Canada–Newfoundland and Labrador Offshore Area Petroleum Operations Framework Regulations (SOR/2024-25)

Marginal note:Formation leak-off or integrity test

• 70 (1) An operator must ensure that a formation leak-off test or a formation integrity test is conducted

  • (a) before drilling more than 10 m of new formation below the shoe of any casing other than the conductor casing; and

  • (b) before drilling more than 10 m when sidetracking from the previous casing string.

• Marginal note:Pressure

  (2) The formation leak-off test or formation integrity test must be conducted at a pressure that allows for safe drilling to the next casing depth and for the adequacy of the cement at the level of the shoe to be verified before drilling ahead.

Marginal note:Completion, testing and operation of development wells

• 71 (1) The operator of a development well must ensure that

  • (a) the well is completed, tested and operated in a safe manner that allows for maximum recovery of petroleum without waste or pollution throughout the life cycle of the well;

  • (b) except in the case of commingled production, each completion interval is isolated from any other porous or permeable interval penetrated by the well;

  • (c) if applicable, the production of sand, carbonate or other solids is controlled and does not create a safety hazard or cause waste;

  • (d) the setting depth of each packer is as deep as possible and is such that any leak through the production casing below the packer will be contained by the barrier envelope outside the casing;

  • (e) the formation and any annulus seal can withstand the pressures and temperatures expected throughout the life cycle of the well;

  • (f) if practicable, any mechanical well condition that may have an adverse effect on the production of petroleum from, or the injection of fluids into, the well is corrected;

  • (g) the injection or production profile of the well is improved or the completion interval of the well is changed if it is necessary to do so to prevent waste;

  • (h) if different pressure and inflow characteristics of two or more pools might adversely affect the recovery of petroleum from any of those pools, the well is operated as a single pool well or as a segregated multi-pool well;

  • (i) during completion operations and before the removal of pressure control equipment and handover for operations, all barrier elements are tested to the maximum pressure to which they are anticipated to be subjected and, if possible, pressure testing is in the direction of flow; and

  • (j) following any workover or intervention, any affected barrier elements are pressure-tested.

• Marginal note:Segregated multi-pool well

  (2) If the development well is a segregated multi-pool well, the operator must also ensure that

  • (a) after the well is completed, segregation within and outside the well casing is verified; and

  • (b) if there is reason to doubt that segregation is being maintained, a segregation test is conducted as soon as the circumstances permit.

• Marginal note:Definition of multi-pool well

  (3) In this section, multi-pool well means a well that is completed in more than one pool.

Marginal note:Production tubing

72 An operator must ensure that the production tubing used in a well is designed and maintained to be compatible with the fluids to which it will be exposed, to withstand the maximum conditions, forces and stresses to which it may be subjected and to maximize recovery of petroleum from the pool.

Marginal note:Safe operations and production

73 An operator must ensure that equipment and procedures are in place to recognize and control normal and abnormal operating conditions, for the purposes of allowing for safe and controlled well operations and production and of preventing pollution.

Measurements

Marginal note:Flow and volume

• 74 (1) Subject to subsection (2), an operator must ensure that the following are measured:

  • (a) the rate of flow and the volume of the fluid that is produced from each well;

  • (b) the rate of flow and the volume of the fluid or waste material that is injected into each well; and

  • (c) the volume of the fluid that is produced from each well that is used, flared, vented, burned or otherwise disposed of.

• Marginal note:Alternate measurements

  (2) Alternate measurements may be conducted if approved by the Board under section 14.

• Marginal note:Method

  (3) The operator must ensure that all measurements are conducted using the flow system, flow calculation procedure and flow allocation procedure approved under subsection 14(2).

Marginal note:Allocation of group production

75 An operator must ensure that group production of oil, gas and water from wells and the volume of fluids injected into those wells are allocated on a pro rata basis using the flow system, flow calculation procedure and flow allocation procedure approved under subsection 14(2).

Marginal note:Allocation over multiple pools or zones

• 76 (1) If a well is completed over multiple pools or zones, the operator must ensure that the production of oil, gas and water from the well and the volume of fluids injected into the well are allocated on a pro rata basis to the pools or zones using the flow allocation procedure approved under subsection 14(2).

• Marginal note:Proration tests

  (2) The operator must ensure that sufficient proration tests are conducted to measure the rates at which fluids are produced from the well to ensure that the allocation of oil, gas and water production to the pools and zones as a result of the flow allocation procedure is accurate.

Marginal note:Testing and maintenance

• 77 (1) An operator must ensure that

  • (a) meters and other associated components of the flow system are calibrated and maintained to ensure their accuracy;

  • (b) the equipment used to calibrate the flow system is calibrated in accordance with good measurement practices; and

  • (c) any component of the flow system that may have an impact on the accuracy or integrity of the flow system and that is not functioning in accordance with the manufacturer’s specifications is repaired or replaced without delay or, if it is not possible to do so without delay, corrective measures are taken to minimize the impact on the accuracy and integrity of the flow system while the repair or replacement is in progress.

• Marginal note:Notice

  (2) The operator must ensure that a conservation officer is notified, as soon as the circumstances permit, of any modification to or malfunction or failure of any flow system component that may have an impact on the accuracy of the flow system and of the corrective measures taken.

Marginal note:Calibration

78 An operator must ensure that

• (a) a conservation officer is notified of the calibration of any transfer meter prover or master meter used in conjunction with a transfer meter at least 30 days before the day on which it is calibrated or as agreed to in writing by the Chief Conservation Officer; and

• (b) following completion of the calibration, a copy of the calibration certificate is submitted to the Chief Conservation Officer as soon as the circumstances permit.

Production Conservation

Marginal note:Resource management

79 An operator must, in respect of the recovery of petroleum, ensure that

• (a) recovery from a pool or zone is maximized in accordance with good oilfield practices;

• (b) wells are located and operated to provide for maximum recovery from a pool or zone; and

• (c) if there is reason to believe that infill drilling or the implementation of an enhanced recovery plan might result in increased recovery from a pool or field, studies on those methods are conducted and submitted to the Board.

Marginal note:Commingled production

• 80 (1) It is prohibited for an operator to engage in commingled production unless approved by the Board.

• Marginal note:Approval by the Board

  (2) The Board must approve commingled production if the operator demonstrates that it will maximize the recovery of petroleum.

• Marginal note:Measurement and allocation

  (3) If the operator engages in commingled production, it must ensure that the total volume and the rate of production of each fluid produced is measured and the volume from each pool or zone is allocated in accordance with the requirements set out in sections 74 to 78.

Marginal note:Pilot scheme

• 81 (1) An operator may develop and implement a pilot scheme that applies technology in relation to the commercial production of petroleum from a pool, field or zone that is accessible from a production installation and in relation to which there is an approved development plan for the purpose of obtaining information on reservoir, production or technology performance in order to optimize production performance under the development plan or to determine whether the development plan requires an amendment for production performance to be optimized.

• Marginal note:Duration and interim evaluations

  (2) The Board must establish

  • (a) the duration of the pilot scheme, based on the time required to achieve the stated objectives; and

  • (b) the intervals at which interim evaluations of the pilot scheme are to be conducted and reported to the Board.

• Marginal note:Completion of pilot scheme

  (3) On completion of the pilot scheme, the operator must ensure that any production activities undertaken for the purpose of the scheme are discontinued.

Marginal note:Prohibition against flaring or venting

82 It is prohibited for an operator to flare or vent gas unless

• (a) the Board authorizes flaring or venting as part of the authorization;

• (b) the flaring or venting occurs during a formation flow test approved by the Board under subsection 63(5); or

• (c) it is necessary in order to remediate an emergency situation that may cause serious risk to human health or safety and the Board is notified, as soon as the circumstances permit, of the flaring or venting and of the volume flared or vented.

Marginal note:Venting limit

• 83 (1) An operator must ensure that the volume of gas vented under paragraph 82(a) per installation during a year is not greater than 15 000 standard m³.

• Marginal note:Definition of vented

  (2) For the purpose of subsection (1), vented means emitted in a controlled manner, other than as a result of combustion, from an installation due to

  • (a) the design of equipment or operational procedures at the installation; or

  • (b) the occurrence of an event that pressurizes the gas beyond the capacity of the equipment at the installation to retain the gas.

Marginal note:Gas emissions

• 84 (1) The operator must ensure that the emissions of gas from the seals of a centrifugal compressor or reciprocating compressor at an installation are

  • (a) captured and routed to gas conservation equipment or gas destruction equipment; or

  • (b) routed to vents that release those emissions into the atmosphere.

• Marginal note:Flow rate measurement device

  (2) The operator must ensure that the flow rate of emissions of gas released from vents referred to in paragraph (1)(b) is measured by means of a continuous monitoring device that is

  • (a) calibrated in accordance with the manufacturer’s recommendations such that its measurements have a maximum margin of error of ±10%;

  • (b) operated continuously, other than during periods when it is undergoing normal servicing or timely repairs; and

  • (c) equipped with an alarm that is triggered when the applicable flow rate limit referred to in subsections (3) and (4) for the vents of the compressor is reached.

• Marginal note:Flow rate limit — centrifugal compressor

  (3) The operator must ensure that the flow rate limit of emissions from the vents of a centrifugal compressor on an installation is

  • (a) in the case of a compressor that is installed before January 1, 2023,

    • (i) 0.68 standard m³/min if the compressor has a rated brake power of greater than or equal to 5 MW, and

    • (ii) 0.34 standard m³/min if the compressor has a rated brake power of less than 5 MW; and

  • (b) in the case of a compressor that is installed on or after January 1, 2023, 0.14 standard m³/min.

• Marginal note:Flow rate limit — reciprocating compressor

  (4) The operator must ensure that the flow rate limit of emissions that are from the rod packings and distance pieces of a reciprocating compressor on an installation is

  • (a) if the compressor is installed before January 1, 2023, the product of 0.023 standard m³/min and the number of pressurized cylinders that the compressor has; or

  • (b) if the compressor is installed on or after January 1, 2023, the product of 0.001 standard m³/min and the number of pressurized cylinders that the compressor has.

• Marginal note:Corrective measures

  (5) If the alarm referred to in paragraph (2)(c) is triggered, the operator must ensure that corrective measures are taken as soon as the circumstances permit to reduce the flow rate to below or equal to the applicable flow rate limit.

Marginal note:Prohibition against oil burning

85 It is prohibited for an operator to burn oil unless

• (a) the Board authorizes burning as part of the authorization;

• (b) the burning occurs during a formation flow test approved by the Board under subsection 63(5); or

• (c) it is necessary in order to remediate an emergency situation that may cause serious risk to human health or safety and the Board is notified, as soon as the circumstances permit, of the burning and of the amount burned.

Spill-treating Agent

Marginal note:Determination of net environmental benefit

86 In determining for the purpose of subsection 161.1(3) of the Act whether the use of a spill-treating agent is likely to achieve a net environmental benefit, the Chief Conservation Officer must take into account

• (a) the assessment of the spill-treating agent’s efficacy referred to in paragraph 11(4)(a);

• (b) the results of the analysis referred to in paragraph 11(4)(b);

• (c) the circumstances referred to in paragraph 11(4)(c);

• (d) the methods and protocols referred to in paragraph 11(4)(d);

• (e) the monitoring plan referred to in paragraph 11(4)(f); and

• (f) the results of any small-scale test conducted in respect of the agent.

Marginal note:Small-scale test

• 87 (1) An operator must, in respect of any small-scale test of a spill-treating agent referred to in section 161.1 of the Act, ensure that

  • (a) before the test is conducted, the Chief Conservation Officer approves the carrying out of the test;

  • (b) during the test, the quantity of spill-treating agent applied is measured and recorded, the efficacy of the spill-treating agent is monitored and the factors that affect that efficacy are evaluated; and

  • (c) after the test, the following information is submitted in writing, without delay, to the Chief Conservation Officer:

    • (i) the volume of oil released and the volume treated,

    • (ii) the quantity of spill-treating agent that was used to conduct the test,

    • (iii) the circumstances under which the test was conducted, and

    • (iv) the efficacy of the use of the spill-treating agent.

• Marginal note:Conditions

  (2) The following conditions must be met before a small-scale test is approved:

  • (a) the operator must demonstrate that the quantity of spill-treating agent to be used in the test is the minimum required to evaluate the efficacy of its use; and

  • (b) in the case of a request to conduct an offshore subsurface test, the operator must demonstrate that, due to physical and environmental conditions, a surface test cannot be done or its efficacy cannot be readily determined.

• Marginal note:Net environmental benefit already determined

  (3) No small-scale test is to be approved if the Chief Conservation Officer has made a determination for the purpose of section 161.1 of the Act regarding the net environmental benefit of the use of the spill-treating agent whose efficacy the test is intended to evaluate.

• Marginal note:Oral or written approval

  (4) Approval of a small-scale test may be provided orally or in writing but, if approval is provided orally, the Chief Conservation Officer must, as soon as the circumstances permit, provide to the operator written confirmation of the approval.