COVID-19 Update #3: Industry and IOGC Operation Deferrals During COVID-19 Pandemic
Dated April 16, 2020 with effective dates as of March 16, 2020
The operational deferrals in this update are now replaced by the operational deferral dates in COVID-19 Update #6.
As a result of the COVID-19 pandemic, the Government of Canada, through its regulatory agency Indian Oil and Gas Canada (IOGC) is taking steps to help oil and gas industry companies (industry) who hold contracts on First Nation reserve lands. The measures described below are intended to support companies continuing their operations as well as ensure continued revenue flow to First Nations at this very critical time. Through delegated authorities under Sec. 5.(1)(d) of the Indian Oil and Gas Act R.S.C., 1985, c. I-7, IOGC is temporarily deferring certain industry requirements in the following four key areas:
- 1. Selection of Lands for Intermediate Term of Permit
Section 54(2) of the Indian Oil and Gas Regulations, SOR/2019-196, establishes a late application process for a company in the instance where they have missed the deadline to apply to IOGC for the selection of lands for the initial term of their permit. IOGC will defer expiry dates from March 16, 2020 onwards related to this section for a 3 month period. The late application fee would only apply to the end of the deferral period.
- 2. Continuation of Subsurface Contracts
Section 64 of the Indian Oil and Gas Regulations, SOR/2019-196, provides a process and criteria for the continuation of a subsurface (mineral) contract. Contract expiry dates related to this section will be deferred for 3 months. This deferral applies to contracts due to expire between March 16, 2020, to June 16, 2020. This deferral also applies to contracts related to section 62 of the Indian Oil and Gas Regulations, SOR/2019-196. Note: All associated rentals require continued payment.
- 3. Surface Rights or Interests
Section 77 of the Indian Oil and Gas Regulations, SOR/2019-196, directs a contract holder to renegotiate rent at specific time intervals. All time intervals prescribed in section 77 of the Indian Oil and Gas Regulations, SOR/2019-196, that results in a requirement to renegotiate between March 16, 2020 to June 16, 2020 are deferred for 3 months. Note: Original rental amounts require continued payment during the deferral period and any rental increase negotiated after the deferral period will be owed retroactively.
- 4. Inspections
The Indian Oil and Gas Act R.S.C., 1985, c. I-7 provides authority for inspections related to verifying compliance with the Act or accompanying regulations. All routine industry-IOGC-First Nation joint site inspections are deferred for 3 months with some notable exceptions and stipulations. This deferral is intended to address: a) potential access restrictions on First Nation reserve lands; b) the safety of First Nation representatives who would normally attend all joint inspections; and c) industry safety. Obligations of contract holders and operators to report environmental issues, emergencies, incidents, production compliance requirements, or any other related matters remain in place. If exceptional circumstances warrant, IOGC may conduct an inspection.
These actions do not defer any other requirements. The longer this uncertain time continues, IOGC may need to extend these deferral dates and consider other measures as more information becomes available. IOGC is open to discuss additional options on a case-by-case basis jointly with oil and gas producing First Nations and industry representatives. Please continue to check IOGC’s website for updates or changes. Please refer to the list of IOGC contacts below.
IOGC Contacts by Area
A/Manager, Resource Analysis and Compliance
Elaine.McIvor@canada.ca or 403-519-9523
Manager, Subsurface and Negotiations
A/Manager, Lease Administration
General and All Other Enquiries