Canada Gazette, Part I, Volume 149, Number 28: Canada–Newfoundland and Labrador Offshore Petroleum Financial Requirements Regulations
July 11, 2015
Canada–Newfoundland and Labrador Atlantic Accord Implementation Act
Department of Natural Resources and Department of Indian Affairs and Northern Development
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Canada Oil and Gas Operations Financial Requirements Regulations.
PROPOSED REGULATORY TEXT
Notice is given, pursuant to subsection 150(1) of the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act (see footnote a), that the Governor in Council, pursuant to subsection 149(1) (see footnote b) of that Act, proposes to make the annexed Canada–Newfoundland and Labrador Offshore Petroleum Financial Requirements Regulations.
Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Daniel Morin, Policy Analyst, Frontier Lands Management Division, Natural Resources Canada, 580 Booth Street, Ottawa, ON K1A 0E4 (tel.: 613-992-4217; email: email@example.com).
Ottawa, June 18, 2015
Assistant Clerk of the Privy Council
CANADA–NEWFOUNDLAND AND LABRADOR OFFSHORE PETROLEUM FINANCIAL REQUIREMENTS REGULATIONS
Definition of “Act”
1. In these Regulations, “Act” means the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act.
Proof of financial resources
2. (1) For the purposes of subsection 162.1(1) of the Act, the proof that an applicant has the necessary financial resources is to be made by the applicant providing the Board with a statement of its net assets or of funding arrangements that it has made that demonstrates to the Board's satisfaction that it is able to pay the applicable amount referred to in that subsection.
(2) The statement must be accompanied by one or more of the following documents that substantiate it:
- (a) the applicant's most recent audited annual financial statement and, if the applicant has been given a credit rating by a credit rating agency that is current at the time the application is made, a document that indicates that credit rating;
- (b) a promissory note;
- (c) an insurance policy or a certificate of insurance;
- (d) an escrow agreement;
- (e) a letter of credit;
- (f) a line of credit agreement under which the funds identified in the statement are available;
- (g) a guarantee agreement;
- (h) a security bond or pledge agreement or an indemnity bond or suretyship agreement.
Audited statement and documents
(3) For greater certainty, the Board may require that an applicant provide a statement of net assets or funding arrangements, and substantiating documents, that have been audited by a qualified independent auditor and a report of the audit signed by that auditor.
Requirements of pooled fund
3. For the purposes of subsection 163(1.01) of the Act,
- (a) a pooled fund must be located and administered in Canada and must be used solely to make payments
- (i) under subsection 163(2) of the Act in connection with the drilling for, or the development or production of, petroleum in the offshore area,
- (ii) under subsection 168(2) of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act in connection with the drilling for, or the development or production of, petroleum in the offshore area as defined in section 2 of that Act, and
- (iii) under subsection 27(2) of the Canada Oil and Gas Operations Act in connection with the drilling for, or the development or production of, oil or gas in the part of Canada that is referred to in paragraph 3(d) or (e) of that Act;
- (b) the administrator of the pooled fund must pay moneys out of the pooled fund to the Board on demand; and
- (c) the administrator of the pooled fund must
- (i) every year, provide the Board with an audited financial statement that demonstrates that the pooled fund has been maintained at a minimum of $250 million,
- (ii) notify the Board within 24 hours of any change to the participants in the pooled fund or of any change in the amount of the pooled fund, other than one that is solely attributable to an interest charge or a banking fee,
- (iii) notify the Board of a contravention by a participant in the pooled fund of their obligation under subsection 163(1.1), (1.2) or (5) of the Act within 24 hours after they become aware of the contravention, and
- (iv) provide the Board with the phone number, email address and mailing address of their contact person.
Reimbursement into pooled fund
4. For the purposes of subsection 163(5) of the Act, the reimbursement into the pooled fund of an amount that is paid out of that fund to the Board, the Canada-Nova Scotia Offshore Petroleum Board or the National Energy Board must be made by the holder of an authorization referred to in that subsection within seven days after the day on which the payment is made.
BOARD RECOMMENDATION REGARDING LESSER FINANCIAL REQUIREMENTS
Circumstances relating to recommendation
5. (1) For the purposes of subsection 163.1(1) of the Act, the Board may make a recommendation to the Federal Minister in respect of an applicant if the Board is satisfied that the estimated total of the losses, damages, costs and expenses — other than losses of non-use value — for which the applicant may be liable under paragraphs 162(1)(b) and (2)(b) of the Act in connection with the proposed work or activity to which the application pertains is less than the amount referred to in paragraph 162(2.2)(a) or (b) of the Act.
(2) The recommendation must identify the hazards that are relevant to the proposed work or activity to which the application pertains and must include an assessment of the risks associated with each event that could reasonably be expected to occur in connection with each of those hazards and that could result in debris, in a spill or in an authorized discharge, emission or escape of petroleum.
(3) The following information must accompany the Board's recommendation:
- (a) the estimated total of the losses, damages, costs and expenses referred to in subsection (1);
- (b) the recommended amount that is less than the amount referred to in paragraph 162(2.2)(a) or (b) or 163(1)(a) of the Act, as the case may be;
- (c) a summary of the reasons for the recommendation;
- (d) a summary of any information provided by the applicant to the Board that the Board considers to be pertinent;
- (e) any information concerning the recommendation that the Board provided to the Provincial Minister in connection with that Minister's approval under subsection 163.1(1) of the Act; and
- (f) any information requested by the Federal Minister.
(4) The Board may submit to the Federal Minister any other information that it considers to be pertinent.
6. The Canada-Newfoundland Oil and Gas Spills and Debris Liability Regulations (see footnote 1) are repealed.
COMING INTO FORCE
S.C. 2015, c. 4
7. These Regulations come into force on the day on which section 61 of the Energy Safety and Security Act comes into force, but if they are registered after that day, they come into force on the day on which they are registered.