The Oil and Gas Conservation, Stabilization and Development Act

Transcription

1 OIL AND GAS CONSERVATION c The Oil and Gas Conservation, Stabilization and Development Act UNEDITED being Chapter 73 of The Statutes of Saskatchewan, (effective January 1, 1974 except Sections 22 and 23 which come into force on June 1, 1974). NOTE: This consolidation is not official. Amendments have been incorporated for convenience of reference and the original statutes and regulations should be consulted for all purposes of interpretation and application of the law. In order to preserve the integrity of the original statutes and regulations, errors that may have appeared are reproduced in this consolidation.

2 2 c. 73 OIL AND GAS CONSERVATION Table of Contents c.72 2 Section 2 amended 3 Section 4 amended 4 New Section 4A 5 New Section 5 6 New Section 7 7 Section 10 amended 8 Section 11 amended 9 New section New Section Section 15 amended 12 New section Section 18 repealed 14 Section 20 amended 15 Section 26 amended 16 Section 28 amended 17 Section 31 amended 18 Section 33 amended 19 Section 34 amended 20 Rev. Stat. c.360, new section 17 amended 21 Schedule I repealed 22 Schedule II amended 23 Schedule III 24 New section 42A 25 Coming into force

3 OIL AND GAS CONSERVATION c CHAPTER 73 An Act to amend the Oil and Gas Conservation, Stabilization and Development Act, 1973 (Assented to May 10, 1974) c.72 1 The Oil and Gas Conservation, Stabilization and Development Act, 1973, is amended in the manner hereinafter set forth , c.73, s.1. Section 2 amended 2(1) Clause (b) of section 2 is amended by striking out the words Oil and Gas Stabilization and in the first line and substituting the words Energy and Resource. (2) Clause (c) of section 2 is repealed and the following substituted therefor: lease (c) lease includes a lease, profit-a-prendre or agreement giving the right to take any of the oil in a producing tract, and any agreement providing for an. interest in such a lease, profit-a-prendre or agreement under which any royalty or other payment with respect to oil produced from a producing tract is payable. (3) Section 2 is amended by inserting after clause (c) the following clause: lessee (c-a) lessee includes a lessee and any person who, under a lease is entitled to a royalty or other payment with respect to oil produced from a producing tract but does not include an owner. (4) Clause (k) of section 2 is repealed and the following substituted therefor: producing tract (k) producing tract means a drainage unit, as defined.in The Oil and Gas Conservation Act: (i) in which or in respect of which is situated a well from which oil or oil and natural gas: (A) is being produced; or (B) is, by virtue of an order of the Lieutenant Governor in Council, deemed to be produced; or (ii) which or a portion of which is included in an area in respect of which there exists: (A) a plan; or (B) a unit operation agreement; or (C) any other arrangement or agreement for the production of oil or oil and natural gas or for the allocation of royalty on that production; under which oil or oil and natural gas is being produced from the drainage unit.

4 4 c. 73 OIL AND GAS CONSERVATION (5) Section 2 is further amended by adding after clause (k) the following clause: well-head price (l) well-head price means the price at the well-head of a barrel of oil produced in Saskatchewan having regard to the grade of oil and the area of production, and includes, where applicable, the well-head value. determined by the minister under section 4A , c.73, s.2. Section 4 amended 3(1) Subsection (1) of section 4 is repealed and the following substituted therefor: (1) Subject to section 4A, the tax payable is an amount equal to the amount by which the well-head price received for each barrel of oil produced and sold in each month exceeds the basic well-head price, times the taxpayer s share of the number of barrels of oil produced from the well from which the taxpayer shares the oil or the proceeds thereof subject to the allowance provided for in section 6. (2) Subsection (3) of section 4 is repealed and the following substituted therefor: (3) Every person entitled to share in the production or proceeds of the oil produced from a well shall, unless exempt from payment of the tax payable under subsection (1), forward not later than the twentieth day of each month a return to the minister on a form approved by the minister, showing his interest in the proceeds of the oil produced and sold from the well and pay to the minister the amount of tax payable together with any penalty incurred less the amount of tax, if any, remitted on his behalf by the producer under sections 7 and , c.73, s.3. New Section 4A 4 The Act is further amended by inserting after section 4 the following section: Minister to determine well-head value of oil 4A(1) Where the minister is of the opinion that oil, the income from which is subject to taxation under sections 3 and 4, has been disposed of in any month at less than its fair value, he shall determine the well-head value of the oil so sold, being the price that he determines should have been obtained, having regard to the grade of oil and the area of production, and then determine the total tax payable on the basis of that well-head value being the well-head price. (2) Where the minister determines the tax payable by a taxpayer to be greater than the amount paid, he shall advise the taxpayer of the amount and the taxpayer shall pay the additional amount forthwith , c.73, s.4.

5 OIL AND GAS CONSERVATION c New Section 5 5 Section 5 is repealed and the following substituted therefor: Exemptions of owners of less than 1,280 acres 5 The tax provided for by sections 3 and 4 does not apply with respect to oil and gas rights in producing tracts of an owner where the aggregate area of all producing tracts owned by such owner or in respect of which he holds an interest other than a lease does not exceed 1,280 acres after adding to the total: (a) the acreage held in trust for the person whose acreage is being totalled; and subtracting from the total: (b) the acreage held in trust for another person by the person whose acreage is being totalled; but regardless of the acreage owned, a person is liable for the tax with respect to his share as lessee of the oil produced from a well in any producing tract under a lease held by him , c.73, s.5. New Section 7 6 Section 7 is repealed and the following substituted therefor: Producer to deduct tax owing by persons not exempt 7 Every producer of oil shall deduct and forward to the minister the tax payable by every person, other than the owner of the oil and gas rights, entitled to share in the production of each well the income from which is subject to taxation under this Part , c.73, s.6. Section 10 amended 7 Subsection (1) of section 10 is amended by inserting after the word or in the second line the words any person or , c.73, s.7. Section 11 amended 8 Clause (b) of section 11 is repealed and the following substituted therefor: (b) The well-head value of oil for the purposes of section 4A , c.73, s.8. New section 12 9 Section 12 is repealed and the following substituted therefor: Section 4 of The Road Allowances Crown Oil Act amended 12 Notwithstanding section 4 of The Road Allowances Crown Oil Act, where the average prevailing well-head price calculated under that section for a month is less than the well-head price for the same month, the well-head price shall be substituted for the average prevailing well-head price for the month in arriving at the amount payable to the minister under that section , c.73, s.9.

6 6 c. 73 OIL AND GAS CONSERVATION New Section Section 13 is repealed and the following substituted therefor: Exemption re royalty surcharge 13 A person sharing in the production of or proceeds from the oil produced from a well in a producing tract is only liable to pay the tax payable by him under sections 3, 4 and 4A to the extent that he is not liable to pay the royalty surcharge imposed by The Petroleum and Natural Gas Regulations, 1969, as amended and ratified and confirmed by sub-sections (1A) and (1B) of section 10 of The Mineral Resources Act , c.73, s.10. Section 15 amended 11(1) Subsection (1) of section 15 is amended by striking out the words Oil and Gas Stabilization and in the fourth line and substituting Energy and Resource. (2) Subsection (2) of section 15 is repealed and the fol-lowing substituted therefor: (2) The Lieutenant Governor in Council may, on such terms and conditions as he considers advisable, authorize the minister to make grants and loans from the Energy and Resource Development Fund for the following purposes: (a) to encourage and assist Saskatchewan Oil and Gas Corporation or any person operating jointly or in partnership with such corporation in the exploration and development of the oil and natural gas resources of the province; (b) to encourage and assist persons to explore and develop the energy and mineral resources of the province; (c) to encourage and assist research into the conservation, development, production and utilization of the energy and mineral resources of the province; (d) any other purpose considered conducive to the development of the energy and mineral resources of the province , c.73, s.11. New section Section 16 is repealed and the following substituted therefor: Sections 27A to 40 of The Mineral Taxation Act to apply 16 The provisions of sections 27A to 40 of The Mineral Taxation Act shall apply mutatis mutandis to the tax payable under this Part , c.73, s.12. Section 18 repealed 13 Section 18 is repealed , c.73, s.13.

7 OIL AND GAS CONSERVATION c Section 20 amended 14(1) Clause (a) of section 20 is repealed and the following substituted therefor: consumer (a) consumer means a person who purchases or acquires refined petroleum products from a retailer in Saskatchewan for his own use or consumption in Saskatchewan. (2) Clause (e) of section 20 is repealed and the following substituted therefor: retailer (e) retailer means a person in Saskatchewan who in the course of his business regularly sells refined petroleum products to a consumer in Saskatchewan. (3) Clause (f) of section 20 is repealed and the following substituted therefor: wholesaler (f) wholesaler means a person in Saskatchewan who transfers, sells or delivers refined petroleum products to a retailer or to a wholesaler in Saskatchewan or where he is a wholesaler to another wholesaler in Saskatchewan, and includes a retailer who is also a wholesaler , c.73, s.14. Section 26 amended 15 Clause (e) of section 26 is replaced and the following substituted therefor: proucing tract (e) producing tract means a drainage unit, as defined in The Oil and Gas Conservation Act: (i) in which or in respect of which is situated as well from which oil or natural gas, or both: (A) is or are being produced; or (B) is or are, by virtue of an order of the lieutenant Governor in Council, deemed to be produced; or (ii) which or a portion of which is included in an area in respect of which there exists: (A) a plan; or (B) a unit operation agreement; or (C) any other arrangement or agreement for the production of oil or natural gas, or both, or for the allocation of royalty on that production; under which oil or natural gas, or both, is or are being produced from a well or is or are deemed to be pro-duced from the drainage unit , c.73, s.15. Section 28 amended 16 Subsection (3) of section 28 is amended by striking out 31st in the twelfth line and substituting the word tenth , c.73, s.16.

8 8 c. 73 OIL AND GAS CONSERVATION Section 31 amended 17 Section 31 is amended by inserting after the word in in the first line the words this Act or , c.73, s.17. Section 33 amended 18 Subsection (2) of section 33 is repealed and the fol-lowing substituted therefor: (2) Any person having a lease of the oil and gas rights or any of them shall be subject to section 63 and 63B of The Petroleum and Natural Gas Regulations, 1969, as amended and ratified and confirmed by subsections (1A) and (1B) of section 10 of The Mineral Resources Act, and shall be liable to pay the royalty surcharge provided for therein from the first day of January, 1974, as if the lease came within subsection (1) of section 63 and shall be subject to any amendments to the said sections that may be made from time to time , c.73, s.18. Section 34 amended 19(1) Subsection (1) of section 34 is amended by striking out the words of the proven in the third line of subclause (i) of clause (c) and substituting the words of the well or wells producing the. (2) Subsection (2) of section 34 is amended by striking out the words of the proven in the third line of subclause (i) of clause (a) and substituting the words of the well or wells producing the , c.73, s.19. Rev. Stat. c.360, new section 17 amended 20 Subclauses (iii) and (iv) of clause (b) of section 17 of The Oil and Gas Conservation Act, as enacted by section 39 of The Oil and Gas Conservation, Stabilization and Development Act, 1973, are repealed , c.73, s.20. Schedule I repealed 21 Schedule I is repealed , c.73, s.21. Schedule II amended 22 Schedule II is amended: (a) by striking out 2.36 in the second line and substituting 2.61 ; and (b) by striking out 2.57 in the third line and substituting , c.73, s.22. Schedule III 23 Schedule III is amended: (a) by striking out 2.65 in the second line and substituting 2.90 ; and (b) by striking out 2.92 in the third line and substituting , c.73, s.23.

9 OIL AND GAS CONSERVATION c New section 42A 24 The Act is further amended by inserting after section 42 the following section: Purpose of Legislature 42A(1) The purpose and intent of the Legislature is to confine the provisions of this Act within the competence of the Legislature, and all the provisions of this Act shall be construed so as to give effect to that purpose and intent. (2) If any provision or section or part of this Act is held or found to be beyond the powers of the province, that provision, section or part shall be read distributively, and the provision, section, or part so far as it deals with matters within the competence of the Legislature shall stand and be valid and operative, and shall have the same effect as if it had dealt with such matters exclusively; and the remaining provisions, sections and parts of this Act shall not be deemed or held to be inoperative or ultra vires, but shall stand and be valid and operative, and shall have the same effect as if they had been originally enacted as separate and independent enactments and as the only provisions, sections and parts of this Act; and all the provisions of the Act that are within the powers of the province shall remain in full force and effect notwithstanding that some provisions, sections or parts are held to be ultra vires, the intention of the Legislature being to give separate and independent effect to the extent of its powers to every provision, section and part in this Act , c.73, s.24. Coming into force 25(1) Subject to subsection (2) and (3), this Act comes into force on the day of assent but is retroactive and shall be deemd to have been in force on and from the first day of January, (2) Section 14 of this Act comes into force on the day of assent and thereupon Part III of The Oil and Gas Conservation, Stabilization and Development Act, 1973, as amended by section 14 of this Act, shall be deemed to have always been in the form as so amended. (3) Sections 22 and 23 of this Act come into force on the first day of June, , c.73, s.25.

10 REGINA, SASKATCHEWAN Printed by the authority of THE QUEEN S PRINTER Copyright 2009