Oil and Gas in Canada's North - Active Exploration and New Development

Approximately 40 percent of Canada's lands lie north of 60 degrees latitude. Vast areas lie beneath the shallow seas of the Arctic continental shelf and within the Arctic archipelago.

The combined land area of the Northwest Territories and Nunavut is over three million square kilometres, comprising diverse sedimentary basins, many with demonstrated high potential for oil and gas development.

During the 1980s, exploration and development in the territories slowed as the federal government and Aboriginal peoples focused on settling land claims in the North. With most of the Arctic claims settled, new global interest in Arctic oil and gas resource potential generally is fuelling re-investment in exploring Canada’s North.

Resurging Activity

Northern oil and gas exploration and development supports economic and social components of the Government’s Northern Strategy. Working in partnership with northerners and Aboriginal peoples, government recognizes that northern oil and gas exploration and development is a key component of the future economic well-being of northern Canada.

A regularized system for annual exploration rights issuance was successfully implemented in the late 1980s in the Beaufort Sea/Mackenzie Delta region and the central and parts of the southern Mackenzie Valley beginning in 1994. Regular annual calls have since been held in both the Sahtu and Gwich'in regions of the central Mackenzie Valley and in the Beaufort Sea/Mackenzie Delta of the Inuvialuit Settlement Region. In 2000, annual calls for nominations began in the Sverdrup Basin of the Arctic Islands of Nunavut.

Today, industry is investing in new oil and gas exploration in the Mackenzie Valley near existing pipeline infrastructure at Norman Wells. Following a decade of activity on the Mackenzie Delta, companies have now expanded their focus further offshore into deep water in areas which have not been previously explored.

The Potential

Geologically, lands extending north of 60 from the Alberta-British Columbia border to the Beaufort Sea are a continuation of the oil and gas-rich Western Canada Sedimentary Basin, but, in comparison are lightly explored. Moving into the offshore, Arctic Canada has offshore continental shelves with petroleum potential of a scale comparable to many active exploration areas around the world.

Northern Canada is estimated to contain one third of Canada's remaining potential for conventional oil and natural gas. This resource is distributed throughout the North as follows:

In addition, the North has good potential for unconventional resources. Test exploration of gas hydrate accumulations beneath the Mackenzie Delta, and, more recently, industry is beginning to evaluate the potential of extensive shale formations in the Mackenzie Valley.

The Policy

The cornerstones of the petroleum resource management regime:

In the Northwest Territories, Nunavut and Arctic offshore, the statutory responsibility for petroleum resource management rests with the Minister of Aboriginal Affairs and Northern Development.

In 1998, the Yukon Territorial Government assumed provincial-type powers to manage and regulate Yukon onshore oil and gas resources.

In 1993, all restrictions of foreign ownership at the production stage were removed, allowing Canadian companies to seek partners worldwide to develop frontier properties.

The Process

The Call for Nominations

  • Your chance to identify land tracts you want to see posted for bidding

The Call for Bids

  • All bid terms and conditions are clearly spelled out
  • Single criterion used to select the winning bid
  • Three land tenure instruments give you control at every stage:
    • Exploration Licence: Maximum nine year terms divided into two periods - with a drilling requirement in the first period of the term.
    • Significant Discovery Licence: Unique to the Canadian frontier, this licence rewards your successful exploration by giving you continuing tenure to your discovery. You proceed to production when you judge the time is right.
    • Production Licence: Issued for discoveries deemed commercial -  25 -year term automatically renewed if still producing

The Royalty Regime

One of the most competitive in the world!

The Data

Canada's North

The time is right for partnership with northern Canadians.

The time is right to explore and develop Canada's most promising frontier.

For more information contact:

Northern Oil and Gas Branch
Aboriginal Affairs and Northern Development Canada
Tel: (819) 997-0877
Fax: (819) 953-5828

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