This consolidation is unofficial and is for reference only. For the official version of the regulations, consult the original documents on file with the Registry of Regulations, or refer to the Royal Gazette Part II. Regulations are amended frequently. Please check the list of Regulations by Act to see if there are any recent amendments to these regulations filed with the Registry that are not yet included in this consolidation. Although every effort has been made to ensure the accuracy of this electronic version, the Registry of Regulations assumes no responsibility for any discrepancies that may have resulted from reformatting. This electronic version is for your personal use and may not be copied for the purposes of resale in this or any other form.
Petroleum Resources Regulations
made under Section 27 of the
Petroleum Resources Act
R.S.N.S. 1989, c. 342
O.I.C. 85-1180 (October 29, 1985), N.S. Reg. 178/85
as amended up to O.I.C. 2008-176 (March 31, 2008, effective April 1, 2008), N.S. Reg. 205/2008
1 These regulations may be cited as the Petroleum Resources Regulations.
Definitions
2 (1) In these regulations
(a) “Act” means the Petroleum Resources Act;
(b) “agreement holder” means, collectively, the interest holders in an exploration agreement;
(c) “delineation well” means a well that, in the opinion of the Minister, is located in such a manner that there is a reasonable expectation that it will intersect another portion of a petroleum accumulation penetrated by a prior well drilled in the geologic structure;
(d) “development well” means a well that, in the opinion of Minister, is located in relation to another well or wells for the purpose of production, or observation, or for the injection or disposal of fluid into or from an accumulation of petroleum;
(e) “emergency conditions” means circumstances which may constitute a hazard to life or property, or which may result in personal injury or damage to the environment;
(f) “exploration agreement” means an agreement entered into pursuant to Section 14 of the Act to explore for petroleum and includes an agreement entered into pursuant to Section 16 of the Act to explore for coal gas;
(g) “exploration well” means a well that is drilled to a depth greater than ninety meters for the purpose of petroleum exploration;
(h) “interest holder” means any person or partnership, as defined in the Partnerships and Business Names Registration Act, having an interest pursuant to any right;
(i) “lands” means Nova Scotia lands to which the Act applies;
(j) “lease” means a production lease granted pursuant to the Act and includes a coal gas production agreement;
(k) “lessee” means a holder of a lease whether or not production has commenced;
(l) “licensee” means a holder of an exploration license;
(m) “production facilities” means production equipment at a field site and includes separating, treating, processing and support facilities;
(n) “representative” means a person designated pursuant to Section 3;
(o) “right holder” means, collectively, the interest holders in a right.
Subsection 2(1) replaced: O.I.C. 93-330, N.S. Reg. 61/93.
(2) The definitions contained in the Act apply to these regulations except where the context otherwise requires.
Part I
General
3 (1) Every right holder shall designate a representative acceptable to the Minister.
(2) A designated representative shall have sole responsibility on behalf of the right holder for
(a) corresponding with the Minister and the Department of Natural Resources;
(b) the payment of any monies payable on behalf of the right holder to the Province;
(c) the distribution of any monies refunded by the Province to the right holder;
(d) renegotiation of an exploration agreement, for surrender of lands, and any other obligation under an agreement on behalf of the agreement holder; and
(e) such other duties as may be specified in the right.
(3) In the event that a right holder fails to appoint a representative, the Minister may designate one of the interest holders as the representative.
(4) A right holder and any interest holder shall be jointly and severally liable for the acts or omissions of the appointed or designated representative with respect to any matter to which the authority of the representative extends.
Land division
4 (1) Maps shall be prepared by and kept at the office of the Registrar.
(2) Such maps shall be the only official depiction of rights.
(3) The maps shall be drawn to the following specifications:
(a) east and west boundaries shall be true meridians of longitude;
(b) north and south boundaries shall be straight lines, parallel to the chord of one-half of the part of the parallel of latitude that represents the boundary of each map sheet;
(c) the angle of intersection of each chord on either side of the median meridian of longitude for each map sheet shall be ninety degrees.
(4) Each map shall depict an area bounded by thirty minutes of longitude and fifteen minutes of latitude.
5 Each map shall be called a “map sheet”.
6 (1) The lands represented by each map sheet shall be considered as subdivided into four quarters, by median lines corresponding to the median longitude and latitude lines of the map sheet.
(2) Each of the four quarters thus produced shall be lettered as shown in the following Figure 1:
62°30'
North
62°00'
46°00'
West
45°45'
C
D
46°00'
East
45°45'
B
A
62°30'
South
62°00'
Figure 1
Standard Map Sheet
Showing Reference Maps
(3) Each quarter shall be called a “reference map”.
7 (1) The lands represented by each reference map shall be considered as subdivided into one hundred and eight tracts.
(2) Each tract shall be deemed to contain two hundred and fifty-nine hectares.
(3) The one hundred and eight tracts so determined shall be numbered as shown in the following Figure 2:
62°15'
North
62°00'
45°52'30"
West
45°45'00"
108
107
106
105
104
103
102
101
100
99
98
97
45°52'30"
East
45°45'00"
85
86
87
88
89
90
91
92
93
94
95
96
84
83
82
81
80
79
78
77
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73
61
62
63
64
65
66
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68
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72
60
59
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55
54
53
52
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49
37
38
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40
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46
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48
36
35
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32
31
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27
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25
13
14
15
16
17
18
19
20
21
22
23
24
12
11
10
9
8
7
6
5
4
3
2
1
62°15'
South
62°00'
Figure 2
Reference Map Showing Tracts
8 (1) Each reference map shall also be divided into six equal units.
(2) Each unit shall be called a “reservation” which shall consist of eighteen tracts.
(3) Each reservation shall be deemed to contain four thousand six hundred and sixty-two
hectares.
(4) Each reservation shall be designated as shown in the following Figure 3:
62°15'
North
62°00'
45°52'30"
West
45°45'00"
108
107
106
105
104
103
102
101
100
99
98
97
45°52'30"
East
45°45'00"
85
86
87 W 88
89
90
91
92
93 V 94
95
96
84
83
82
81
80
79
78
77
76
75
74
73
61
62
63
64
65
66
67
68
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72
60
59
58 T 57
56
55 A 54
53
52 U 51
50
49
37
38
39
40
41
42
43
44
45
46
47
48
36
35
34
33
32
31
30
29
28
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26
25
13
14
15 S 16
17
18
19
20
21 R 22
23
24
12
11
10
9
8
7
6
5
4
3
2
1
62°15'
South
62°00'
Figure 3
Reference Map Showing Reservations
9 (1) Each tract shall be subdivided into sixteen equal units.
(2) Each unit shall be called a “section” and shall be lettered as shown in the following Figure 4:
North
45o45'50"
West
45o45'00"
N
O
P
Q
45o45'50"
East
45o45'00"
M
L
K
J
E
F
G
H
D
C
B
A
62o01'15"
South
62°00'00"
Figure 4
Tract Showing Sections
(3) Each section shall be deemed to contain sixteen point one eight seven five hectares.
10 All rights shall be defined and described in terms of the divisions of land prescribed herein.
11 (1) All boundaries shall extend downward vertically without limit.
(2) All surface measurements shall be horizontal.
Exploration licenses
12 (1) Any person may apply for an exploration license by submitting an application in Form A to the Minister.
(2) Every application shall include a statement setting out the extent and character of the exploration to be carried out, including
(a) the location of the proposed exploration;
(b) the type of exploration;
(c) the equipment to be used to carry out the exploration; and
(d) the dates during which it is anticipated that the exploration will be carried out.
(3) The applicant shall notify the Minister forthwith of any changes in the information included in the statement.
13 (1) Every exploration license shall contain a description of the lands to which it applies.
(2) The exploration license may be in the form set out as Form B.
14 (1) No licensee shall disrupt or interfere with any activities performed pursuant to any other right.
(2) Where the Minister is of the opinion that a licensee is in breach of the requirements of subsection (1), the Minister may, at any time, order the licensee to terminate or modify his exploration program in such manner or to such extent as the Minister may deem necessary.
(3) Every licensee shall report to the Minister the location of the exploration, the equipment used, and personnel to be employed in the exploration, at such intervals and upon such terms as specified in the license.
(4) Subject to subsection (5), every licensee shall deliver to the Minister, within sixty days of the end of the term of his exploration license or such greater period as the Minister may allow, copies of all data obtained pursuant to the program of exploration.
(5) Every licensee shall deliver to the Minister, within six months of the end of the term of his license or such greater period as the Minister may allow, copies of all seismic data and interpretations thereof obtained pursuant to the program of exploration.
(6) No licensee shall drill a well to a depth greater than ninety metres.
(7) Every licensee shall notify the Minister of the completion of the exploration program undertaken pursuant to his license.
15 Every licensee shall notify the Minister prior to the commencement of a seismic exploration to be undertaken pursuant to his exploration license.
16 The Minister may amend an exploration license at the request of the licensee.
Royalties
17 It shall be, and shall be deemed to be, a term of every lease that all petroleum produced under the authority of the lease is subject to such royalties payable to the Province in the nature and amount as may be prescribed from time to time.
18 (1) Where a lessee consists of two or more interest holders
(a) each holder is liable for the royalty in respect of the petroleum production imputable to his share;
(b) the royalty shall be collected and remitted on behalf of the holders by the representative;
(c) the representative shall file such consolidated returns as the Minister directs in respect of each holder liable for royalty; and
(d) all the holders shall provide that representative with the information necessary to file the returns.
(2) Notwithstanding subsection (1), the Minister may audit an interest holder or may require him to file such reports as may be specified from time to time.
(3) The Minister may, in any particular case, make an order determining the fair market value of petroleum for the purposes of the calculation of a royalty.
(4) No royalty is payable for petroleum that
(a) is consumed for drilling, producing, extracting, testing or treating purposes within the lands under the production lease; or
(b) is injected into a formation for conservation purposes in accordance with good oilfield practice.
(5) Unless the Minister otherwise orders, no royalty is payable for petroleum that is consumed for the operation or maintenance of production facilities, or that is flared, vented or otherwise destroyed.
(6) The Governor in Council may suspend or reduce any royalty payable for such periods, by such amounts, and subject to such conditions as may be specified in any case where the Governor in Council is of the opinion that such suspension or reduction would enable production of petroleum to be commenced or continued for a longer period or would facilitate the implementation of conservation measures.
(7) The Minister may order that all or part of any royalty be paid in kind or in money in a form acceptable to the Minister.
(8) The amount of any royalty required to be paid in money shall be paid as follows:
(a) for coal gas extracted from the Donkin coal block, as defined in the Donkin Coal Block Development Opportunity Act (Canada), at the same time intervals prescribed in the Mineral Resources Act for payment of royalties on coal;
(b) for all other petroleum, on or before the twenty-fifth day of the month next following the month of production.
Subsection 18(8) replaced: O.I.C. 2008-143, N.S. Reg. 120/2008.
(9) The amount of any royalty required to be paid in kind shall be delivered in kind at the time and place specified by the Minister and in condition and quality acceptable to the Minister.
(10) Where a royalty has not been paid when due, the interest holder is liable for interest on the amount outstanding at an annual rate of eighteen percent.
(11) The Minister may require a lessee to furnish bonds in a form satisfactory to the Minister in such amounts as the Minister considers appropriate to ensure performance of obligations with respect to royalty.
(12) The provisions of Sections 46 and 47 shall apply mutatis mutandis to a bond given under subsection (11).
19 All fees, rentals, royalties, accrued interest and other amounts due and owing to the Crown under the Act and these regulations may be recovered by the Crown as a debt in any court of competent jurisdiction.
Goods and services
20 (1) Every reference to goods in these regulations includes significant structures and construction, plant, equipment, and all other facilities required by a right holder in the exploration, development, production, transportation, processing, and marketing of petroleum.
(2) In acquiring goods and services for work relating to the exercise of his right, every right holder shall make all reasonable attempts to utilize
(a) services provided from within Nova Scotia; and
(b) goods manufactured in Nova Scotia or where not so manufactured, provided from within Nova Scotia
but only if such goods and services are competitive in terms of fair market price, quality and delivery.
21 In hiring employees and independent contractors, every right holder shall make all reasonable attempts to hire qualified persons normally resident in Nova Scotia.
22 Every right holder shall require and ensure that his contractors and main subcontractors similarly comply with the provisions and requirements specified in Sections 20 and 21.
23 Nothing in these regulations relieves the right holder, his contractors, and main subcontractors of responsibility for the selection of employees, independent contractors, goods, services and suppliers.
Information reporting
24 Every lessee and, upon commencement of drilling operations, every agreement holder shall create and maintain an establishment in Nova Scotia where the representative
(a) can be reached during normal business hours;
(b) shall keep at least one copy of all information and samples of all material obtained or recovered from the lands held under exploration agreement or production lease, including well cuttings, core material, fluid samples and production records, as required from time to time by the Minister;
(c) shall keep at least one copy of all reports and records directly related to the exercise of his right;
(d) shall ensure that during normal business hours there shall be at least one individual qualified to assist the Minister; and
(e) is in continuing contact with the activities under the right and with all participating persons responsible for the obligations contained in the right.
25 Any person having reason to believe that an emergency condition exists, or is likely to occur, shall inform the Minister forthwith.
26 Every right holder shall forthwith inform the Minister of any discovery of petroleum, coal, minerals or other valuable substance.
27 Every right holder shall submit to the Minister any information obtained as a result of the exercise of his right which is of importance to the understanding or safety of the environment, renewable resources, geology or history.
28 Volumes of petroleum shall be reported at surface conditions [of] 15o Centigrade and 1 atmosphere pressure.
29 Every right holder shall use due diligence and care to ensure that the information submitted to the Minister is not misleading, false or incomplete.
Inspection
30 Every right holder shall allow the Minister to inspect anything done in relation to the exercise of his right and shall assist the Minister in so doing.
31 The Minister may intervene directly in the exercise of the rights of a right holder and may take all necessary measures, including ordering a permanent or temporary halt to any activities, where in the opinion of the Minister the exercise of the right
(a) could cause serious injury or death to any person;
(b) is causing or may cause serious damage to the environment, natural resources or property;
(c) is not managed in accordance to good oilfield practice; or