Indian Oil and Gas Regulations, 1995 (SOR/94-753)

Regulations are current to 2017-11-20

SCHEDULE I(Section 33)Royalties

Oil Royalty

    • 1 (1) The royalty on oil that is obtained from, or attributable to, a lease area shall comprise the basic royalty determined pursuant to subsection (2) or (3) plus the supplementary royalty determined pursuant to subsection (5), calculated at the time and place of production.

    • (2) During the five year period beginning on the date determined by the Executive Director to be the date of commencement of production of oil from a contract area, the basic royalty is the part of the oil that is obtained from, or attributable to, each well during each month of that period calculated in accordance with the table to this subsection

      TABLE

      Column IColumn II
      ItemMonthly Production

      (m3)

      Royalty per Month
      1Less than 80 10% of the number of cubic metres
      280 to 160 8 m3 plus 20% of the number of cubic metres in excess of 80
      3More than 160 24 m3 plus 26% of the number of cubic metres in excess of 160
    • (3) Commencing immediately after the period referred to in subsection (2), the basic royalty is the part of the oil that is obtained from, or attributable to, each well in a contract area during each month thereafter calculated in accordance with the table to this subsection.

      TABLE

      Column IColumn II
      ItemMonthly Production

      (m3)

      Royalty per Month
      1Less than 80 10% of the number of cubic metres
      280 to 160 8 m3 plus 20% of the number of cubic metres in excess of 80
      3160 to 795 24 m3 plus 26% of the number of cubic metres in excess of 160
      4More than 795 189 m3 plus 40% of the number of cubic metres in excess of 795
    • (4) The Executive Director shall advise the band council of the date of commencement determined under subsection (2).

    • (5) The supplementary royalty referred to in subsection (1) is

      • (a) in respect of oil to which subsection (2) applies, the royalty determined by the formula

        S = (T - B) 0.50 (P - R)

        and

      • (b) in respect of oil to which subsection (3) applies, the royalty determined by the formula

        S = (T - B) [0.75 (P - R - $12.58) + $6.29]

        where

        S
        is the supplementary royalty in dollars,
        T
        is the amount of oil, in cubic metres, that is obtained from, or attributable to, each well in a contract area during a month,
        B
        is the basic oil royalty, in cubic metres, calculated under subsection (2) or (3),
        P
        is the actual selling price of the oil per cubic metre, and
        R
        is the reference price, equal to
        • (a) in the case of oil obtained from a source set out in column II of an item of the table to this subsection, the amount set out in column III of that item, and

        • (b) in any other case, $25 per cubic metre.

        TABLE

        Column IColumn IIColumn III
        ItemReserveSource Producing before January 1, 1974Reference Price ($/m3)
        1

        Pigeon Lake Indian

        Reserve No. 138A

        Cardium$24.04
        Leduc25.37
        2

        Sawridge Indian

        Reserve No. 150G

        Gilwood Sand25.13
        3

        Stony Plain Indian

        Reserve No. 135

        Lower Cretaceous24.64
        Acheson Leduc24.45
        Yekau Lake Leduc25.01
        4

        Sturgeon Lake

        Indian Reserve No. 154

        Leduc21.51
        5

        Utikoomak Indian

        Reserve No. 155A

        Gilwood Sand Unit No. 1$25.00
        West Nipisi Unit No. 124.58
        6

        Whitebear Indian

        Reserve No. 70

        10-2-10-2 W2 well22.40
        8-9-10-2 W2 well22.63
        7

        Blackfoot Indian

        Reserve No. 146

        6-25-20-21 W4 well18.19
        8

        Ermineskin Indian

        Reserve No. 138

        6-11-45-25 W4 well19.18

Gas Royalty

    • 2 (1) Where gas that is obtained from, or attributable to, a lease area is sold, the royalty payable is the gross royalty value of the gas, determined pursuant to subsection (2), less the portion of the cost of gathering, dehydrating, compressing and processing the gas that is equal to its gross royalty value divided by its total value.

    • (2) The gross royalty value of gas that is obtained from or attributable to a lease area is the basic gross royalty value of 25 per cent of the quantity of that gas multiplied by the actual selling price plus a supplementary gross royalty value determined pursuant to subsection (3), calculated at the time and place of production.

    • (3) The supplementary gross royalty value on gas referred to in subsection (2), individually determined for each gas component produced, is equal to the sum of the products obtained by multiplying 75 per cent of the quantity of each gas component by

      • (a) in the case of marketable gas,

        • (i) if the actual selling price exceeds $10.65/103 m3 but does not exceed $24.85/103 m3, 30 per cent of the difference between the actual selling price per 103 m3 and $10.65/103 m3, or

        • (ii) if the actual selling price exceeds $24.85/103 m3, $4.26/103 m3 plus 55 per cent of the portion of the actual selling price in excess of $24.85/103 m3;

      • (b) in the case of pentanes plus, if the actual selling price exceeds $27.68 per cubic metre, 50 per cent of the portion of the actual selling price in excess of $27.68 per cubic metre;

      • (c) in the case of sulphur, if the actual selling price exceeds $39.37 per tonne, 50 per cent of the portion of the actual selling price in excess of $39.37 per tonne;

      • (d) in the case of other components from a source that produces marketable gas, an amount equal to the product obtained by multiplying the actual selling price of each of those components by the percentage by which the overall royalty rate for marketable gas, taking both basic and supplementary gross royalties values into account, exceeds 25 per cent; and

      • (e) in the case of other components from a source that does not produce marketable gas, the lesser of one third of the actual selling price of that component and the amount determined under any special agreement entered into under subsection 4(2) of the Act.

    • (4) For the purposes of this section, volumes referred to are volumes measured at standard conditions of 101.325 kPa and 15°C.

    • (5) The Executive Director shall advise the band council of any costs that are deducted under subsection (1) for gathering, dehydrating, compressing and processing.

Royalty on Oil or Gas Consumed

    • 3 (1) Notwithstanding sections 1 and 2 and subject to subsection (2), the royalty payable on oil or gas obtained from, or attributable to, a lease area that is consumed in the drilling for, or the production or processing of, oil or gas obtained from, or attributable to, that lease area is nil.

    • (2) Subsection (1) does not apply in respect of oil or gas that is consumed for the production or processing of crude bitumen.

Interpretation

  • 4 For the purposes of sections 1 and 2, actual selling price means the greater of

    • (a) in respect of

      • (i) oil, the price at which the oil is sold, and

      • (ii) gas, the price or other consideration payable that is specified in the gas sales contract under which the gas is sold, free of any fees or deductions other than transmission charges beyond the facility outlet; and

    • (b) the fair market value of the oil or gas, determined pursuant to subsection 33(6) of these Regulations.

 
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