Canada–Nova Scotia Offshore Petroleum Resources Accord Implementation and Offshore Renewable Energy Management Act (S.C. 1988, c. 28)

Marginal note:Effective date of unitization order

• 182 (1) Subject to subsection (2), a unitization order becomes effective on the day that the Committee determines in the order, but that day shall be not less than thirty days after the day on which the order is made.

• Marginal note:Effective date when unit agreement or unit operating agreement varied

  (2) Where a unit agreement or unit operating agreement is varied by the Committee in a unitization order, the effective date prescribed in the order shall be a date not less than thirty days following the day the order is made, but the order becomes ineffective if, before the effective date, the applicant files with the Committee a notice withdrawing the application on behalf of the working interest owners or there are filed with the Committee statements in writing objecting to the order and signed

  • (a) in the case of the unit agreement by

    • (i) one or more working interest owners who own in the aggregate more than twenty-five per cent of the total working interests in the area and were included within the group owning sixty-five per cent or more of the total working interests as described in subparagraph 181(2)(a)(i), and

    • (ii) one or more royalty owners who own in the aggregate more than twenty-five per cent of the total royalty interests in the unit area and were included within the group owning sixty-five per cent or more of the total royalty interests as described in subparagraph 181(2)(a)(ii); or

  • (b) in the case of the unit operating agreement, by one or more working interest owners who own in the aggregate more than twenty-five per cent of the total working interests in the unit area and were included within the group owning sixty-five per cent or more of the total working interests as described in subparagraph 181(2)(a)(i).

• Marginal note:Revocation of order

  (3) Where a unitization order becomes ineffective under subsection (2), the Committee shall forthwith revoke the order.

Marginal note:Technical defects in unitization order

183 A unitization order is not invalid by reason only of the absence of notice or of any irregularities in giving notice to any owner in respect of the application for the order or any proceedings leading to the making of the order.

Marginal note:Amending unitization order

• 184 (1) A unitization order may be amended on the application of a working interest owner, but before amending a unitization order the Committee shall hold a hearing at which all interested parties shall have an opportunity to be heard.

• Marginal note:Voluntary proposal for amendment by owners

  (2) If the Committee finds that, at the date of the commencement of a hearing of an application for the amendment of a unitization order, one or more working interest owners who own in the aggregate sixty-five per cent or more of the total working interests and one or more royalty interest owners who own in the aggregate sixty-five per cent or more of the total royalty interests in the unit area have consented to the proposed amendment, the Committee may amend the unitization order in accordance with the amendment proposed.

Marginal note:Protection of tract participation ratios

185 No amendment shall be made under section 184 that will alter the ratios between the tract participations of those tracts that were qualified for inclusion in the unit area before the commencement of the hearing, and, for the purposes of this section, the tract participations shall be those indicated in the unit agreement when it became subject to a unitization order.

Marginal note:Production prohibited except in accord with unitization order

186 After the date on which a unitization order comes into effect and while the order remains in force, no person shall carry on any operations within the unit area for the purpose of drilling for or producing petroleum from the unitized zone, except in accordance with the provisions of the unit agreement and the unit operating agreement.

Marginal note:How percentages of interests to be determined

187 The percentages of interests referred to in subsections 179(1), 181(2), 182(2) and 184(2) shall be determined

• (a) as to royalty interests, on a prorated area basis; and

• (b) as to working interests, on the basis of tract participations shown in the unit agreement.

General

Marginal note:Pooled spacing unit included in unit area

• 188 (1) A pooled spacing unit that has been pooled pursuant to a pooling order and on which a well has been drilled may be included in a unit area as a single unit tract and the Committee may make such amendments to the pooling order as it deems necessary to remove any conflict between the provisions of the pooling order and the provisions of the unit agreement, or the unit operating agreement or the unitization order, if any.

• Marginal note:Effect of including pooled spacing unit in unit area

  (2) Where a pooled spacing unit is included in a unit area pursuant to subsection (1), the provisions of the unit agreement, the unit operating agreement and the unitization order, if any, prevail over the provisions of the pooling order in the event of a conflict.

• Marginal note:Exceptions

  (3) Notwithstanding subsection (2),

  • (a) the share of the unit production that is allocated to the pooled spacing unit shall in turn be allocated to the separately owned tracts in the pooled spacing unit on the same basis and in the same proportion as production actually obtained from the pooled spacing unit would have been shared under the pooling order;

  • (b) the costs and expenses of the unit operation that are allocated to the pooled spacing unit shall be shared and borne by the owners of the working interests therein on the same basis and in the same proportion as would apply under the pooling order; and

  • (c) the credits allocated under a unit operating agreement to a pooled spacing unit for adjustment of investment for wells and equipment thereon shall be shared by the owners of the working interests therein in the same proportion as would apply to the sharing of production under the pooling order.

Transboundary Pools

Determination and Delineation

Marginal note:Information

• 188.01 (1) If an exploratory well, as defined in subsection 122(1), is drilled in the perimeter, the Regulator shall provide the appropriate authority, in the prescribed time and manner, with any information in its possession, including any prescribed information, pertinent to its determination of whether a transboundary pool exists and the delineation of it.

• Marginal note:Information in advance

  (2) The Regulator shall provide the Federal Minister and the Provincial Minister with any information referred to in subsection (1) before providing it to the appropriate authority.

• Marginal note:Additional information

  (3) After providing any information referred to in subsection (1) in the prescribed time, the Regulator shall, on request, provide the appropriate authority with any additional information in its possession that is pertinent to its determination of the existence of a transboundary pool and the delineation of it.

Marginal note:Notice — pool

• 188.02 (1) If the data obtained from any drilling in the perimeter provides sufficient information for the Regulator to determine whether a pool exists, the Regulator shall notify the appropriate authority as soon as feasible of its determination.

• Marginal note:Notice — transboundary pool

  (2) If the Regulator determines that a pool exists, the Regulator shall also specify in the notice whether or not there is, in its opinion, reason to believe that the pool is transboundary.

• Marginal note:Reasons

  (3) The Regulator shall, before it notifies the appropriate authority under subsection (1), provide the Federal Minister and the Provincial Minister with the reasons for its determination and opinion, if any.

• Marginal note:Timeline

  (4) The notice shall be given no later than one year after the Regulator receives the data from three drillings of the same geological feature in the perimeter.

Marginal note:Information received by Regulator

• 188.03 (1) If the Regulator receives a notice from an authority indicating the authority’s determination as to whether a pool exists in an area adjoining the perimeter, and, if applicable, whether there is reason to believe the pool extends into the perimeter, the Regulator shall, within 90 days after receiving the notice, inform the authority of its agreement or disagreement with the determination or opinion set out in the notice.

• Marginal note:Reasons

  (2) If the Regulator disagrees with the content of the notice, it shall provide the authority with the reasons for its disagreement.

• Marginal note:Information in advance

  (3) The Regulator shall, before it informs the authority under subsection (1), provide the Federal Minister and the Provincial Minister of its agreement or disagreement and its reasons, if any.

Marginal note:Determination and delineation

• 188.04 (1) If, after receiving a notice under section 188.02 or 188.03, the Regulator and the authority in question agree that a pool exists, the Regulator and that authority shall jointly determine whether that pool is transboundary and, if so, they shall jointly delineate its boundaries.

• Marginal note:Disagreement

  (2) The Regulator or the authority — or in respect of any transboundary pool extending into the jurisdiction of a foreign government, the Federal Minister after consultations with the Minister of Foreign Affairs and the Provincial Minister — may, if they disagree about whether a pool exists, whether the pool is transboundary or its delineation, refer the matter to an expert and shall do so no later than 180 days after the day on which the Regulator issues a notice under subsection 188.02(1) or the authority issues an equivalent notice.

• Marginal note:Notification to Ministers

  (3) The Regulator shall, with respect to subsection (2), inform the Federal Minister and the Provincial Minister

  • (a) that the Regulator intends to refer the matter to an expert; or

  • (b) that the authority has referred the matter to an expert.

• Marginal note:Notification to the Provincial Minister

  (4) The Federal Minister shall, with respect to subsection (2) and any transboundary pool extending into the jurisdiction of a foreign government, inform the Provincial Minister that the foreign government has referred the matter to an expert.

Agreements Relating to Joint Exploitation

Marginal note:Single pool

• 188.05 (1) A transboundary pool is to be exploited as a single pool.

• Marginal note:Conditions for joint exploitation

  (2) The exploitation of a transboundary pool is subject to a joint exploitation agreement having been entered into and to a unit agreement and a unit operating agreement having been entered into and approved under subsection 188.08(4) or 188.12(4).

• Marginal note:Joint exploitation agreement prevails

  (3) The joint exploitation agreement prevails over the unit agreement and the unit operating agreement to the extent of any inconsistency between them.

Marginal note:Joint exploitation agreement

• 188.06 (1) Subject to subsection (2), the Regulator and the appropriate authority may enter into a joint exploitation agreement providing for the exploitation of a transboundary pool as a single pool. The agreement shall include any matters provided for by regulation.

• Marginal note:Advice to Ministers

  (2) In the case of any transboundary pool extending into the jurisdiction of a foreign government, the Regulator shall provide advice in respect of the exploitation of that transboundary pool to the Federal Minister and the Provincial Minister, who may enter into a joint exploitation agreement with the appropriate authority.

Marginal note:Intention to start production

• 188.07 (1) If an interest owner, as defined in section 49, advises the Regulator, including by way of an application under subsection 84(1) or paragraph 142(1)(b), that it intends to start production of petroleum from a transboundary pool, the Regulator shall notify the appropriate authority as soon as feasible of the interest owner’s intention.

• Marginal note:Notification of intention

  (2) The Regulator shall, before notifying the appropriate authority of the interest owner’s intention to start production of petroleum from the transboundary pool, notify the Federal Minister and the Provincial Minister of that intention.

• Marginal note:Referral to expert

  (3) The appropriate authority or the Regulator — or in respect of any transboundary pool extending into the jurisdiction of a foreign government, the Federal Minister after consultation with the Minister of Foreign Affairs and the Provincial Minister — may, if they have not yet entered into a joint exploitation agreement within a period of 180 days after the Regulator’s notice was given under subsection (1), refer the matter of determining the particulars of the agreement to an expert. However, they may agree to refer the matter to an expert any time before the period ends.

Marginal note:Unit agreement

• 188.08 (1) The royalty owners and the working interest owners in a transboundary pool may enter into a unit agreement and, once it is approved, shall operate their interests in accordance with it or any amendment to it.

• Marginal note:Unit operating agreement

  (2) The working interest owners in a transboundary pool may enter into a unit operating agreement and, once it is approved, shall operate their interests in accordance with it or any amendment to it.

• Marginal note:Content

  (3) The unit agreement shall include the details referred to in paragraphs 180(2)(a) to (d) and the unit operating agreement shall include the details referred to in paragraphs 180(3)(a) to (e).

• Marginal note:Approval

  (4) The Regulator and the appropriate authority may approve the unit agreement if all the royalty owners and all the working interest owners in the transboundary pool are parties to it; the Regulator and the appropriate authority may approve the unit operating agreement if all the working interest owners in the transboundary pool are parties to it.

• Marginal note:Condition precedent

  (5) An authorization under paragraph 142(1)(b) for a work or activity proposed to be carried on in relation to the exploitation of a transboundary pool shall not be issued if the unit agreement and the unit operating agreement have not been jointly approved by the Regulator and the appropriate authority.

• Marginal note:Applicable provisions

  (6) Subsections 177(2) and (3) apply to the unit agreement.

Marginal note:Order to enter into agreements

188.09 When a joint exploitation agreement is entered into in respect of a transboundary pool, the Regulator shall order the working interest owners in the portion of the pool that is in its jurisdiction to enter into a unit agreement and a unit operating agreement with any other working interest owner in the pool if they have not already done so.