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

Reporting Period April 1, 2019 to June 30, 2019

1. Important Notice for All IOGC Contacts and Clients:

Indian Oil and Gas Canada (IOGC) is pleased to announce that the2009 amendments to the Indian Oil and Gas Act and the Phase I regulations will both come into force and become law on August 1, 2019. Public notices were published simultaneously, on June 26, 2019, in both the Canada Gazette, Part II and in the First Nations Gazette. The relevant information can be found on-line:

This important accomplishment and milestone would not be possible without the participation, review, and feedback from IOGC's many contacts and clients.

The new legislative and regulatory regime is intended to strike a balance between: 1) the clarity and certainty required by industry when making their investment decisions; and, 2) the flexibility that First Nations desire so they can customize their business arrangements to fit the needs and aspirations of their communities and community members. As we get closer to the August 1, 2019 coming into force date, IOGC will be providing more specific information to facilitate a smooth transition from the existing ruleset to the new ruleset. Please direct all enquiries to aadnc.contactiogc.aandc@canada.ca OR aadnc.contacterpgic.aandc@canada.ca 

2. Engagement and Outreach on the Indian Oil and Gas Regulations, 2019

IOGC continues to host engagement and outreach meetings on the Indian Oil and Gas Regulations, 2019. If you would like to meet with IOGC on the 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

a) Information for First Nations Clients

IOGC has entered into an 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 Indian Oil and Gas Act, 2009 and the Indian Oil and Gas Regulations, 2019. Oil and gas-producing First Nations are being contacted by the IRC to schedule these sessions. For more information, please contact David Shade, IRC's JTC-1 Program Manager (davids@irccanada.ca or 403-281-8308).

b) Information for Industry Stakeholders

IOGC held Industry Engagement Information Sessions on November 7 & 8, 2018. These sessions were hosted in meeting spaces that were kindly made available to IOGC by the National Energy Board in downtown Calgary. Participants included all industry partners that operate on First Nations' lands and petroleum associations. Feedback received at these sessions was used to develop Frequently-Asked Questions (FAQs) which have been posted on IOGC's Internet website.

In the preceding issue of this Newsletter, we informed IOGC contacts and clients that an article regarding IOGC's new Act and regulations (PDF) was published in the February 2019 edition of "The Negotiator" magazine published by the Canadian Association of Petroleum Landmen (CAPL). As a non-government organization.

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

IOGC is ensuring that it is ready, as an organization, to move on August 1, 2019 from the 1974 Act and its 1995 regulations to the 2009 Act and its 2019 regulations. For the past few months, IOGC has been conducting dry-runs and simulation exercises to ensure that it will be ready to implement, administer, and enforce the 2009 Act and the 2019 regulations by August 1, 2019. Please note, IOGC service standards may be lengthened during this important transition process.

4. 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 contacts and clients 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, with IOGC has completed over 90% of the task of developing the royalty calculation mechanisms needed for active leases in Saskatche an. Ten major types have been identified; all have completed acceptance testing. Development of the systems to process the data and to provide an assessment is continuing. Work has now shifted to the defining the major types or schema as identified in Alberta. To date, 19 major types have been identified with approximately 50 % of the active leases being reviewed.

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.

5. 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. 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 2019 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 and Environment regulation modules 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.

6. Organizational Change Management (OCM) Update:

OCM has spent the last quarter focused on working with business units and their cross-functional partners to plan, execute and collaborate on a series of dry-run exercises focused on the main areas of change resulting from the 2009 Act and its 2019 regulations that affect more than one business unit. The results of the dry-run exercises are being used to address gaps and improve processes.

For the RIMS2 project, OCM has been involved as IOGC engaged with Sierra on project governance and establishing a better defined process for working together.

7. Other News

  • On June 21, 2019, Bill C-97 – an Act to implement the Budget, received Royal Assent. As a result, IOGC will soon be reporting to the Minister of Indigenous Services Canada (prior to this, IOGC reported to the Minister of Crown-Indigenous Relations and Northern Affairs Canada).
  • The final version of IOGC's Annual Report for FY2017-2018 is now available on IOGC's Internet website
  • IOGC officials attended the Global Petroleum Show June 11 to 13 held at Calgary's BMO Centre. IOGC officials were available to address any questions or concerns regarding the new Act and regulations.
  • Please note, effective June 17, 2019 – Canada Post has changed IOGC's Postal Code to T3T 0E1.

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

Indian Oil and Gas Canada
100 – 9911 boul. Chiila Blvd.
Tsuut'ina AB  T3T 0E1
Phone / Téléphone: (403) 292-5625
Fax / Télécopieur: (403) 292-5618
Email: aadnc.contactiogc.aandc@canada.ca

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