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

Indian Oil and Gas Canada (IOGC) Quarterly Newsletter, volume VIII, issue 4

Reporting Period January 1, 2019 to March 31, 2019

Phase I Regulations – Project Update:

a) General Information for All IOGC Clients and Stakeholders

In the preceding issue of this newsletter, IOGC reported that feedback obtained during the 90-day public comment period for the pre-publication of the Draft Phase I regulations (the Proposed Indian Oil and Gas Regulations) was being accommodated, where appropriate. This process converts the Draft Phase I regulations into the Final Phase I regulations which are considered by Treasury Board for approval and publication in the Canada Gazette, Part II. Shortly following this consideration, the Indian Oil and Gas Act, 2009 will come into force along with its Phase I regulations (projected to occur during the summer months of 2019).

IOGC continues to host engagement and outreach meetings on the proposed regulations. If you would like to meet with IOGC on the proposed regulations, please contact:

Pamela McNeil, Policy Manager
Telephone: (403) 292-5654
Email: Pamela.McNeil@Canada.ca

OR

Shirley Conrad, Communications Officer
Telephone: (403) 292-5872
Email: Shirley.Conrad@Canada.ca

b) Information for First Nations Clients

You may recall that IOGC entered into agreement with the Indian Resource Council (IRC) that would assist the IRC in providing Readiness Training to First Nations in preparing for the implementation of the 2009 Act and the Phase I regulations. Oil and Gas First Nations can expect to be contacted by the IRC in the upcoming months. The timing for this must be just right – if the readiness training takes place too early, then some First Nations will require future refresher training as too much time has elapsed since when the training occurred and when First Nations need to implement new or modified processes. If readiness training is delayed too long, then there is risk that some First Nations would not have received the training prior to when it would be required for them to switch over to the new rules set.

c) Information for Industry Stakeholders

IOGC hosted Industry Engagement Information Sessions on November 7 & 8, 2018 for all industry partners that operate on First Nations' reserve lands and petroleum associations. The two sessions were held in meeting spaces that were kindly made available to IOGC by the National Energy Board in downtown Calgary. Based upon the feedback received at these sessions, IOGC has developed a list of Frequently-Asked Questions (FAQs) for industry which has been posted on IOGC's Internet website at:

Frequently Asked Questions (FAQs)

An article regarding IOGC's new Act and regulations was published in the February 2019 edition of "The Negotiator" magazine published by the Canadian Association of Petroleum Landmen (CAPL). Since CAPL is a non-government organization, the article is available in English-language only at:

The Negotiator, February 2019 edition

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

In the coming months, IOGC will continue its focus on its internal or organizational readiness to implement, administer, and enforce the 2009 Act and its new regulations beginning on the day they first become law. IOGC's readiness will be tested via an internal simulation or walkthrough, scheduled for early May 2019. As previously noted, service standards will be lengthened to allow for focus on this important milestone.

3. RIMS2 Project Update:

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

A major project milestone was reached during the past reporting period as new Gas Cost Allowance (GCA) capability was developed and deployed. IOGC's clients and stakeholders will be using this new feature for the next period for their GCA reporting and the new tools and processes are expected to facilitate and streamline reporting.

FY2019-2020 will be challenging yet exciting times for the RIMS2 Project as systems development is scheduled to be completed. New components will progressively be implemented as they are readied.

The Sierra project team has completed the task of developing the royalty calculation mechanisms needed for active leases in Saskatchewan. Ten major types have been identified; all have completed acceptance testing. Work has now shifted to the major types identified in Alberta. At the same time the development team is reviewing the design of the interfaces for the exchange of data between Petrinex and IOGC as well as internal interfaces within our systems (RIMS and RIMS2). Test data has been shared by Petrinex for our use in developing the interface, unpacking the data and providing it to the calculation engine. Work is progressing for a Q4 Go Live within the Saskatchewan royalty reporting scope.

The Petrinex Industry Readiness Team has begun preparations to communicate and train companies in Saskatchewan to submit the data as designed. Each company is required to provide a Change Leader to manage their conversion.

The RIMS2 Communications Plan, required for project gating approvals processes, is being updated and is undergoing internal review and approvals.

4. Phase II Regulations – Project Update

The Phase II regulations are out of scope of the "Implementation of the 2009 Act and Phase I regulations." Phase II regulations will continue to be developed and brought into force, as they are readied, once the 2009 Act and Phase I regulations are published in Part II of the Canada Gazette. By the end of this process, the existing Indian Oil and Gas Regulations, 1995 will have been entirely replaced by new, modern regulations.

With the 2009 Act and its Phase I regulations close to becoming law, the IRC and the Joint Technical Committee (JTC) have decided to focus their efforts in ensuring First Nations are ready for the new legislative and regulatory regime. Work on the Phase II regulations will be postponed until FY2019-2020. Currently, joint work between the JTC and IOGC is not projected to take place during Q1 or Q2. In its place, the JTC will focus on developing a strategic approach for the Royalty Management regulations module that would reflect both the position of the JTC / IRC but also of their respective individual First Nations. The results of this work is expected to be presented to IOGC in Q3 of FY2019-2020 when IOGC will be expected to re-engage the JTC on the development of regulatory drafting instructions.

5. Organizational Change Management (OCM) Update:

OCM is continuing  to meet with business units to promote cross-functional collaboration and support change management through communications, coaching and training as IOGC prepares for the implementation of the 2009 Act and Phase I regulations. OCM is providing coaching support to managers as part of the RIMS2 Business Process Re-engineering Project and has facilitated a coaching/sponsorship session with IOGC executives.

6. Site Access and Joint Inspections – An Important Safety Notice for First Nations' Oil and Gas Representatives:

IOGC performs field inspections with First Nation oil and gas representatives on several reserves each year. The purpose of these inspections is to ensure compliance with regulations, IOGC environmental protection terms, standards, practices and follow-up concerns from First Nations. To ensure safe  access to oil and gas facilities containing equipment, all representatives are required to have appropriate Personal Protective Equipment (PPE), valid Hydrogen Sulfide (H2S) Alive® and Standard First Aid certification in line with Occupational Health and Safety requirements (Canada Occupational Health and Safety Regulations). Proof of valid certification will be required. If documentation is unavailable for review, representatives will be instructed to remain outside of the lease boundaries while the inspection is undertaken. A separate letter was sent to Chief and Councils of producing First Nations with additional details.

7. Other News

IOGC officials attended the IRC's Annual General Meeting (AGM) on January 17, 2019 at the Tsuut'ina Nation's Grey Eagle Resort and Casino. IOGC's Executive Director and CEO presented his annual address and senior IOGC officials were available to address any questions or concerns regarding the new Act and regulations and to discuss other operational issues. An advanced, printed copy of IOGC's Annual Report for FY2017-2018 was made available to participants. The final version of IOGC's Annual Report for FY2017-2018 is now available on IOGC's Internet website at:

Indian Oil and Gas Canada Annual Report 2017-2018

On December 2, 2018, the Government of Alberta announced a temporary curtailment of crude bitumen and crude oil production that began on January 1, 2019. Production curtailment requirements are to be assigned at the operator level and will be allotted by the provincial regulator to each operator. In response to concerns raised by First Nations Clients, IOGC prepared a statement (IOGC Statement: Alberta Curtailment of Oil Production and the Price Differential) which was sent to all Chiefs of producing First Nations and also shared at the IRC Annual AGM on January 16-17, 2019.

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

Indian Oil and Gas Canada / Pétrole et gaz des Indiens du Canada
100 – 9911 boul. Chiila Blvd.
Tsuu T'ina AB  T2W 6H6
Phone / Téléphone: (403) 292-5625
Fax / Télécopieur: (403) 292-5618
Email: aadnc.contactiogc.aandc@canada.ca

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