Indian Oil and Gas Canada Annual Report 2016-2017

by pmnationtalk on May 14, 2018322 Views

Message from the CEO

To our stakeholders

In addition to Indian Oil and Gas Canada’s (IOGC) daily operations, there were two ongoing key projects that were priorities:

  • the Modern Act, Regulations and Systems (MARS) project; and,
  • Organizational Change Management (OCM), with particular focus on the implementation of the 2009 Act and its Phase I regulations

The MARS project was initiated in Fiscal Year (FY) 2010-2011 to guide the modernization of the Indian Oil and Gas Regulations, 1995 and the implementation of the Indian Oil and Gas Act, 2009 and its new regulations. The first milestone enabling the MARS project was achieved once amendments to the Indian Oil and Gas Act received Royal Assent in May 2009. This resulted in a new Indian Oil and Gas Act, 2009 that will eventually replace the existing Indian Oil and Gas Act, 1974.

A Joint Technical Committee (JTC) – comprised of First Nation oil and gas technicians, Government of Canada officials from IOGC, Indigenous and Northern Affairs Canada, and Justice Canada – worked on both the Indian Oil and Gas Act, 2009 and have since focused on the development of its supporting regulations.

An agreement reached in 2014 between the department and oil and gas First Nations established a phased, or staggered, approach for regulatory development. First, the 2009 Act plus a set of Phase I, or Core, regulations would become law. Next, regulations would continue to be developed and implemented until the existing Indian Oil and Gas Regulations, 1995 have been entirely replaced by new, modern regulations. IOGC’s new legislative and regulatory regime will be implemented by modernized business practices, supported by new or enhanced information systems.

During FY2016-2017, two significant milestones were reached on the MARS project. Firstly, the official, or Blue-Stamped, regulations were produced by Justice Canada in May 2016. Secondly, Treasury Board gave both Project and Expenditure Approvals for the Resource Information Management System 2 (RIMS2) project at about the same time in May 2016. A key feature of the RIMS project will be Petrinex data exchange with IOGC. Petrinex is the result of a unique provincial-industry partnership that created and which maintains the recognized, authoritative source for hydrocarbon volume and pricing information. Once fully implemented, the RIMS2 project will provide two important benefits: 1) avoid potential disagreements between First Nations and their industry partners, namely in volume measurement and pricing; and, 2) improve both the accuracy and timeliness of IOGC’s royalty assessment process.

In February 2017, the Phase I regulations were ready for Treasury Board consideration and approval for pre-publication in the Canada Gazette, Part I. However, at the urging of oil and gas First Nations, this process was temporarily put into abeyance. In response to persistent, low world prices for oil, some First Nations have expressed a desire for greater authority and control over their oil and gas resources as well as the ability to customize each of their business deals. The department is exploring options to accommodate these concerns and, since First Nations’ governance is outside the scope of a new Act and regulations, governance-related issues would likely require the establishment of a separate table for resolution.

The OCM project addresses the people side of change so IOGC will be better-equipped to adapt to both internally and externally-driven change. Internally-driven changes would be those arising from the implementation of our new Act and regulations; an example of externally-driven change would be the implementation of new government-wide processes or systems. The benefit of the OCM project will be realized via IOGC and its stakeholders adapting to change with minimal disruption.

On the operations side, persistent, weak world oil and natural gas prices have resulted in: 1) a movement away from dry gas plays to oil plays and liquids-rich gas plays; and, 2) fewer wells being drilled. In FY2016-2017, IOGC collected $59,644,356 on behalf of First Nations and issued a total of 24 new surface agreements and 15 sub-surface agreements. Greater details on IOGC’s operational activities are contained within this report.

The progress in the past year would not have been possible without the contributions made by IOGC’s dedicated staff, our partners, and our clients. Through hard work, effective partnerships, and perseverance, a strong foundation has been established for IOGC to implement and to administer its new Act and regulations, beginning on the day they both become law.

Strater Crowfoot
Executive Director and CEO

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