Northern Oil and Gas Annual Report 2021

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Table of Contents

Foreword

The Northern Oil and Gas Annual Report is prepared in accordance with section 109 of the Canada Petroleum Resources Act which states:

The Minister shall, within ninety days after the end of each year, cause to be prepared a report with respect of the administration of this Act during that year, and shall cause the report to be laid before each House of Parliament on any of the first fifteen days on which that House is sitting after the day the report is prepared.

Responsibility for the management of oil and gas resources on Crown lands north of 60°N in the Northwest Territories, Nunavut and Northern offshore is administered by the Petroleum and Mineral Resources Management Directorate under the mandate of the Canada Petroleum Resources Act by:

Information about northern petroleum resource management regime and the program can be found at: Northern petroleum resources.

Minister's Message

Every year, in accordance with the Canada Petroleum Resources Act, the Government of Canada tables before Parliament an annual report on the administration of the Act in the Northwest Territories, Nunavut, and Northern offshore, for the calendar year ending on December 31.

Throughout 2021, the work of Crown-Indigenous Relations and Northern Affairs Canada continued to be guided by the Government of Canada's determination to foster strong economic growth in the Arctic that respects Indigenous rights and protects the environment.

While there was no activity in Canada's northern oil and gas sector in 2021, Crown-Indigenous Relations and Northern Affairs Canada devoted significant efforts to advance two essential elements that will shape the future on this industry in Canada's North.

First, the Department continued to gather marine and climate science in collaboration with Indigenous and territorial partners, in order to inform the future of the moratorium.

Second, Crown-Indigenous Relations and Northern Affairs Canada continued to advance the negotiations of a Beaufort Sea oil and gas co-management and revenue-sharing agreement with key partners: the Government of Yukon, the Government of Northwest Territories, and the Inuvialuit Regional Corporation.

I invite you to consult this report for further details on the state of Canada's Northern oil and gas resources sector over the past year, including the disposition of interests, financial administration of interests, environmental considerations, consultations and royalty management for 2021.

The Honourable Daniel Vandal, P.C., M.P.
Minister of Northern Affairs

Canada Petroleum Resources Act Activities

Current Disposition of Interests

The Government of Canada maintains a public registry of petroleum interests and instruments registered under Part VIII of the Canada Petroleum Resources Act. This registry is the official record of rights holders, and any transfer of rights or change of ownership must be registered.

More information is available at Rights Management.

Table 1: Exploration Licences as of December 31, 2021

Beaufort Sea
Licence Area
(in hectares)
Representative Effective Date End of Period 1 Expiry Date2
EL3171 105,150 BP Canada Energy Development Company 5 Oct 1986 N/A N/A
EL3291 339,434 BP Canada Energy Development Company 5 Sep 1987 N/A N/A
EL476 205,321 Imperial Oil Resources Limited 1 Sep 2012 31 Jul 2019 31 Jul 2019
EL477 202,380 Imperial Oil Resources Limited 1 Sep 2012 30 Sep 2018 30 Sep 2020
EL478 205,359 BP Exploration Operating Company Limited 1 Sep 2012 30 Sep 2018 30 Sep 2020
EL479 203,635 BP Exploration Operating Company Limited 1 Sep 2012 30 Sep 2018 30 Sep 2020
EL481 205,946 Chevron Canada Limited 1 Sep 2012 31 Aug 2019 31 Aug 2021
EL483 196,497 ConocoPhillips Canada Resources Corp. 1 Sep 2012 30 Sep 2018 30 Sep 2020
EL485 29,350 Franklin Petroleum Canada Limited 1 Sep 2012 31 Aug 2019 31 Aug 2021
EL488 24,574 Franklin Petroleum Canada Limited 6 Mar 2013 5 Mar 2020 5 Mar 2022
EL489 35,544 Franklin Petroleum Canada Limited 6 Mar 2013 5 Mar 2019 5 Mar 2022
EL491 100,677 Franklin Petroleum Canada Limited 6 Mar 2013 5 Mar 2020 5 Mar 2022
EL496 14,820 Franklin Petroleum Canada Limited 1 Jun 2014 31 May 2021 31 May 2023

1 Under work prohibition order P.C. 1987-2265 pursuant to section 12 of the Canada Petroleum Resources Act.

2 In the Arctic Offshore, terms of existing Licences as well as oil and gas activities are suspended under order in council P.C. 2019-1121 pursuant to subsection 12(1) of the Canada Petroleum Resources Act. Time remaining on licences (time between the coming into force of the order and the expiry date of the suspended licences) will resume once the order is repealed.

Table 2: Land disposition as of December 31, 2021

In Hectares
Region Exploration Licence Significant Discovery Licence Production Licence Former Rights1 Total
Arctic Islands of Nunavut 0 327,981 0 0 327,981
Eastern Arctic Offshore 0 11,184 0 0 11,184
Beaufort Sea 1,868,687 224,623 0 0 2,093,310
Norman Wells Proven Area 0 0 0 654 654
Total (in hectares) 1,868,687 563,788 0 654 2,433,129
1 Permits and/or leases issued under former legislative regimes and continued in force pursuant to subsection 112(2) of the Canada Petroleum Resources Act.
By Interest Type (number of licences)
Region Exploration Licence Significant Discovery Licence Production Licence Former Rights1 Total
Arctic Islands of Nunavut 0 20 0 0 20
Eastern Arctic Offshore 0 1 0 0 1
Beaufort Sea 13 48 0 0 61
Norman Wells Proven Area 0 0 0 6 6
Total 13 69 0 6 88
1 Permits and/or leases issued under former legislative regimes and continued in force pursuant to subsection 112(2) of the Canada Petroleum Resources Act.

Rights issuance

In December 2016, the Government of Canada announced a moratorium on new oil and gas rights issuance in the Arctic offshore, subject to a five-year science-based review. The Government of Canada worked with Northern Partners to co-develop a climate and marine science-based review in the Arctic offshore. Canada is continuing to work collaboratively with Northern Indigenous organizations and territorial governments to jointly administer the review, taking into account marine and climate change science. The science-based review committees co-developed new research for an Arctic offshore-wide resources assessment, an assessment of greenhouse gas emissions from potential offshore oil and gas development in the Beaufort Sea, and a survey of Arctic offshore well containment and control capabilities. The objective of the collaborative review process is to assess the potential impact from Arctic offshore oil and gas exploration and development.

Reports of the review process in the western Arctic offshore and eastern Arctic offshore are being co-developed by the Government of Canada, Northern Indigenous organizations and territorial governments. They will be supplemented by the foundational research and information gathering that was completed as part of the Beaufort Regional Environmental Assessment and the Eastern Arctic Strategic Environmental Assessment, and include new climate and marine information. In 2022, the reports will inform next steps related to the moratorium.

Finally, the Government of Canada has continued to negotiate a Beaufort Sea oil and gas co-management and revenue-sharing agreement with the Government of Yukon, the Government of Northwest Territories and the Inuvialuit Regional Corporation.

Prohibition Order in Canadian Arctic Offshore Waters

On October 4, 2018, Canada announced "Next Steps on Future Arctic Oil and Gas Development," committing Canada to suspend the terms of existing licences in the Arctic offshore to preserve existing rights for the duration of the moratorium on new oil and gas rights issuance in the Arctic offshore. Subsequently, on July 30, 2019, the Governor in Council issued an Order Prohibiting Certain Activities in Arctic Offshore Waters. The Order prohibited any person, including an interest owner of a licence, to commence or continue any work or activity authorized under the Canada Oil and Gas Operations Act on the frontier lands that are situated in Canadian Arctic offshore waters and in respect of which the Minister of Northern Affairs has administrative responsibility for natural resources. The Order was set to expire December 31, 2021, but was renewed for one year to accommodate consideration of the moratorium.

Figure 1: The Beaufort Sea Region

The Beaufort Sea Region
Map showing the position of Exploration Licences and Significant Discovery Licences issued in the Beaufort Sea region.

Table listing the oil and gas rights shown in Figure 1 including the type of right, the date it became effective, the date it will expire at and the surface of the right in hectares.

Title Representative Type Region Effective Date Expiry Date Area (Ha)
EL317 Repsol Oil & Gas Canada Inc. Exploration Licence Beaufort Sea 05/10/1986   175,810
EL329 BP Canada Energy Development Company Exploration Licence Beaufort Sea 05/09/1987   339,434
EL476 Imperial Oil Resources Limited Exploration Licence Beaufort Sea 01/09/2012 31/07/2019 205,321
EL477 Imperial Oil Resources Limited Exploration Licence Beaufort Sea 01/09/2012 30/09/2020 202,380
EL478 BP Exploration Operating Company Limited Exploration Licence Beaufort Sea 01/09/2012 30/09/2020 205,359
EL479 BP Exploration Operating Company Limited Exploration Licence Beaufort Sea 01/09/2012 30/09/2020 203,635
EL481 Chevron Canada Limited Exploration Licence Beaufort Sea 01/09/2012 31/08/2021 205,946
EL483 ConocoPhillips Canada Resources Corp. Exploration Licence Beaufort Sea 01/09/2012 30/09/2020 196,497
EL485 Franklin Petroleum Canada Limited Exploration Licence Beaufort Sea 01/09/2012 31/08/2021 29,350
EL488 Franklin Petroleum Canada Limited Exploration Licence Beaufort Sea 06/03/2013 05/03/2022 24,574
EL489 Franklin Petroleum Canada Limited Exploration Licence Beaufort Sea 06/03/2013 05/03/2022 35,544
EL491 Franklin Petroleum Canada Limited Exploration Licence Beaufort Sea 06/03/2013 05/03/2022 100,677
EL496 Franklin Petroleum Canada Limited Exploration Licence Beaufort Sea 01/06/2014 31/05/2023 14,820
SDL014-CAN Chevron Canada Limited Significant Discovery Licence Beaufort Sea 05/09/1987   190
SDL025-CAN Nytis Exploration Company Canada Ltd. Significant Discovery Licence Beaufort Sea 09/02/1988   570
SDL026-CAN Nytis Exploration Company Canada Ltd. Significant Discovery Licence Beaufort Sea 09/02/1988   304
SDL028 Nytis Exploration Company Canada Ltd. Significant Discovery Licence Beaufort Sea 09/02/1988   1,809
SDL037 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 24/09/1987   8,034
SDL038 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 12/08/1987   6,620
SDL039 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 12/08/1987   12,182
SDL040 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 12/08/1987   5,190
SDL041 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 01/09/1987   10,059
SDL047 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 21/08/1987   4,104
SDL048 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 21/08/1987   1,740
SDL049 BP Canada Energy Development Company Significant Discovery Licence Beaufort Sea 21/08/1987   7,627
SDL050-CAN Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   8,197
SDL051 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   2,368
SDL053 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   888
SDL054 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 01/05/1987   9,768
SDL055 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   2,072
SDL058 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   7,168
SDL061 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   4,504
SDL065 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 22/04/1987   5,081
SDL083 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   11,692
SDL084 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   6,244
SDL085 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   1,396
SDL086 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   12,181
SDL087 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   3,872
SDL088 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 22/02/1989   7,133
SDL089 BP Canada Energy Group ULC Significant Discovery Licence Beaufort Sea 13/11/1989   10,512
SDL091 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 04/05/1990   7,488
SDL092-CAN Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 04/05/1990   1,085
SDL095 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 04/05/1990   11,051
SDL096 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 19/07/1990   353
SDL097 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 19/07/1990   1,059
SDL110 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 30/01/1992   891
SDL111 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 30/01/1992   891
SDL112 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 30/01/1992   1,485
SDL113 BP Canada Energy Group ULC Significant Discovery Licence Beaufort Sea 25/03/1993   4,787
SDL114 BP Canada Energy Group ULC Significant Discovery Licence Beaufort Sea 25/03/1993   4,795
SDL115 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 11/07/1994   3,000
SDL116 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 10/06/1998   2,700
SDL117 Imperial Oil Resources Limited Significant Discovery Licence Beaufort Sea 10/06/1998   900
SDL126 ConocoPhillips Canada Resources Corp. Significant Discovery Licence Beaufort Sea 01/08/2005   16,618
SDL130 Devon NEC Corporation Significant Discovery Licence Beaufort Sea 26/04/2007   14,458
SDL132-CAN MGM Energy Significant Discovery Licence Beaufort Sea 13/11/2007   38
SDL133-CAN MGM Energy Significant Discovery Licence Beaufort Sea 13/11/2007   19
SDL134-CAN MGM Energy Significant Discovery Licence Beaufort Sea 13/11/2007   247
SDL135 MGM Energy Significant Discovery Licence Beaufort Sea 13/11/2007   610
SDL136-CAN MGM Energy Significant Discovery Licence Beaufort Sea 17/01/2008   136
SDL146-CAN MGM Energy Significant Discovery Licence Beaufort Sea 23/04/2009   507

Figure 2: The Arctic Islands Region

The Arctic Islands Region
Map showing the position of Significant Discovery Licences issued in the Arctic Islands region.

Table listing the oil and gas rights shown in Figure 2 including the type of right, the date it became effective, the date it will expire at and the surface of the right in hectares.

Title Representative Type Region Effective Date Expiry Date Area (Ha)
SDL043 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 11/08/1987   612
SDL044 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   7,163
SDL045 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   10,578
SDL046 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   4,671
SDL066 BP Canada Energy Group ULC Significant Discovery Licence Arctic Islands 19/03/1987   3,548
SDL067 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   8,198
SDL068 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   5,721
SDL069 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   12,347
SDL070 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 01/09/1987   18,130
SDL071 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   5,347
SDL072 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   18,389
SDL073 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   32,169
SDL074 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   32,785
SDL075 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   6,112
SDL076 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 01/09/1987   8,758
SDL077 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   4,276
SDL078 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   9,856
SDL079-CAN Suncor Energy Inc. Significant Discovery Licence Arctic Islands 19/03/1987   65,883
SDL080 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 01/09/1987   10,355
SDL081 Suncor Energy Inc. Significant Discovery Licence Arctic Islands 10/07/1987   63,083

Figure 3: The Eastern Arctic Region

The Eastern Arctic Region
Map showing the position of Significant Discovery Licence SDL 005 in the Eastern Arctic region.

Characteristics of Significant Discovery Licence SDL 005 shown in figure 3 including the date it became effective, the date it will expire at and the surface in hectares.

Title Representative Type Region Effective Date Expiry Date Area (Ha)
SDL005 Husky Oil Operations Limited Significant Discovery Licence Eastern Arctic Offshore 15/02/1987   11,184

Financial Administration of Interests

Table 3: Revenues from Administration of Interests, 2017-2021

Expressed in dollars
  2016 2017 2018 2019 2020 2021
Non-refundable rentals1 993 993 993 993 993 993
Fees2 2,708 1,571 736 2,585 0 397
Total 3,701 2,564 1,729 3,578 993 1,390

1 Norman Wells Proven Area leases issued under the Canada Oil and Gas Land Regulations which continued in force pursuant to subsection 114(4) of the Canada Petroleum Resources Act.

2 Fees for service (section 15 of the Frontier Lands Registration Regulations).

Environmental Considerations

The Government of Canada's Budget 2016 provided funding to help assess the potential environmental impacts of future offshore oil and gas activity in the Arctic, as part of the Government's five year science-based review.

Beaufort Regional Strategic Environmental Assessment

The Beaufort Regional Strategic Environmental Assessment was launched in 2016 and a final report was released in September 2020. The assessment was developed and led in partnership between the Inuvialuit Regional Corporation, the Inuvialuit Game Council, and Crown-Indigenous Relations and Northern Affairs Canada. The final report, available at Beaufort Regional Strategic Environmental Assessment, provides strategic direction and analysis of environmental considerations for decision-making pertaining to future offshore oil and gas activity in the Beaufort Sea, Inuvialuit Settlement Region.

Strategic Environmental Assessment in Baffin Bay and Davis Strait

The Strategic Environmental Assessment in Baffin Bay and Davis Strait was also initiated in 2016. The assessment was led by a working group that included the Qikiqtani Inuit Association, Nunavut Tunngavik Incorporated, the Government of Nunavut and Crown-Indigenous Relations and Northern Affairs Canada.

In Summer 2019 the Nunavut Impact Review Board submitted a final report and recommendations to the Minister. This final report serves to inform decision-making on offshore oil and gas activities within the Baffin Bay and Davis Strait region.

All documents relating to the Strategic Environmental Assessment can be found on the Nunavut Impact Review Board public registry.

Environmental Studies Research Fund

The Environmental Studies Research Fund is a provision of the Canada Petroleum Resources Act, and is funded through levies applied to oil and gas lands held under licence. The research program sponsors environmental and social studies related to the exploration, development and production of oil and gas resources on frontier lands. Based upon the recommendations of the Environmental Studies Research Fund Management Board, the Minister approved a levy of zero for each northern region for 2020-2021, as the terms of existing licences in the Arctic offshore are suspended.

The Environmental Studies Research Fund Management Board has identified a marine study that will take place in the northern regions beginning in the 2021-2022 fiscal year, using funds from prior to the 2016 moratorium. The study will use autonomous glider technology to monitor marine mammals and ship noise in the eastern Beaufort Sea. Further details on the Environmental Studies Research Fund, including annual reports and publications can be found at The Environmental Studies Research Fund.

Royalty management

Given that there are no producing fields in Nunavut or in offshore Arctic waters, the amount of offshore royalty received by Canada in the 2021 calendar year is $0.

Pursuant to the Northwest Territories Land and Resource Devolution Agreement, the Norman Wells Proven Area remains under federal jurisdiction. The Government of Canada continues to collect petroleum royalties associated with the Norman Wells Proven Area and remits such royalties to the Government of the Northwest Territories. Two fields produced oil and/or gas in the Northwest Territories in 2021: the Ikhil gas field on the Mackenzie Delta and the Norman Wells oil field in the Central Mackenzie Valley.

The Ikhil gas field lies on Inuvialuit Lands and continues to be administered by Canada on behalf of the Inuvialuit pursuant to Section 7(94) of the Inuvialuit Final Agreement. Canada's responsibility to collect and remit royalties to the Inuvialuit continued after April 1, 2014, pursuant to the terms of the Northwest Territories Land and Resource Devolution Agreement.

Benefits

In 2021, no benefits plans were submitted as no exploration activity was conducted in Frontier Lands under Crown-Indigenous Relations and Northern Affairs Canada jurisdiction.

Subsection 5.2 of the Canada Oil and Gas Operations Act and section 21 of the Canada Petroleum Resources Act require that a benefits plan be approved by the Minister before authorization of any oil and gas work or activity, or approval of a development plan relating to a pool or field on Frontier Lands in Nunavut, the Northwest Territories, and in the Arctic offshore.

For further information

Petroleum and Mineral Resources Management Directorate

To obtain further information, please contact the Directorate by phone or in writing.

Mailing address:
Crown–Indigenous Relations and Northern Affairs Canada
Petroleum and Mineral Resources Management Directorate
Government of Canada
10 Wellington Street, 14th floor
Gatineau QC  K1A 0H4

Telephone: 819-953-2087
Website: Northern petroleum resources

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