EMD02-05
TITLES DIVISION
SUBJECT: Drilling Licence Regulation Amendments - Term Extension
The Ministry of Energy and Mines is interested in facilitating exploration and development of coalbed methane. In support of this objective, amendments have been made to the Petroleum and Natural Gas Drilling Licence Regulation, to provide an extension of the term of a drilling licence.
The normal terms of drilling licences (3, 4 or 5 years, plus one extension year) do not provide sufficient time for operators to undertake coalbed methane projects. The Petroleum and Natural Gas Drilling Licence Regulation has been amended to extend the terms of licences that have been included in a scheme approved by the Oil and Gas Commission, under section 100 of the Petroleum and Natural Gas Act, for the development for production of coalbed methane.
The amendments provide extensions that:
- Are made annually for a maximum of five extensions;
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- Are only available after the normal term and extension period have elapsed;
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- Include only the area and zones that are included in the scheme for the development or production of coalbed methane; and
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Extensions will be provided for one-year, based on an application submitted to the Titles Division, Ministry of Energy and Mines, PO Box 9326, Stn Prov Gov't, 6th floor, 1810 Blanshard Street, Victoria, BC, V8W 9N3, that identifies the approved scheme, describes the portions of the drilling licence and geological zone within the scheme and is accompanied by the annual rental of $3.50 per hectare. The specific revisions to the Petroleum and Natural Gas Drilling Regulation are attached.
The Province's position is that coalbed methane is natural gas and is therefore regulated under the Petroleum and Natural Gas Act. For further information regarding Provincial policy on coalbed methane, refer to: Information Letter EMD99-05 - Coalbed Methane Policy. Additional information on coalbed methane may be found at:
http://www.em.gov.bc.ca//OG/oilandgas/petroleumgeology/UnconventionalOilAndGas/CoalbedGas/Pages/default.aspx
Gerald German
Executive Director
Titles Division
Attachment (see below)
MPCAA/B/C
Section 3 of B.C. Reg. 10/82, the Petroleum and Natural Gas Drilling Licence Regulation, is amended.
(a) in subsection (3), by striking out "(5.1)" and substituting "(5.1), (5.3)", and
(b) by adding the following subsections:
(5.3) The minister may extend a drilling licence for a period of one year if
(a) the drilling licence has previously been extended under subsection (5),
(b) the application for the extension is made during the term of a current
extension of the licence under
(i) subsection (5),
(ii) subsection (5.1), or
(iii) this subsection,
(c) the application for the extension is accompanied by rental of $3.50 for each hectare, and
(d) the drilling licence is included in a scheme approved under section 100 of the Act for the development or production of natural gas from a stratum or strata that mainly contain coal.
(5.4) An extension under subsection (5.3) must not
(a) apply to a depth below the deepest zone that is included in the scheme referred to in subsection (5.3) (d),
(b) be given if 5 extensions under subsection (5.3) have been given previously for the same drilling licence, or
(c) include land that is not included in the scheme referred to in subsection (5.3) (d).
For further information contact:
Colin Magee
Director, Oil and Gas
Titles Division
PO Box 9326, Stn Prov Gov't
6th floor, 1810 Blanshard Street
Victoria, BC V8W 9N3
Telephone: (250) 952-0335
Facsimile: (250) 952-0331
E-mail: Colin.Magee@gems8.gov.bc.ca
