey or store oil, gas, helium or water, but does not include equipment used in connection with the underground storage of gas; (« installation gazière et pétrolière »)
"oil and gas resources" includes helium and oil shale resources; (« ressources gazières et pétrolières »)
"oil and gas rights" means, in respect of a parcel of land, rights to search for and produce oil and gas found in or under the land; (« droits gaziers et pétroliers »)
"oil shale" means shale or tar sands from which oil and gas might be produced, and any other substance that is prescribed as oil shale; (« schistes bitumieux »)
"operator" means,
(a) with respect to a geophysical operation, the holder of a geophysical licence issued under this Act or a person who has control or management of the geophysical operation,
(b) with respect to a spacing unit, a person who has the right as owner to carry on operations in the spacing unit,
(c) with respect to a well, a person who holds a well licence issued under Part 8 or who has control or management of the well,
(d) with respect to an oil and gas facility, a person who holds a licence or permit under this Act in respect of the oil and gas facility or who has control or management of the facility,
(e) a contractor who contracts or engages in operations pertaining to drilling, completing, equipping, servicing, operating, producing, suspending the operation of, or abandoning a well, or
(f) a person designated by the minister as an operator of a well, battery, oil and gas facility or spacing unit for the purpose of this Act; (« exploitant »)
"owner" means a working interest owner and a royalty owner;
"performance security" means a performance deposit or levy under Part 14; (« garantie d'exécution »)
"person" includes a corporation, partnership, limited partnership or syndicate and the heirs, executors, administrators or other legal representatives of a person; (« personne »)
"pipeline" means a pipe or system of pipes, located wholly within the province, that is designed or used to convey oil and gas, refined petroleum products or other fluids produced by, or used in association with, an oil and gas facility and includes
(a) all property, real and personal, used for the purpose of, or in connection with, or incidental to, the operation of a pipeline, and
(b) tanks, surface reservoirs, pumps, racks and storage, loading and other terminal facilities and all real property necessary for the operation of a pipeline or used in connection with the operation of a pipeline,
but does not include a flow line, transmission line, distribution system or a refining, manufacturing or marketing pipeline situated wholly within the property of an industrial plant; (« pipeline »)
"pool" means a reservoir designated as a pool by the director under clause 11(4)(a), and includes part of a pool; (« gisement »)
"pooling agreement" means an agreement whereby the owners of oil and gas rights within a spacing unit agree to pool their oil and gas rights within the spacing unit for the development and operation of the spacing unit; (« accord de mise en commun »)
"pooling order" means an order of the minister under section 126 whereby separate interests in a spacing unit are pooled for the development and operation of the spacing unit; (« arrêté de mise en commun »)
"prescribed" means prescribed by regulation under this Act;
"refined petroleum products" means liquid hydrocarbons, other than oil, that are refined from oil; (« dérivés du pétrole »)
"registrar" means the Petroleum Registrar appointed under subsection 13(1) and includes an acting registrar appointed under subsection 13(2); (« registraire »)
"reservation area" means an area of land to which an exploration reservation applies; (« périmètre de la réserve »)
"reservoir" means a subsurface area that contains or might contain oil, gas or helium, or that is or might be suitable for the underground storage of hydrocarbons and excludes underground tanks; (« réservoir »)
"royalty owner" means, in respect of a parcel of land, a person who owns any oil and gas, or a share of any oil and gas, found in the parcel of land, and may include the Crown; (« titutlaire de redevance »)
"spacing unit" means the area allocated to a well for the purpose of producing oil and gas from a formation; (« surface unitaire »)
"spill" means an uncontrolled or unauthorized escape or flow of oil, gas, salt water or other potentially harmful fluid from a well, oil and gas facility or vehicle used to produce, process, store or convey oil and gas; (« déversement »)
"storage reservoir" means a reservoir that is developed and operated for the storage of hydrocarbons; (« cavité de stockage »)
"surface rights" means surface rights as defined in The Surface Rights Act; (« droits de surface »)
"survey", in respect of a reservation area or lease area, includes a re-survey; (« levés »)
"test hole" means a hole of more than 150 m in depth that is drilled through sedimentary rock to obtain information respecting structure, stratigraphy or lithology; (« trou d'essai »)
"tract" means a tract of land in a spacing unit within which an owner has the right, or an interest in the right, to drill for and produce oil and gas, but does not include a unit tract; (« parcelle »)
"transmission line" means a gas transmission line as defined in The Gas Pipe Line Act; (« ligne de transmission de gaz »)
"unit agreement" means an agreement between one or more working interest owners and one or more royalty owners to consolidate, merge, integrate or otherwise combine their rights or interests in a field or pool into a unit operation, but does not include a pooling agreement; (« accord d'union »)
"unit area" means
(a) an area comprised of two or more unit tracts in which a unit operation is carried on under a unit agreement or a unit order, or
(b) where a unit agreement or unit order applies only to certain formations under the unit tracts described in the unit agreement or unit order, the subsurface area comprised of those formations; (« secteur unitaire »)
"unit operation" means an operation in which two or more unit tracts are, in accordance with the terms of a unit agreement or unit order, consolidated, merged, integrated or otherwise combined, without regard to the boundaries of the respective unit tracts to provide for the coordinated management of oil and gas rights in the unit area for the purpose of
(a) more efficient production of oil and gas within the unit area,
(b) implementing a program for the prevention of waste, or
(c) protecting correlative rights; (« exploitation unitaire »)
"unit operator" means a person appointed under or pursuant to a unit agreement or unit order to manage a unit operation; (« exploitant unitaire »)
"unit order" means an order of the minister under section 135 that a field or pool be subject to a unit operation; (« arrêté d'union »)
"unit tract" means the part of a unit area to which a share of any production in the unit area is allocated by the terms of a unit agreement or unit order; (« parcelle unitaire »)
"waste" includes
(a) the inefficient, excessive or improper use or dissipation of reservoir energy however caused,
(b) the location, drilling or operation of a well in a manner that,
(i) having regard to sound engineering and economic principles, results or might result in a reduction in the quantity of oil and gas recoverable from a pool,
(ii) causes or might cause unnecessary or excessive loss or destruction of oil and gas after removal from a reservoir,
(c) the inefficient or improper storage of oil and gas, whether on the surface or underground,
(d) the production of oil and gas in excess of available storage or transportation capacities,
(e) the escape or flaring of gas, where in the opinion of the minister, having regard to sound engineering and economic principles, the gas could be gathered, processed if necessary, marketed or beneficially injected into a reservoir,
(f) the failure to use a suitable method of enhanced recovery in a pool, where in the opinion of the minister having regard to sound engineering and economic principles that the method would increase the quantity of oil and gas recoverable from the pool,
(g) locating and drilling a well in a place or in a manner that, in the opinion of the minister having regard to sound engineering and economic principles, is not necessary to achieve maximum recovery of the oil and gas resources from the pool, and
(h) locating and operating a well or an oil and gas facility in a manner that, in the opinion of the minister, results in an unacceptable impact on the environment or on activities carried on in the area; (« gaspillage »)
"well" means a hole in the surface of the ground
(a) that is made, by drilling or boring into the ground, for the purpose of
(i) exploring for oil, gas, oil shale, salt, potash or helium,
(ii) obtaining water for injection into a pool,
(iii) disposing of salt water and other substances produced in association with oil, gas, salt or helium,
(iv) injecting water or any other substance to enhance the recovery of oil and gas, or
(v) the development and operation of a storage reservoir, or
(b) from which oil, gas, helium or salt is, has been or could be produced,
and includes a test hole, but does not include a seismic shot hole or a borehole as that term is defined in The Mines and Minerals Act; (« puits »)
"working interest owner" means, in respect of a parcel of land, a person who has the right to drill for and produce oil and gas from the land; (« titulaire d'intérêt économique direct »)
"year" means a period of 12 consecutive months. (« année »)
1(2) In this Act, a reference to "this Act" includes a regulation made under this Act.
2(1) The objects and purposes of this Act are
(a) to provide for, encourage and facilitate the safe and efficient development, and the maximum economic recovery, of the oil, gas, helium and oil shale resources of the province in accordance with the principles of sustainable development;
(b) to prevent waste of oil, gas, helium and oil shale resources;
(c) to protect the correlative rights of owners;
(d) to provide for the safe and efficient construction and operation of pipelines; and
(e) to provide for the safe and efficient development and operation of storage reservoirs.
Principles of sustainable development
2(2) For the purpose of subsection (1), the principles of sustainable development include the following:
(a) that decisions respecting the development of oil and gas resources be integrated with decisions respecting protection and management of the environment so that oil and gas industry activity is conducted with due regard for its impact on the environment, and environmental programs and initiatives are instituted with due regard for their economic impact;
(b) that government and the oil and gas industry acknowledge, in their respective policies and practices, their stewardship of the oil and gas resources of the province so that the economy is developed and the environment is preserved, for the benefit of the present generation and future generations of Manitobans;
(c) that government and industry share responsibility for sustaining a sound and healthy environment and developing a sound and healthy oil and gas industry;
(d) that hazards to the environment and impediments to the development of oil and gas resources be prevented or minimized by avoiding environmental programs and economic activities that have significant adverse environmental or economic impact;
(e) that conservation policies and practices be applied to enable the exploration for and production of oil and gas resources in the province in a manner that is wise and efficient in both environmental and economic terms;
(f) that recycling of oil field waste by-products be encouraged to enable the re-use, reduction or recovery of their by-products;
(g) that oil and gas industry activity and economic development, as well as government regulation, be conducted with a view to protecting and enhancing the ecosystems of the province;
(h) that land which, in environmental terms, is damaged or diminished by oil and gas industry activity be rehabilitated;
(i) that scientific and technological research in respect of the processes and methods of oil and gas exploration and production be continued by government and industry, with a view to improving the productivity, efficiency and competitiveness of the oil and gas industry and to preventing or reducing adverse impact on the environment; and
(j) that the ecological interdependence of the provinces and territories of Canada and of the nations of the world increasingly requires integration of the decisions of government and industry in respect of the environment and the economy.
3(1) This Act applies to, or in respect of,
(a) Crown oil and gas rights and the rights to helium or oil shale owned by the Crown;
(b) the exploration for oil, gas, helium or oil shale;
(c) the drilling of wells, and the operation and abandonment of wells, oil and gas facilities and storage reservoirs; and
(d) oil and gas primary production.
"Oil and gas primary production"
3(2) For the purpose of clause (1)(d), "oil and gas primary production" means
(a) the production of oil and gas from a reservoir; or
(b) the production of an oil or gas product before refining or manufacturing.
4 The Crown is bound by this Act.
PART 2
ADMINISTRATION
General authority of the minister
5 The minister may inquire, or may direct the board, the director or any other person to inquire, into a matter relating to the objects and purposes of this Act and may make such orders authorized under this Act as are necessary to carry out the objects and purposes of this Act.
6 On completion of each fiscal year of the government, the minister shall prepare a report on the activities and accomplishments of the department under this Act during the fiscal year and shall table the report in the Legislative Assembly no later than December 15 of each year except that, where the Legislative Assembly is not then in session or a session is then adjourned, the minister shall table the report in the Legislative Assembly no later than the 15th day following the day on which the next session commences or the adjourned session resumes sitting.
7 Where the minister determines that it is in the public interest to do so, the minister may, with the approval of the Lieutenant Governor in Council, enter into an agreement under which the government agrees to provide assistance with respect to exploration for or development or recovery of oil and gas resources.
Minister may refer matter to board
8(1) The minister may, before making a decision on a matter arising under this Act, including an application made to the minister under subsection (2), refer the matter to the board, and may include a direction that the board hold a hearing in respect of the matter within such period of time as the minister may specify.
8(2) Any person may make application to the minister for the resolution of a matter arising under this Act, including a matter arising under an order or decision of the minister, the director or an inspector, and the minister may by order determine the matter as the minister considers fair and just.
8(3) An application under subsection (2) must include
(a) the address for service for each party to the application;
(b) a statement of the matter to be resolved;
(c) a statement of the facts material to the matter to be resolved; and
(d) any other information required by the minister.
9 The minister may by order extend a time fixed or allowed for doing anything under this Act, subject to such terms and conditions as the minister considers necessary or advisable.
10 There is hereby established a branch of the department to be known as the "Petroleum Branch" and through which the provisions of this Act are to be administered and carried out.
Appointment of Director of Petroleum
11(1) The Lieutenant Governor in Council shall for the purposes of this Act appoint a Director of Petroleum.
11(2) The minister may appoint a person as acting director to act in the absence of the director, and the person appointed has all the powers and duties of the director.
11(3) The director shall
(a) exercise general supervision of the branch, including the office of the registrar;
(b) facilitate the administration of this Act;
(c) promote the sound management of the oil and gas resources of the province;
(d) perform any function required of the director under the regulations; and
(e) do all things necessary to give best effect to the objects and purposes of this Act.
Additional powers of the director
11(4) The director may, in addition to any power elsewhere provided to the director under this Act,
(a) designate as a pool an area that, in the opinion of the director, contains an accumulation of oil and gas that is separate from any other accumulation of oil and gas;
(b) designate as a field an area under which one or more pools are situated;
(c) exercise the powers of an inspector; and
(d) in accordance with this Act, inquire into any matter and take any step or impose any measure required to ensure that the operation of a well or oil and gas facility is in compliance with this Act.
Establishment of office of registrar
12(1) There is hereby established an office of the branch to be known as the office of the registrar.
Filing and registering in office of registrar
12(2) Except as otherwise expressly provided in this Act, an application, instrument or other document required or permitted to be filed or registered under this Act shall be filed or registered at the office of the registrar.
Payments made at office of registrar
12(3) The payment of a fee, levy, rent, royalty, performance security or other amount payable under this Act must be made at the office of the registrar.
13(1) The minister shall appoint a Petroleum Registrar.
13(2) Where the registrar is absent because of illness, or for any other reason is unable to perform the duties of the registrar, the director may appoint a person as acting registrar and the person appointed has all the powers and the duties of the registrar.
14(1) The registrar shall
(a) keep records of and, where applicable, register
(i) dispositions, transfers of dispositions, and orders cancelling dispositions,
(ii) instruments,
(iii) licences and permits issued or transferred under this Act,
(iv) plans respecting wells and oil and gas facilities,
(v) any document submitted to the registrar in respect of an inquiry under section 5 or 23, and
(vi) the names given to wells by the director under subsection 99(1);
(b) register any order of the minister filed under subsection 30(5);
(c) maintain maps showing the location of dispositions and wells in the province;
(d) maintain a register of unit agreements; and
(e) generally maintain the records of the branch.
14(2) The registrar may, with the written approval of the director, at any reasonable time and without a warrant, enter upon the site of a well or oil and gas facility or any business premises where the registrar has reasonable grounds to believe that business records are kept in respect of the well or facility and
(a) audit records and books of account relating to the well or facility to determine or verify information that is required to be filed or provided under this Act; and
(b) after giving a receipt for the records and books, remove them from the site or premises for the purpose of making copies.
Records and documents open to public
15(1) Subject to The Freedom of Information and Protection of Privacy Act and the provisions of this Act, a person may during normal office hours inspect a record or document referred to in subsection 14(1) and, on the request of the person and payment of any prescribed fee, the registrar shall
(a) provide a copy of the record or document, or of an extract from the record or document; and
(b) certify the copy as a true copy.
Evidence of record or document
15(2) Where a copy of a record or document is certified by the registrar under clause (1)(b), the copy may be received by the board or a court as proof of the record or document without proof of the appointment, authority or signature of the registrar.
Note of decision on record of disposition
16 Where an order or decision affecting a disposition is made under this Act, the registrar shall enter a note of the order or decision on the record of the disposition and shall include in the note the date the order or decision is made, the date the order or decision takes effect and the date of entry of the note on the record.
17 The minister may appoint persons, including persons who are employees of the government, as inspectors.
18(1) An inspector may, for the purpose of determining whether an operator is in compliance with this Act,
(a) at any reasonable time, enter the site of a geophysical operation, well or oil and gas facility to conduct an inspection, make inquiries, take samples or carry out tests;
(b) at the site, inspect books, records, documents or things pertaining to a geophysical operation, well or oil and gas facility and, after giving a receipt for them, remove them from the site for the purpose of making copies;
(c) enter upon private land without being liable to trespass or subject to any charge or toll; and
(d) be accompanied and assisted by persons having special, expert or professional knowledge.
Operator and employees to assist inspector
18(2) Where an inspector exercises a power under subsection (1), the operator and any employee or agent of the operator on the site shall
(a) give the inspector all reasonable assistance to enable the inspector to carry out his or her duties under this Act; and
(b) provide the inspector with any information the inspector requires for the enforcement of this Act.
18(3) The minister shall furnish each inspector with an identification card, and an inspector exercising a power of an inspector under this Act shall, on request, produce the identification card.
19(1) In this section, "direct pecuniary interest" means an interest in a disposition or in oil and gas rights in the province by which a person derives or could derive a pecuniary benefit and includes
(a) a share, whether or not publicly traded, or other beneficial interest in a corporation, partnership or syndicate that holds oil and gas rights or a disposition; and
(b) a working interest ownership in oil and gas rights.
Disclosure and divestment of interest
19(2) Subject to the regulations, a person appointed under this Act or an employee of the department who has duties that include the administration of this Act
(a) shall, within 30 days of commencement of the appointment or employment or of proclamation of this Act, whichever last occurs, disclose to the minister full particulars of any direct pecuniary interest held by the appointee or employee and, where so directed by the minister, shall dispose of the direct pecuniary interest; and
(b) shall not, except with the prior approval of the minister in writing, acquire a direct pecuniary interest during the term of appointment or employment.
Use or disclosure of confidential information
20 Subject to The Freedom of Information and Protection of Privacy Act and section 198, no person who, in the course of performing a duty or exercising a power under this Act, acquires information that is confidential shall
(a) disclose the information to a third party, except
(i) on the order of a judge of a court of competent jurisdiction, or
(ii) for the purpose of the administration and enforcement of this Act, or an order made, or a term or condition of a licence or permit issued, under this Act; or
(b) use the information for personal gain or for the personal gain of another person.
S.M. 1996, c. 27, s. 21; S.M. 1997, c. 50, s. 92.
21 A person who contravenes subsection 19(2) or section 20 is guilty of an offence and is liable on summary conviction to the penalty set out under Part 19.
22(1) Where a person, including the Crown, is adversely affected by a pecuniary gain obtained as a result of a contravention of subsection 19(2) or clause 20(b), the person may make application to the Court of Queen's Bench for an order of restitution against the recipient of the pecuniary gain.
Limitation period for application
22(2) An application under subsection (1) may not be made more than six years after the discovery of the contravention.
23 The Lieutenant Governor in Council may appoint a person to inquire into any matter to which this Act applies and a person so appointed has the protection and powers of a commissioner appointed under Part V of The Manitoba Evidence Act.
PART 3
OIL AND GAS CONSERVATION BOARD
24(1) The Lieutenant Governor in Council may establish a board to be known as the "Oil and Gas Conservation Board" which shall consist of not fewer than three members who shall be appointed by the Lieutenant Governor in Council.
24(2) The members of the board shall include not fewer than two persons who have an expert or specialized knowledge of oil and gas, and not more than one member who is an employee of the government.
24(3) Unless a member sooner dies, resigns or is removed from office, a member shall serve for such period as is specified in the order by which the member is appointed.
24(4) The Lieutenant Governor in Council shall designate a member of the board to act as the presiding member of the board and a second member to act as the deputy presiding member of the board.
Remuneration and reimbursement
24(5) The members of the board, other than a member employed by the government, may be paid remuneration for serving as members of the board in such amount as the Lieutenant Governor in Council may determine, and the members shall be reimbursed for out-of-pocket expenses incurred in the course of performing functions under this Act.
24(6) A majority of the members of the board, including the presiding member or the deputy presiding member, constitutes a quorum at a meeting of the board or at a hearing conducted by the board.
24(7) Where a member of the board is absent or expects to be absent, the minister may appoint a person to act in the place of the absent member during the period of absence, and the person so appointed has the powers of the member of the board in whose place the person is appointed to act.
24(8) Where the presiding member is absent, or on the request of the minister or presiding member, the deputy presiding member shall act as the presiding member and while so acting has the powers, authority and duties of the presiding member.
Appointment of another person in case of interest
24(9) Where a member of the board has a direct interest or indirect interest in a matter that is before the board, the member shall not act or vote as a member of the board with respect to the matter, and the minister may in respect of the matter appoint a person to act as a member of the board in place of the member who has the interest.
Secretary, staff and other assistance
24(10) The minister may designate an officer or employee of the department to act as secretary to the board, shall provide the board with such officers and other staff as are required to conduct the affairs of the board, and may provide the board with professional or technical assistance for temporary periods or for specific work where the board requests the assistance.
Board to submit report on referred matter
25(1) Where a matter is referred to the board under subsection 8(1), the board shall consider the matter in accordance with this Act and submit to the minister a written report of its findings and recommendations.
25(2) Subject to subsection (3), for the purpose of carrying out its duties under subsection (1), the board has the protection and powers of, and is subject to the requirements conferred on, or required of, commissioners appointed under Part V of The Manitoba Evidence Act.
25(3) Section 88 of The Manitoba Evidence Act does not apply to the board.
Rules of practice and procedure
26(1) Subject to this section and the regulations, the board shall make rules of practice and procedure governing the conduct of the business of the board.
Regulations Act does not apply
26(2) The Regulations Act does not apply to rules of practice and procedure made under subsection (1).
26(3) The board shall arrange for the recording and transcription of oral evidence given at a hearing before the board.
26(4) Testimony at a hearing shall be presented orally unless a person is unable to attend the hearing for a reason acceptable to the members of the board conducting the hearing, in which case the board may receive the evidence of the person under statutory declaration.
Record of proceedings before board
26(5) The board shall file with the registrar a record of each matter referred to it under this Act, including
(a) a copy of the document by which the matter is referred to the board;
(b) a copy of any recording or transcription made under subsection (3);
(c) a copy or photograph of any exhibit or document received by the board;
(d) a copy of any written report made for the board by an expert under section 27 or by an inspector; and
(e) a copy of each report submitted under subsection 25(1).
Board may seek expert assistance
27 The board may, for the purpose of preparing a report under subsection 25(1), seek the assistance of an expert and may authorize the expert, for the purpose of preparing a study, report or opinion for the board, to conduct under the board's direction any inspection considered necessary or advisable by the board, and the board may give such weight to the study, report or opinion as the board considers appropriate.
Board and expert have power of inspector
28 Subject to the approval of the minister in writing, the board, for the purpose of preparing a report under subsection 25(1), and an expert authorized by the board under section 27, may exercise the powers of an inspector.
29 In a report made under subsection 25(1), the board may recommend to the minister that costs incurred by a party or the board in respect of the matter be awarded to the party or the board, or both, in an amount the board may specify, and paid by a party to the matter.
30(1) The board shall, not later than 10 days after receiving a direction under subsection 8(1) to hold a hearing in respect of a matter, set a date, time and place for the hearing and shall, not less than 14 days before the scheduled date, give notice of the date, time and place to the parties to the matter, the registrar and any person whose rights or interests could, in the opinion of the board, be directly affected by a decision made in respect of the matter.
Board may proceed in absence of a party
30(2) Where a person who is entitled to be given notice under subsection (1) is not in attendance at the commencement of the hearing and the board is satisfied that the person was given notice under subsection (1), the board may proceed to conduct the hearing in the absence of the party.
30(3) Where a matter is considered by the board under subsection 25(1), the board shall submit its report to the minister
(a) where a hearing is conducted, not later than 60 days after completion of the hearing; or
(b) where a hearing is not conducted, not later than 60 days after the matter is referred to the board.
30(4) After consideration of the report of the board, the minister may
(a) refer the matter back to the board for reconsideration or rehearing, in whole or in part, in accordance with the directions of the minister; or
(b) by order determine the matter as he or she considers fair and just;
and the minister may by order require a party to the matter to pay the costs of another party to the matter or of the board, or both, in an amount the minister may specify.
Documents to be filed with registrar
30(5) The minister shall, not later than 30 days after receipt of a report of the board, file with the registrar the order of the minister in respect of the matter, together with reasons for the order.
Registrar to serve copies of order
30(6) Where an order filed under subsection (5) is in respect of a matter for which a hearing was conducted by the board, the registrar shall serve a copy of the order and reasons on each person who was given notice under subsection (1) and participated in the hearing, and to any person the board allowed to intervene at the hearing.
Minister's order as to costs filed in Q.B.
30(7) A duplicate of an order made by the minister under subsection (4) respecting costs may be filed in the office of the Court of Queen's Bench and, upon being filed, the order as to costs becomes an order of the court and is enforceable as an order of the court.
31(1) An order of the minister under subsection 30(4) may be appealed to the Court of Queen's Bench on a question of law or jurisdiction.
31(2) A judge of the Court of Queen's Bench may stay proceedings on an order that is the subject of an appeal under subsection (1) pending determination of the appeal.
Minister may extend or abridge time
32 The minister may at any time extend or abridge a time set for doing anything in relation to a matter before the board.
PART 4
DISPOSITIONS
33(1) In this Part,
"offset area" means a spacing unit, within a reservation area or a lease area, that laterally adjoins a spacing unit that is productive and is not on a reservation area or lease area; (« zone limite »)
"productive" means, in respect of the renewal of a lease under subsection 52(3) or an election under clause 58(2)(b), that a spacing unit or quarter section that is the subject of the renewal or election produced oil and gas or had oil and gas production allocated to it under a unit agreement or unit order during the year preceding the date on which the lease might be renewed or the election made. (« productif »)
33(2) For the purpose of this Part, a section, quarter section and legal subdivision of land are deemed to contain 256 hectares, 64 hectares and 16 hectares, respectively.
Disposition in accordance with Act
34 A disposition may be issued only in accordance with this Act.
Issuance of disposition by minister
35 The minister may issue
(a) a disposition, on acceptance of an offer to purchase a disposition made in accordance with the regulations, to the person who makes the offer to purchase;
(b) a lease under subsection 45(1) or 46(2);
(c) an amended lease under subsection 71(1), to the holder of a lease; and
(d) with the approval of the Lieutenant Governor in Council, a disposition that the minister considers to be in the public interest.
36 Without limiting the discretion of the minister under section 35, the minister may refuse to issue a disposition
(a) to a person who is in arrears in a payment, including a royalty, owing to the Crown in respect of a disposition; or
(b) to a group comprised of more than five persons.
Additional terms and conditions
37 The minister may include in a disposition, in addition to the terms and conditions applicable under this Act, such terms and conditions as the minister considers necessary or advisable.
Form and execution of disposition
38 A disposition must be in the prescribed form and executed in duplicate, in accordance with the regulations.
Registration of executed disposition
39 On receipt of an executed disposition from the minister, the registrar shall
(a) register the disposition; and
(b) endorse the duplicate copy of the disposition and send it to the holder.
Right of access to oil and gas
40 A right of access to oil and gas that is the subject of a disposition is included in the disposition, but a right of entry to land to gain access to the oil and gas must be obtained by the holder under The Surface Rights Act.
EXPLORATION RESERVATIONS
41 Subject to this Act, the holder of an exploration reservation has the exclusive right, in the reservation area referred to in the exploration reservation, to drill for oil and gas and to test a well to determine whether the well is capable of producing oil and gas.
42 A reservation area shall not be less than 768 hectares nor exceed 3840 hectares.
Effective date of exploration reservation
43(1) The effective date of an exploration reservation is
(a) in the case of an exploration reservation issued under clause 35(a), the date on which the offer to purchase the exploration reservation is accepted; or
(b) in the case of an exploration reservation issued under clause 35(d), on the date of issue or on such other date as the minister may fix.
Term of exploration reservation
43(2) Subject to subsection (3), the term of an exploration reservation is three years commencing on the effective date of the exploration reservation.
43(3) Where a holder of an exploration reservation drills a well or commences the drilling of a well in the reservation area, the director may, in accordance with the regulations, extend the term of the exploration reservation for a period of one year.
44 The holder of an exploration reservation shall pay an annual rent in the prescribed amount on or before each anniversary of the effective date of the exploration reservation.
Conversion of exploration reservation to lease
45(1) Where the holder of an exploration reservation who is in compliance with this Act drills at least one well to a depth adequate to test a reservoir that is or might be located under the reservation area, the holder may, in accordance with the regulations, make application to the minister for a lease of all or part of the reservation area.
Expiry of exploration reservation
45(2) Where a lease is issued under subsection (1), the exploration reservation expires on the effective date of the lease.
Size of lease area not restricted
45(3) Section 50 does not apply to a lease issued under subsection (1).
Offset area drilling requirements
46(1) Section 58 applies to a reservation area, with necessary modifications.
Where offset area produces oil and gas
46(2) Where a well is drilled in a reservation area for the purpose of subsection 58(1) and clause 58(2)(c), the holder of the exploration reservation shall, before producing oil and gas from the well, make application in accordance with the regulations for a lease of an area that includes the well.
Exploration reservation continues
46(3) Where a lease issued pursuant to subsection (2) is not for the whole of the reservation area described in the exploration reservation, the exploration reservation continues for the balance of its term in respect of the part of the reservation area that is not included in the lease.
47 The holder of an exploration reservation may not
(a) transfer part of the exploration reservation other than an undivided interest;
(b) consolidate two or more exploration reservations into one exploration reservation; or
(c) divide an exploration reservation into two or more exploration reservations.
Surrender of exploration reservation
48 The holder of an exploration reservation may surrender the exploration reservation or a portion of the reservation area by giving written notice thereof to the registrar, but no rent or fee paid by the holder in respect of the exploration reservation is refundable to the holder.
LEASE
49 Subject to this Act, the holder of a lease has the exclusive right to drill for oil and gas within the lease area and to remove and dispose of any oil and gas produced from the lease area.
50 A lease area shall not exceed 768 hectares.
51(1) The effective date of a lease is
(a) the date on which the offer to purchase the lease is accepted; or
(b) the date on which an application is made for a lease under subsection 45(1) or 46(2).
51(2) Subject to section 53, the term of a lease is five years commencing on the effective date of the lease.
Application to registrar for renewal of lease
52(1) Subject to subsection (3), the holder of a lease may, in accordance with the regulations, make application to the registrar, before expiry of the initial term or a renewal term of a lease, or of an extension of the term of a lease under section 53, for renewal of the lease.
Registrar to issue five year renewal
52(2) Subject to subsection (3), where an applicant under subsection (1) is in compliance with this Act and the terms or conditions of the lease, the registrar shall issue a renewal of the lease for a term of five years from the day on which the initial term or renewal term of the lease would otherwise expire.
52(3) The holder of a lease may renew the lease in respect of
(a) any quarter section that is productive, at the end of the initial term of the lease; and
(b) any spacing unit that is productive, to the base of the deepest formation that is productive, at the end of each renewal term.
Application to director for one year extension
53(1) Notwithstanding section 52, the holder of a lease may, in accordance with the regulations, make application to the director for a one year extension of the term of the lease.
Conditions for one year extension
53(2) The director may issue to the holder of a lease an extension of the term of the lease for a period of one year, after the holder of the lease
(a) pays any prescribed fee, rent or other charge; and
(b) provides a written commitment, satisfactory to the director, to drill at least one well within the lease area or to further develop the lease area within the one year period.
Further extension if commitment honoured
53(3) Where the holder of a lease has, to the satisfaction of the director, honoured a commitment given under clause (2)(b), the holder of the lease may make application under subsection (1) for a further extension of the lease.
53(4) The director shall not issue more than five extensions of a lease under subsection (2).
Renewal of lease after extension period
53(5) The holder of a lease extended under subsection (2) may make application to the registrar for renewal of the lease under subsection 52(1).
54 The holder of a lease shall pay an annual rent in the prescribed amount on or before each anniversary of the effective date of the lease.
Division of lease area into parts
55 On application in accordance with the regulations by a holder of a lease, the minister may divide a lease area into parts that are individually not less than one spacing unit in size, and may issue a new lease to the holder for each such part.
56 The holder of a lease may surrender all or part of the lease area by giving written notice thereof to the registrar, but no rent, fee or other charge paid by the holder in respect of the lease is refundable to the holder.
Amendment of holder's copy of lease
57 Where part of a lease area is surrendered under section 56, the holder of the lease shall submit the duplicate copy of the lease to the registrar, who shall amend the legal description of the lease area in the lease and return the duplicate copy to the holder of the lease.
Offset area drilling requirement
58(1) Subject to subsections (2) and (3), where oil and gas that is not owned by the Crown is being produced from a spacing unit on land adjoining an offset area, the holder of the disposition that includes the offset area shall, not later than 90 days after the director gives notice to the holder to drill a well in the offset area, comply with the notice and drill the well to a depth sufficient to test the formation from which the oil and gas is being produced.
Compensatory royalty, surrender, substitution
58(2) The holder referred to in subsection (1) may, before the expiry of the 90 day period referred to in subsection (1), notify the director in writing that the holder elects
(a) to extend the 90 day period by paying a compensatory royalty in accordance with the regulations;
(b) to surrender the offset area to the Crown, except any formation that is productive at the time of the election; or
(c) subject to the approval of the director, to drill another well in the lease area or reservation area.
Drilling of offset well may be deferred
58(3) The holder referred to in subsection (1) may, in accordance with the regulations, make application to the director to defer drilling a well in the offset area, and the director may grant a deferral for such period of time as the director considers necessary or advisable.
59(1) Where the director considers it necessary or advisable to have a survey made of a reservation area or lease area to settle a dispute respecting the position of the area, or where no plan of survey exists for a reservation area or lease area or any part of it, the director shall require the applicant for, or the holder of, a disposition in respect of the area to obtain a survey of the area or any part of it, as the director may determine, in accordance with The Surveys Act.
59(2) For the purpose of subsection (1), the applicant or holder of the disposition is liable for the costs of obtaining the survey.
Implied reservations to the Crown
60 There is implied in every disposition any reservation that is required by the law of the province to be made on the disposal of oil and gas rights owned by the Crown.
Notice to holder of failure to comply
61(1) Where the registrar has reasonable grounds to believe that a holder has failed to comply with this Act or with a term or condition of the disposition, the registrar may give the holder written notice of the failure to comply and shall indicate in the notice the remedy required, the date by which the holder must remedy the failure to comply, and the right of the minister after that date to cancel the disposition if the failure to comply is not remedied.
61(2) Where a holder does not remedy a failure to comply in accordance with a notice given to the holder under subsection (1), the minister may by order cancel the disposition.
61(3) Where a disposition is cancelled under subsection (2), the rights and interest of the holder under the disposition are forfeited to the Crown without compensation to the holder.
Cancellation on misrepresentation, bankruptcy
62 The minister may, by order and without giving prior notice to a holder of a disposition, cancel the disposition where the minister is satisfied that the holder
(a) made a material misrepresentation in the application for the disposition;
(b) through a false statement, has avoided or attempted to avoid the payment of a royalty, rent, fee or other charge payable for or under the disposition; or
(c) is insolvent or a declared bankrupt, or has committed an act of bankruptcy.
Service of notice of cancellation
63 An order made under subsection 61(2) or section 62 shall immediately be served on the registrar who shall as soon as practicable serve the holder of the disposition with a copy of the order.
64(1) Unless otherwise authorized by the director in writing, the holder of a disposition shall, not later than 180 days after the disposition expires or is surrendered or cancelled, abandon any well or oil and gas facility located in the reservation area or lease area, in accordance with Part 9.
64(2) Where a holder fails to comply with subsection (1), the minister may authorize the director to seize the well or oil and gas facility under section 182 without prior notice to the holder.
Waiver of term or condition by minister
65 Notwithstanding the provisions of this Act or a disposition, a waiver by the minister of a term or condition of a disposition must be in writing and any such waiver does not limit or affect the rights of the Crown in respect of any other provision of this Act or the disposition.
Disposal of Crown rights in Northern Manitoba
66 Crown oil and gas rights situated north of latitude 55 degrees north and east of meridian of longitude 96 degrees west may be reserved, leased or otherwise disposed of only in accordance with the regulations.
Agreements on helium and oil shale
67 The minister may, by an agreement entered into in accordance with the regulations, authorize exploration or drilling for, or production of, helium and oil shale in an area in which the Crown holds the rights to helium and oil shale.
PART 5
REGISTRATION OF TRANSFERS AND INSTRUMENTS
Holder may transfer disposition
68 The holder of a disposition may transfer the whole or an undivided part of the interest of the holder in the disposition.
69(1) On the registration of a transfer under this Part, the transferee becomes the holder of the disposition or of an undivided interest in the disposition, as the case may be, for the purpose of this Act.
69(2) A transfer has no effect under this Act unless it is registered under this Part.
Effect of not registering transfer
69(3) The failure to register a transfer under this Part does not invalidate the transfer as between the parties to it.
70(1) Subject to the regulations, the registrar may register a transfer if
(a) the transfer document is in the prescribed form and does not conflict with the requirements of this Act or a term or condition in the disposition;
(b) registration of the transfer is requested by or on behalf of the transferor or transferee;
(c) where a corporation is a party to the transfer, the seal of the corporation is affixed to the transfer document or the transfer document is executed by a person who has authority to execute it on behalf of the corporation;
(d) where the transfer would result in the number of holders of the disposition being more than five persons, the minister in writing consents to registration of the transfer;
(e) no fee, rent or other charge in respect of the disposition is due or owing to the Crown by the holder of the disposition that is being transferred; and
(f) the transfer is accompanied by the prescribed fee.
Duplicate copy of transfer to transferee
70(2) The registrar shall, on registering a transfer, endorse a duplicate copy of the disposition with a notation of the transfer and send the duplicate copy to the transferee as soon as practicable.
Transfer of part of a lease area
71(1) Where the holder of a lease intends to transfer part of the lease area, the holder shall, in accordance with the regulations, make application to the minister for a new lease in respect of the part of the lease area to be transferred.
Registrar to amend lease area description
71(2) Where the minister is satisfied that the proposed transferee is in compliance with this Act, the minister may issue a new lease to the transferee for the part of the lease area that is transferred, and the registrar shall, on registration of the new lease, amend the legal description of the original lease area to reflect the transfer of part of the lease area.
Transfer on death, bankruptcy, insolvency
72(1) The transferee in a transfer that is not made under section 68, including a transfer resulting from the death, bankruptcy or insolvency of a holder or a person having an interest in the disposition, shall authenticate, by statutory declaration and such other document as the registrar may require, the circumstances of the transfer.
72(2) The following documents must be filed with a transfer referred to in subsection (1):
(a) in the case of a transfer resulting from a bankruptcy or insolvency, proof of the right of the person to be transferee as a result of the bankruptcy or insolvency; and
(b) in the case of a transfer resulting from a testamentary instrument or intestacy, a copy of the letters probate or letters of administration.
Registrar to register transferee's name
72(3) The registrar shall, on receipt of documents required under subsections (1) and (2), register the name of the person entitled under the transfer as the holder of the disposition or as a person having an undivided interest in the disposition.
Registration of instruments against disposition
73(1) Subject to subsection 74(1) and the regulations, any person may submit an instrument to the registrar for registration against the disposition affected by the instrument.
Registrar to give notice to holder
73(2) The registrar shall, on registering an instrument against a disposition, give notice of the registration to the holder of the disposition.
73(3) The registration of an instrument against a disposition under this Act constitutes notice of the instrument to any person claiming an interest in the disposition, notwithstanding any defect in the instrument.
73(4) The registration of an instrument against a disposition
(a) does not restrict or in any manner affect a right or power of the Crown or the minister under this Act or the disposition; and
(b) does not derogate from the proprietary rights of the Crown in the oil and gas rights that are granted by the disposition.
Security given under the Bank Act
74(1) Where, by an instrument made under section 177 of the Bank Act (Canada), a disposition or an interest in a disposition is given as security to a bank by the holder, the bank may, in accordance with the regulations, submit an original or certified copy of the instrument to the registrar for registration.
74(2) Where the obligations secured by an instrument registered under subsection (1) are satisfied in whole or in part, the bank shall submit a discharge or partial discharge of the instrument to the registrar for registration.
75 The registrar shall cancel the registration of an instrument upon submission of proof acceptable to the registrar, that
(a) the obligations arising under the instrument are discharged;
(b) the holder or person who had an interest in the disposition no longer has an interest in it; or
(c) the instrument was filed in error or as the result of a misrepresentation.
PART 6
OIL AND GAS LEASE AGENTS
76 In this Part,
"oil and gas interest" means the ownership of, or an interest in, oil and gas or a right to drill for, take, win, gain and remove oil and gas from land, whether the ownership, interest or right is acquired by lease, grant, assignment or otherwise, but does not include
(a) the ownership of, or an interest in, oil and gas that is acquired as a result of an acquisition of title to land or an interest in land where the title includes oil and gas rights in respect of the land, or
(b) an interest in Crown oil and gas rights; (« intérêt gazier et pétrolier »)
"oil and gas lease agent" means a person who negotiates, on the person's own behalf or on behalf of a third party, the acquisition of an oil and gas interest from a royalty owner or an agent of a royalty owner. (« agent d'affaires »)
77 No person shall carry on the business of an oil and gas lease agent unless the person is registered as an oil and gas lease agent under this Part.
78(1) Subject to section 80, a person may, in accordance with the regulations, make application to the registrar for registration as an oil and gas lease agent, and the registrar shall, on payment of the prescribed fee, register the person as an oil and gas lease agent.
78(2) Subject to section 80, the registration of an oil and gas lease agent is valid for the prescribed term and may be renewed for the prescribed term by an application made in accordance with the regulations before the registration expires, and on payment of the prescribed fee.
Validity of acquisition agreement
79(1) Subject to subsection (2), an agreement to acquire an oil and gas interest is not valid or binding for the purpose of section 91 unless it is acquired through an oil and gas lease agent registered under this Part.
Validation by order of the minister
79(2) The minister may, with the written consent of the parties to an agreement that does not comply with subsection (1), by order validate the agreement for the purpose of section 91.
Inquiry into misrepresentation by agent
80 Where a person alleges that an oil and gas interest was acquired as a result of a misrepresentation by an oil and gas lease agent, the minister may refer the matter to the board under subsection 8(1) and, where the minister determines that a misrepresentation occurred, the minister may by order suspend or revoke the registration of the oil and gas lease agent and the right of the oil and gas lease agent to renew his or her registration or to make application for registration under this Part.
Minister may declare agreement invalid
81 Where the minister makes an order under section 80, the minister may declare an agreement under which an oil and gas interest was acquired as a result of misrepresentation to be invalid for the purpose of this Act.
Reinstatement of oil and gas lease agent
82 On application made in accordance with the regulations by an oil and gas lease agent who is the subject of an order under section 80, the minister may direct the registrar
(a) to reinstate or, on application by the oil and gas lease agent under section 78, to renew the registration of the oil and gas lease agent; or
(b) where the term of the registration has expired, to accept the application of the oil and gas lease agent to be registered;
on such terms and conditions as the minister considers necessary or advisable.
PART 7
GEOPHYSICAL OPERATIONS
83 In this Part, "licensee" means the holder of a geophysical licence issued under this Part.
No geophysical operation without licence
84(1) No person shall conduct a geophysical operation unless the person holds, or is acting under the instructions of a person who holds, a geophysical licence issued under this Part in respect of the geophysical operation.
Application for geophysical licence
84(2) A person may, in accordance with the regulations, make application to the director for a geophysical licence, and shall include with the application any prescribed performance security.
Director may issue geophysical licence
84(3) Where the director is satisfied that an application made under subsection (2) complies with this Act, the director may issue a geophysical licence to the applicant, subject to the regulations and such terms and conditions as the director considers necessary or advisable.
Geophysical operation on highway
84(4) The director shall not issue a geophysical licence in respect of land that includes a highway without the written approval of the member of the Executive Council charged with the administration of The Highways and Transportation Act, and the geophysical licence shall be made subject to any term or condition the member considers necessary or advisable.
Application of Surface Rights Act
85 The Surface Rights Act applies in respect of a right of entry to land, including compensation for any loss or damage suffered by an owner or occupant of the land, for the purpose of a geophysical operation.
Licensee to comply with licence and Act
86 A licensee is responsible for the geophysical operation, and shall carry out the geophysical operation in accordance with the geophysical licence and this Act.
Director to approve transfer of licence
87 A licensee shall not transfer a geophysical licence without the prior written approval of the director obtained by application made in accordance with the regulations.
PART 8
WELL LICENCES
88 In this Part, "licensee" means the holder of a well licence issued under this Part.
89(1) No person shall drill, operate or carry on any activity related to a well unless the person holds, or is acting under the instructions of a person who holds, a well licence issued under this Part in respect of the well.
89(2) Notwithstanding subsection (1), the site for a proposed well may be surveyed under The Surveys Act without first obtaining a well licence.
90(1) A person may, in accordance with the regulations, make application to the director for a well licence, and shall include with the application any prescribed performance security.
90(2) Where the director is satisfied that an application complies with this Act, the director may issue a well licence subject to such terms and conditions as the director considers necessary or advisable.
Applicant must have surface rights
91(1) The director shall not issue a well licence unless the director is satisfied that the applicant has obtained the necessary surface rights in accordance with the requirements of The Surface Rights Act.
Applicant must have right to produce oil and gas
91(2) The director shall not issue a well licence for the purpose of drilling for and producing oil and gas unless the director is satisfied that the applicant has, or is the authorized representative of a person who has, a right to drill for and produce oil and gas from the spacing unit in which the proposed well is to be drilled.
Restricted right to produce oil and gas for testing
91(3) Where a licensee is not the owner of all the oil and gas rights in the spacing unit, the licensee shall not produce oil and gas from the well in the spacing unit, except for testing purposes, until the licensee submits proof satisfactory to the director that the licensee has obtained, through a pooling order under Part 10 or a pooling agreement or other agreement, all of the oil and gas rights in the spacing unit.
Application for purpose other than oil and gas
91(4) The director shall not issue a well licence for a purpose other than the recovery of oil and gas unless the director is satisfied that the applicant has, or is the authorized representative of a person who has, the rights required for the purpose for which the proposed well is to be used.
Licence void where licensee does not have rights
92 Where the director determines that a licensee did not have the rights required under section 91 at the time the well licence was issued or lost the rights after the well licence was issued, the well licence is void for all purposes except the obligation of the licensee to complete or abandon the well, and to rehabilitate the site of the well, in accordance with this Act.
Director may refuse to issue well licence
93 Where in the opinion of the director, drilling a well on a site that is proposed in an application might cause significant adverse impact on the environment or significantly impair use of the surrounding land, the director may refuse to issue a well licence.
Director may amend well licence
94(1) Where, in the opinion of the director, new circumstances or information respecting a well for which a well licence has been issued warrant a change in a term or condition in, or the addition of a term or condition to, the well licence, the director may, after giving written notice to the licensee, vary a term or condition in, or add a term or condition to, the well licence.
Cancellation of well licence where no drilling
94(2) Where drilling is not commenced within six months from the day a well licence is issued, the director may, after giving written notice to the licensee, cancel the well licence.
Drilling to be done at authorized location
95 A licensee shall not drill a well at a location other than the location specified in the well licence.
Licensee responsible for operations
96 A licensee is responsible for all operations carried out at the well.
97 No person may re-enter a well that is abandoned unless the person is acting under the instructions of the director or holds a well licence in respect of the well.
Well abandoned because of mechanical difficulties
98(1) Subject to subsection (2), where a licensee decides it is necessary, owing to mechanical difficulties, to abandon a well before drilling is completed, the licensee may, with the prior approval of the director or an inspector, drill another well in the same spacing unit.
98(2) Where surface casing is set in a well abandoned under subsection (1), the licensee shall not drill another well in the spacing unit without first obtaining a new well licence under this Part.
99(1) The director shall, in accordance with the regulations, name each well for which a well licence is issued under this Part and may change the name on his or her own initiative or on application by the licensee in accordance with the regulations.
99(2) Repealed, S.M. 1996, c. 27, s. 21.
Director to approve transfer of licence
100(1) A licensee shall not transfer a well licence without the prior written approval of the director obtained on application by the licensee or proposed licensee in accordance with the regulations, and the application shall include submission by the proposed licensee of any prescribed performance security.
Transfer where licensee not located
100(2) Where the director is unable to locate a licensee or is satisfied that a corporation that is a licensee is dissolved, the director may, after receiving the prescribed fee and any prescribed performance security, transfer the well licence to a person who holds the surface rights for the site of the well, and the oil and gas rights in the spacing unit in which the well is located.
Registrar to transfer permit, licence
100(3) Where a well licence is transferred in accordance with this section, the registrar shall, after receiving any prescribed performance security, transfer to the transferee of the well licence any battery operating permit issued under section 111 and any flow line licence issued under section 146 in respect of the well.
PART 9
OIL AND GAS PRODUCTION AND CONSERVATION
101 In this Part,
"licensee" means the holder of a well licence issued under Part 8; (« titulaire de permis »)
"target area" means the part of a spacing unit in which a well drilled for the purpose of producing oil and gas can be completed without reduction of the maximum production rate established for the well under this Act. (« zone cible »)
SPACING UNITS AND TARGET AREAS
Size and shape may be prescribed and varied
102 The Lieutenant Governor in Council may prescribe the size and shape of spacing units and target areas but, notwithstanding any such regulation, an operator may in accordance with the regulations make application to the minister to vary the size or shape of a spacing unit or of a target area within the spacing unit, or both, and the minister may by order alter the size or shape of the spacing unit or target area, or both, subject to the regulations and such terms and conditions as the minister considers necessary or advisable.
Effect of completion outside target area
103(1) Subject to subsection (2), where any part of a well is completed outside the target area for the well, the maximum production rate established for the well shall be reduced in accordance with the regulations.
103(2) A licensee may, in accordance with the regulations, make application to the director to waive the application of subsection (1), and the director may waive its application if he or she is satisfied that correlative rights are not adversely affected by completion of the well outside the target area.
DRILLING, COMPLETION AND SERVICING
Duty of licensee re equipment and methods
104 The licensee of a well shall ensure that equipment or methods used to drill, complete, service, operate or abandon the well comply with the regulations and The Workplace Safety and Health Act.
MAXIMUM PRODUCTION RATE
Prescribed maximum production rates
105(1) The Lieutenant Governor in Council may make regulations respecting the maximum production rates applicable to wells or classes of wells but, notwithstanding any such regulation, the minister may by order vary or remove a maximum production rate applicable to a well or class of wells.
Application for variation or removal
105(2) A licensee may, in accordance with the regulations, make application to the minister to vary or remove the maximum production rate applicable to the well or pool from which the well is producing.
Order where gas or water reduces oil recovery
105(3) Where, in the opinion of the minister, a well is producing gas or water in an amount that is reducing or is likely to reduce the amount of oil that could otherwise be recovered from the pool in which the well is completed, the minister may by order reduce the maximum production rate applicable to the well by such amount as the minister considers necessary or advisable.
106 Where the monthly production from a well exceeds the maximum production rate prescribed or ordered for the well under section 105 the licensee shall restrict production from the well in accordance with the regulations.
New well in spacing unit already producing
107 Where a well in a spacing unit is producing or capable of producing oil and gas from a pool, a licensee shall not produce oil and gas from any other well drilled in the spacing unit unless the licensee makes application, in accordance with the regulations, to do so and the director in writing authorizes production from the well, subject to such terms and conditions as the director considers necessary or advisable.
Approval for commingled production or injection
108 A licensee shall segregate production from, or the injection of a substance into, two or more pools through a well unless the director approves, on application made in accordance with the regulations, commingled production from or injection into the well.
DISPOSAL OF SALT WATER
Disposal in accordance with permit or order
109(1) A licensee shall dispose of any salt water produced from a well by reinjecting the salt water into an underground formation in accordance with the regulations and a salt water disposal permit issued under this section or an order made under subsection 116(2).
Application for disposal permit
109(2) A licensee may, in accordance with the regulations, make application to the director for a salt water disposal permit.
Director may issue permit or refer application
109(3) On receiving an application under subsection (2), the director may
(a) issue a salt water disposal permit to the licensee on such terms and conditions as the director considers necessary or advisable;
(b) where, in the opinion of the director, approval of the application is not in the public interest, deny the application; or
(c) refer the application to the minister, in which case the application is deemed to be an application to the minister under subsection 8(2).
110 A licensee shall ensure that equipment used to transport salt water produced from a well is designed, operated and maintained in accordance with the regulations.
CONSTRUCTION AND OPERATION OF BATTERIES AND GAS PLANTS
No construction of battery without approval
111(1) No person shall
(a) construct a battery without the prior written approval of an inspector; or
(b) operate a battery without a battery operating permit.
Application for battery operating permit
111(2) A person may, in accordance with the regulations, make application to the director for a battery operating permit, and shall include with the application any prescribed performance security.
No construction until application made for permit
111(3) An inspector shall not approve the construction of a battery under subsection (1) before an application for a battery operating permit is made under subsection (2).
Powers of director on application
111(4) Where an application is made under subsection (2), the director may, after construction of the battery is completed, issue a battery operating permit in accordance with the regulations and on such terms and conditions as the director considers necessary or advisable.
Inspector to approve modification to battery
111(5) The holder of a battery operating permit shall not make a modification to the battery without the approval of an inspector obtained by application made in accordance with the regulations.
112 The director shall, in accordance with the regulations, name each battery for which a battery operating permit is issued under this Part and may change the name on his or her own initiative or on application by the holder of the battery operating permit in accordance with the regulations.
No construction or operation without approval
113(1) No person shall construct or operate a gas plant unless the person holds, or is acting under the instructions of a person who holds, a gas plant permit issued under this Part.
Application for gas plant permit
113(2) A person may, in accordance with the regulations, make application to the minister for a gas plant permit.
Consideration of application by minister
113(3) On receipt of an application under subsection (2), the minister shall give notice of the application in accordance with the regulations, and shall not approve the application unless the minister
(a) considers any representations and recommendations received as a result of giving notice of the application; and
(b) is satisfied that the application complies with this Act, and that the proposed construction and operation is consistent with the principles of sustainable development.
Minister may issue gas plant permit
113(4) The minister may, in accordance with the regulations, issue a gas plant permit for the construction and operation of a gas plant on such terms and conditions as the minister considers necessary or advisable.
Operator to limit discharge of pollutants
114(1) The operator of a battery or gas plant shall at all times make every reasonable effort to operate the battery or gas plant with the least possible discharge of pollutants, as defined in The Environment Act.
Director's powers respecting pollutants
114(2) Where the director is of the opinion that a discharge of pollutants from a battery or gas plant is a hazard to public health or is having or might have a significant adverse effect on the environment, the director may in accordance with the regulations require the operator of the battery or gas plant to take such steps to stop or reduce the discharge of pollutants as the director considers necessary or advisable.
Minister may require gas conservation
115 Where the minister is of the opinion that the escape or flaring of gas at a well, battery or gas plant constitutes waste, the minister may require the operator of the battery or gas plant to alter the operation of the battery or gas plant in order to conserve gas.
ENHANCED RECOVERY
116(1) No person shall undertake enhanced recovery without the approval of the minister.
116(2) An application for approval of a project of enhanced recovery must be made to the minister, in accordance with the regulations, and the minister may by order approve an application on such terms and conditions as he or she considers necessary or advisable.
Report on feasibility of enhanced recovery
117 The minister may by order require the operator of wells in a pool to investigate and report to the minister, within such time as the minister may fix in the order, on the feasibility of implementing enhanced recovery in the pool.
Minister may refer matter to board
118(1) After receiving a report under section 117, or where the operator fails to implement enhanced recovery within a time specified in an order made under subsection 116(2), the minister may refer the matter to the board under subsection 8(1) and on so doing shall direct the board to hold a hearing in respect of the matter.
Minister may suspend or restrict production
118(2) Where, after consideration of the report of the board under subsection (1), the minister is satisfied that enhanced recovery is necessary or advisable to prevent waste, the minister may by order require the operator to suspend or restrict production from a pool or part of a pool until the operator implements enhanced recovery or takes such other action to prevent waste as is satisfactory to the minister.
SPILLS
119(1) The operator of a well or an oil and gas facility shall at all times make every reasonable effort to prevent a spill and for that purpose shall, in accordance with the regulations, install equipment to prevent a spill at the well or oil and gas facility.
119(2) Where a spill occurs, the operator of the well or oil and gas facility shall, in accordance with the regulations, report the spill to an inspector and shall, subject to any order of an inspector under subsection (4),
(a) stop the spill;
(b) contain and clean up the spill;
(c) repair or replace any faulty or damaged equipment that caused or contributed to the spill;
(d) mitigate or eliminate any danger to life, health, the environment or property arising from the spill;
(e) take steps to rehabilitate any land affected by the spill; and
(f) take steps to prevent the occurrence of a similar spill.
Duty to rehabilitate after spill
119(3) Clause (2)(e) applies to
(a) the operator of an oil and gas facility; or
(b) the licensee of a well;
at which a spill occurs, whether before or after this section comes into force.
Power of inspector re spill procedure
119(4) An inspector may by order specify the action to be taken by an operator under subsection (2) and, where the operator does not take appropriate action under subsection (2) or the order, the inspector may, with the approval of the director, take such action as the inspector considers necessary or advisable.
Continuing duty of operator and successor
119(5) Subsection (2) applies to the operator of a well or oil and gas facility and to a successor operator of the well or oil and gas facility until the obligations under subsection (2) and any order made by an inspector under subsection (4) are discharged.
Minister may relieve operator from application
119(6) Notwithstanding subsections (2) and (5), the minister may by order, with the consent of the owner of the land on which a spill has occurred and on such terms and conditions as the minister considers necessary or advisable, relieve an operator of a well or an oil and gas facility, including a successor operator, from the application of subsection (2) where the minister is satisfied that further mitigation or rehabilitation in respect of the spill is not practicable.
119(7) An operator of a well or an oil and gas facility at which a spill occurs is liable, without proof of negligence and notwithstanding due diligence on the part of the operator, for the costs and expenses reasonably incurred by the inspector or any other person in action taken under subsection (4).
120(1) In this section, "oil spill cooperative" means two or more operators of wells or oil and gas facilities who agree to combine resources and expertise for the purpose of containing and cleaning up spills in accordance with this Act.
120(2) Subject to subsection (3), the director may require an operator of a well or an oil and gas facility to develop and file, in accordance with the regulations, an environmental protection plan in respect of the well or oil and gas facility.
Exemption of members of oil spill cooperative
120(3) The director shall not require an operator of a well or oil and gas facility who is a member of an oil spill cooperative to file an environmental protection plan under subsection (2) unless the well or oil and gas facility is located in an area that, in the opinion of the director, is environmentally sensitive.
Minister may require oil spill cooperative
120(4) The minister may by order require the operator of a well or oil and gas facility to be a member of an oil spill cooperative.
Duties of oil spill cooperative
120(5) The members of an oil spill cooperative shall, in accordance with the regulations,
(a) develop and file with the director an environmental protection plan in respect of the wells and oil and gas facilities operated by the members;
(b) conduct training exercises in the use of equipment that is required for the oil spill cooperative to contain and clean up a spill; and
(c) provide the director with regular reports respecting the activities of the oil spill cooperative.
EMERGENCY, FIRE, BLOWOUT, ACCIDENT
Operator to report fire, blowout or accident
121(1) The operator of a well or oil and gas facility shall, in accordance with the regulations, report to an inspector any fire, blowout or accident that occurs at the well or oil and gas facility.
Declaration of state of emergency
121(2) Where the minister is satisfied that conditions at the site of a well or oil and gas facility are an immediate hazard to the health or safety of people in the area or to the environment, the minister may request the member of the Executive Council charged with the administration of The Emergency Measures Act to declare a state of emergency under that Act.
ABANDONMENT AND REH