Canada–Newfoundland and Labrador Atlantic Accord Implementation and Offshore Renewable Energy Management Act (S.C. 1987, c. 3)

Marginal note:Compensation — surrender

• 56.5 (1) If an interest owner surrenders an interest referred to in subsection 56.4(1), His Majesty in right of the Province may grant any compensation that is determined by negotiations with the Provincial Minister for the surrender of the interest.

• Marginal note:Compensation — cancellation

  (2) If an interest is cancelled by an order made under subsection 56.4(4), His Majesty in right of the Province may grant an interest owner the compensation that is specified in the order. The order is subject to section 124 in respect of the amount of that compensation, and, for the purposes of this subsection, any reference to the Regulator in that section is to be read as a reference to the Provincial Minister.

• Marginal note:No compensation

  (3) A person shall not have any right to claim or receive any compensation, damages, indemnity or other form of relief from His Majesty in right of the Province or from any servant or agent of His Majesty in right of the Province for any acquired, vested, future or potential right or entitlement that is affected by a surrender of an interest referred to in subsection 56.4(1) or a cancellation of an interest referred to in subsection 56.4(4), other than compensation that may be granted to an interest owner under this section.

DIVISION IIGeneral Rules Relating to Issuance of Petroleum-Related Interests

Authority to Issue Interests

Marginal note:Authority to issue petroleum-related interests

• 57 (1) The Regulator may issue petroleum-related interests in respect of any portion of the offshore area in accordance with this Part and the regulations.

• Marginal note:Fundamental decision

  (2) The issuance of a petroleum-related interest by the Regulator is subject to sections 31 to 40 unless the issuance of the interest is mandatory under another provision of this Part.

• Marginal note:Application of interest may be limited

  (3) Subject to subsection (4), the application of any petroleum-related interest may be restricted to geological formations and to substances specified in the interest.

• Marginal note:Exception

  (4) Subsection (3) does not apply to any petroleum-related interest

  • (a) that is in force or in respect of which negotiations were completed before or on the coming into force of this section in relation to any portion of the offshore area; or

  • (b) that immediately succeeds an interest referred to in paragraph (a) in relation to that portion of the offshore area if that portion was not a Crown reserve area on the expiration of the interest referred to in paragraph (a).

Issuance of Interests in Relation to Crown Reserve Areas

Marginal note:Calls for bids

• 58 (1) Subject to section 61, the Regulator shall not issue a petroleum-related interest in relation to Crown reserve areas unless

  • (a) prior to issuing the interest, the Regulator has made a call for bids in relation to those Crown reserve areas by publishing a notice in accordance with this section and section 63; and

  • (b) the interest is issued to the person who submitted, in response to the call, the bid selected by the Regulator in accordance with subsection 59(1).

• Marginal note:Fundamental decision

  (2) The making of a call for bids for the issuance of a petroleum-related interest is subject to sections 31 to 40.

• Marginal note:Requests for call for bids

  (3) Any request received by the Regulator to make a call for bids for the issuance of a petroleum-related interest in relation to particular portions of the offshore area shall be considered by the Regulator in selecting the portions of the offshore area to be specified in such a call for bids.

• Marginal note:Contents of call

  (4) The call for bids shall specify

  • (a) the interest to be issued and the portions of the offshore area to which the interest is to apply;

  • (b) if applicable, the geological formations and substances to which the interest is to apply;

  • (c) the other terms and conditions subject to which the interest is to be issued;

  • (d) any terms and conditions that a bid must satisfy to be considered by the Regulator;

  • (e) the form and manner in which a bid is to be submitted;

  • (f) subject to subsection (5), the closing date for the submission of bids; and

  • (g) the sole criterion that the Regulator will apply in assessing bids submitted in response to the call.

• Marginal note:Time of publishing call

  (5) Unless otherwise prescribed, a call for bids shall be published at least one hundred and twenty days before the closing date for the submission of bids specified in the call.

Marginal note:Selection of bid

• 59 (1) A bid submitted in response to a call for bids for the issuance of a petroleum-related interest shall not be selected unless

  • (a) the bid satisfies the terms and conditions and is submitted in the form and manner specified in the call; and

  • (b) the selection is made on the basis of the criterion specified in the call.

• Marginal note:Publication of bid selected

  (2) If the Regulator selects a bid submitted in response to the call for bids, the Regulator shall publish a notice in accordance with section 63 setting out the terms and conditions of that bid.

• Marginal note:Interest to be consistent with call

  (3) If a petroleum-related interest is to be issued as a result of a call for bids, the terms and conditions of the interest shall be substantially consistent with any terms and conditions in respect of the interest specified in the call.

• Marginal note:Publication of terms and conditions of interest

  (4) The Regulator shall publish a notice in accordance with section 63 setting out the terms and conditions of any petroleum-related interest issued as a result of a call for bids as soon as practicable after its issuance.

Marginal note:Issuance of interest not required

• 60 (1) The Regulator is not required to issue a petroleum-related interest as a result of a call for bids.

• Marginal note:New call required

  (2) Subject to section 61, if the Regulator has not issued a petroleum-related interest with respect to a particular portion of the offshore area specified in a call for bids within six months after the closing date specified in the call for bids, the Regulator shall, before issuing a petroleum-related interest in relation to that portion of the offshore area, make a new call for bids.

Marginal note:Exception to call for bids — petroleum

• 61 (1) Subject to sections 31 to 40, the Regulator may issue a petroleum-related interest, in relation to any Crown reserve area, without making a call for bids if

  • (a) the portion of the offshore area to which the interest is to apply has, through error or inadvertence, become a Crown reserve area and the interest owner who last held an interest in relation to such portion of the offshore area has, within one year after the time it became a Crown reserve area, requested the Regulator to issue an interest; or

  • (b) the Regulator is issuing the interest to an interest owner in exchange for the surrender by the interest owner, at the request of the Regulator, of any other interest or a share in any other interest, in relation to all or any portion of the offshore area subject to that other interest.

• Marginal note:Notice

  (2) Where the Regulator proposes to issue an interest under subsection (1), the Regulator shall, not later than ninety days before issuing the interest, publish a notice in accordance with section 63 setting out the terms and conditions of the proposed interest.

Marginal note:Failure to comply with call procedures

62 If a petroleum-related interest has been issued, it is not vitiated by reason only of a failure to comply with any of the requirements set out in sections 58 to 61 respecting the form and content of, and time and manner of publishing, any notice required by those sections in relation to that interest.

Marginal note:Manner of publication of notices

63 Any notice required to be published by the Regulator pursuant to subsection 58(1), 59(2) or (4), 61(2) or 68(2) shall be published in the Canada Gazette and in any other publication the Regulator deems appropriate and, notwithstanding those subsections, may contain only a summary of the information required to be published and a statement that the full text thereof is available for inspection by any person on request made to the Regulator.

Marginal note:Regulations

64 Subject to section 7, the Governor in Council may, for the purposes of section 58, make regulations of general application in relation to the offshore area or any portion thereof, or in respect of any particular call for bids, prescribing the terms, conditions and criterion to be specified in a call for bids, the manner in which bids are to be submitted and requiring those terms and conditions and that criterion and manner to be specified in the call.

DIVISION IIIExploration

Exploration Licences

Marginal note:Rights under exploration licences

65 An exploration licence confers, with respect to the portions of the offshore area to which the licence applies,

• (a) the right to explore for, and the exclusive right to drill and test for, petroleum;

• (b) the exclusive right to develop those portions of the offshore area in order to produce petroleum; and

• (c) the exclusive right, subject to compliance with the other provisions of this Part to obtain a production licence.

Marginal note:Shares

66 A share in an exploration licence may, subject to any requirements that may be prescribed, be held with respect to a portion only of the offshore area subject to the exploration licence.

Marginal note:Terms and conditions

• 67 (1) An exploration licence shall contain such terms and conditions as may be prescribed and may contain any other terms and conditions, not inconsistent with this Part or the regulations, as may be agreed on by the Regulator, subject to sections 31 to 40, and the interest owner of the licence.

• Marginal note:Regulations

  (2) Subject to section 7, the Governor in Council may make regulations prescribing terms and conditions required to be included in exploration licences issued in relation to the offshore area or any portion thereof.

Marginal note:Amendment of exploration licence

• 68 (1) The Regulator, subject to sections 31 to 40, and the interest owner of an exploration licence may, by agreement, amend any provision of the exploration licence in any manner not inconsistent with this Part or the regulations and, without limiting the generality of the foregoing, may, subject to subsection (2), amend the licence to include any other portion of the offshore area.

• Marginal note:Exception

  (2) The Regulator shall not amend an exploration licence to include any portion of the offshore area that, immediately prior to the inclusion, was a Crown reserve area unless the Regulator would be able to issue an interest to that interest owner in relation to that area under subsection 61(1) and a notice has been published in accordance with section 63 not later than ninety days before making the amendment, setting out the terms and conditions of the amendment.

• Marginal note:Consolidation of exploration licences

  (3) Subject to sections 31 to 40, the Regulator may, on the application of the interest owners of two or more exploration licences, consolidate those exploration licences into a single exploration licence, subject to any terms and conditions that may be agreed on by the Regulator and those interest owners.

Marginal note:Effective date of exploration licence

• 69 (1) The effective date of an exploration licence is the date specified in the licence as the effective date thereof.

• Marginal note:Non-renewable term of nine years

  (2) Subject to subsection (3) and section 70, the term of an exploration licence shall not exceed nine years from the effective date of the licence and shall not be extended or renewed.

• Marginal note:Exception

  (3) Subject to section 70, the term of an exploration licence entered into or in respect of which negotiations have been completed before December 20, 1985 may be renegotiated once only for a further term not exceeding four years and thereafter the term thereof shall not be renegotiated, extended or renewed.

• Marginal note:Crown reserve areas on expiration of licence

  (4) On the expiration of an exploration licence, the portions of the offshore area to which the exploration licence related and that are not subject to a production licence or a significant discovery licence become Crown reserve areas.

Marginal note:Continuation of exploration licence where drilling commenced

• 70 (1) Where, prior to the expiration of the term of an exploration licence, the drilling of any well has been commenced on any portion of the offshore area to which the exploration licence applies, the exploration licence continues in force while the drilling of that well is being pursued diligently and for so long thereafter as may be necessary to determine the existence of a significant discovery based on the results of that well.

• Marginal note:Deemed pursued diligently

  (2) Where the drilling of a well referred to in subsection (1) is suspended by reason of dangerous or extreme weather conditions or mechanical or other technical problems encountered in the drilling of the well, the drilling of that well shall, for the purposes of subsection (1), be deemed to be being pursued diligently during the period of suspension.

• Marginal note:Drilling of second well deemed commenced

  (3) Where the drilling of a well referred to in subsection (1) cannot be completed for mechanical or other technical problems and if, within ninety days after the cessation of drilling operations with respect to that well, or such longer period as the Regulator determines, the drilling of another well is commenced on any portion of the offshore area that was subject to the exploration licence, the drilling of that other well shall, for the purposes of subsection (1), be deemed to have commenced prior to the expiration of the term of the exploration licence.