Canada Petroleum Resources Act (R.S.C., 1985, c. 36 (2nd Supp.))

Marginal note:Amendment 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.

• Marginal note:Exception

  (2) 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.

• Marginal note:Consolidation of exploration licences

  (3) 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.

Marginal note:Effective 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.

• Marginal note:Non-renewable term of nine years

  (2) 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.

• Marginal note:Exception

  (3) 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.

• Marginal note:Regulations prescribing areas

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

• Marginal note:Extension of exploration licences in prescribed areas

  (5) 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).

• Marginal note:Crown reserve lands on expiration of licence

  (6) 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.

Marginal note:Continuation 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.

• 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 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.

Significant Discoveries

Marginal note:Application 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.

• Marginal note:Declaration on initiative of Commission of the Canadian Energy Regulator

  (2) 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.

• Marginal note:Description of frontier lands subject to declaration

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

• Marginal note:Amendment or revocation of declaration

  (4) 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,

  • (a) amend the declaration of significant discovery by increasing or decreasing the significant discovery area; or

  • (b) revoke the declaration.

• Marginal note:Idem

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

  • (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

  • (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.

• Marginal note:Notice

  (6) 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.

• Marginal note:Procedures

  (7) 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.

• Marginal note:Delegation

  (8) 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.

Significant Discovery Licences

Marginal note:Rights under significant discovery licence

29 A significant discovery licence confers, with respect to the frontier lands 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 frontier lands in order to produce petroleum; and

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

Marginal note:Significant 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.

• Marginal note:Significant discovery licence in relation to Crown reserve lands

  (2) 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.

• Marginal note:Terms and conditions of significant discovery licence

  (3) 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.

Marginal note:Reduction 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.

• Marginal note:Increase in lands subject to significant discovery licence

  (2) 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.

Marginal note:Exploration 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.

• Marginal note:Effective date of significant discovery licence

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

• Marginal note:Term of significant discovery licence

  (3) 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.

• Marginal note:Crown reserve lands on expiration of licence

  (4) 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.

Drilling Orders

Marginal note:Drilling 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.

• Marginal note:Exception

  (2) 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.

• Marginal note:Condition

  (3) 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.

• Marginal note:Idem

  (4) 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.

• Marginal note:Definition of well termination date

  (5) 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.