Amendments to the Petroleum and Natural Gas Act’s drilling licence regulation modernize the provincial government’s oil and gas tenure system in advance of the winter drilling season.

The private sector conducts oil and gas activities on Crown land following the acquisition of tenure through a competitive bidding process. One type of tenure is a drilling licence, which provides the right to drill oil and gas wells in acquired areas. Under the provincial government’s drilling licence regulation, tenure holders are subject to specific rules to show adequate development is taking place in an effort to find oil and gas resources.

The updates made today align B.C.’s regulations with exploration activities that have advanced with new technology and modern science. The updates include:

• New rules for ‘grouping’ oil and gas tenures so tenure holders can concentrate investments in areas that are more likely to be brought into production. They will no longer need to drill in remote areas to prove they are conducting adequate exploration activities - new technology and longer, deeper wells are better able to do this.

• A redefinition of an ‘earning well’ - a well drilled for the purpose of finding oil and gas - to account for modern technology’s ability to assess the likelihood of finding oil and gas in an area being explored and to support orderly development at drilling sites.

• An extension of the provincial ‘validation table’ to align with current drilling distances. This table is used by the Province of British Columbia to measure a tenure holder’s efforts to find oil and gas below the surface of the land.

Collectively, these changes will result in improved exploration management, lessen the impact on the land-base, and should lead to earlier royalty revenues for the government of B.C.

Changes are being made following government’s commitment to improve the administration of British Columbia’s oil and gas tenure system. This pledge was a key action item in the Natural Gas Strategy released earlier this year. A broader review of the tenure provisions in the Petroleum and Natural Gas Act is still underway.

All industry tenure holders must apply to the BC Oil and Gas Commission to begin exploration and development activities within their tenure area. Industry is subject to strict regulations to ensure oil and gas practices are safe and responsible.

To learn more about British Columbia’s natural gas sector, including full details about government’s intentions to amend the Petroleum and Natural Gas Act, visit: gov.bc.ca/ener/natural_gas_strategy.html

Contact:
Sandra Steilo
Ministry of Energy and Mines
250 952-0617