Author Archives: Nigel Bankes

About Nigel Bankes

Nigel Bankes is emeritus professor of law at the University of Calgary. Prior to his retirement in June 2021 Nigel held the chair in natural resources law in the Faculty of Law.

Limitations Issues in Oil and Gas Royalty Litigation

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Case commented on: Canadian Natural Resources Limited v Jensen Resources Ltd., 2013 ABCA 399

This case involves a geologist’s gross overriding royalty (GORR). The principal issue at trial (see earlier post here) was the question of whether or not the royalty continued as against the property in question when the Crown issued oil sands leases for the oil sands rights in place of the earlier petroleum natural gas leases which were in force when the royalties crystallized. The trial judge held that the royalty did continue against these new leases and the Court of Appeal has confirmed that part of the award.

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Judgment Handed Down in a Complex Petroleum and Natural Gas Lease Case

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Case commented on: Stewart Estate v TAQA North Ltd, 2013 ABQB 691

This lengthy (121 page plus appendices) and well-reasoned decision will be essential reading for members of the oil and gas bar in Alberta. Justice Barbara Romaine offers guidance on a number of issues including the importance of having all relevant parties before the Court when seeking a declaration as to lease validity, limitations, the interpretation of the term “lack of or intermittent market” and the term “any cause whatsoever beyond the Lessee’s reasonable control”, and the measure of damages where a lessee produces on a dead lease. Given the length of the decision (much of which is taken up with a careful review of the testimony of expert witnesses) I will limit this post to the above legal questions. There are, however, a number of other issues discussed in the decision that this post does not deal with (e.g. estoppel, leave and licence, champerty and maintenance, etc).

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Canada Ratifies ICSID and Alberta Introduces the Necessary Implementing Legislation

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Matters commented on: Canada’s ratification of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the Washington or ICSID Convention) and Bill 40: Settlement of International Investment Disputes Act

On November 1, 2013 Canada deposited its instrument of ratification of the Washington Convention with the secretariat for the International Centre for the Settlement of Investment Disputes (ICSID). The Convention will enter into force for Canada on December 1, 2013. The ICSID Convention, as its name implies, is designed to provide for dispute settlement (binding arbitration or conciliation) of investment disputes between states and investors from other states. The Centre may take jurisdiction over any such dispute by the written consent of both parties. That consent may be given in a specific case or it may be given generally. General consent is frequently given by the terms of a bilateral investment treaty such as the recent agreement that Canada has concluded with China. Article 22 of that agreement (which has yet to enter into force) provides as follows:

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Cancellation of a Nova Scotia Exploration License for Failure to Tender a Work Deposit

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Case commented on: Shin Fan F & P Inc v Canada-Nova Scotia Offshore Petroleum Board, 2013 NSSC 341

In this straightforward decision Justice Gregory Warner of the Nova Scotia Supreme Court declined to grant judicial review of a decision of the Canada-Nova Scotia Offshore Petroleum Board to cancel Shin Han’s exploration license (EL) for failure to tender a work deposit.

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Constitutional Questions and the Alberta Energy Regulator

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Decisions commented on: (1) ERCB Letter Decision, April 18, 2013, re Fort McKay First Nation, Notice of Question of Constitutional Law; (2) ERCB Letter decision, May 23, 2013, reasons for decision in relation to Fort McKay First Nation, Notice of Question of Constitutional Law; (3) 2013 ABAER 014, Dover Operating Corporation, Application for a Bitumen Recovery Scheme Athabasca Oil Sands Area, August 6, 2013; and (4) Fort McKay First Nation v Alberta Energy Regulator, 2013 ABCA 355

The Alberta Court of Appeal has granted leave to the Fort McKay First Nation (FMFN) to appeal two questions of law or jurisdiction in relation to decisions made by the Energy Resources Conservation Board (ERCB) (the predecessor to the Alberta Energy Regulator (AER)) and the AER itself in approving, subject to the further approval of the Lieutenant Governor in Council, Dover’s application for a major steam assisted gravity drainage (SAGD) bitumen recovery project. The two questions on which leave was granted are as follows:

(a) Whether the Tribunal erred in law or jurisdiction by finding that the question whether approval of the project would constitute a meaningful diminution of the Treaty rights of the Fort McKay First Nation and therefore be beyond provincial competence was not a question of constitutional law as defined in the Administrative Procedures and Jurisdiction Act;

(b) Whether the Tribunal erred in law or jurisdiction by finding that it had no jurisdiction to consider constitutional issues other than those defined as “questions of constitutional law” in the Administrative Procedures and Jurisdiction Act.

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