Canada Petroleum Resources Act

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Sections640

• 1Short title

  This Act may be cited as the Canada Petroleum Resources Act.

• 2Definitions

  In this Act,

• 2[p2]

  call for bids means a call for bids made in accordance with section 14; (appel d’offres)

• 2[p3]

  commercial discovery means a discovery of petroleum that has been demonstrated to contain petroleum reserves that justify the investment of capital and effort to bring the discovery to production; (découverte exploitable)

• 2[p4]

  commercial discovery area means, in relation to a declaration of commercial discovery made pursuant to subsection 35(1) or (2), those frontier lands described in the declaration; (périmètre de découverte exploitable)

• 2[p5]

  Crown reserve lands means frontier lands in respect of which no interest is in force; (réserves de l’État)

• 2[p6]

  former exploration agreement means an exploration agreement under the Canada Oil and Gas Land Regulations; (ancien accord d’exploration)

• 2[p7]

  former lease means an oil and gas lease under the Canada Oil and Gas Land Regulations; (ancienne concession)

• 2[p8]

  former permit means an exploratory permit under the Canada Oil and Gas Land Regulations; (ancien permis)

• 2[p9]

  former special renewal permit means a special renewal permit under the Canada Oil and Gas Land Regulations; (ancien permis spécial de renouvellement)

• 2[p10]

  frontier lands means lands that belong to Her Majesty in right of Canada, or in respect of which Her Majesty in right of Canada has the right to dispose of or exploit the natural resources, and that are situated in but does not include the adjoining area, as defined in section 2 of the Yukon Act; (terres domaniales)

• 2[p10](a)

  that part of the onshore that is under the administration of a federal minister,

• 2[p10](b)

  Nunavut,

• 2[p10](c)

  Sable Island,

• 2[p10](d)

  the submarine areas in that part — of the internal waters of Canada or the territorial sea of Canada — that is not situated

• 2[p10](d)(i)

  in a province other than the Northwest Territories, or

• 2[p10](d)(ii)

  in that part of the onshore that is not under the administration of a federal minister, or

• 2[p10](e)

  the continental shelf of Canada,

• 2[p18]

  gas means natural gas and includes all substances, other than oil, that are produced in association with natural gas; (gaz)

• 2[p19]

  holder or interest holder means, in respect of an interest or a share therein, the person indicated, in the register maintained pursuant to Part VIII, as the holder of the interest or the share;

• 2[p20]

  interest means any former exploration agreement, former lease, former permit, former special renewal permit, exploration licence, production licence or significant discovery licence; (titre)

• 2[p21]

  interest owner means the interest holder who holds an interest or the group of interest holders who hold all of the shares in an interest;

• 2[p22]

  Minister means

• 2[p22](a)

  in relation to any lands in respect of which the Minister of Natural Resources has administrative responsibility for the natural resources therein, the Minister of Natural Resources, and

• 2[p22](b)

  in relation to any lands in respect of which the Minister of Northern Affairs has administrative responsibility for the natural resources therein, the Minister of Northern Affairs; (ministre)

• 2[p25]

  oil means

• 2[p25](a)

  crude oil, regardless of gravity, produced at a well head in liquid form, and

• 2[p25](b)

  any other hydrocarbons, except coal and gas, and, without limiting the generality of the foregoing, hydrocarbons that may be extracted or recovered from deposits of oil sand, bitumen, bituminous sand, oil shale or from any other types of deposits on the surface or subsurface or the seabed or its subsoil of any frontier lands; (pétrole)

• 2[p28]

  onshore has the same meaning as in section 2 of the Northwest Territories Act; (région intracôtière)

• 2[p29]

  petroleum means oil or gas; (hydrocarbures)

• 2[p30]

  prescribed means

• 2[p30](a)

  in the case of a form or the information to be given on a form, prescribed by the Minister, and

• 2[p30](b)

  in any other case, prescribed by regulations made by the Governor in Council;

• 2[p33]

  share means, with respect to an interest, an undivided share in the interest or a share in the interest held in accordance with section 23; (fraction)

• 2[p34]

  significant discovery means a discovery indicated by the first well on a geological feature that demonstrates by flow testing the existence of hydrocarbons in that feature and, having regard to geological and engineering factors, suggests the existence of an accumulation of hydrocarbons that has potential for sustained production; (découverte importante)

• 2[p35]

  significant discovery area means, in relation to a declaration of significant discovery made pursuant to subsection 28(1) or (2), those frontier lands described in the declaration. (périmètre de découverte importante)

• 3Repealed

  [Repealed, 2024, c. 30, s. 7]

• 4Giving notice

  Where a notice is required to be given under this Act or the regulations, it shall be given in such form and manner as may be prescribed and shall contain such information as may be prescribed.

• 5Application

  This Act applies to all frontier lands.

• 6Binding on Her Majesty

  This Act is binding on Her Majesty in right of Canada or a province.

• 7Delegation

  The Minister may designate any person to exercise the powers and perform the duties and functions under this Act that are specified in the designation and on that designation that person may exercise those powers and shall perform those duties and functions subject to such terms and conditions, if any, as are specified in the designation.

• 8Advisory bodies
• 8(1)

  The Minister may from time to time appoint and fix the terms of reference of such advisory bodies as the Minister considers appropriate to advise the Minister with respect to such matters relating to the administration or operation of this Act or the Canada Oil and Gas Operations Act as are referred to them by the Minister.

• 8(2)Remuneration

  The members of any advisory body appointed under subsection (1) may be paid for their services such remuneration and expenses as are fixed by the Governor in Council.

• 9Appointment of representative
• 9(1)

  Where an interest owner consists of two or more holders, those holders shall, in the manner prescribed, appoint one of their number to act as representative of the interest owner for the purposes of this Act, but the holders may, with the consent of the Minister, appoint different representatives for different purposes.

• 9(2)Designation of representative

  In the event that an interest owner consisting of two or more holders fails to appoint a representative for any of the purposes of this Act, the Minister may designate one of those holders as the representative of the interest owner for those purposes.

• 9(3)Acts or omissions of representative binding

  An interest owner is bound by the acts or omissions of the appointed or designated representative of that interest owner with respect to any matter to which the authority of the representative extends.

• 9(4)Duties of representative

  A representative of an interest owner appointed or designated under this section shall perform the duties in respect of the purposes for which he has been appointed or designated, and any operating agreement or other similar arrangement in force in respect of the relevant interest of that interest owner stands varied or amended to the extent necessary to give effect to this subsection.

• 10No issuance of interests in respect of certain lands
• 10(1)

  The Governor in Council may, by order, for such purposes and under such conditions as may be set out in the order, prohibit the issuance of interests in respect of such frontier lands as are specified in the order.

• 10(2)Presumption

  Where any frontier lands are, pursuant to the Territorial Lands Act, withdrawn from disposition or set apart and appropriated for any purposes and under any conditions, the issuance of interests in relation to such lands is deemed to be prohibited pursuant to subsection (1) for those purposes and under those conditions.

• 11Surrender of interests
• 11(1)

  An interest owner may, in the manner prescribed and subject to any requirements that may be prescribed respecting the minimum geographical area to which an interest may relate, surrender an interest in respect of all or any portion of the frontier lands subject to the interest.

• 11(2)Debts due to Her Majesty not affected

  Any liability of an interest owner or interest holder to Her Majesty in right of Canada, either direct or by way of indemnity, that exists at the time of any surrender under subsection (1) is not affected by the surrender.

• 12Orders to prohibit activities in certain circumstances
• 12(1)

  The Governor in Council may, by order, prohibit any interest owner or any other person from commencing or continuing any work or activity authorized under the Canada Oil and Gas Operations Act on the frontier lands, or any portion of them, if the Governor in Council considers that it is in the national interest to do so or that it is necessary in any of the following circumstances:

• 12(1)(a)

  a disagreement with any government concerning the location of an international boundary;

• 12(1)(b)

  an environmental or social problem of a serious nature;

• 12(1)(c)

  dangerous or extreme weather conditions affecting the health or safety of people or the safety of equipment; or

• 12(1)(d)

  the designation of a marine protected area under subsection 35(3) or 35.1(2) of the Oceans Act.

• 12(2)Suspension of requirements in relation to interest

  Where, by reason of an order made under subsection (1), any requirement in relation to an interest cannot be complied with while the order is in force, compliance with the requirement is suspended until the order is revoked.

• 12(3)Extension of term of interest

  Notwithstanding any other provision in this Act, the term of an interest that is subject to an order under subsection (1) and the period provided for compliance with any requirement in relation to the interest are extended for a period equal to the period that the order is in force.

• 12(4)Relieving authority not affected

  Nothing in this section affects the authority of the Minister to relieve a person from any requirement in relation to an interest or under this Act or the regulations.

• 12.1Negotiations for compensation
• 12.1(1)

  The Minister may enter into negotiations with an interest owner, in respect of all or any portion of the frontier lands subject to the interest, for a determination of any compensation that may be granted to the interest owner for the surrender of the interest to Her Majesty in right of Canada, if

• 12.1(1)(a)

  the interest is located in a marine protected area that is designated under the Oceans Act or in an area of the sea that, in the opinion of the Minister of Fisheries and Oceans, may be designated as a marine protected area under that Act; and

• 12.1(1)(b)

  the Minister of Fisheries and Oceans recommends that the interest be cancelled to give effect to the purpose of the designation or proposed designation of the marine protected area under section 35 of the Oceans Act.

• 12.1(2)Notice

  For the purposes of subsection (1), the Minister shall send a notice to the interest owner informing the interest owner of the Minister’s intent to enter into negotiations with the interest owner within the period specified in the notice.

• 12.1(3)Power to cancel

  The Minister may, by order, cancel the interest in respect of all or any portion of the frontier lands, if

• 12.1(3)(a)

  the interest owner did not enter into negotiations with the Minister within the period specified in the notice sent to the interest owner;

• 12.1(3)(b)

  in the opinion of the Minister, the compensation to be granted to the interest owner for the surrender of the interest has not been determined during the negotiations within a reasonable time; or

• 12.1(3)(c)

  in the opinion of the Minister, the negotiations do not result in the surrender of the interest by the interest owner within a reasonable time even though the compensation to be granted to the interest owner has been determined during the negotiations.

• 12.1(4)Amount of compensation

  The Minister shall, in the order, specify the amount of the compensation to be granted to the interest owner in respect of the cancellation of the interest.

• 12.1(5)Interest becomes reserve lands

  If the interest referred to in subsection (1) is surrendered or cancelled in respect of all or any portion of the frontier lands, the lands or portions of lands that are subject to the interest become Crown reserve lands.

• 12.1(6)Return of deposit

  If the interest referred to in subsection (1) is surrendered or cancelled, any deposit balance with respect to the interest held by Her Majesty in right of Canada on behalf of the interest owner shall be returned to the interest owner, less any liability, either direct or by way of indemnity, owed by the interest owner to Her Majesty in right of Canada at the time of the surrender or cancellation.

• 12.2Compensation — surrender
• 12.2(1)

  If the interest owner surrenders an interest referred to in subsection 12.1(1), Her Majesty in right of Canada may grant any compensation that is determined by negotiations with the Minister.

• 12.2(2)Compensation — cancellation

  If the Minister cancels an interest referred to in subsection 12.1(1), Her Majesty in right of Canada may grant to the interest owner the compensation that is specified in an order made by the Minister under subsection 12.1(3), subject to section 106 in respect of the amount of that compensation.

• 12.2(3)No compensation

  A person shall not have any right to claim or receive any compensation, damages, indemnity or other form of relief from Her Majesty in right of Canada or from any servant or agent or mandatary of Her Majesty in right of Canada for any acquired, vested, future or potential right or entitlement that is affected by a surrender or cancellation of an interest referred to in subsection 12.1(1), other than compensation that may be granted to an interest owner under this section.

• 13Authority to issue interests
• 13(1)

  The Minister may issue interests in respect of any frontier lands in accordance with this Act and the regulations.

• 13(2)Application of interest may be limited

  Subject to subsection (3), the application of any interest may be restricted to such geological formations and to such substances as may be specified in the interest.

• 13(3)Non-retrospective effect of subsection (2)

  Subsection (2) does not apply to any interest

• 13(3)(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 frontier lands; or

• 13(3)(b)

  that immediately succeeds an interest referred to in paragraph (a) in relation to those lands where those lands were not Crown reserve lands on the expiration of the interest referred to in paragraph (a).

• 14Calls for bids
• 14(1)

  Subject to section 17, the Minister shall not issue an interest in relation to Crown reserve lands unless

• 14(1)(a)

  prior thereto, the Minister has made a call for bids in relation to those Crown reserve lands by publishing a notice in accordance with this section and section 19; and

• 14(1)(b)

  the interest is issued to the person who submitted, in response to the call, the bid selected by the Minister in accordance with subsection 15(1).

• 14(2)Requests for postings of frontier lands

  Any request received by the Minister to make a call for bids in relation to particular frontier lands shall be considered by the Minister in selecting the frontier lands to be specified in a call for bids.

• 14(3)Contents of call

  A call for bids shall specify

• 14(3)(a)

  the interest to be issued and the frontier lands to which the interest is to apply;

• 14(3)(b)

  where applicable, the geological formations and substances to which the interest is to apply;

• 14(3)(c)

  the other terms and conditions subject to which the interest is to be issued;

• 14(3)(d)

  any terms and conditions that a bid must satisfy to be considered by the Minister;

• 14(3)(e)

  the form and manner in which a bid is to be submitted;

• 14(3)(f)

  subject to subsection (4), the closing date for the submission of bids; and

• 14(3)(g)

  the sole criterion that the Minister will apply in assessing bids submitted in response to the call.

• 14(4)Time of publishing call

  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.

• 15Selection of bid
• 15(1)

  A bid submitted in response to a call for bids shall not be selected unless

• 15(1)(a)

  the bid satisfies the terms and conditions and is submitted in the form and manner specified in the call; and

• 15(1)(b)

  the selection is made on the basis of the criterion specified in the call.

• 15(2)Publication of bid selected

  Where the Minister selects a bid submitted in response to a call for bids, the Minister shall publish a notice in accordance with section 19 setting out the terms and conditions of that bid.

• 15(3)Interest to be consistent with bid

  Where an 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.

• 15(4)Publication of terms and conditions of interest

  The Minister shall publish a notice in accordance with section 19 setting out the terms and conditions of any interest issued as a result of a call for bids as soon as practicable after the issuance thereof.

• 16Issuance of interest not required
• 16(1)

  The Minister is not required to issue an interest as a result of a call for bids.

• 16(2)New call required

  Subject to section 17, where the Minister has not issued an interest with respect to a particular portion of the frontier lands specified in a call for bids within six months after the closing date specified in the call for the submission of bids, the Minister shall, before issuing an interest in relation to that portion of the frontier lands, make a new call for bids.

• 17Exception to call for bids
• 17(1)

  The Minister may issue an interest, in relation to any Crown reserve lands, without making a call for bids where

• 17(1)(a)

  the frontier lands to which the interest is to apply have, through error or inadvertence, become Crown reserve lands and the interest owner who last held an interest in relation to such lands has, within one year after the time they so became Crown reserve lands, requested the Minister to issue an interest; or

• 17(1)(b)

  the Minister is issuing the interest to an interest owner in exchange for the surrender by the interest owner, at the request of the Minister, of any other interest or a share in any other interest, in relation to all or any portion of the frontier lands subject to that other interest.

• 17(2)Notice

  Where the Minister proposes to issue an interest under subsection (1), he shall, not later than ninety days before issuing the interest, publish a notice in accordance with section 19 setting out the terms and conditions of the proposed interest.

• 18Interest not vitiated by failure to comply with call procedures

  Where an 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 14 to 17 respecting the form and content of, and time and manner of publishing, any notice required by those sections in relation to that interest.

• 19Manner of publication of notices

  Any notice required to be published by the Minister pursuant to subsection 14(1), 15(2) or (4), 17(2) or 25(2) shall be published in the Canada Gazette and in any other publication the Minister 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 Minister.

• 20Regulations

  The Governor in Council may, for the purposes of section 14, make regulations of general application in relation to all frontier lands 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.

• 21Benefits plan

  No work or activity on any frontier lands that are subject to an interest shall be commenced until the Minister has approved, or waived the requirement of approval of, a benefits plan in respect of the work or activity pursuant to subsection 5.2(2) of the Canada Oil and Gas Operations Act.

• 22Rights under exploration licences

  An exploration licence confers, with respect to the frontier lands to which the licence applies,

• 22(a)

  the right to explore for, and the exclusive right to drill and test for, petroleum;

• 22(b)

  the exclusive right to develop those frontier lands in order to produce petroleum; and

• 22(c)

  the exclusive right, subject to compliance with the other provisions of this Act, to obtain a production licence.

• 23Shares

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

• 24Terms and conditions
• 24(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 Act or the regulations, as may be agreed on by the Minister and the interest owner of the licence.

• 24(2)Regulations

  The Governor in Council may make regulations prescribing terms and conditions required to be included in exploration licences issued in relation to all frontier lands or any portion thereof.

• 25Amendment of exploration licence
• 25(1)

  The Minister 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 Act or the regulations and, without limiting the generality of the foregoing, may, subject to subsection (2), amend the licence to include any other frontier lands.

• 25(2)Exception

  The Minister shall not amend an exploration licence to include frontier lands that, immediately prior to the inclusion, were Crown reserve lands unless the Minister would be able to issue an interest to that interest owner in relation to those lands under subsection 17(1) and a notice has been published in accordance with section 19 not later than ninety days before making the amendment, setting out the terms and conditions of the amendment.

• 25(3)Consolidation of exploration licences

  The Minister 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 Minister and those interest owners.

• 26Effective date of exploration licence
• 26(1)

  The effective date of an exploration licence is the date specified in the licence as the effective date thereof.

• 26(2)Non-renewable term of nine years

  Subject to subsection (3) and section 27, 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.

• 26(3)Exception

  Subject to subsection (5) and section 27, 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.

• 26(4)Regulations prescribing areas

  The Governor in Council may make regulations prescribing areas in respect of which the Minister may make an order pursuant to subsection (5).

• 26(5)Extension of exploration licences in prescribed areas

  The Minister may, subject to such terms and conditions as the Minister deems appropriate, extend the term of an exploration licence in relation to any frontier lands within a prescribed area that has been renegotiated under subsection (3).

• 26(6)Crown reserve lands on expiration of licence

  On the expiration of an exploration licence, any frontier lands to which the exploration licence related and that are not subject to a production licence or a significant discovery licence become Crown reserve lands.

• 27Continuation of exploration licence where drilling commenced
• 27(1)

  Where, prior to the expiration of the term of an exploration licence, the drilling of any well has been commenced on any frontier lands 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.

• 27(2)Deemed pursued diligently

  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.

• 27(3)Drilling of second well deemed commenced

  Where the drilling of a well referred to in subsection (1) cannot be completed by reason of 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 Minister determines, the drilling of another well is commenced on any frontier lands that were 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.

• 28Application for declaration of significant discovery
• 28(1)

  Where a significant discovery has been made on any frontier lands that are subject to an interest or a share therein held in accordance with section 23, the Commission of the Canadian Energy Regulator shall, on the application of the interest holder of the interest or the share made in the form and manner and containing such information as may be prescribed, make a written declaration of significant discovery in relation to those frontier lands in respect of which there are reasonable grounds to believe that the significant discovery may extend.

• 28(2)Declaration on initiative of Commission of the Canadian Energy Regulator

  Where a significant discovery has been made on any frontier lands, the Commission of the Canadian Energy Regulator may, by order, make a declaration of significant discovery in relation to those frontier lands in respect of which there are reasonable grounds to believe the significant discovery may extend.

• 28(3)Description of frontier lands subject to declaration

  A declaration made pursuant to subsection (1) or (2) shall describe the frontier lands to which the declaration applies.

• 28(4)Amendment or revocation of declaration

  Subject to subsection (5), where a declaration of significant discovery is made pursuant to subsection (1) or (2) and, based on the results of further drilling, there are reasonable grounds to believe that a discovery is not a significant discovery or that the frontier lands to which the significant discovery extends differ from the significant discovery area, the Commission of the Canadian Energy Regulator may, as appropriate in the circumstances,

• 28(4)(a)

  amend the declaration of significant discovery by increasing or decreasing the significant discovery area; or

• 28(4)(b)

  revoke the declaration.

• 28(5)Idem

  A declaration of significant discovery shall not be amended to decrease the significant discovery area or revoked earlier than

• 28(5)(a)

  in the case of a significant discovery area that is subject to a significant discovery licence issued pursuant to subsection 30(1), the date on which the exploration licence referred to in that subsection expires; and

• 28(5)(b)

  in the case of a significant discovery area that is subject to a significant discovery licence issued pursuant to subsection 30(2), three years after the effective date of the significant discovery licence.

• 28(6)Notice

  A copy of a declaration of significant discovery and of any amendment or revocation thereof made under this section in relation to any frontier lands subject to an interest shall be sent by registered mail to the interest owner of that interest.

• 28(7)Procedures

  The procedures described in section 382 of the Canadian Energy Regulator Act apply to the making, amendment and revocation of a declaration under this section.

• 28(8)Delegation

  The Commission of the Canadian Energy Regulator may delegate any of its powers under this section to a member, officer or employee of the Commission, who shall exercise the powers in accordance with the terms of the delegation.

• 29Rights under significant discovery licence

  A significant discovery licence confers, with respect to the frontier lands to which the licence applies,

• 29(a)

  the right to explore for, and the exclusive right to drill and test for, petroleum;

• 29(b)

  the exclusive right to develop those frontier lands in order to produce petroleum; and

• 29(c)

  the exclusive right, subject to compliance with the other provisions of this Act, to obtain a production licence.

• 30Significant discovery licence in relation to lands subject to exploration licences
• 30(1)

  Where a declaration of significant discovery is in force and all or a portion of the significant discovery area is subject to an exploration licence or a share therein held in accordance with section 23, the Minister shall, on the application of the interest holder of the exploration licence or the share made in the form and manner and containing such information as may be prescribed, issue to the interest holder a significant discovery licence in respect of all portions of the significant discovery area that are subject to the exploration licence or the share.

• 30(2)Significant discovery licence in relation to Crown reserve lands

  Where a declaration of significant discovery is in force and the significant discovery area extends to Crown reserve lands, the Minister may, after making a call for bids in relation to those Crown reserve lands or any portion thereof and selecting a bid submitted in response to the call in accordance with subsection 15(1), issue a significant discovery licence to the person who submitted that bid in relation to the Crown reserve lands specified in the call.

• 30(3)Terms and conditions of significant discovery licence

  A significant discovery licence shall be in the form prescribed and may contain any other terms and conditions, not inconsistent with this Act or the regulations, as may be agreed on by the Minister and the interest owner of the significant discovery licence.

• 31Reduction of lands subject to significant discovery licence
• 31(1)

  Where a significant discovery area in relation to a declaration of significant discovery is decreased pursuant to an amendment made under subsection 28(4), any significant discovery licence that was issued on the basis of that declaration shall be amended by decreasing accordingly the frontier lands subject to that licence.

• 31(2)Increase in lands subject to significant discovery licence

  Where a significant discovery area in relation to a declaration of significant discovery is increased pursuant to an amendment made under subsection 28(4), any significant discovery licence that was issued on the basis of that declaration shall be amended to include all portions of the amended significant discovery area that are subject to any exploration licence held by the interest owner of that significant discovery licence at the time the significant discovery area is so increased.

• 32Exploration licence ceases to have effect
• 32(1)

  On the issuance of a significant discovery licence pursuant to subsection 30(1) with respect to a significant discovery area, any exploration licence ceases to have effect in relation to that significant discovery area.

• 32(2)Effective date of significant discovery licence

  The effective date of a significant discovery licence is the date of application for the licence.

• 32(3)Term of significant discovery licence

  Subject to subsection 42(1), a significant discovery licence continues in force, in relation to each portion of the frontier lands to which the licence applies, during such period as the declaration of significant discovery on the basis of which the licence was issued remains in force in relation to that portion.

• 32(4)Crown reserve lands on expiration of licence

  On the expiration of a significant discovery licence, any frontier lands to which the significant discovery licence related and that are not subject to a production licence become Crown reserve lands.

• 33Drilling orders
• 33(1)

  Subject to subsections (2) to (4), the Minister may, at any time after the Commission of the Canadian Energy Regulator has made a declaration of significant discovery, by order subject to section 106, require the interest owner of any interest in relation to any portion of the significant discovery area to drill a well on any portion of the significant discovery area that is subject to that interest, in accordance with any directions that may be set out in the order, and to commence the drilling within one year after the making of the order or within any longer period that the Minister specifies in the order.

• 33(2)Exception

  No order may be made under subsection (1) with respect to any interest owner who has completed a well on the relevant frontier lands within six months after the completion of that well.

• 33(3)Condition

  No order may be made under subsection (1) within the three years immediately following the well termination date of the well indicating the relevant significant discovery.

• 33(4)Idem

  No order made under subsection (1) may require an interest owner to drill more than one well at a time on the relevant frontier lands.

• 33(5)Definition of well termination date

  For the purposes of subsection (3), well termination date means the date on which a well has been abandoned, completed or suspended in accordance with any applicable drilling regulations.

• 34Information may be disclosed
• 34(1)

  The Minister may, notwithstanding section 101, provide information or documentation relating to a significant discovery to any interest owner who requires such information or documentation to assist the interest owner in complying with an order made under subsection 33(1).

• 34(2)Idem

  An interest owner shall not disclose any information or documentation provided to that interest owner under subsection (1) except to the extent necessary to enable the interest owner to comply with an order made under subsection 33(1).

• 35Application for declaration of commercial discovery
• 35(1)

  Where a commercial discovery has been made on any frontier lands that are subject to an interest or a share therein held in accordance with section 23, the Commission of the Canadian Energy Regulator shall, on the application of the interest holder of the interest or the share, made in the form and manner and containing such information as may be prescribed, make a written declaration of commercial discovery in relation to those frontier lands in respect of which there are reasonable grounds to believe that the commercial discovery may extend.

• 35(2)Declaration on initiative of Commission of the Canadian Energy Regulator

  Where a commercial discovery has been made on any frontier lands, the Commission of the Canadian Energy Regulator may, by order, make a declaration of commercial discovery in relation to those frontier lands in respect of which there are reasonable grounds to believe that the commercial discovery may extend.

• 35(3)Application of certain provisions

  Subsections 28(3) to (6) apply, with any modifications that the circumstances require, with respect to a declaration made under subsection (1) or (2).

• 35(4)Procedures

  The procedures described in section 382 of the Canadian Energy Regulator Act apply to the making, amendment or revocation of a declaration under this section.

• 35(5)Delegation

  The Commission of the Canadian Energy Regulator may delegate any of its powers under this section to a member, officer or employee of the Commission, who shall exercise the powers in accordance with the terms of the delegation.

• 36Notice of order to reduce term of interest
• 36(1)

  The Minister may, at any time after the Commission of the Canadian Energy Regulator has made a declaration of commercial discovery, give notice to the interest owner of any interest in relation to any portion of the commercial discovery area where commercial production of petroleum has not commenced before that time stating that, after any period of not less than six months that may be specified in the notice, an order may be made reducing the term of that interest.

• 36(2)Opportunity for submissions

  During the period specified in a notice sent to an interest owner under subsection (1), the Minister shall provide a reasonable opportunity for the interest owner to make such submissions as the interest owner considers relevant to determining whether the Minister should make an order reducing the term of the relevant interest.

• 36(3)Order reducing term of interest

  Notwithstanding any other provision of this Act, where the Minister is of the opinion that it is in the public interest, he may, at any time not later than six months after the expiration of the period specified in a notice in respect of an interest sent under subsection (1), by order subject to section 106, reduce the term of the interest to three years after the date the order is made or such longer period as may be specified in the order.

• 36(4)All interests cease

  Notwithstanding any other provision of this Act but subject to subsections (5) and (6), where an order is made under subsection (3), any interest in respect of frontier lands within the area to which the interest that is the subject of the order applied on the date the order was made ceases to have effect at the end of the period specified in the order.

• 36(5)Order ceases to have effect where production commences

  Where commercial production of petroleum on any portion of the frontier lands referred to in subsection (4) commences before the expiration of the period specified in an order made under subsection (3) or the period extended pursuant to subsection (6), the order ceases to have effect and is deemed to have been vacated.

• 36(6)Extension of period

  The Minister may extend the period specified in an order made under subsection (3) or may revoke the order.

• 37Rights under production licence
• 37(1)

  A production licence confers, with respect to the frontier lands to which the licence applies,

• 37(1)(a)

  the right to explore for, and the exclusive right to drill and test for, petroleum;

• 37(1)(b)

  the exclusive right to develop those frontier lands in order to produce petroleum;

• 37(1)(c)

  the exclusive right to produce petroleum from those frontier lands; and

• 37(1)(d)

  title to the petroleum so produced.

• 37(2)Exception

  Notwithstanding subsection (1), the Minister may, subject to such terms and conditions as the Minister deems appropriate, authorize any interest holder of an interest or a share therein to produce petroleum on the frontier lands subject to the interest or share for use in the exploration or drilling for or development of petroleum on any frontier lands.