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Newfoundland and Labrador
Regulation 2016


NEWFOUNDLAND AND LABRADOR REGULATION 6/16

NEWFOUNDLAND AND LABRADOR
REGULATION 6/16

Offshore Petroleum Cost Recovery Regulations
under the
Canada-Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act
(O.C. 2016-024)

(Filed February 26, 2016)

Under the authority of section 29.1 of the Canada-Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act, the Lieutenant-Governor in Council makes the following regulations.

Dated at St. John’s, February 26, 2016.

Julia Mullaley
Clerk of the Executive Council

REGULATIONS

Analysis


        1.   Short title

        2.   Definition

              PART 1
REGULATORY ACTIVITY PLAN CHARGES

        3.   Regulatory activity plan

        4.   Existing project

        5.   Recalculation

        6.   Quarterly invoicing

        7.   Annual charge adjustment

              PART 2
FORMULA FEES

        8.   Interpretation

        9.   Publication

      10.   Basic formula

      11.   Payment of fees

              PART 3
GEODATA CENTRE

      12.   Definition

      13.   Sample access fee

              PART 4
OTHER CHARGES

      14.   Reimbursement of board costs

              PART 5
GENERAL

      15.   Interest

      16.   Remittance of fees and charges

              PART 6
CONSEQUENTIAL AMENDMENTS, TRANSITIONAL PROVISIONS AND COMMENCEMENT

      17.   CNLR 2/96 Amdt.

      18.   Transitional


Short title

        1. These regulations may be cited as the Offshore Petroleum Cost Recovery Regulations.

Definition

        2. In these regulations,

             (a)  "Act" means the Canada-Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act;

             (b)  "actual full cost" means the full cost confirmed by the board's audited financial statements;

             (c)  "direct regulatory activities" means the activities that are required for the board to fulfill its regulatory responsibilities such as assessing applications, issuing licences, granting approvals and authorizations, verifying and enforcing compliance with the Act and providing information, products and services;

             (d)  "indirect regulatory costs" means the costs that support the board's direct regulatory activities such as office accommodation, supplies and equipment, professional services, communications, travel, management, training, administration, human resources services, finance, information technology services, hardware and software, the preparation of documents, including policies, standards, guidelines, procedures and notices, and the provision of technical expertise, including any advice relating to legislation or regulations, to the federal minister or the provincial minister at that minister's request; and

             (e)  "project" means the work or activity referred to in paragraph 134(1)(b) of the Act.

PART 1
REGULATORY ACTIVITY PLAN CHARGES

Regulatory activity plan

        3. (1) For each new project relating to development, production, abandonment, exploratory drilling or multi-year or complex seismic programs in respect of petroleum operations, on receipt of a project description or letter of intent, the board shall

             (a)  prepare a regulatory activity plan;

             (b)  calculate the estimated annual charge payable by the applicant or the operator for the project by determining the estimated full cost, including indirect regulatory costs, associated with the implementation of the regulatory activity plan based on

                      (i)  the cost of the estimated total number of units of time necessary to be spent in that fiscal year on direct regulatory activities for the project, and

                     (ii)  any other costs, excluding costs calculated under other cost recovery methods; and

             (c)  notify the applicant or the operator, in writing, of the regulatory activity plan and the estimated annual charge payable.

Existing project

        4. For each existing project that was previously under a regulatory activity plan, after approval of the board's budget in any given fiscal year following its submission in accordance with subsection 27(2) of the Act, the board shall

             (a)  prepare a new regulatory activity plan;

             (b)  calculate the estimated annual charge payable by the applicant or the operator for the project by determining the estimated full cost, including indirect regulatory costs, associated with the implementation of the new regulatory activity plan based on

                      (i)  the cost of the estimated total number of units of time necessary to be spent in that fiscal year on direct regulatory activities for the project, and

                     (ii)  any other costs, excluding costs calculated under other cost recovery methods; and

             (c)  notify the applicant or the operator, in writing, of the new regulatory activity plan and the estimated annual charge payable.

Recalculation

        5. If an applicant or operator proposes changes to its project that are not reflected in the regulatory activity plan, the board may recalculate the estimated annual charge for that project and adjust the payable amount accordingly.

Quarterly invoicing

        6. (1) The board shall, on a quarterly basis, prepare and send an invoice for an amount equal to 25% of the estimated annual charge payable to each applicant or operator who has been notified under paragraph 3(c) or 4(c).

             (2)  Within 30 days after the date of the invoice, the applicant or the operator shall pay the amount invoiced.

Annual charge adjustment

        7. (1) Each year, following the end of the fiscal year, the board shall, for each project under a regulatory activity plan,

             (a)  calculate the actual full cost associated with the implementation of the regulatory activity plan;

             (b)  calculate the charge adjustment, if any, by subtracting the estimated annual charge, calculated in accordance with paragraph 3(b) or 4(b), from the actual full cost; and

             (c)  notify the applicant or the operator in writing of the amount of the actual full cost and the amount of the charge adjustment.

             (2)  If the actual full cost calculated under paragraph (1)(a) is

             (a)  less than the estimated annual charge, the difference is credited to the applicant's or operator's account and shall be refunded as a credit on the next invoice; or

             (b)  greater than the estimated annual charge, the board shall invoice the applicant or the operator for an amount equal to the difference and the applicant or the operator shall pay that amount to the board within 30 days after the date of the invoice.

PART 2
FORMULA FEES

Interpretation

        8. In this Part

             (a)  "base units of time" means the number of units of time published by the board in accordance with section 9 based on the board's estimate of the time required for it to undertake direct regulatory activities in relation to each activity set out in the tables to section 10;

             (b)  "variable units of time" means the number of units of time published by the board in accordance with section 9 based on the board's estimate of the time required for it to undertake direct regulatory activities in relation to the variables set out in column 3 of the tables to subsection 10(3);

             (c)  "effective rate" means the rate published by the board in accordance with section 9 based on the estimated sum of the costs incurred by the board's undertaking of all direct regulatory activities and of the board's indirect regulatory costs minus the sum of the costs incurred by the board's undertaking of regulatory activities that are not recovered by the board at the request of the federal minister and the provincial minister and divided by the total number of units of time spent by the board for those direct regulatory activities; and

             (d)  "heavy burden coefficient" means a multiplier that the board may apply to a fee for an activity if the board is of the opinion that the fee should be increased to reflect the additional number of units of time spent by the board to undertake direct regulatory activities as a result of non-compliance with the Act, negligence or lack of effort by an applicant or operator in responding to any of the board's questions during an application process or activity.

Publication

        9. Each year the board shall publish, by electronic or other means that is likely to reach applicants or operators,

             (a)  the base units of time for each activity set out in the tables to section 10;

             (b)  the variable units of time for each activity set out in the table to subsection 10(3); and

             (c)  the effective rate.

Basic formula

      10. (1) The fee for each activity set out in the table to this subsection is determined by the formula

A x C

where

A is the base units of time related to each activity; and

B is the effective rate.

 

Item

Activity

1.

Application for a declaration of significant discovery

2.

Application for a declaration of commercial discovery

3.

Application for a significant discovery licence

4.

Application for a licence for subsurface storage

5.

Application for a production licence

6.

Application for an amendment to a licence or a consolidation of licences

7.

Registration of a transfer

8.

Registration of a security notice

9.

Registration of an interest

10.

Recording of a notice

11.

Registration of an instrument other than a transfer or security notice

12.

Application to an extension, by order, of the term of a production licence

13.

Application for allowable expenditures

 

(2) The fee for each activity set out in column 2 of the table to this subsection is determined by the formula

A x C x D

where

A is the base units of time related to each activity;

C is the effective rate; and

D if applicable, is the heavy burden coefficient.

 


Item

Column 1
Category of Activity

 

Column 2
Activity

1.

Geological operations authorization (with field work)

Geochemical study

2.

Geophysical (without field work)

Geophysical study

3.

Geological (without field work)

Purchase of geological studies

4.

Geological (without field work)

Isotope age dating

5.

Geological (without field work)

In-house geological studies

6.

Geological (without field work)

Petrography

7.

Geological (without field work)

Paleontological or
palynological study

8.

Geological (without field work)

Other geophysical
activity

9.

Annual compliance fee

All geophysical projects

(3) The fee for each activity set out in column 2 of the table to this subsection is determined by the formula

(A +B) x (C x D)

where

A is the base units of time related to each activity;

B is the variable units of time multiplied by the number of primary vessels or aircraft to be used in each activity;

C is the effective rate; and

D if applicable, is the heavy burden coefficient.

 


Item

Column 1
Category of Activity

Column 2
Activity

Column 3
Variable

1.

Geophysical operations authorization (with field work)

2-D seismic reflection survey (primary
activity)

Primary vessel

2.

Geophysical operations authorization (with field work)

3-D seismic reflection survey (primary
activity)

Primary vessel

3.

Geophysical operations authorization (with field work)

4-D seismic reflection survey (primary
activity)

Primary vessel

4.

Geophysical operations authorization (with field work)

Seafloor gravity survey (primary activity)

Primary vessel

5.

Geophysical operations authorization (with field work)

Seismic refraction survey (primary
activity)

Primary vessel

6.

Geophysical operations authorization (with field work)

Controlled source electromagnetic
survey

Primary vessel

7.

Geophysical operations authorization (with field work)

Other geophysical program

Primary vessel

8.

Geophysical operations authorization (with field work)

Aeromagnetic survey (primary activity)

Aircraft

9.

Geotechnical authorization (seabed survey)

Piston core

Primary vessel

10.

Geotechnical authorization (seabed survey)

Shallow seismic,
seabed survey

Primary vessel

 

Payment of fees

      11. (1) On the submission of an application in respect of an activity set out in any table to section 10, the applicant shall pay to the board the fee determined in accordance with that section.

             (2)  If the board uses a heavy burden coefficient to calculate an additional charge in respect of an activity, the board shall invoice the applicant or the operator and the applicant or the operator shall pay that amount to the board within 30 days after the date of the invoice.

PART 3
GEODATA CENTRE

Definition

      12. In this Part, the daily access rate means the rate established and published by the board by electronic or other means that is likely to reach applicants and operators.

Sample access fee

      13. Any person, except a person requesting access for an academic purpose, the federal minister and the provincial minister, who accesses a physical sample at the geodata centre shall pay the daily access rate for each day the sample is accessed.

PART 4
OTHER CHARGES

Reimbursement of board costs

      14. The board may require reimbursement for 100% of its costs for activities that are not set out in Parts 1 to 3 and that are related to the following:

             (a)  any verification of compliance under the Act involving travel to another location by the board's staff;

             (b)  the Oil and Gas Committee;

             (c)  any technical analysis or process review that is related to a specific project and that is requested by an applicant or operator;

             (d)  any public review, written or oral hearing or inquiry that is related to a specific project and that is required or initiated by the board;

             (e)  a participant funding program that is part of an environmental assessment conducted under the Canadian Environmental Assessment Act, 2012; and

             (f)  information, products or services that are requested by a person.

PART 5
GENERAL

Interest

      15. Interest on an amount owing to the board shall be calculated and compounded monthly at the rate of 1.5% and is payable and accrues during the period beginning on the due date and ending on the day before the day on which the payment is received by the board.

Remittance of fees and charges

      16. For the purposes of section 29.2 of the Act, the fees and charges obtained in accordance with these regulations shall be remitted on a quarterly basis subject to the board's operational requirements.

PART 6
CONSEQUENTIAL AMENDMENTS, TRANSITIONAL PROVISIONS AND COMMENCEMENT

CNLR 2/96 Amdt.

      17. (1) Subsections 8(1) and (2) of the Offshore Area Registration Regulations are repealed and the following substituted:

Searches

        8. (1) A person may, at the office of the registrar, inspect the daybook, the register and copies of an interest or instrument registered under Division VII of Part II of the Act.

             (2)  The registrar shall provide to the person making the request a certified exact copy of

             (a)  an interest or instrument registered under Division VII of Part II of the Act; and

             (b)  the abstract of an interest.

             (2)  Section 14 of the Offshore Area Registration Regulations is repealed.

Transitional

      18. (1) Section 4 does not apply to a project that relates to development, production, abandonment, exploratory drilling or multi-year or complex seismic programs if the applicant or the operator has paid 100% of the board's estimated costs for the project for the fiscal year in which these regulations come into force.

             (2)  All existing projects relating to development, production, abandonment, exploratory drilling or multi-year or complex seismic programs that are under the board's regulatory authority before these regulations come into force and that do not have a regulatory activity plan are considered to have been previously under a regulatory activity plan for the purposes of section 4.