British Columbia collects royalties on oil and natural gas produced from a Crown lease. The royalty regime is structured to maximize the amount of economic rent collected from produced oil and natural gas, while ensuring that producers are able to earn fair return on their investment. British Columbia also has a competitive royalty regime compared to other jurisdictions in Canada and the US.
The goals of the current royalty regime are:
- Values to the Crown are maximized: encourage resource development to the benefit of the Crown in terms of maximizing royalties and taxes
- Equity: producers, large and small, are treated equally under the regime
- Long-term investment: the royalty regime is aimed at rational, long-term investment by industry
- Administrative Ease: simple to administer and verify for government and industry.
Since 2002, the government has introduced royalty rates for marginal and ultra-marginal natural gas, royalty credits for deep gas exploration, summer drilling and infrastructure development. The coalbed methane royalty recognizes the unique development and production costs of this resource. All these new changes to the royalty regime will ensure that British Columbia’s fiscal regime remains competitive with other jurisdictions, encourage development of natural resources, and in turn increase direct revenue to the Province. These will also create jobs in the oil and gas sector and help revitalize the provincial economy.
This page and the related subpages provide brief explanations of the royalty programs and may not contain complete information. For full details contact:
- Ines Piccinino (Executive Director, Policy and Royalty, Ministry of Energy, Mines and Petroleum Resources) at 250-356-9825.
- Doug Stangeland (Director, Mineral, Oil and Gas Revenue Branch, Ministry of Finance) at 250-952-0194.
For detailed information on legislation, calculating and reporting B.C. oil and gas royalties and taxes, please visit the Ministry of Finance Natural Resources Page.
The B.C. Ministry of Energy, Mines and Petroleum Resources (MEMPR) will offer a FREE webinar on British Columbia’s Royalty Programs, including the recently announced Oil and Gas Stimulus Package, on September 29th, from 9:00 am to 11:00 am PT (10:00 am to 12:00 pm MT).
The webinar is intended to increase awareness on B.C.’s royalty programs in the oil and gas industry, and help industry make informed investment decisions for the 2010 budget cycle.
No special equipment is required to attend this webinar. You only need a computer with Internet Explorer, and a phone. Participants will be able to submit questions in writing during the webinar.
To register, please send an email to Josie.Kelly@gov.bc.ca before end of the day September 28. You will then receive an Outlook invitation with clear instructions on how to access the webinar.
Topics that will be covered are:
B.C. Natural Gas Resources
- B.C.’s General Royalty Regime
- Royalty Credit Programs
o Summer Royalty Credit Program
o Deep Royalty Credit Programs
§ Examples for a vertical well, horizontal well and multilateral well
§ Deep re-entry well
§ Deep discovery well
o Coalbed Methane Royalty Program
o Infrastructure Royalty Credit Program
- Royalty Rate Reduction Programs
o Marginal Royalty Program
o Ultra-marginal Royalty Program
o Net Profit Royalty Program
- B.C. Oil and Gas Stimulus Package
o Objectives
o Two per cent Royalty Relief Program – qualification and examples
o Deep Royalty Program Modifications
§ 15 per cent increase in credits
§ Qualification for horizontal wells between 1,900 and 2,300 metres
§ $50 million additional allocation for the Infrastructure Royalty Credit Program (Request for Applications opened September 10, closes November 10)
o Commingling for the Plains area (OGC to announce)
o Amendments to the Drilling Licence Regulation
- Who’s Who in Oil and Gas in the Province of British Columbia
o Ministry of Energy, Mines and Petroleum Resources: the Oil and Gas Division and the Titles Division
o Mineral, Oil and Gas Revenue Branch, Ministry of Finance
o Oil and Gas Commission
- Resources and Contact Information
Please feel free to invite any of your colleagues that might benefit from this opportunity.
