Northern Oil and Gas Annual Report 2017

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Foreword

The Northern Oil and Gas Annual Report is prepared in accordance with section 109 of the Canada Petroleum Resources Act (CPRA) which notes:

The Minister shall, within ninety days after the end of each year, cause to be prepared a report with respect of the administration of this Act during that year, and shall cause the report to be laid before each House of Parliament on any of the first fifteen days on which that House is sitting after the day the report is prepared.

Federal responsibility for the management of oil and gas resources on Crown lands north of 60°N in the Northwest Territories, Nunavut and Northern offshore is administered by the Petroleum and Mineral Resources Management Directorate under the mandate of the CPRA by:

Information about northern petroleum resource management regime and the program can be found at: Northern Petroleum Resources.

Copyright information

For information regarding reproduction rights, please contact: CommunicationsPublications@canada.ca

www.canada.ca/indigenous-northern-affairs
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QS-6358-300-EE-A1
Catalogue: R71-47E-PDF
ISSN : 1497-1445

©Her Majesty the Queen in Right of Canada, 2018.

This publication is also available in French under the title: Pétrole et Gaz du Nord, Rapport Annuel 2017

Cover photos from Northern Petroleum Resources image bank.

Minister's Message

Message from the Honourable Carolyn Bennett, M.D., P.C., M.P.,
Minister of Crown-Indigenous Relations and Northern Affairs

I am pleased to table before Parliament the annual report on the administration of the Canada Petroleum Resources Act (CPRA) in the Northwest Territories, Nunavut and Northern offshore for the year ending December 31, 2017.

In this report, Canadians and all interested parties will find information on the disposition of interests, financial administration of interests, environmental initiatives and royalty management for 2017.

Of particular interest, this report provides a summary of a one-year consultation period with license holders, territorial governments and Indigenous organizations, as well as with other interested parties on their interests, plans and vision for the Canadian Arctic offshore.

These consultations follow the United States–Canada Joint Arctic Leaders' Statement, on December 20, 2016, when the Prime Minister designated all Canadian arctic waters as indefinitely off limits to future offshore oil and gas licensing, to be reviewed every five years through a climate and marine science-based life-cycle assessment.

I invite you to consult this report for further details on the development of Canada's Northern oil and gas resources over the past year.

The Honourable Carolyn Bennett, M.D., P.C., M.P.,
Minister of Crown-Indigenous Relations and Northern Affairs

Canada Petroleum Resources Act activities

Current disposition of interests

The Government of Canada maintains a public registry of petroleum interests and instruments registered under Part VIII of the Canada Petroleum Resources Act. This registry is the official record of rights holders, and any transfer of rights or change of ownership must be registered.

Monthly activity reports are available on: Monthly Registry Activities

Table 1: Exploration Licences as of December 31, 2017.
Licence Area (in hectares) Representative Effective Date End of Period 1 Expiry Date Work Proposal Bid (in dollars)Footnote 1
Beaufort Sea
EL317Footnote 2 105,150 BP Canada Energy Development Company 5 Oct 1986 N/A N/A N/A
EL329Footnote 2 339,434 BP Canada Energy Development Company 5 Sep 1987 N/A N/A N/A
EL476Footnote 3 205,321 Imperial Oil Resources Limited 1 Sep 2012 31 Jul 2018 31 Jul 2019 585,000,000
EL477 202,380 Imperial Oil Resources Limited 1 Sep 2012 30 Sep 2018 30 Sep 2020 1,180,100,000
EL478 205,359 BP Exploration Operating Company Limited 1 Sep 2012 30 Sep 2018 30 Sep 2020 15,100,000
EL479 203,635 BP Exploration Operating Company Limited 1 Sep 2012 30 Sep 2018 30 Sep 2020 1,100,000
EL481 205,946 Chevron Canada Limited 1 Sep 2012 31 Aug 2019 31 Aug 2021 103,300,000
EL483 196,497 ConocoPhillips Canada Resources Corp. 1 Sep 2012 30 Sep 2018 30 Sep 2020 2,543,896
EL485Footnote 4 29,350 Franklin Petroleum Canada Limited 1 Sep 2012 31 Aug 2019 31 Aug 2021 1,000,000
EL488Footnote 4 24,574 Franklin Petroleum Canada Limited 6 Mar 2013 5 Mar 2020 5 Mar 2022 1,251,088
EL489Footnote 4 35,544 Franklin Petroleum Canada Limited 6 Mar 2013 5 Mar 2018 5 Mar 2022 1,251,088
EL491Footnote 4 100,677 Franklin Petroleum Canada Limited 6 Mar 2013 5 Mar 2020 5 Mar 2022 1,251,088
EL492Footnote 4 187,200 Franklin Petroleum Canada Limited 6 Mar 2013 5 Mar 2020 5 Mar 2022 1,251,088
EL493Footnote 4 190,650 Franklin Petroleum Canada Limited 6 Mar 2013 5 Mar 2020 5 Mar 2022 1,251,088
EL496Footnote 4 14,820 Franklin Petroleum Canada Limited 1 Jun 2014 31 May 2021 31 May 2023 1,000,000
Table 2 : Land disposition as of December 31, 2017 (in hectares)
Region Exploration Licence Significant Discovery Licence Production Licence Former RightsFootnote 1 Total
Arctic Islands of Nunavut 0 327,981 0 0 327,981
Eastern Arctic Offshore 0 11,184 0 0 11,184
Hudson Bay 0 0 0 0Footnote 2 0
Beaufort Sea 1,868,687Footnote 4 224,623 0 0 2,093,310
Norman Wells Proven Area 0 0 0 654 654
Total (in hectares) 1,868,687 563,788 0 654 2,433,129
By Interest Type (number of licences)
Arctic Islands of Nunavut 0 20 0 0 20
Eastern Arctic Offshore 0 1 0 0 1
Hudson Bay 0 0 0 8Footnote 2 0
Beaufort Sea 13Footnote 3 48 0 0 61
Norman Wells Proven Area 0 0 0 6 6
Total 13 69 0 14 98

Rights issuance

Call for nomination and call for bids

With respect to the United States-Canada Joint Arctic Leaders' Statement from December 20, 2016, Canada has indefinitely suspended the issuance of new oil and gas licences in the Arctic offshore for an initial period of five years during which no Call for Bids will take place. The suspension will be reviewed every five years through a climate and marine science-based life-cycle assessment and does not apply to the onshore areas of Nunavut. As of December 31rd, 2017, there are 13 exploration licences in the Beaufort Sea and the primary rights holders include Imperial Oil, BP, ExxonMobil, ConocoPhillips, Chevron, and Franklin Petroleum.

Changes in rights and dispositions

On January 23rd, 2017, two exploration licences in the Beaufort Sea were surrendered in their entirety in accordance with the Canada Petroleum Resources Act. Likewise, on August 8th, 2017, eight offshore exploration permits in the Hudson Bay were surrendered in their entirety in accordance with the Canada Oil and Gas Land Regulations. Total rights disposition decreased by 967,406 hectares over the course of 2017.

Figure 1 - Map of the Beaufort Sea region

Figure 1 - Map of the Beaufort Sea region

Text description of figure 1 - Map of the Beaufort Sea region
Title Representative Type Region Effective Date Expiry Date Area (Ha)
EL317 Repsol Oil & Gas Canada Inc. Exploration Licence Beaufort Sea 05/10/1986   175,810
EL329 BP Canada Energy Development Company Exploration Licence Beaufort Sea 05/09/1987   339,434
EL476 Imperial Oil Resources Limited Exploration Licence Beaufort Sea 01/09/2012 31/07/2019 205,321
EL477 Imperial Oil Resources Limited Exploration Licence Beaufort Sea 01/09/2012 30/09/2020 202,380
EL478 BP Exploration Operating Company Limited Exploration Licence Beaufort Sea 01/09/2012 30/09/2020 205,359
EL479 BP Exploration Operating Company Limited Exploration Licence Beaufort Sea 01/09/2012 30/09/2020 203,635
EL481 Chevron Canada Limited Exploration Licence Beaufort Sea 01/09/2012 31/08/2021 205,946
EL483 ConocoPhillips Canada Resources Corp. Exploration Licence Beaufort Sea 01/09/2012 30/09/2020 196,497
EL485 Franklin Petroleum Canada Limited Exploration Licence Beaufort Sea 01/09/2012 31/08/2021 29,350
EL488 Franklin Petroleum Canada Limited Exploration Licence Beaufort Sea 06/03/2013 05/03/2022 24,574
EL489 Franklin Petroleum Canada Limited Exploration Licence Beaufort Sea 06/03/2013 05/03/2022 35,544
EL491 Franklin Petroleum Canada Limited Exploration Licence Beaufort Sea 06/03/2013 05/03/2022 100,677
EL496 Franklin Petroleum Canada Limited Exploration Licence Beaufort Sea 01/06/2014 31/05/2023 14,820
SDL014-CAN Chevron Canada Limited Significant Discovery Licence Beaufort Sea 05/09/1987   190
SDL025-CAN Nytis Exploration Company Canada Ltd. Significant Discovery Licence Beaufort Sea 09/02/1988   570
SDL026-CAN Nytis Exploration Company Canada Ltd. Significant Discovery Licence Beaufort Sea 09/02/1988   304
SDL028 Nytis Exploration Company Canada Ltd. Significant Discovery Licence Beaufort Sea 09/02/1988   1,809
SDL037 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 24/09/1987   8,034
SDL038 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 12/08/1987   6,620
SDL039 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 12/08/1987   12,182
SDL040 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 12/08/1987   5,190
SDL041 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 01/09/1987   10,059
SDL047 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 21/08/1987   4,104
SDL048 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 21/08/1987   1,740
SDL049 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 21/08/1987   7,627
SDL050-CAN Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   8,197
SDL051 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   2,368
SDL053 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   888
SDL054 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 01/05/1987   9,768
SDL055 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   2,072
SDL058 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   7,168
SDL061 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   4,504
SDL065 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   5,081
SDL083 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   11,692
SDL084 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   6,244
SDL085 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   1,396
SDL086 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   12,181
SDL087 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   3,872
SDL088 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   7,133
SDL089 BP Canada Energy Group ULC Significant Discovery Licence Beaufort Sea 13/11/1989   10,512
SDL091 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 04/05/1990   7,488
SDL092-CAN Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 04/05/1990   1,085
SDL095 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 04/05/1990   11,051
SDL096 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 19/07/1990   353
SDL097 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 19/07/1990   1,059
SDL110 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 30/01/1992   891
SDL111 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 30/01/1992   891
SDL112 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 30/01/1992   1,485
SDL113 BP Canada Energy Group ULC Significant Discovery Licence Beaufort Sea 25/03/1993   4,787
SDL114 BP Canada Energy Group ULC Significant Discovery Licence Beaufort Sea 25/03/1993   4,795
SDL115 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 11/07/1994   3,000
SDL116 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 10/06/1998   2,700
SDL117 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 10/06/1998   900
SDL126 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 01/08/2005   16,618
SDL130 Devon NEC Corporation Significant Discovery Licence Beaufort Sea 26/04/2007   14,458
SDL132-CAN MGM Energy Significant Discovery Licence Beaufort Sea 13/11/2007   38
SDL133-CAN MGM Energy Significant Discovery Licence Beaufort Sea 13/11/2007   19
SDL134-CAN MGM Energy Significant Discovery Licence Beaufort Sea 13/11/2007   247
SDL135 MGM Energy Significant Discovery Licence Beaufort Sea 13/11/2007   610
SDL136-CAN MGM Energy Significant Discovery Licence Beaufort Sea 17/01/2008   136
SDL146-CAN MGM Energy Significant Discovery Licence Beaufort Sea 23/04/2009   507
Figure 2 - Map of the Arctic Islands region

Figure 2 - Map of the Arctic Islands region

Text description of figure 2 - Map of the Arctic Islands region
Title Representative Type Region Effective Date Expiry Date Area (Ha)
SDL043 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 11/08/1987   612
SDL044 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   7,163
SDL045 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   10,578
SDL046 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   4,671
SDL066 BP Canada Energy Group ULC Significant Discovery Licence Arctic Islands 19/03/1987   3,548
SDL067 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   8,198
SDL068 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   5,721
SDL069 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   12,347
SDL070 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 01/09/1987   18,130
SDL071 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   5,347
SDL072 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   18,389
SDL073 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   32,169
SDL074 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   32,785
SDL075 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   6,112
SDL076 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 01/09/1987   8,758
SDL077 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   4,276
SDL078 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   9,856
SDL079-CAN Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   65,883
SDL080 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 01/09/1987   10,355
SDL081 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 10/07/1987   63,083
Figure 3 - Map of the Eastern Arctic region

Figure 3 - Map of the Eastern Arctic region

Text description of figure 3 - Map of the Eastern Arctic region
Title Representative Type Region Effective Date Expiry Date Area (Ha)
SDL005 Husky Oil Operations Limited Significant Discovery Licence Eastern Arctic Offshore 15/02/1987   11,184
Figure 4 - Map of oil and gas dispositions as of December 31, 2017

view larger map

Figure 4 - Map of oil and gas dispositions as of December 31, 2017

Text description of Figure 4 - Map of oil and gas dispositions as of December 31, 2017

Map showing oil and gas dispositions within the INAC Jurisdiction as of December 31, 2017.

Financial administration of interests

Pursuant to the terms of conditions of exploration licences pursuant to section 24(1) of the Canada Petroleum Resources Act, the Department holds financial security deposits with respect to exploration licences; these deposits are refundable to interest holders under certain conditions. Revenues from the administration of interests include three sources in general: forfeitures, non-refundable rentals, and fees.

Table 3: Revenues from administration of interests, 2013-2017 - In Canadian dollars
  2013 2014 2015 2016 2017
ForfeituresFootnote 1 50,000 599,830 0 509,599 26,562
Non-refundable rentalsFootnote 2 53,195 11,219 933 933 933
FeesFootnote 3 8,832 5,520 1,569 2,708 1,571
Total 112,027 616,569 2,502 513,240 29,069

Consultations on offshore Arctic oil and gas exploration

Since April 2017, the Government of Canada has been conducting consultations with rights holders, territorial governments and northern indigenous organizations on their existing and future interests in the Arctic offshore. The goals of these consultations have been to clarify the interests and plans of northern stakeholders and to inform next steps concerning the future of Arctic offshore oil and gas exploration and development.

The consultations have also taken into account the reports completed by Ministerial Special Representatives; Mr. Rowland Harrison and his Review of the Canada Petroleum Resources Act and Mrs. Mary Simon's A new Shared Arctic Leadership Model.

Environmental considerations

The Government of Canada's Budget 2016 provided funding for collaboration with researchers and Inuit communities in order to gather new knowledge of the Arctic environment, to help assess the potential environmental impacts of future offshore oil gas activity in the Arctic. Initiatives funded through the Budget 2016 announcement will inform a key part of the Government's five year science-based review (as mentioned in the Canada-US Joint Arctic Leaders' Statement).

Beaufort regional strategic environmental assessment

The Beaufort Regional Strategic Environmental Assessment (BRSEA) launched in 2016. The BRSEA will provide strategic direction and analysis of environmental considerations pertaining to future offshore oil and gas activity in the Beaufort Sea, Inuvialuit Settlement Region.

The BRSEA examines the cumulative effects of forecasted development and conservation scenarios; recommends desired environmental outcomes and thresholds; advances baseline information and the state of knowledge for the Beaufort SEA; supports decision-making around possible future resource development and management, environmental conservation programs, subsistence activities and other complementary commercial activities; and, takes into account trade-offs and changes in the state of the ecosystem.

The BRSEA is being developed and led in partnership between the Inuvialuit Regional Corporation, the Inuvialuit Game Council, and the Government of Canada. Two engagement sessions took place with partners and community members in 2017 to identify valued ecosystem components and cumulative effects indicators, set research priorities, and gather input for Traditional Knowledge-based projects.

Strategic environmental assessment in Baffin Bay and Davis Strait

A Strategic Environmental Assessment (SEA) in Baffin Bay and Davis Strait was also initiated in 2016. The SEA incorporates scientific information, Inuit knowledge and public feedback to assess the potential environmental, social, economic, and cultural impacts of possible future offshore oil and gas activities in the region.

In 2017, the Government of Canada requested that the Nunavut Impact Review Board coordinate the SEA process. The SEA working group also includes the Qikiqtani Inuit Association, Nunavut Tunngavik Incorporated and Government of Nunavut. Community engagement meetings were held in the spring and fall to consider Inuit concerns and traditional use of the region. This input was used to develop the SEA scope.

Details and documents can be found on the public registry at www.nirb.ca.

Environmental Studies Research Fund

The Environmental Studies Research Fund (ESRF) is a provision of Part VII of the Canada Petroleum Resources Act, and is funded through levies applied to oil and gas lands held by companies under licence. The research program sponsors environmental and social studies related to the exploration, development and production of oil and gas resources on frontier lands. Based upon the recommendations of the ESRF Management Board, the Minister approved $499,953 for the 2017-2018 Budget.

The Integrated Beaufort Observatory project was ongoing in 2017. Details on ESRF, including annual reports and publications can be found at www.esrfunds.org.

Royalty management

Given that there are no producing fields in Nunavut or in offshore Arctic waters, the amount of offshore royalty received by Canada in the 2017 calendar year is $0.

Pursuant to the Northwest Territories Land and Resource Devolution Agreement, the Norman Wells Proven Area remains under federal jurisdiction. CIRNA continues to collect petroleum royalties associated with the Norman Wells Proven Area and remits such royalties to the Government of the Northwest Territories. Two fields produced oil and/or gas in the Northwest Territories in 2017: the Ikhil gas field on the Mackenzie Delta and the Norman Wells oil field in the Central Mackenzie Valley.

The Ikhil gas field lies on Inuvialuit Lands and continues to be administered by Canada on behalf of the Inuvialuit pursuant to Section 7(94) of the Inuvialuit Final Agreement. Canada's responsibility to collect and remit royalties to the Inuvialuit continues after April 1, 2014, pursuant to the terms of the Northwest Territories Land and Resource Devolution Agreement. These royalties are not reported here.

Benefits

In 2017, no benefits plans were submitted as no exploration activity was conducted in Frontier Lands under CIRNA jurisdiction.

Subsection 5.2 of the Canada Oil and Gas Operations Act and section 21 of the Canada Petroleum Resources Act require that a benefits plan be approved by the Minister of Crown-Indigenous Relations and Northern Affairs before authorization of any oil and gas work or activity, or approval of a development plan relating to a pool or field on Frontier Lands in Nunavut, the Northwest Territories, and in the Arctic offshore.

For further information

Petroleum and Mineral Resources Management Directorate

To obtain further information, please contact the Directorate by phone or in writing.

Mailing address:

Petroleum and Mineral Resources Management Directorate
Government of Canada
10 Wellington Street
Gatineau QC K1A 0H4
Telephone: 819-934-9181
Fax: 819-953-5828
Website: Northern Petroleum Resources

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