Category Archives: Oil & Gas

Charter and Oil and Gas Issues to Await Another Day: A Disappointing End to the Kelly Appeal?

Case Considered: Kelly v. Alberta (Energy and Utilities Board), 2009 ABCA 161

PDF version: Charter and Oil and Gas Issues to Await Another Day: A Disappointing End to the Kelly Appeal?

In an earlier post, I suggested that a recent development in the Kelly appeal would likely lead the Court of Appeal to declare the appeal moot (see “An Important Development in the Kelly Appeal“). I also suggested that, although this would not be a surprising decision, it would amount to a disappointing end for an appeal which held out promises of elucidating important legal issues. The Court of Appeal has indeed dismissed the Kelly appeal as moot. Although this result is certainly disappointing from a legal point of view, it is perhaps less so from a societal and public participation point of view.

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Rights of first refusal in a package sale of oil and gas properties: a follow up to Chase Manhattan

Cases considered: Bearspaw Petroleum Ltd. v. ConocoPhillips Western Canada Partnership, unreported judgement of Master Hanebury, February 26, 2009
Bearspaw Petroleum Ltd. v. ConocoPhillips Western Canada Partnership, 2009 ABQB 202 (Master in Chambers)

PDF version: Rights of first refusal in a package sale of oil and gas properties: a follow up to Chase Manhattan

The rationale for the right of first refusal (ROFR) in the context of jointly owned oil and gas properties is well understood. ROFRs are typically included in a variety of oil and gas agreements and in particular the operating agreement (see Article 24 of the various iterations of the Canadian Association of Petroleum Landmen (“CAPL”) form). But they are messy, especially in so-called package sales where a party is disposing of a number of assets in a particular deal. Current versions of the CAPL form provide a procedure for dealing with package deals but the provisions are not free of difficulty and older forms offer little if any guidance.

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Extraordinary Times Justify Extraordinary Remedies: Interim Measures under the AIPN Standard Form Operating Agreement

Cases Considered: BG International Limited v. Canadian Superior Energy Inc., 2009 ABCA 127; BG International Limited v. Canadian Superior Energy Inc., 2009 ABCA 73 (Justice Carole Conrad, chambers)

PDF Version: Extraordinary times justify extraordinary remedies: interim measures under the AIPN standard form operating agreement

This is the first Alberta and indeed Canadian decision to consider the standard form operating agreement of the Association of International Petroleum Negotiators (AIPN) (2002). The Court of Appeal has upheld the order of Justice Barbara Romaine [unreported, February 11, 2009] sitting in chambers to issue an interim receivership order with respect to Canadian Superior Energy Inc’s (CSEI) interest in an exploration property in the offshore area of Trinidad and Tobago. In the course of doing so the order effected a change of operatorship and provided significant interim relief to BG International (BGI) in order to preserve the jointly owned property and to ensure continued drilling and testing operations.

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The protection of potable ground water through a purposive or objective approach to regulation

Case Considered: ERCB Decision 2009-029, CCS Corporation, Section 40 Review and Variance of Application No. 1515213, Class 1b Waste Disposal Scheme, Well 00/09-01-048-14W5M, Brazeau River, March 24, 2009

PDF version: The protection of potable ground water through a purposive or objective approach to regulation

There are at least five reasons to read and blog on this decision. First, it is very rare for the ERCB (“the Board”) to issue a reasoned decision on an application relating to a disposal well. Others include ERCB D 90-17 and D2002-055. The Board deals with most such decisions administratively. Typically there will be no reasoned decision and the general public will not have a clue that the Board has just approved a proposal to inject oilfield waste or acid gas into a geological formation unless they happen to live within a fairly circumscribed radius of the well. Other well operators are far more likely to receive notification than the general public. Second, the decision deals with a topic of crucial societal importance, the protection of potable groundwater and how to ensure that. Third, the decision contains a very interesting discussion of two different approaches to regulation. One approach (which we will term the prescriptive approach) seeks to set certain prescriptive standards that any project must meet in order to be approved. This approach works on the basis that if the proponent complies with that standard, the desired regulatory objective (e.g. protection of groundwater) will be achieved. The other approach (which we will term the purposive or objective approach) requires the applicant to meet the desired regulatory objective but affords the applicant greater discretion as to how it achieves that objective. Fourth, the decision offers some interesting comments on the interrelationship and respective responsibilities of the ERCB and Alberta Environment. And fifth it is important to look at this decision for what it might tell us about the Board’s approach to the regulation of disposal operations associated with carbon capture and storage.

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TransCanada’s Alberta Pipeline System now under federal regulatory authority

Cases Considered: National Energy Board, Reasons for Decision, TransCanada PipeLines Limited, GH-5-2008, Jurisdiction and Facilities, February 2008 (posted to the NEB website February 26, 2009)

PDF Version:  TransCanada’s Alberta Pipeline System now under federal regulatory authority

It’s official. The intra-provincial natural gas transmission system (the Alberta System), originally built by Alberta Gas Trunk Line Limited, latterly known as NOVA, and part of the TransCanada PipeLines (TCPL) empire since 1998, will henceforward be regulated by the National Energy Board rather than the provincial regulators, the Energy Resources Conservation Board (ERCB) (for pipeline construction etc) and the Alberta Utilities Commission (AUC) (for tolls and tariffs etc).

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