Update on the Modernization of the Act, Regulations and Systems (MARS)

IOGC Quarterly Newsletter Volume VII, Issue 4

Reporting Period January 1, 2018 to March 31, 2018

1. Phase I Regulations – Project Update:

During the current reporting period, agreement was reached with oil and gas First Nations regarding the six specific areas of accommodations brought forward in a resolution at the Indian Resource Council (IRC) January 31, 2017 AGM. Firstly, after careful review and consideration of proposed, draft Phase I regulations, the Joint Technical Committee One (JTC-1) passed a unanimous resolution on February 8, 2018 recommending that the Indian Resource Council (IRC) formally support the proposed Phase I regulations. The IRC Board approved this JTC-1 recommendation at its March 5, 2018 IRC Board meeting and this was unanimously ratified the following day, March 6, 2018, by the IRC membership during the 2018 IRC AGM.

You may recall that in a letter dated December 11, 2017, JTC-1 submitted a set of seven new recommendations for accommodation within the Phase I regulations. IOGC has committed to work with JTC-1 during the pre-publication process for the draft Phase I regulations so any accommodations on six of the recommendations will appear in the final Phase I regulations. The sole exception which cannot currently be accommodated within the Phase I regulations is "Minimum Monthly Reference Price" and this recommendation will be accommodated within the Phase II regulations (whereby the regulations relating to royalties will be developed).

Departmental approvals for the proposed Phase I regulations is underway and they are expected to be nearly simultaneously pre-published in the Canada Gazette, Part I and published in the First Nations Gazette. To the extent possible, the First Nation and public review and comment period will be extended to 90 days to allow as much time as possible for review and feedback.

2. Implementation of 2009 Act and Phase I regulations – Readiness Update:

IOGC continues to work on internal processes through its MARS Portfolio Steering Committee to ensure the organization is ready to begin to implement, administer, and enforce the Indian Oil and Gas Act, 2009 and its Phase I regulations beginning on the day they both become law.

Now that there is greater clarity on a path forward for the approval and First Nations' and public consultation on the proposed Phase I regulations, MARS Portfolio Plan and Deliverables Timeline is being updated.

IOGC is in the process of developing a MARS Strategic Communications Framework. Two of the four following (1 & 2) projected major components have been completed to support the Resource Information Management System 2 (RIMS2) Project:

  1. Petrinex – IOGC Inclusion Project
  2. RIMS Royalty Management and Case Management
  3. 2009 Act and Regulations Implementation
  4. Bring 2009 Act and Phase I regulations into force

3. Organizational Change Management (OCM) Update:

IOGC is using the Government of Canada's standard Prosci© Methodology and Tools to support all projects and sub-projects, including the MARS portfolio.

To support the implementation of the 2009 Act and Phase I regulations, OCM is helping business units complete sponsor self-assessments and nce the business units have updated their gap analyses, OCM will help business units complete their impact analyses.

An OCM team has been assembled for the RIMS2 Project and is currently working with business units to complete their impact analyses.

A successful bidder has been identified via the procurement process to provide long-term OCM services and support to IOGC. The contract can be officially awarded once security clearance issues have been resolved.

IOGC is also exploring options to further increase its internal change management capacity by contracting for training related to: 1) creating an additional 10 to 12 Prosci©-certified Change Management Practitioners within IOGC's core staff; 2) one-day manager / supervisor training for new managers and those unable to attend the last time this was offered; and, 3) one-day employee training for all remaining IOGC staff.

4. RIMS2 Project Update:

Please note that RIMS2 systems development is independent of the "Implementation of the 2009 Act and Phase I regulations." The new RIMS2 system functionality will come on-line sometime after the 2009 Act and Phase I regulations have both become law.

An important project milestone was reached when Sierra Systems was identified as the successful bidder and the contract was awarded for Sierra to: 1) construct new royalty management functionality (leverages Petrinex data exchange with IOGC); and, 2) the introduction of shared case management functionality to IOGC. A team from Sierra is presently on-site at IOGC and is quickly getting up to speed on IOGC's business requirements.

An important scope change has been introduced in that IOGC will not be receiving the range of data originally contemplated; instead, the data extract from Petrinex will be smaller, focusing only on the essential data elements required for the calculation of royalties.

Sierra project team has begun the task of developing the royalty calculation mechanisms need by active leases in Saskatchewan. Nine major types have been identified, with three of them now under user acceptance testing by IOGC's staff. The remaining types should be coded and available for testing by early May.

Finally, as noted earlier, two of the four projected major components of the MARS Strategic Communications Framework required to support the RIMS2 Project have been completed. The partially-completed framework is currently undergoing review and approvals processes by INAC-HQ Communications.

5. Phase II Regulations – Project Update:

Please note that the Phase II regulations are out of scope of the "Implementation of the 2009 Act and Phase I regulations." Once the 2009 Act and Phase I regulations come into force, Phase II regulations will be developed and brought into force, as they are readied, until the existing Indian Oil and Gas Regulations, 1995 have been entirely replaced by new, modern regulations.

IOGC received JTC-1's feedback on the proposed regulatory drafting instructions for the Moneys regulations module on June 28, 2017. The feedback received additional consideration during the current reporting period and a response is being prepared.

On December 13, 2017, IOGC received JTC-1's feedback on the proposed regulatory drafting instructions for both the Surface regulations module and the Exploration regulations module. This feedback has been forwarded to the regulatory module leads for analysis and response.

Progress on developing Phase II regulations has been somewhat limited as IOGC subject matter experts have been focused on completing the Phase I regulations.

For further information on IOGC or the MARS Portfolio of projects, please contact IOGC at:

Indian Oil and Gas Canada
100 – 9911 Chiila Blvd.
Tsuu T'ina AB T2W 6H6
Phone: (403) 292-5625
Fax: (403) 292-5618
Email: aadnc.contactiogc.aandc@canada.ca

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