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Indian Oil and Gas Regulations (SOR/2019-196)

Regulations are current to 2019-11-19 and last amended on 2019-08-01. Previous Versions

Surface Rights or Interests (continued)

Marginal note:Term

 A surface contract ends on the day on which its surrender has been approved by the Minister, unless the contract provides otherwise.

Marginal note:Renegotiation of rent

  •  (1) Unless a surface lease provides otherwise, the holder must renegotiate the amount of the rent with the Minister, the council and any First Nation member in lawful possession of lands in the lease area at the end of the shorter of

    • (a) every five-year period, and

    • (b) any period fixed by the laws of the relevant province for the renegotiation of surface leases in lands that are not First Nation lands.

  • Marginal note:Amendment of lease

    (2) The Minister must amend the lease to reflect the rent renegotiated under subsection (1) if

    • (a) a written resolution of the council approving the renegotiated rent is submitted along with the written consent of any First Nation member in lawful possession of lands in the lease area; and

    • (b) the Minister determines that the renegotiated rent is fair on the basis of the criteria referred to in paragraph 73(3)(c).

  • Marginal note:Renegotiation breakdown

    (3) If an agreement cannot be reached in renegotiating the rent, the Minister must, at the request of the holder, the council or any First Nation member in lawful possession of lands in the lease area, determine the rent on the basis of the criteria referred to in paragraph 73(3)(c) and amend the lease accordingly.

Marginal note:Abandonment, remediation and reclamation

 If the lands in a surface contract area are no longer used for the uses for which the contract was granted, the holder must abandon any well and facilities in the area and remediate and reclaim those lands.

Royalties

Marginal note:Payment of royalty

  •  (1) Except as otherwise provided in a special agreement entered into under subsection 4(2) of the Act, a subsurface contract holder must pay a royalty, in an amount calculated in accordance with Schedule 5, on the oil and gas recovered from, or attributed to, lands in the subsurface contract area.

  • Marginal note:Index price or actual selling price

    (2) If a special agreement entered into under subsection 4(2) of the Act provides that the royalty on oil or gas is to be calculated using a monthly index price or corporate pool price rather than the actual selling price, the holder must, in the prescribed form, provide the Minister with the index price or corporate pool price for each month in which the oil or gas is produced.

Marginal note:Deadline for payment

 The royalty must be paid on or before the 25th day of the third month after the month in which the oil or gas is produced.

Marginal note:Royalty — every sale

  •  (1) Subject to subsection (2), every sale of oil or gas that is recovered from, or attributed to, lands in a subsurface contract area must include the sale, on behalf of Her Majesty in right of Canada, of any oil or gas that constitutes the royalty payable under the Act.

  • Marginal note:Payment in kind

    (2) After giving the contract holder notice, and having regard to any obligations that the holder may have in respect of the sale of oil or gas, the Minister may, with the prior approval of the council, direct the holder to pay all or part of the royalty in kind for a specified period or until the Minister directs otherwise.

Marginal note:Keeping of information

  •  (1) Any person that produces, sells, acquires or stores oil or gas that has been recovered from First Nation lands, or acquires a right to such oil or gas, must keep, for a period of 10 years, all information that may be used to calculate the royalty owing in respect of that oil and gas, including any information required by this section.

  • Marginal note:Information — royalties

    (2) Any person referred to in subsection (1) must submit the following information to the Minister in the prescribed form as soon as it becomes available:

    • (a) the volume and quality of the oil or gas produced, sold, acquired or stored, or to which a right was acquired, by that person during the month in which the oil or gas was produced;

    • (b) the value for which the oil or gas, or a right to the oil or gas, was sold or acquired;

    • (c) any costs and allowances to be taken into account in determining the royalty payable on the oil or gas; and

    • (d) any other information that is required to calculate or verify the royalty payable.

  • Marginal note:Information — related parties

    (3) The Minister may require a person referred to in subsection (1) to submit information for the purpose of determining whether the parties to a transaction are related parties.

  • Marginal note:Related parties

    (4) For the purpose of subsection (3), persons are related parties if they are related persons, affiliated persons or associated corporations within the meaning of subsection 251(2), section 251.1 and subsection 256(1), respectively, of the Income Tax Act.

Marginal note:Order to submit plan or diagram

  •  (1) For the purpose of verifying the royalty payable under a contract, the Minister may order an operator to submit a plan or diagram, drawn to a specified scale, of any facility that is used by the operator in exploiting oil or gas.

  • Marginal note:Deadline

    (2) An operator that receives an order must submit the requested plan or diagram within 30 days after the day on which the order is received.

Marginal note:Notice to submit documents

  •  (1) For the purpose of verifying the royalty payable under a contract, the Minister may send a notice requiring any person that has sold, purchased or swapped oil or gas recovered from First Nation lands to provide any of the following documents:

    • (a) a signed copy of any written sales contract or, if the contract was unwritten, a document that sets out its terms and conditions;

    • (b) a transaction statement, invoice or other document that sets out the details of the transaction;

    • (c) any agreement between persons respecting the costs and allowances to be taken into account in determining the royalty payable on the oil or gas.

  • Marginal note:Deadline

    (2) A person that receives a notice sent under subsection (1) must submit the requested documents within 14 days after the day on which the notice is received.

First Nation Audits and Examinations

General Rules

Marginal note:Agreement required

  •  (1) A First Nation may conduct an audit or examination for the purpose of verifying the royalties payable on oil or gas recovered from its lands if

    • (a) its council has entered into an audit or examination agreement with the Minister; and

    • (b) the audit or examination is conducted in accordance with the agreement and these Regulations.

  • Marginal note:Procedure to obtain agreement

    (2) A council that has obtained preliminary approval of an audit or examination under section 89 may request that the Minister enter into an audit or examination agreement under section 90.

Marginal note:Qualifications

  •  (1) A person who conducts an audit or examination under the Act must have the credentials and experience required to carry out their role in the audit or examination in accordance with generally accepted auditing standards.

  • Marginal note:Requirements

    (2) A person who conducts an audit or examination under the Act, or accompanies an auditor or examiner,

    • (a) must not be employed by, be affiliated with or represent the oil or gas company that is the subject of the audit or examination;

    • (b) must have the certifications and comply with the occupational health and safety requirements required or imposed by the contract holder or by law; and

    • (c) must keep confidential any documents or information they obtain in connection with the audit or examination and must comply with the security requirements imposed by the contract holder or by law.

Marginal note:Confidentiality — First Nation

  •  (1) A First Nation that conducts an audit or examination must keep confidential any documents or information it obtains in connection with the audit or examination and must comply with the security requirements imposed by the contract holder or by law.

  • Marginal note:Exception

    (2) Despite subsection (1), the council must provide the Minister with a copy of all audit or examination reports and working papers within 30 days after the day on which the audit or examination is completed.

 
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