Canada Oil and Gas Operations Act (R.S.C., 1985, c. O-7)

Act current to 2018-07-05 and last amended on 2016-06-19. Previous Versions

Marginal note:Hearing
  •  (1) Once seized of an application made under section 48.21, the expert shall hold a hearing at which all interested persons shall be given an opportunity to be heard.

  • Marginal note:Conclusion of hearing

    (2) On the conclusion of the hearing, the expert shall request that the Minister and the appropriate regulator

    • (a) order that the unit agreement is a valid contract enuring to the benefit of all the royalty owners and working interest owners who have an interest in the unit area and binding on and enforceable against all such owners, and that the unit operating agreement is a valid contract enuring to the benefit of all the working interest owners who have an interest in the unit area and binding on and enforceable against all such owners; and

    • (b) include in the order any variations to the unit agreement or unit operating agreement that the expert determines are necessary to allow for the more efficient or more economical production of oil or gas from the unitized zone.

  • Marginal note:Exception

    (3) Despite subsection (2), the expert shall end the hearing and request that the Minister and the appropriate regulator take the measure outlined in paragraph (2)(a) if the expert finds that,

    • (a) on the day on which the hearing begins,

      • (i) the unit agreement and the unit operating agreement have been executed by one or more working interest owners who own in total 65% or more of the total working interests in the unit area, and

      • (ii) the unit agreement has been executed by one or more royalty owners who own in total 65% or more of the total royalty interests in the unit area; and

    • (b) the unitization order applied for would allow for the more efficient or more economical production of oil or gas from the unitized zone.

  • 2015, c. 4, s. 24.
Marginal note:Unitization order
  •  (1) The Minister shall issue an order in accordance with the expert’s request under subsection 48.22(2) or (3).

  • Marginal note:Effect of unitization order

    (2) The unit agreement and the unit operating agreement have the effect given to them by the Minister’s order.

  • Marginal note:Equivalent order

    (3) A unitization order becomes effective only if the appropriate regulator has issued an equivalent order.

  • Marginal note:Joint approval

    (4) The issuance of a unitization order by the Minister and of an equivalent order by the regulator is deemed to be their joint approval of the unit agreement and the unit operating agreement.

  • Marginal note:Effective date of unitization order

    (5) Subject to subsections (3) and (6), a unitization order becomes effective on the date set out in the order, but that date shall not be less than 30 days after the day on which the order is made.

  • Marginal note:Order revoked

    (6) The Minister shall immediately revoke a unitization order that varies a unit agreement or a unit operating agreement if, before the effective date of that order, the applicant files with the Minister a notice withdrawing the application on behalf of the working interest owners or there are filed with the Minister statements 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 total more than 25% of the total working interests in the unit area and are part of the group that owns 65% or more of the total working interests as described in subparagraph 48.22(3)(a)(i), and

      • (ii) one or more royalty owners who own in total more than 25% of the total royalty interests in the unit area and are part of the group that owns 65% or more of the total royalty interests as described in subparagraph 48.22(3)(a)(ii); or

    • (b) in the case of the unit operating agreement, by one or more working interest owners who own in total more than 25% of the total working interests in the unit area and are part of the group that owns 65% or more of the total working interests as described in subparagraph 48.22(3)(a)(i).

  • Marginal note:Application of sections 43 and 46

    (7) Sections 43 and 46 apply to the unitization order.

  • 2015, c. 4, s. 24.
Marginal note:Amending unitization order
  •  (1) A unitization order may be amended on the application of a working interest owner submitted to both the Minister and the appropriate regulator.

  • Marginal note:Appointment of expert

    (2) The Minister and the regulator shall appoint an expert in accordance with subsections 48.27(2) to (4) for the purposes of this section.

  • Marginal note:Hearing

    (3) Once seized of the application, the expert shall hold a hearing at which all interested persons shall be given an opportunity to be heard.

  • Marginal note:Conclusion of hearing

    (4) On the conclusion of the hearing, the expert may request that the Minister order the amendment of the unitization order in accordance with the amendment proposed and to include in the order any variations to it that the expert determines are necessary to allow for the more efficient or more economical production of oil or gas from the unitized zone. If the expert makes such a request, the expert shall also request that the appropriate regulator order the amendment of its equivalent order in the same way.

  • Marginal note:Exception

    (5) If the expert finds that, on the day on which the hearing begins, one or more working interest owners who own in total 65% or more of the total working interests and one or more royalty interest owners who own in total 65% or more of the total royalty interests in the unit area have consented to the proposed amendment, the expert may end the hearing and request that the Minister amend the unitization order in accordance with the amendment proposed. If the expert makes such a request, the expert shall also request that the appropriate regulator amend its equivalent order in the same way.

  • Marginal note:Application of section 48.23

    (6) Section 48.23 applies, with any modifications that the circumstances require, to an amended unitization order.

  • 2015, c. 4, s. 24.
Marginal note:Protection of tract participation ratios

 No amendment shall be made under section 48.24 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.

  • 2015, c. 4, s. 24.
Marginal note:Determination — percentages of interests

 The percentages of interests referred to in subsections 48.21(1), 48.22(3), 48.23(6) and 48.24(5) shall be determined in accordance with section 47.

  • 2015, c. 4, s. 24.

Referral to Expert

Marginal note:Notice
  •  (1) The party that intends to refer a matter to an expert under subsection 5.1(9), 5.2(6), 48.14(2) or 48.18(2) shall notify the other party of their intention.

  • Marginal note:Appointment — single expert

    (2) Within 30 days after the day on which a notice is given under subsection (1) or an application is made under subsection 48.21(1) or 48.24(1), the parties shall agree on the appointment of an expert who shall be seized of the matter.

  • Marginal note:Appointment — expert panel

    (3) If the parties do not agree on the appointment of a single expert, they shall, within 30 days after the day on which the period to jointly appoint an expert under subsection (2) ends, each appoint one expert to a panel and those experts shall, in turn, jointly appoint an additional expert as chairperson. If there is no agreement on the appointment of a chairperson within 30 days after the day of the last appointment, the chairperson shall be appointed by the Chief Justice of the Federal Court within 30 days after the period for appointing a chairperson ends. Once the chairperson is appointed, the expert panel shall be seized of the matter.

  • Marginal note:Qualifications — expert

    (4) An expert shall be impartial and independent, and have knowledge or experience relative to the subject of disagreement between the parties.

  • Marginal note:Decisions

    (5) Decisions of an expert panel shall be made on the basis of a majority vote of the members. The chairperson’s vote is the deciding vote in the case of a tie.

  • Marginal note:Time limit

    (6) The expert’s decision shall be made no later than 270 days after the day on which they were seized of the matter.

  • Marginal note:Decision is final and binding

    (7) Subject to judicial review, a decision made by an expert is final and binding on all parties specified in the decision from the date specified in it.

  • Marginal note:Records to be kept

    (8) An expert shall cause records to be kept of their hearings and proceedings and shall deposit their records with the Minister when their activities to which the records relate have ceased.

  • 2015, c. 4, s. 24.
 
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