North of 60: Report Recommends Two Key Changes to Arctic Oil & Gas Exploration Regime
September 13, 2016
On September 7, 2016, the federal Minister of Indigenous and Northern Affairs released its report on the Canada Petroleum Resources Act and its recommendations for changes. While concluding that industry generally supports the regime under the Act, it did recommend two key changes.
The Act governs the issuance of petroleum rights in the offshore areas north of 60. On November 26, 2015 Indigenous and Northern Affairs Minister Carolyn Bennett confirmed Rowland Harrison QC as the Minister’s Special Representative to conduct a comprehensive review of the Canada Petroleum Resources Act and to engage with stakeholders to determine how the Act can best ensure the responsible development of Canada’s Arctic oil and gas resource opportunities. The Special Representative filed the Review with the Minister on May 30, 2016. The Review concluded that industry generally supports the regime under the Act, but recommended two key changes:
Longer term for offshore exploration licenses. The Act currently restricts exploration licenses held in the Beaufort Sea offshore region to a non-renewable nine year term. As of August 2016, there are 15 such licenses held. Based on stakeholder input and having regard to encouraging offshore exploration in the challenging frontier areas of the north, the review recommended an increase in the term of exploration licenses to 16 years, with a limited authority to extend. The review concludes that failing to do so will discourage future exploration. This extended term should be applied retroactively to the existing exploration licenses to encourage development of existing properties.
Strategic environmental assessment. The review also recommends that the Minister complete and consider a strategic environmental assessment covering the area in which bids for licenses are contemplated before the federal government issues a call to industry for bids to lease the relevant lands.
Please contact your McInnes Cooper lawyer or any member of the Oil and Gas Team @ McInnes Cooper to discuss this topic or any other legal issue.
McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.
© McInnes Cooper, 2016. All rights reserved. McInnes Cooper owns the copyright in this document. You may reproduce and distribute this document in its entirety as long as you do not alter the form or the content and you give McInnes Cooper credit for it. You must obtain McInnes Cooper’s consent for any other form of reproduction or distribution. Email us at [email protected] to request our consent.
- Share with others
- Stay informed with our legal updates by subscribing.